UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

## FORM 10-Q

[X]      
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2002

[   ]       
TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From _____ to ____

Commission file number0-24673

METAWAVE COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)

|                                         |                    
|---------------------------------------- | -------------------
|Delaware                                 | 91-1673152         
|(State or other jurisdiction of          | (I.R.S. Employer   
|incorporation or organization)           | Identification No.)
|                                         |                    
|10735 Willows Road NE, Redmond, WA       | 98052              
|(Address of principal executive offices) | Zip Code)          

(425) 702-5600(Registrant's telephone number, including area code)NOT APPLICABLE(Former name, former address and former fiscal year, if changed since last report)

|Indicate by check mark whether the registrant  (1) has filed all reports  required to be filed by Section 13 or 15(d)
ofthe  Securities  Exchange  Act of 1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such filing  requirements for the past 90
days.  Yes [X]      No [  ]
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|The number of shares outstanding of the registrant's common stock as of November 11, 2002 was 51,718,162 .                                                                                                                                                                                                                                                                                  

METAWAVE COMMUNICATIONS CORPORATIONFORM 10-QFor the Quarter Ended September 30, 2002 INDEX

|PART I            | FINANCIAL INFORMATION                                                                           | 
|----------------- | ----------------------------------------------------------------------------------------------- | 
|                  |                                                                                                 | 
|Item 1.           | Financial Statements                                                                            | 
|                  | Consolidated Balance Sheets - September 30, 2002 and December 31, 2001                          | 
|                  | Consolidated Statements of Operations - Three and Nine months ended September 30, 2002 and 2001 | 
|                  | Consolidated Statements of Cash Flows - Nine months ended September 30, 2002 and 2001           | 
|                  | Notes to Consolidated Financial Statements                                                      | 
|Item 2.           | Management's Discussion and Analysis of Financial Condition and Results of Operations           | 
|Item 3.           | Quantitative and Qualitative Disclosure of Market Risk                                          | 
|Item 4.           | Controls and procedures                                                                         | 
|                  |                                                                                                 | 
|PART II.          | OTHER INFORMATION                                                                               | 
|Item 1.           | Legal Proceedings                                                                               | 
|Item 4.           | Submission of Matters to a Vote of Security Holders                                             | 
|Item 5.           | Other Information                                                                               | 
|Item 6.           | Exhibits and Reports on Form 8-K                                                                | 
|Signature         |                                                                                                 | 
|Certifications    |                                                                                                 | 
|Index to Exhibits |                                                                                                

PART I.             Financial Information

Item 1.  Financial Statements

METAWAVE COMMUNICATIONS CORPORATION 
                                   CONSOLIDATED BALANCE SHEETS
                                   (In thousands)

|                                                                 |                                                                                                                                                                                                                                                                                                  |                                            | September 30, | December 31,
|---------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------ | ------------- | ------------
|                                                                 |                                                                                                                                                                                                                                                                                                  |                                            | 2002          | 2001        
|                                                                 |                                                                                                                                                                                                                                                                                                  |                                            | (Unaudited)   |             
|ASSETS                                                           |                                                                                                                                                                                                                                                                                                  |                                            |              
|Current assets:                                                  |                                                                                                                                                                                                                                                                                                  |                                           
|                                                                 | Cash and cash equivalents                                                                                                                                                                                                                                                                        | $    3,907                                 | $   28,851   
|                                                                 | Restricted cash                                                                                                                                                                                                                                                                                  | 3,488                                      | 4,175        
|                                                                 | Accounts receivable, net                                                                                                                                                                                                                                                                         | 3,684                                      | 11,371       
|                                                                 | Receivable from Viasystems Group, Inc.                                                                                                                                                                                                                                                           | 75                                         | 5,153        
|                                                                 | Inventories, net                                                                                                                                                                                                                                                                                 | 6,128                                      | 5,111        
|                                                                 | Prepaid expenses and other assets                                                                                                                                                                                                                                                                | 1,446                                      | 3,926        
|                                                                 |                                                                                                                                                                                                                                                                                                  | Total current assets                       | 18,728        | 58,587      
|Property and equipment, net                                      | 1,517                                                                                                                                                                                                                                                                                            | 3,323                                     
|Goodwill                                                         | 35,753                                                                                                                                                                                                                                                                                           | 59,205                                    
|Other intangibles, net                                           | 2,657                                                                                                                                                                                                                                                                                            | 4,297                                     
|Other noncurrent assets                                          | 17                                                                                                                                                                                                                                                                                               | 143                                       
|                                                                 |                                                                                                                                                                                                                                                                                                  | Total assets                               | $   58,672    | $125,555    
|LIABILITIES AND STOCKHOLDERS' EQUITY                             |                                                                                                                                                                                                                                                                                                  |                                           
|Current liabilities:                                             |                                                                                                                                                                                                                                                                                                  |                                           
|                                                                 | Accounts payable                                                                                                                                                                                                                                                                                 | $    2,576                                 | $     8,715  
|                                                                 | Payable to Viasystems Group, Inc.                                                                                                                                                                                                                                                                | -                                          | 6,762        
|                                                                 | Other current liabilities                                                                                                                                                                                                                                                                        | 4,775                                      | 8,347        
|                                                                 | Accrued compensation                                                                                                                                                                                                                                                                             | 1,569                                      | 2,914        
|                                                                 | Current portion of notes payable and capital lease obligations                                                                                                                                                                                                                                   | 673                                        | 2,689        
|                                                                 |                                                                                                                                                                                                                                                                                                  | Total current liabilities                  | 9,593         | 29,427      
|Notes payable and capital lease obligations less current portion | 524                                                                                                                                                                                                                                                                                              | 1,268                                     
|                                                                 |                                                                                                                                                                                                                                                                                                  | Total liabilities                          | 10,117        | 30,695      
|Commitments and contingencies                                    | -                                                                                                                                                                                                                                                                                                | -                                         
|Convertible preferred stock, $.0001 par value:                   |                                                                                                                                                                                                                                                                                                  |                                           
|                                                                 | Authorized shares - 10,000,000 at September 30, 2002 and December 31, 2001;
           Issued and outstanding shares - 84,782 at September 30, 2002 and December 31,
           2001, and warrants.  Liquidation preference $20,000 plus pro rata with
           common stockholders to $40,000 | 20,000                                     | 20,000       
|                                                                 |                                                                                                                                                                                                                                                                                                  |                                            |               |             
|Stockholders' equity:                                            |                                                                                                                                                                                                                                                                                                  |                                           
|Common stock, $.0001 par value, and paid-in capital:             |                                                                                                                                                                                                                                                                                                  |                                           
|                                                                 | Authorized shares - 150,000,000 at September 30, 2002 and December 31, 2001;Issued and outstanding shares - 51,664,842 and 51,662,687 at September 30, 2002and December 31, 2001, respectively                                                                                                   | 340,426                                    | 340,776      
|Deferred stock compensation                                      | (332)                                                                                                                                                                                                                                                                                            | (1,430)                                   
|Accumulated other comprehensive income                           | 167                                                                                                                                                                                                                                                                                              | 30                                        
|Accumulated deficit                                              | (311,706)                                                                                                                                                                                                                                                                                        | (264,516)                                 
|                                                                 |                                                                                                                                                                                                                                                                                                  | Total stockholders' equity                 | 28,555        | 74,860      
|                                                                 |                                                                                                                                                                                                                                                                                                  | Total liabilities and stockholders' equity | $    58,672   | $   125,555 
|                                                                 |                                                                                                                                                                                                                                                                                                  |                                            |               |             

See accompanying notes to consolidated financial statements.

METAWAVE COMMUNICATIONS CORPORATION CONSOLIDATED STATEMENTS OF
                                                        OPERATIONS
                                 (In thousands, except earnings per share and share data)
                                                       (Unaudited)

|                                                                                          |   | Three Months Ended September 30, | Nine Months Ended September 30,
|----------------------------------------------------------------------------------------- | - | -------------------------------- | -------------------------------
|                                                                                          |   | 2002                             |                                
|Product revenues                                                                          | $ | 2,726                            | $                              
|Service revenues                                                                          |   | 1,264                            |                                
|Total revenues                                                                            |   | 3,990                            |                                
|Cost of product revenues                                                                  |   | 1,441                            |                                
|Cost of service revenues                                                                  |   | 1,031                            |                                
|Total cost of revenues                                                                    |   | 2,472                            |                                
|Gross (loss) profit                                                                       |   | 1,518                            |                                
|Operating expenses:                                                                       |   |                                  |                                
|Research and development                                                                  |   | 2,524                            |                                
|Sales, marketing and customer operations                                                  |   | 1,322                            |                                
|General and administrative                                                                |   | 1,085                            |                                
|Impairment of goodwill                                                                    |   | -                                |                                
|Amortization of intangibles and goodwill                                                  |   | 419                              |                                
|Total operating expenses                                                                  |   | 5,350                            |                                
|Loss from operations                                                                      |   | (3,382)                          |                                
|Other income (expense), net                                                               |   | 1                                |                                
|Interest expense                                                                          |   | (19)                             |                                
|Other income (expense), net                                                               |   | (18)                             |                                
|Net loss from continuing operations                                                       |   | (3,850)                          |                                
|Discontinued operations                                                                   |   |                                  |                                
|Net loss from disposal of  Spotlight GSM related assets                                   |   | (975)                            |                                
|Net gain (loss) from operations discontinued business unit                                |   | 1600                             |                                
|Net gain (loss) from discontinued operations                                              |   | 625                              |                                
|Net loss                                                                                  | $ | (3,225)                          | $                              
|Basic and diluted net loss per share from continuing operations                           | $ | (0.07)                           | $                              
|Basic and diluted net loss per share from disposal of
 Spotlight     GSM related assets   |   | (.02)                            |                                
|Basic and diluted net loss per share from discontinued operations                         | $ | (0.03)                           | $                              
|Basic and diluted net loss per share                                                      | $ | (0.6)                            | $                              
|Weighted average shares used in computation of basic
      and diluted net loss per share |   | 51,849                           |                                

See accompanying notes to consolidated financial statements.

METAWAVE COMMUNICATIONS CORPORATION CONSOLIDATED STATEMENTS
                                                      OF CASH FLOWS
                                 (In thousands, except earnings per share and share data)
                                                       (Unaudited)

|                                                                            |                                 |          |   |         
|--------------------------------------------------------------------------- | ------------------------------- | -------- | - | --------
|                                                                            | Nine Months Ended September 30,
|                                                                            | 2002                            | 2001    
|Continuing Operations:                                                      |                                 |          |   |         
|Operating Activities                                                        |                                 |          |   |         
|Net loss from continuing operations                                         | $                               | (42,426) | $ | (55,727)
|Adjustments to arrive at cash provided by operating activities:             |                                 |          |   |         
|Depreciation and amortization expense                                       |                                 | 2,237    |   | 16,098  
|Amortization of deferred stock compensation                                 |                                 | 689      |   | 5,843   
|Impairment of goodwill                                                      |                                 | 24,000   |   | -       
|Loss on disposal of certain assets                                          |                                 | 108      |   | 55      
|Changes in operating assets and liabilities:                                |                                 |          |   |         
|Decrease in accounts receivable                                             |                                 | 8,224    |   | 211     
|Increase in inventories                                                     |                                 | (1,776)  |   | (4,549) 
|Decrease (increase) in prepaids and other noncurrent assets                 |                                 | 1,009    |   | (468)   
|Decrease in accounts payable, accrued liabilities,
and accrued compensation |                                 | (4,478)  |   | (6,298) 
|Net cash used in operating activities                                       |                                 | (12,413) |   | (44,835)
|                                                                            |                                 |          |   |         
|Investing Activities                                                        |                                 |          |   |         
|Net proceeds from sale of inventory and fixed assets                        |                                 | -        |   | 7,964   
|Purchases of equipment and intangible assets                                |                                 | (862)    |   | (2,026) 
|Net cash provided by (used in) investing activities                         |                                 | (862)    |   | 5,938   
|                                                                            |                                 |          |   |         
|Financing Activities                                                        |                                 |          |   |         
|Net proceeds from exercise of common stock options                          |                                 | 11       |   | 980     
|Net proceeds from sale of common stock                                      |                                 | -        |   | 21,644  
|Principal payments on notes payable and capital lease obligations           |                                 | (1,894)  |   | (2,002) 
|Net cash provided by (used in) financing activities                         |                                 | (1,883)  |   | 20,622  
|Net decrease in cash and cash equivalents                                   |                                 | (15,158) |   | (18,275)
|Effect of exchange rate changes on cash                                     |                                 | 62       |   | 261     
|Cash and cash equivalents used for continuing operations                    | $                               | (15,096) | $ | (18,014)
|Cash used for discontinued operations                                       |                                 | (10,535) |   | (3,760) 
|Cash and cash equivalents at beginning of period                            |                                 | 33,026   |   | 37,921  
|Cash and cash equivalents at end of period                                  | $                               | 7,395    | $ | 16,147  

See accompanying notes to consolidated financial statements

METAWAVE COMMUNICATIONS CORPORATION

                                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                         (Unaudited)

1.    Description of the Business

Metawave
Communications Corporation, a Delaware corporation (the Company),
headquartered in Redmond, Washington, provides smart antenna products and services to
wireless operators, tower operators and base station manufacturers facing
capacity constraints and performance issues in the wireless communications
industry. The Company believes that its smart antenna systems improve overall
network performance by increasing capacity, improving or maintaining network
quality, reducing network operating costs and better managing network
infrastructure. Our smart antenna systems are designed to allow wireless network
operators, tower operators and base station manufacturers to address wireless
network challenges, allowing them to more cost-effectively keep pace with growth
in subscriber rates and minutes of use and increased demand for digital voice
and data services. Our technologies are designed to be implemented in a variety
of market segments in the worldwide wireless communications industry and
currently support various CDMA, GSM, third generation (3G) and analog standards.

2.    Principles of Consolidation and Basis of Presentation

The
accompanying consolidated financial statements of Metawave Communications
Corporation have been prepared in conformity with accounting
principles general accepted in the United States of America for interim financial information and
with the instructions for Form 10-Q and Article 10 of Regulation S-X.
Accordingly, certain information and footnote disclosures normally included have
been condensed or omitted. In the opinion of management, all adjustments
(consisting only of normal recurring adjustments) considered necessary for a
fair presentation have been included. Interim results are not necessarily
indicative of results for a full year. The information included in this Form
10-Q should be read in conjunction with the audited financial statements filed
on April 15, 2002 as part of Form 10-K.

The
Company uses a 52-week fiscal year ending on the Sunday closest to December 31.
The 2001 fiscal year ended on December 31, 2001, with each of the fiscal
quarters representing a 13-week period. The third quarter of 2002 ended on Sepetember
29, 2002. For convenience of presentation, all fiscal periods in these financial
statements are treated as ending on a calendar month end.

3.    Use of Estimates

The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Accordingly, actual results may differ from those estimates. Significant
estimates include the allowance for bad debt, inventory valuation and impairment
of assets.

4.    Revenue Recognition

Revenues
consist of sales to end-users. Our sales agreements do not provide a right of
return. Sales of our products are recognized when title to the
system and risk of loss is transferred to the customer and all customer
acceptance conditions, if any, have been satisfied, and collection is probable.
The Company defers any portion of equipment revenue that is billable after
completion of installation and optimization services.

Service revenues, generally for installation and optimization, are recognized when the services have been
        performed and all customer acceptance conditions, if any, have been satisfied. Our maintenance contract
        revenues are deferred and recognized ratably over the term of the agreement (which is typically one year).
        Revenues from our nonrecurring engineering contracts are recognized based on the percentage-of-completion
        method using a milestone method to calculate the appropriate units of work recognized.
All nonrecurring engineering contracts have been completed as of September 30, 2002.

5.    Termination of Manufacturing Outsourcing Agreement

During
the first quarter of 2001, the Company entered into an exclusive, five-year
supply agreement with Viasystems Group, Inc. (Viasystems) to
outsource substantially all of its manufacturing operations to Viasystems, a
provider of electronics manufacturing services. In August of 2002, the Company
and Viasystems mutually agreed to terminate this supply agreement. The Company
paid an aggrate of $3.5 million as follows: $0.1 million for all amounts owed to Viasystems, $3.1 million for
remaining inventory commitments and additional inventory purchased and $0.3 million for the purchase
of related fixed assets. As of September 30, 2002 the Company had paid a total of $2.9 million.

6.    Recent Accounting Pronouncements

Effective January 1, 2002, the Company adopted the Statement of Financial Accounting Standard (SFAS) No. 141,
         "Business Combinations", which resulted in
        discontinuation of future amortization of goodwill.

In
July 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 142,
Goodwill and Other Intangible Assets. SFAS No. 142 establishes a new
method of testing goodwill for impairment on an annual basis or on an interim
basis if an event occurs or circumstances change that would more likely than not
reduce the fair value of a reporting unit below its carrying value. The Company
tested goodwill for impairment in the first quarter of 2002, which resulted in a
charge of $24.0 million. Any future impairment could have an adverse effect on
the future results of operations.

Prior to adoption of this statement goodwill and other intangibles were amortized using the straigh-line
method over the estimated useful life of five years for financial statement purposes. Net income and
earnings per share for the three and nine months periods ended September 30, 2001 are adjusted below
 to exclude amortization expense.

| |                                               |   | Three Months Ended
September 30, 2002                               |   | Nine Months Ended
September 30, 2001
| | --------------------------------------------- | - | ------------------------------------------------------------------- | - | ------------------------------------
| |                                               |   | (unaudited)(In thousands, except earnings per share and share data)
| | Reported net loss                             | $ | (15,300)                                                            | $ | (60,729)                            
| | Add back goodwill amoritzation                |   | 4,057                                                               |   | 12,171                              
| | Adjusted net income                           |   | (11,243)                                                            |   | (48,558)                            
| |                                               |   |                                                                     |   |                                     
| | Basic and diluted net loss per share          | $ | (0.31)                                                              | $ | (1.33)                              
| | Goodwill amortization                         |   | 0.08                                                                |   | 0.27                                
| | Adjusted basic and diluted net loss per share | $ | (0.23)                                                              | $ | (1.06)                              

In August 2001, the FASB approved SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No. 144
      requires a single accounting model for the impairment or disposal of long-lived assets. SFAS No. 144 is
      effective for financial statements after December 15, 2001. Under SFAS No. 144, the results of operations of our
     SpotLight GSM operating unit have been classified as discontinued operations on the Consolidated
      Statement of Operations.

In April 2002, the FASB issued SFAS No. 145, "Recession of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13
and Technical Corrections. Statement No. 145. recinds Statement No. 4, which required all gains and losses from extinguishments
 of debt to be aggregated and, if material, classified as an extraordinary item, net of related income tax effect. Upon adoption
of Statement No. 145, companies will be required to apply certain criteria in APB Opinion No. 30, "Reporting the results of Operations -
reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions
 in determining the classification of gains and losses resulting from the extinguishment of debt. Statement No. 145 is effective for
fiscal years begining after May 15, 2002. The Company is currently evaluating the requirements and impact of this statement on its results
of operations and financial position.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." This standard requires
companies to recognize costs associated with exit of disposal activities when they are incurred rather than at the date of the commitment
 to an exit or disposal plan. Examples of costs covered by the standard include lease termination costs and certain employee severence costs that
are associated with a restructuring, discontiued operation, plant closing or other exit or disposal activity. SFAS No 146 is to be applied
prospectively to exit or disposal activies initiated after December 31, 2002.
The Company is currently evaluating the requirements and impact of this statement on its results
of operations and financial position.

7.   Inventories

| |                          |   | September 30, 2002 |   | December 31, 2001
| | ------------------------ | - | ------------------ | - | -----------------
| |                          |   | (In thousands)    
| | Materials and Components | $ | 5,243              | $ | 3,449            
| | Trial Units              |   | -                  |   | 585              
| | Completed Systems        |   | 885                |   | 1,077            
| |                          | $ | 6,128              | $ | 5,111            

8.    Net Loss Per Share

Basic and diluted net loss per share is calculated using the weighted average number
of shares of common stock outstanding, less the weighted-average number of restricted
shares of common stock issued that are subject to
repurchase. The effect of stock options, warrants and convertible preferred stock
has not been included in the calculation of diluted net loss per share as their
effect is antidilutive. Securities not included in the loss per share
calculation (in thousands) were 18,229 and 6,479 in 2002 and 2001, respectively
..

9.    Commitments

Total noncancelable material purchase commitments outstanding at September 30, 2002 were
approximately $1.0 million, of which $0.6 million relate to Viasystems. As of
December 31, 2001 the Company had material purchase commitments of approximately
$6.0 million, of which $3.8 million related to Viasystems.

10.   International Operations

The Company sells its smart antenna systems and services domestically and
internationally, and operates in a single industry segment. While expenses for
sales and marketing activities are incurred in various geographical regions,
substantially all of the Companys assets are located, and the majority of
its operating expenses are incurred at its corporate headquarters. Revenue
information by geographic region is the only segment information presented as
follows:

|              |   | Three Months Ended September 30, |   | Nine Months Ended September 30,
|------------- | - | -------------------------------- | - | -------------------------------
|              |   | 2002                             |   | 2001                           
|              |   |                                  |   | (In thousands)                 
|United States | $ | 3,495                            | $ | 3,765                          
|Mexico        |   | 239                              |   | 954                            
|Korea         |   | 256                              |   | 502                            
|Total         | $ | 3,990                            | $ | 5,221                          

11.    Restricted Cash

The Company has $3.5 million of restricted cash as of September 30, 2002 to support letters of credit
         associated with leases in the United States and certain inventory purchases associated with the termination
of our manufacturing agreement with Viasystems.  The Company had $4.2 million of restricted cash as of
         December 31, 2001 to support letters of credit associated with leases in the United States and short-term
         notes in China.

12.    Restructuring

In March of 2002, the Company implemented a restructuring plan to discontinue the
SpotLight GSM product, reduce its workforce and consolidate facilities. After
evaluation of the market, it was determined that the SpotLight GSM product did
not have sufficient customer demand to continue with the product. While this
decision was made based on market conditions in the first quarter of 2002, it
was determined that these market conditions impaired the carrying value of the
inventory and fixed assets associated with the product as of December 31, 2001.
Accordingly, a provision for the write down of these assets was made in the year
ended December 31, 2001.

The Company has recorded charges of  $22.3 million relating to this restructuring, $18.1 million of
 which was recorded in 2001. In 2002, a $4.4 million charge was recorded in the first quarter, a $0.4 million charge was
recorded in the second quarter and a $0.6 million gain was recorded in the third quarter.

|                              |                                            |           | Three months ended                                      
|----------------------------- | ------------------------------------------ | --------- | --------------------------------------------------------
|                              |                                            |           | September 30, 2002                                      
|                              |                                            |           | (In thousands, except earnings per share and data share)
|Employee termination benefits | -                                          | $   
320  | $  
1,061                                               
|Other charges (gain)          | $  (641)                                   | 71        | 3,321                                                   
|                              | Total restructuring charge (gain)          | $  (641)  | $   
391                                                
|                              |                                            |           |                                                         
|                              | Loss (gain) per share                      | $  (0.01) | $  0.01                                                 
|                              | Total included in continuing operations    | -         | 136                                                     
|                              | Total included in discontinued operations. | (641)     | 255                                                     
|                              |                                            |           |                                                         

Other charges for the three months ended September 30, 2002 included a $1.5 million gain from the reversal of an estimated
liability related to the discontinued operations which was accrued in the first quarter of 2002, and a $1.0 million loss on the write-off
of assets related to the Spotlight GSM product.

Employee termination benefits of $1.4 million primarily included severance costs for 147 employees.  The
         other charges consist primarily of losses on disposal of property, equipment and inventory and costs
         related to exiting the SpotLight GSM product line.

13.    Discontinued Operations

As a result of the restructuring discussed in note 12, the Company disposed of its SpotLight GSM
related business unit. As of Septmeber 30, 2002 the business unit has been disposed of by
scrap and limited sales of fixed assets and inventory components. A total of
$1.0 million in accrued potential obligations remains on the balance sheet as of
September 30, 2002. The amounts on the consolidated financial statements for the
three and nine month periods ended September 30, 2001 have been reclassified to
reflect the disposal of this business unit.

14.    Subsequent Events

The Company has filed a claim with our insurance provider for business interruption losses
         arising out of the fire that destroyed our Taiwan facility in May of 2001.  The magnitude and timing of any
        insurance proceeds are not known at this time.

The Company announced a restructuring of its operations in
October of 2002 to realign the Company with current market expectations. As a part of this restructuring
the Company reduced its workforce by approximately 30%, resulting in employee termination benefits of approximately $0.7 million.
The Company is also in the process of renegotiating or terminating its operating lease for it's headquarters in Redmond, WA as a part of the restructuring.
The Company expects that a charge will be taken as a result of this renegotiation or termination, although the Company is currently unable to estimate
that charge.

Item 2.      Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the Consolidated Financial Statements and the related notes that
appear elsewhere in this document.

Forward-Looking Statements

Certain statements in the Management's Discussion and Analysis of Financial Condition and Results of Operations constitute
"forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and the Company intends that
such forward-looking statements be subject to the safe harbors created by this law.  You generally can identify these statements by
our use of forward-looking words such as "plans,""estimates," "believes," "expects," "may," "will," "should" or "anticipates" or the
negative or other variations of such terms or comparable terminology, or by discussion of the strategy that involves risks and
uncertainties. We often use these types of statements when discussing our plans and strategies, our anticipation of revenues from the
markets for our services and products, our anticipated capital expenditures, operations support systems or change in regulatory
requirements and other statements contained in this report regarding matters that are not historical facts.

We caution you that these forward-looking statements are only predictions and estimates regarding future events and
circumstances. All forward-looking statements included in this document are based on information available to us on the date hereof
and we assume no obligation to update any such forward-looking statements. Actual results could differ materially from those
projected in the forward-looking statements.

Our business and financial performance are subject to substantial risks and uncertainties. In evaluating our business, you
should carefully consider various factors that might cause actual results to differ materially from stated expectations. Please see
the "Risks Related to Our Business" and "Risks Related to our Stockholders" below and the various risks outlined in our filings with the
Securities and Exchange Commission from time-to-time.

Critical Accounting Policies and Estimates

Management's Discussion and Analysis of Financial Condition and Results of Operations discusses our consolidated financial
statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The
preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities.

We believe that the estimates, assumptions and judgments involved in the accounting policies described
below have the greatest pottential impact on our financial statements, so we consider these to be our critical accounting
policies. Because of the uncertainty inherent in these matters, actual results could differ from the estimates we used in applying
the critical accounting policies. Certain of these critical accounting policies affect working capital account balances, including
the policies for the allowance for bad debts, allowance for excess and obsolete inventory and reserve warranty expense.



Within the context of these critical accounting policies, we are not currently aware of any reasonably
likely event that would result in materially different amounts being reported.



Allowance for Bad Debts

We periodically analyze our trade accounts receivable to estimate the potential impact of bad debts. We
base our estimate on historical bad debt rates and the credit history of the customers in question. If actual or expected
future bad debts were significantly greater or lower than the established allowance, we would record a reduction or
increase to the allowance that would affect the total operating expenses reported in such a period.

Allowance for Excess and Obsolete Inventory

Inventories, which are composed of materials and components, trial units and completed systems, are valued at the lower of cost
(first in, first out) or market.  On a periodic basis, we compare the amount of inventory on hand and under commitment with our
latest forecasted requirements to determine whether write-downs for excess or obsolete inventory are required. Actual requirements
 in any future periods are inherently uncertain and thus may differ from our estimates. If actual or expected requirements were
 significantly greater or lower than the established  reserves, we would record a reduction or increase to net revenues
in the period in which we made such a determination.

Reserve for Warranty Expense

As part of our revenue recognition policy, we record estimated expense from customers as reductions to revenues
over the term of the warranty. We base our estimates on the historical rates of warranty expenses. Actual expenses
and claims in any future period are inherently uncertain and thus may differ from our estimates. If actual or expected
 warranty expenses were significantly greater or lower than the established reserves, we would record a reduction
 or increase to net revenues in the period in which we made such a determination.

Goodwill Impairment

The Company evaluates the valuation of its goodwill according to the provisions of SFAS 142 to determine if the current
 value of goodwill has been impaired. To do this the Company determines the present value of anticipated cash flows based
 on anticipated results of operations over a five year period. Any negative change in the Company ́s projected results
of operation may also lead the Company to re-evaluate its current recorded balance of $35.2 million, which may result in
additional impairment charges in the future.

Company Overview

The global wireless telecommunications industry continued to experience a very challenging period during the first nine months of
2002, during which capital expenditures continued to contract. Our customers are facing slowing revenue growth, reduced access to
capital and the need to carefully manage their cash flow and profitability. In response to these challenges, our customers are
reducing capital expenditures and rethinking their plans to expand their networks. As a result, the Company has experienced lower revenues
during 2002 as compared with prior periods. If capital investment levels continue to decline, or if the markets for our products
grow at a slower pace than we anticipate, our revenues and profitability will continue to be adversely affected.  We continue to
focus on smart antenna solutions, and have added new smart antenna product offerings to better match the opportunities offered by
 the wireless equipment market.

Our SpotLight(R) smart antenna systems are appliques or add-ons to existing or new base stations and are intended to increase the
capacity and improve the performance of current 2G and 2.5G CDMA networks.  Our customers of SpotLight applique systems include
Verizon Wireless, ALLTEL Communications and Grupo Iusacell Celular S.A. de C.V. of Mexico.  As of September 30, 2002, the Company has sold approximately
425 SpotLight applique systems worldwide.  As an improvement to our current SpotLight 2200 applique product, in October of 2001 we entered into an
agreement with Lucent Technologies to better and more closely integrate our SpotLight 2200 CDMA smart antenna system into Lucent's
Flexent(TM) Modular Cellular base station.

During 2002 we have been developing new products that we believe will expand our market base to tower and PCS wireless
 operators in addition to our traditional customers.  SmartShare(TM) antenna sharing solution is our new antenna
application that allows multiple wireless operators, who may operate at different frequencies and multiple air interface
 standards, to share a single set of antenna panels at a cell site. Wireless network operators benefit from this arrangement
 because it will provide access to more cell sites in areas where tower space is limited or zoning restrictions preclude
building of new tower sites. SmartShare will provide operators with the flexibility to independently define and optimize
antenna patterns to fit their particular needs. SmartShare enables tower operators to take advantage of shared antenna economies
 by accommodating more operators on their towers and by offering multiple operators a premium position on the tower. In February
2002, we signed an agreement with Crown Castle to develop and supply our SmartShare products for use in their tower locations.
 During the third quarter of 2002 we successfully completed testing the SmartShare prototype with Crown Castle.

Our SmartCell product uses our proprietary Cell Sculpting(TM) technology that enables a wireless network operator to "sculpt" or
shape a cell's coverage pattern in a way that delivers greater performance, capacity and coverage benefits than off-the-shelf sector
antennas. Cell Sculpting technology is used to establish an optimal antenna pattern for a cell site, which is captured in a personality
module that is installed in the back of each antenna panel. Unlike the fixed patterns of conventional sector antennas, SmartCell
allows wireless network operators to change antenna patterns by swapping out the personality module. Our SmartCell solution is
designed to be compatible with base stations operators in the cellular and PCS frequency bands across multiple air interface
standards. We successfully completed an initial trial during the third quarter of 2002 with a leading
wireless operator.

We have also developed embedded adaptive smart antenna solutions, which have been field tested to
demonstrate CDMA (IS-95) system performance enhancements. The same solutions can be applied to CDMA2000
and WCDMA. Our embedded solutions increase network capacity by utilizing fully adaptive beam forming
techniques that track individual mobile subscribers, and hence reduce interference from surrounding users
and base stations. In February 2001, we entered into an agreement with Samsung to embed our adaptive
smart antenna technology into some of their base stations. During the third quarter of 2002 we completed
 field trials of this technology and we are currently reviewing the results.

Beginning in March of 2002 the Company implemented a restructuring plan to discontinue the SpotLight GSM product, reduce our workforce
and consolidate facilities.  After evaluation of the market, we determined that the SpotLight GSM product did not have sufficient
customer demand to continue with the product. While this decision was made based on market circumstances in the first quarter of
2002, we determined that the discontinuance of the SpotLight GSM product impaired the carrying value of the inventory and other
assets associated with the product as of December 31, 2001. Accordingly, a provision for the write down of these assets was made in
the year ended December 31, 2001.

The Company has recorded charges of  $22.3 million relating to this restructuring, $18.1 million of which was recorded in 2001.
In 2002, a $4.4 million charge was recorded in the first quarter, a $0.4 million charge was recorded in the second and $0.6 million gain was
 recorded in the third quarter.

During October of 2002 we implemented a restructuring plan of its operations and has named Gary S. Flood as its chief
executive officer. As part of the restructuring, Robert H. Hunsberger has resigned his position as chief executive officer and will
remain as chairman of the board. The restructuring also involved a reduction in force of approximately 30 percent of the Company's
workforce, resulting in employee termination benefits of approximately $0.7 million. The Company is also in the process of renegotiating
or terminating its operating lease for it's headquarters in Redmond, WA as a part of the restructuring.
The Company exects that a charge will be taken as a result of this renegotiation or termination, although the Company is currently
unable to estimate that charge.

Liquidity and Capital Resources

Our cash and  short-term  investment  portfolio  totaled  $7.4 million at  September  30, 2002 as compared to $33.0  million at
December 31, 2001. Our  investments are composed  primarily of money market funds and commercial  paper with a maturity of three months
or less to minimize  interest rate risk and  facilitate  rapid  deployment  for immediate  cash needs.  We have $3.5 million of
restricted  cash as of  September  30,  2002 to support  letters of credit  associated  with  leases in the United  States and  certain
inventory  purchases  associated with the termination of our manufacturing  agreement with Viasystems.  We had $4.2 million of
restricted cash as of December 31, 2001 to support letters of credit  associated with leases in the United States and short-term  notes
in China.

As of September 30, 2002 we do not have any off-balance sheet arrangements.

We lease our facilities  under  noncancelable  operating  lease  agreements that expire on various dates through 2005. We lease
certain equipment under noncancelable capital leases that expire on various dates through 2004.

The operating lease for our  headquarters  in Redmond,  Washington  expires on May 31, 2005. We may, at our option,  extend the
term of this lease for two  successive  periods  of five  years  each.  The  option to extend  must be  elected 12 months  prior to the
expiration of the initial lease term. In connection with this  arrangement,  we have issued a letter of credit in favor of the landlord
in the amount of $2.5 million. We are in the process of renegotiating or terminating this operating lease as a part of our restructuring
 announced in October of 2002.

Total purchase orders and other noncancelable  purchase  commitments  outstanding at September 30, 2002 were approximately $1.0
million.

For the nine months ended  September  30, 2002, we used net cash in operating  activities  of $12.4  million  compared to $44.8
million  during the same period in 2001. In the nine months ended  September 30, 2002, our operating  activities  included uses of cash
to fund our net loss of $42.4  million,  an  increase in  inventory  of $1.8  million  and a decrease  in accounts  payable and accrued
liabilities  of $4.5 million.  We partially  offset cash uses with a decrease of accounts  receivable of $8.2 million and a decrease of
$1.0 million in prepaid and other  assets.  We have  adjusted  net loss for  non-cash  charges for  depreciation,  amortization,  stock
compensation  expenses and the  impairment of goodwill  totaling  $27.0  million.  For the nine months ended  September  30, 2001,  our
operating  activities included uses of cash to fund our net loss of $55.7 million,  increased  inventories of $4.5 million, an increase
in prepaid and other assets of $0.5 million and a decrease in accounts  payable and accrued  liabilities of $6.3 million.  We partially
offset  cash uses with a decrease  in  accounts  receivable  of $0.2  million.  We have  adjusted  net loss for  non-cash  charges  for
depreciation, amortization and stock compensation expenses totaling $22.0 million.

Our net cash used in investing  activities for the nine months ended September 30, 2002 was $1.0 million as compared to net cash
provided of $5.9 million for the nine months ended  September  30, 2001.  Net cash used in investing  activities  was primarily for the
purchase of test equipment,  leasehold  improvements,  and customer  support  equipment to support our research and development and our
customers.  During 2001 we received  approximately $8.0 million in payment for inventory and fixed assets pursuant to the manufacturing
agreement with Viasystems.

Our net cash used for  financing  activities  for the nine months ended  September 30, 2002 was $1.9 million as compared to net
cash provided of $20.6  million for the nine months ended  September 30, 2001.  Net cash used for  financing  activities  was primarily
principal payments on notes payable and capital lease  obligations.  The Company received  approximately  $21.6 million for issuance of
common stock in the second and third quarter of 2001.

Our primary  requirements  for working  capital over the next twelve months are to fund our operations,  including  spending on
research and  development  and capital  expenditures.  We expect that the primary  source of funds will be from  operations and current
working  capital.  It is  important  to note that the majority of our current  inventory  balance has been paid in full.  If we achieve
projected  sales,  continue to liquidate our  inventory  and reduce  operating  expenses  over the next twelve  months,  this should be
sufficient to fund our cash  requirements.  If we do not achieve our projected level of quarterly sales over the next 12 months,  which
is  significantly  higher than our  reported  quarterly  sales in the first nine months of 2002,  our ability to meet  working  capital
requirements will be adversely affected.

The Company  has filed a claim with our  insurance  provider  for  business  interruption  losses  arising out of the fire that
destroyed our Taiwan  facility in May of 2001.  While the  magnitude  and timing of any insurance  proceeds are not known at this time,
the potential impact on our liquidity may be significant.

If we are unable to meet our projections and/or if collected proceeds resulting from the claim with our insurance provider, if any, are not significant, we
will require additional funds in the future to support our working capital requirements or for other purposes, and we may seek to
raise such additional funds through the sale of public or private equity and/or debt financings as well as from other sources.  No
assurance can be given that additional financing will be available in the future or that if available, such financing will be
obtainable on terms favorable to our stockholders or us when we may require it, particularly in light of our depressed stock price
and current market conditions in our industry. Any inability to obtain needed financing by us could have a materially adverse affect
on our business and operating results.

Results of Operations

Revenues

Revenues consist of sales to wireless operators.  Our sales agreements do not provide a right of return.  Sales of our products
to  wireless  operators  are  recognized  when  title to the system  and risk of loss is  transferred  to the  customer,  all  customer
acceptance  conditions,  if any, have been satisfied,  and collection is probable.  The Company defers any portion of equipment revenue
that is billable after completion of installation and optimization services.



Service  revenues,  generally for installation and  optimization,  are recognized when the services have been performed and all
customer  acceptance  conditions,  if any have been satisfied.  Our maintenance  contract revenues are deferred and recognized  ratably
over the term of the agreement  (which is typically one year).  Revenues from our  nonrecurring  engineering  contracts are  recognized
based on the percentage-of-completion method using a milestone method to calculate the appropriate units of work recognized.



Our contract terms,  including  pricing and acceptance  criteria,  if any,  typically vary depending on the length of the sales
cycle and the applicable  contract  terms for the  installation  and  optimization  of the product.  We expect that a limited number of
customers will account for a substantial  percentage of our revenues for the foreseeable  future. In the third quarter of 2002, Verizon
(73.4%) and ALLTEL  (14.2%)  accounted for 87.6% of our total  revenues.  The majority of our revenues were from SpotLight 2200 product
and related services.



Total  revenues  were $4.0 million in the third  quarter of 2002 and $5.2  million in the third  quarter of 2001, a decrease of
23.6%.  Product  revenues  totaled $2.7 million in the third  quarter of 2002 and $3.1 million in the third quarter of 2001, a decrease
of 12.4%.  Service  revenues  totaled  $1.3  million in the third  quarter of 2002 and $2.1  million  in the third  quarter of 2001,  a
decrease of 40.1%.



Total  revenues for the nine months ended  September 30, 2002 were $14.3 million as compared to $23.8 million in the nine months
 ended  September 30, 2001, a decrease of 39.7%.  Product  revenues  totaled $11.5 million in the nine months ended September 30,
2002 and $18.0 million in the nine months ended September 30, 2001, a decrease of 36.2%.  Service  revenues totaled $2.9 million in the
nine months ended September 30, 2002 and $5.8 million in the nine months ended September 30, 2001, a decrease of 50.3%.



The decreases were primarily due to a general  slowdown in the worldwide  economy and capital  spending by wireless  telecommunications
companies.  In addition,  service revenues were impacted by lower backlogs of uninstalled systems. The Company believes that our future
revenues will be derived from SpotLight CDMA, with increasing  contributions from SmartShare,  SmartCell and embedded technologies over
the next twelve months.

Gross Margin

The cost of revenues for products is the unit price paid and certain other costs such as a provision for warranty costs. Our gross
margins are generally higher for hardware revenues than for service revenues. We anticipate that our overall gross margins will
fluctuate from period-to-period as a result of shifts in product mix, impact of deferred revenues, anticipated decreases in average
selling prices and our ability to reduce costs as well as timing of new product introduction and overall product volume. During the
third quarter of 2002 we resumed the assembly and testing of our Spotlight CDMA systems in-house. These functions have previously
been performed by Viasystems since the second quarter of 2001. We have not noted a significant change in gross margin as a result
of the resumption of these functions.

Gross margin was $1.5 million or 38.0% in the third quarter of 2002 and $1.9 million or 36.4% in the third quarter of 2001.
Gross margin was $4.6 million or 32.31% in the nine months ended September 30, 2002 and a negative $1.7 million in the nine months
ended September 30, 2001. Gross margin in the first nine months of 2001 was negatively affected by the recording of a $5.4 million
inventory charge for excess and obsolete inventory, product enhancements and changes in the product mix as compared to the first
nine months of 2002.

Research and Development

Our research and development expense consists principally of salaries, related personnel expenses, consultant fees and prototype
expenses related to the design, development, testing and enhancement of our products. We expense all of our research and development
costs as incurred. We believe that continued investment in research and development is critical to achieving our strategic product
development and cost reduction objectives. However, due to our restructuring efforts in 2001 and 2002, including the discontinuation
of our SpotLight GSM product, we expect research and development expenses to decrease in 2002 as compared to prior periods.

Research and development expense decreased 59.8% to $2.5 million for the third quarter of 2002 from $6.3 million for the third
quarter of 2001 and decreased 58.8% to $9.5 million for the nine months ended September 30, 2002 from $23.1 million for the nine
months ended September 30, 2001. The decrease in research and development expense was primarily due to our restructuring efforts in
 2001 and the first quarter of 2002.

Sales, Marketing and Customer Operations

Our sales, marketing and customer operations expense consists of salaries, sales commissions and expenses for personnel engaged
in marketing, sales and field service support for new installations and installed base, as well as promotional expenditures. We
believe that these expenses will decrease in the future as a result of restructuring efforts in 2001 and 2002, in particular as
a result of our shift from a predominatly direct sales model to a sales representative model.

Sales, marketing and
customer operations expense decreased 55.1% to $1.3 million for the third quarter of 2002 from $2.9 million in the third quarter of
2001 and decreased 20.8% to $7.0 million for the nine months ended September 30, 2002 from $8.9 million for the nine months ended
September 30, 2001. The decrease was primarily due to staff reductions and operational improvements made as a part of our
restructuring efforts in 2001 and the first quarter of 2002, in particular as a result of our shift from a predominantly direct
sales model to a sales representative model.

General and Administrative

Our general and administrative expense consists primarily of salaries and personnel related expenses, recruiting and relocation
expenses, professional and consulting fees, insurance premiums and other corporate expenses. Due to our restructuring efforts in 2001
and 2002 we expect general and administrative costs to decrease in the future.

General and administrative expense decreased 20.3% to
$1.1 million in the third quarter of 2002 and $1.4 million in the third quarter of 2001, and decreased 39.4% to $5.1 million in the
nine months ended September 30, 2002 from $8.4 million in the nine months ended September 30, 2001. The decrease was primarily due
to our restructuring efforts in 2001 and the first quarter of 2002.

Impairment of Goodwill

As of March 31, 2002, we determined that our recorded goodwill had been impaired under the provisions of SFAS 142. As a result,
we recorded a $24.0 million change for the impairment of intangible assets in the first quarter of 2002. There was no other impairment based
on the Company's analysis. Any significant negative change in the  Company ́s projected  results of operations  may also lead
 to the Company to reevaluate its current
goodwill balance of $35.3, which may result in additional impairment or charges in the future.

Other Income and Expenses

Our other income and expenses are composed primarily of investment income and interest expense on our outstanding leases and
notes. Our investments are composed primarily of money market funds and commercial paper with maturities of three months or less.
We anticipate that investment income will continue to fluctuate with our overall cash position.

Other expenses for the third quarter of 2002 were $18,000 as compared to other income in 2001 of $223,000. Other income/expense has
decreased in 2002 from prior periods due to lower market returns and lower overall cash balances during 2002.

Discontinued Operations

Discontinued operations includes the results of our discontinued SpotLight GSM business unit and disposal of
SpotLight GSM related assets. We expect results from discontinued operations to continue to decrease as we conclude activities
 related to the discontinued business unit. Should the Company realize any significant proceeds from its business interuption claim
resulting from the fire in Taiwan in the second quarter of 2001, we would expect to report a gain from discontinued operations
in the future.

Discontinued operations changed to a gain of $0.6 million in the third quarter of 2002 as compared to a loss of $1.9 million
in the third quarter of 2001, and decreased 4.8% to $4.8 million in the first nine months of 2002 from $5.0 million in the first nine
months of 2001. The gain in the third quarter was due to the reversal of an estimated liability accrued in the first quarter of 2002,
net of a loss on the disposal of Taiwan manufacturing assets.

Risks Related to Our Business

Market acceptance uncertainties

Our products may fail to achieve market acceptance among potential customers.  For example, our SpotLight GSM systems did not
achieve market acceptance in Asia, causing us to discontinue the product line in March of 2002.  Our SpotLight CDMA product line has
not achieved broad market acceptance since its introduction in 1998. In light of the rapidly evolving nature of the wireless
communications industry, we cannot predict with any degree of assurance whether our future products will achieve broad market
acceptance.  Our future growth is dependent in part upon the acceptance and success of our embedded smart antenna solutions and
products like SmartCell and SmartShare.  Given the early stage of development of these products, we cannot predict whether they will
achieve market acceptance.  If our products do not achieve broad market acceptance among potential customers, our business and
operating results will be adversely affected.

Capital spending patterns of wireless network operators and tower operators

We rely on wireless network operators and tower operators to purchase our products and services. Any substantial decrease or
delay in capital spending patterns in the industry would negatively affect our revenues and business results. The demand for our
products and services depends, to a significant degree, on the magnitude and timing of capital spending by these operators for
constructing, building or upgrading their systems or tower portfolios. Due to the current volatility of the financial markets and
slowdown in the global economy many of our customers may find it increasingly difficult to predict demand for their products and
services. As a result, many of our customers continue to reduce and postpone the expansion or upgrade of their wireless networks or
tower portfolios, the development of new technologies and products for both wireless and tower operators, and the demand for shared
tower applications which has reduced, or can reduce, the demand for our products and services.  The capital spending patterns of our
customers depends on a variety of factors outside of our control, including access to financing, overall financial health, the status
of federal, local and foreign government regulation and deregulation, changing standards for wireless technology, overall demand for
wireless services, competitive pressures, and general economic conditions. Further, in certain circumstances the financial health of
our customers could adversely affect their ability to pay for our products and services in addition to affecting their demand for
such products and services.  In addition, capital-spending patterns in the wireless industry can be subject to some degree of
seasonality, with lower levels of spending in the first half of the calendar year, based on annual budget cycles.

Liquidity

We believe  existing cash and cash  equivalents,  projected  quarterly  sales,  the continued  liquidation of our inventory and
reduced  operating  expenses over the next twelve months will be sufficient to fund our working capital  requirements  over the next 12
months.  If we do not achieve our projected level of quarterly sales over the next 12 months,  which is  significantly  higher than our
reported  quarterly  sales in the first nine  months of 2002,  our  ability to meet  working  capital  requirements  will be  adversely
affected.  In addition to existing cash and projected  quarterly sales,  the Company has filed a claim with our insurance  provider for
business  interruption  losses  arising out of the fire that  destroyed  our Taiwan  facility in May of 2001.  While the  magnitude and
timing of any insurance proceeds are not known at this time, the potential impact on our liquidity may be significant.

If we are unable to meet our projections and/or if collected proceeds resulting from the claim with our insurance provider, if any, are not
significant, we may have to raise funds to finance projected losses. Further, we may have to raise funds to finance growth, to
develop new or enhanced services or products, to respond to competitive pressures, to acquire complementary products, businesses or
technologies or otherwise respond to unanticipated requirements. If we are required to raise additional funds we may seek to raise
such funds through the sale of public or private equity and/or debt financings as well as from other sources.  No assurance can be
given that additional financing will be available in the future or that if available, such financing will be obtainable on terms
favorable to our stockholders or us when we may require it, particularly in light of our depressed stock price and current market
conditions in our industry. If adequate funds are not available or are not available on acceptable terms, we may not be able to fund
our ongoing operations or take advantage of unanticipated acquisition opportunities, develop or enhance products and services or
respond to competitive pressures. Any inability to obtain needed financing by us could seriously harm our business and results of
operations. See Going concern consideration for more information.

Going concern consideration

At December 31, 2001, our independent auditors' report, as prepared by Arthur Andersen LLP and dated April 3, 2002, which
appears in our 2001 Form 10-K, includes the following explanatory paragraph:

"The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As
discussed in Note 20 to the financial statements, uncertainties regarding asserted and potential unasserted claims exist that raise
substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also
described in Note 20. The financial statements do not include any adjustments relating to the recoverability and classification of
asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as
a going concern."

As a result of this opinion, we may experience an adverse impact on future sales if customers choose not to purchase our
products due to concerns about our ongoing viability. In addition, suppliers may refuse to provide product components or insist upon
unacceptable payment terms. Further, we may have increased difficulty raising capital due to this opinion.

Competition and alternative capacity solutions

The market for spectrum  management  solutions,  though  relatively new, is very  competitive.  This market is part of the broader
market for wireless infrastructure equipment,  which is dominated by a number of large companies including Lucent, Ericsson,  Motorola,
Nortel,  Nokia,  Samsung,  Siemens and Alcatel.  Several of these companies have announced plans to introduce products that incorporate
smart antenna  technology.  Our smart antenna systems compete with other solutions to improve network  performance.  These  alternative
solutions  include other smart  antenna  systems and adding base  stations.  We believe that the  principal  competitive  factor is the
cost-effective  delivery of increased  capacity to wireless network  operators and their acceptance of alternative  solutions,  such as
smart  antenna  systems.  If our  products are not a  cost-effective  solution or are not  accepted,  our ability to attract and retain
customers would be harmed.  To date we have not achieved broad market  acceptance for our smart antenna  systems.  We believe that base
station  manufacturers,  which provide  wireless  network  capacity  through sales of additional  base stations or the  development  of
competitive technologies, represent the most significant competitive threat.

In addition,  efficient digital  technologies and enhancements to these  technologies are expected to provide  increased  capacity
and,  therefore,  may be substitutes for our products.  The large wireless  infrastructure  equipment providers listed above also offer
these digital  technologies  and various  enhancements.  We believe that our smart antenna  technologies  can be compatible  with these
digital technologies and their various enhancements.  Our technology,  and its ability to enhance capacity, is additive to the capacity
enhancement  provided by these digital  technologies.  Customers,  however, may delay or cancel deployment of our smart antenna systems
while they deploy these more efficient digital technologies and other enhancements.

Litigation and SEC investigation

A number of class action  lawsuits have been filed against us and current and former  officers of the Company in the United States
District Court for the Western  District of Washington.  The complaints  were filed on behalf of persons who purchased our common stock
between  April 2001 and March 2002.  The  complaint  alleges  that the Company  made false and  misleading  statements  or omissions in
violation  of  Sections  10(b) and 20(a) and Rule 10b-5 of the  Securities  Exchange  Act of 1934,  and seek  unspecified  compensatory
damages and other relief.

On November 6, 2001, a class action lawsuit was filed in the United States  District  Court for the Southern  District of New York
against us and certain of our  officers  and  directors  as well as against  the  underwriters  who handled our April 26, 2000  initial
public  offering of common  stock.  The  complaint was filed on behalf of persons who purchased our common stock during the time period
beginning on April 26, 2000 and ending on December 6, 2000.  The complaint  alleges  violations of the  Securities  Act of 1933 and the
Securities Exchange Act of 1934 primarily based on the assertion that there was undisclosed  compensation  received by our underwriters
in connection with our initial public offering. The individual defendants in this case were dismissed on October 9, 2002. The company
and the underwriters remain defendants in the case.

On May 14, 2002,  Hencorp  Technology  (Shanghai)  Group Co., Inc., a former  distributor  of Metawave's  Spotlight GSM systems in
China,  filed suit  against  Metawave  Communications  Corporation  and its Chinese  subsidiary,  Metawave  Communications  and Trading
(Shanghai) Co., Inc. in Shanghai No.1  Intermediate  People's Court alleging that Metawave owes it  approximately  $600,000 as a result
of purported verbal agreements regarding the purchase and sale of Spotlight GSM systems in China.

We intend to vigorously  defend against these  complaints.  The results of litigation  proceedings  are inherently  unpredictable,
however,  and we are unable to provide  assurance  regarding the outcome of these  complaints or possible damages that may be incurred.
The uncertainty  associated with these substantial  unresolved lawsuits could harm our business and financial  condition.  In addition,
negative  developments with respect to the lawsuits or the  investigation  could cause our stock price to decline.  Moreover,  although
we are unable to determine the amount,  if any, that we may be required to pay in connection  with the  resolution of these lawsuits by
settlement or otherwise, any such payment could harm our financial condition.

We are cooperating with an investigation being conducted by the Securities and Exchange Commission into the events that led to
our restatement of our financial results for 2001.  We have provided documents requested by the SEC and former and current employees
have met with SEC personnel.  No formal action has been taken by the SEC against the Company, its employees or its directors as of
the filing of this report on Form 10-Q.

Lower than expected growth trends in the wireless communications industry

Our future  operating  results  will depend upon the  continued  growth and  increased  availability  and  acceptance  of wireless
communications  services.  Current  trends in growth  rates have been down.  There can be no  assurance  that the  current  trends will
reverse and the volume and variety of wireless  services or the markets for and  acceptance  of such  services  will grow,  or that any
such growth will create a demand for our systems.  If current trends continue,  or recover at a slow rate, our sales will be lower than
expected, which would adversely affect our business and operating results.

The wireless  communications  industry has developed  different  technologies  and standards based on the type of service provided
and  geographical  region.  There is  uncertainty  as to whether all existing  wireless  technologies  will continue to achieve  market
acceptance in the future.  If a digital  technology  for which we develop a smart antenna system is not widely  adopted,  the potential
size of the market for this system would be limited,  and we may not recover the cost of  development.  Further,  we may not be able to
redirect our  development  efforts toward those digital  wireless  technologies  that do sustain market  acceptance in a timely manner,
which would impede our ability to achieve or sustain profitability once achieved.

Development and sales delays

We are still in the development stage of our new SmartCell and SmartShare products. While we anticipate that the initial sale of
SmartShare will occur in 2002 and the initial sale of SmartCell will occur in 2003, we may encounter unforeseen delays.  Such delays
may include unforeseen design complexities, loss of skilled personnel, failure to achieve expected performance requirements and
supplier non-performance.  Our agreement for the development and sale of SmartShare, signed in February 2002, requires the
satisfaction of performance criteria and delivery schedules as conditions of purchases of SmartShare by Crown Castle.  In the past we
have experience delays in the development of our products. Should any problems or obstacles delay the commercialization of either of
these products, operating results could fall significantly below our expectations.

Delays in product installation and end-user sales

We typically install our products systems for customers at cell sites for commercial operation. Timely installation of our
systems is affected by a variety of factors not within our control. For example, customers may need to obtain zoning approvals for a
new cell site building and tower before we may begin our installation process. With existing sites, if a customer chooses to upgrade
to our antennas, permits may also be required to place the antennas on the tower. In addition, the customer is responsible for
preparing the cell site for installation, including any electrical, air conditioning or tower cabling requirements. Customers often
experience delays in obtaining the requisite permits and preparing the sites, which delays our ability to install the systems.
Several of our supply agreements provide that, in the event that the customer purchases installation and optimization services from
us, we will invoice the services fees and a portion of the systems price upon completion of the services. Consequently, if
installation and optimization are delayed, payment from the customer will be delayed.

In addition, as a result of our revenue recognition policy (see note 4 to our financial statements), we will defer revenues for
that portion of the revenue derived from that system until the installation and optimization services are completed. These delays
could contribute to fluctuations in our revenues and margins from quarter to quarter and negatively affect our cash flow and business
operations. Moreover, delays in installation may contribute to delays in obtaining new sales orders from customers as customers'
inventory of uninstalled products systems increase. A significant reduction in order activity from customers could harm our business
and operating results.

Complex and lengthy sales cycle

We believe that the purchase of our products is typically a strategic decision that requires approval at senior levels of
customers' organizations, significant technical evaluation and a substantial commitment of customers' personnel, financial and other
resources. Our contracts with new customers typically contain conditional acceptance provisions for the initial product sales, and we
delay recognition of revenue until all conditions are satisfied, which causes our initial sales cycle to vary substantially from
customer to customer.  This variability makes predicting our revenues difficult.  Typically, performance of our products must be
accepted in a field trial prior to completing any sales to a particular customer. We may incur substantial expenses and expend
significant management and personnel resources in the process of a field trial. This makes the sales process associated with the
purchase of our products complex, lengthy and subject to a number of significant risks. If we do not satisfy conditions in these
contracts or if satisfaction of these conditions were delayed for any reason, revenues in any particular period could fall
significantly below our expectations.

Current financial results do not predict future results

Because of the uncertain  nature of the rapidly  changing  wireless market we serve and the high fixed costs we incur in the short
term,  period-to-period  comparisons  of operating  results are not likely to be  meaningful.  In addition,  you should not rely on the
results for any period as an indication of future performance. Factors that may cause our quarterly results to fluctuate include:

- gain or loss of significant customers;
- our ability to increase or maintain sales to our existing customers;
- delays in customer orders;
- our ability to reduce manufacturing costs of our smart antenna systems;
- our ability to introduce and successfully market new smart antenna systems and embedded solutions;
- introduction and enhancement of competitive or substitute products by our competitors;
- limitations in our suppliers or manufacturing capacity; and
- delays or changes in regulatory environments.

Concentration of customers

Due to the highly concentrated nature of the wireless industry and the recent industry consolidation, we depend on a limited
number of wireless network operators for substantially all of our revenues from our SpotLight product.  The loss of a customer or a
delay in an order from a customer could impact our operating results. Additionally, the loss of a customer or a delay in payment by a
customer could adversely affect our cash flow. We believe that the number of potential customers for future SpotLight systems sales
will be limited. In the third quarter of 2002, two SpotLight customers accounted for 87.6% of our total revenues.  In addition, we
anticipate that sales of our SmartShare and SmartCell products and our embedded solutions will be to a limited number of customers.
Currently, we have signed only one agreement to develop our embedded solutions for use in a base station manufacturer's products. Failure to retain these customers could cause our operating
results to be significantly less than anticipated and lead to a decline in our stock price. Moreover, due to this customer
concentration, any loss or reduced demand from our customers could cause our sales to fall significantly.

Retention of qualified personnel

The success of our business depends upon the continued contributions of each of our key technical and senior management
personnel, each of whom would be difficult to replace. We have not entered into employment agreements with any of our employees other
than severance arrangements  Richard P. Henderson, Andy Merrill, Dr. Marty Feuerstein, Randy (Larry R.) Scheer and Gary S. Flood.
We have entered into a non-competition agreement with Robert H. Hunsberger and Shimon Scherzer, our former chief executive officer
 and our former chief technology officer.
  We will also need to retain qualified engineering, financial, manufacturing,
quality assurance, sales, marketing and customer support personnel to ensure our future success.  In addition, the unpredictability
of the wireless communications market, the volatility
of the economic markets and the reduction in demand for our products caused us to reduce our workforce.  These recent layoffs may
make it more difficult to recruit qualified personnel if needed.  The loss of any key employee, the failure of any key employee to
perform in his or her current position, our inability to attract and retain skilled employees as needed or the inability of our
officers and key employees to expand, train and manage our employee base could limit our ability to expand and become profitable.

Potential impairment of our goodwill and intangible assets

The adoption of SFAS No. 142, effective January 1, 2002, resulted in our discontinuation of amortization of goodwill; however, we are
required to test goodwill for impairment periodically and upon the occurrence of certain events.  We had no impairment of goodwill upon
adoption, however, during the first quarter of 2002, we tested for impairment due to the significant drop in market capitalization, which
resulted in a charge against earnings of $24.0 million for the first quarter of 2002. Any negative change in the Company ́s projected
results of operations may also lead the company to reevaluate its current recorded balance of $35.2 million, which may result in additional
 impairment charges in the future.

Manufacturing and supply limitations

On August 1, 2002 we reached an agreement with Viasystems Group, Inc. to terminate an exclusive five-year supply agreement with
them signed in April 2001 to manufacture our SpotLight products. We have resumed assembling and testing our
SpotLight systems internally.  Prior to our agreement with Viasystems, we had performed these functions in-house and believe that we
have the expertise and resources to resume these functions. We anticipate that we will also depend on a limited number of suppliers
to manufacture our SmartShare and SmartCell antenna components.  In addition, components used in our
 products are available from a limited number of sources.  The reliance on these sole or limited
source suppliers involves certain risks and uncertainties, including the possibility of a shortage or discontinuation of certain key
components or the financial health and continued operations of the supplier. Any reduced availability of these parts or components
when required could materially impair the ability to manufacture and deliver our products on a timely basis and result in the
cancellation of orders, which could significantly harm our business and operating results.

Intellectual property protection

Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or otherwise obtain and use our
intellectual property or technology. In the foreign markets in which we are active, such as Asia, intellectual property laws and
their enforcement are weaker than in the United States. If our methods of protecting our intellectual property are not adequate, our
competitors may misappropriate our technology and we could lose customers to these competitors. In addition, third parties may
develop alternative wireless communication technologies or products that do not infringe on any of our patents or intellectual
property. Moreover, competing dissimilar technologies, such as those using wireline communication or using new or different
protocols, may be deployed which would cause us to lose customers. In addition, the licensing of our technology for embedded
solutions requires closer collaboration with our partners and, consequently, greater disclosure of our trade secrets and other
intellectual property. Although we take precautions to protect our intellectual property, such as confidentiality agreements and
patent and copyright filings in the U.S. and foreign jurisdictions, this may not be sufficient to prevent unauthorized use of our
intellectual property.

Patents and patent  applications  relating to products  used in the wireless  communications  industry are  numerous.  Current and
potential  competitors  and other third parties may have been issued or in the future may be issued patents,  or may obtain  additional
proprietary  rights  relating to products used or proposed to be used by us. We may not be aware of all patents or patent  applications
that may  materially  affect our ability to make,  use or sell any current or future  products.  From time to time,  third parties have
asserted  patent,  copyright and other  intellectual  property rights to technologies  that are important to us. We expect that we will
increasingly be subject to infringement  claims as the number of products and competitors in the spectrum  management  market grows and
the functionality of products  overlaps.  Third parties may assert  infringement  claims against us in the future,  and such assertions
could result in costly  litigation,  the  diversion  of  management  and  engineering  resources  and require us to obtain a license to
intellectual  property rights of such parties.  There can be no assurance that these licenses would be available on terms acceptable to
us, if at all.  Any  failure to obtain a license  from any third  party  asserting  claims in the future or defense of any third  party
lawsuit could materially and adversely affect our business and operating results.

Cost reductions are necessary

We anticipate that average selling prices for our products may need to decrease in the future in response to competitive
pricing pressures and new product introductions by competitors.  If the price of base station equipment continues to decrease, the
addition of new cell sites may be viewed as a more cost-effective alternative for wireless network operators seeking increased
capacity. To lower average selling prices without adversely affecting gross profits, we will have to reduce the manufacturing costs
of our smart antenna systems. We may not be able to achieve cost savings at a rate needed to keep pace with competitive pricing
pressures.

Government regulation

Many of our products are required to comply with numerous domestic and international  government regulations and standards,  which
vary by market.  As standards for products  continue to evolve,  we will need to modify our systems or develop and support new versions
of our systems to meet emerging  industry  standards,  comply with  government  regulations and satisfy the  requirements  necessary to
obtain  approvals.  Compliance with government  regulations and industry  standards can each be a lengthy process,  taking from several
months to longer than a year.  It may be  difficult  for us to obtain  additional  necessary  regulatory  approvals  or comply with new
industry  standards in a timely manner,  if at all. Our inability to obtain  regulatory  approval and meet  established  standards in a
timely  manner could delay or prevent  entrance  into or force our departure  from  markets,  which would harm our sales.  In addition,
compliance  with U.S.  export  control  regulations  may delay or prevent the export of our  products,  data and  technology to foreign
customers, distributors and wireless equipment partners.

In addition,  our customers' operations in the U.S. are subject to extensive federal,  state and local regulations.  For example, on
the local level,  our  customers  must obtain zoning  approval  from local  authorities  to place  antennas on their towers.  Delays in
obtaining these approvals could delay installation of our products,  and thus delay revenues.  See "Delays in Product  Installation and
End-User Sales" for more  information.  To the extent that our customers are delayed in deploying their wireless systems as a result of
existing or new standards or  regulations,  we could  experience  delays in orders.  Any delay could  contribute to fluctuations in our
results of operations.

Governments  currently limit the amount of spectrum each carrier is allowed in any market.  Any increase in spectrum  allowance by
governments  may  adversely  affect  us.  See  "Business--Government  Regulation"  in Form  10-K as  filed on  April  15,  2002 for more
information regarding the governmental control and approval of our business.

Future acquisitions

We may make additional acquisitions of businesses, products or technologies in the future. No assurance can be given as to our
ability to successfully integrate additional businesses, products, technologies or personnel that might have been acquired or may be
acquired in the future, and our failure to do so could significantly affect our business and operating results. Moreover, we may not
be able to locate suitable acquisition opportunities to obtain access to technology that may be important to the development of our
business.

Risks Related to Our Stockholders

Potential for Nasdaq delisting

On July 25, 2002 we were moved to the Nasdaq SmallCap Market from the Nasdaq National Market. The Company has until April 24, 2003
to trade above the $1.00 per share minimum bid requirement for 30 consecutive trading days to remain on the SmallCap Market. If we
fail to do that, we would be delisted from Nasdaq and would most likely be quoted on the OTC Bulletin Board. If our stock is removed
from the Nasdaq SmallCap Market, an investor could find it more difficult to dispose of, or to obtain
accurate quotations as to the market value of, our common stock. Additionally, our stock may be subject to penny stock regulations.

Stock price volatility

Our common shares have experienced, and may continue to experience, substantial price volatility, particularly as a result of
variations between our actual or anticipated financial results and the published expectations of analysts and as a result of
announcements by us.  In addition, the stock market has experienced extreme price fluctuations that have affected the market price of
many technology companies in particular and that have often been unrelated to the operating performance of these companies.  A major
decline in the capital markets generally, or in the market price of our securities, may negatively impact our ability to make future
strategic acquisitions, raise capital, issue debt or convertible debt, or retain employees.  These factors, as well as general
economic and political conditions, may in turn have a material adverse effect on the market price of our common stock.

Risk of dilution

If additional funds are raised through the issuance of equity or convertible debt securities, the percentage ownership of our
stockholders will be reduced, particularly due to the depressed price of our stock. If we raise capital through debt financing, we
may be forced to accept restrictions affecting our liquidity, including restrictions on our ability to incur additional indebtedness
or pay dividends. See Liquidity for further information on our working capital requirements and risks related to raising additional
capital.

Preferred stock with preferential rights

The Company has 84,782 shares of Series A Preferred Stock and warrants to purchase an aggregate of 42,391 shares of Series A
Preferred Stock outstanding.  The shares are convertible to common stock at a ratio of 100 shares of common stock for each share of
preferred stock.  The Series A preferred stock has liquidation preferences and price-based antidilution protection. The liquidation
preferences provide that upon any liquidation, sale or change of control of Metawave, holders of the Series A preferred stock will be
entitled to receive the amount invested prior and in preference to any distribution to holders of Metawave's common stock. After the
foregoing preference, holders of Series A preferred stock shall also participate with holders of the common stock in any distribution
until the holders of Series A preferred stock have received three times their original investment amount in the aggregate.
Thereafter, the holders of common stock shall receive the remaining funds; provided, however, that if holders of Series A preferred
stock would have received more on an as-converted basis, the holders will be treated as if they had converted the shares of preferred
stock into common stock whether or not the conversion had actually occurred. The Series A stockholders also have registration rights.
We must register the shares of common stock to be received upon conversion of the Series A preferred stock upon the earlier of
eighteen months after the closing date of the financing or expiration of sales restrictions on the Series A preferred stock.
Additionally, the holders of the Series A preferred stock have the right to designate a member to the board of directors.

Management and a few stockholders beneficially own a substantial portion of our stock

As of December 31, 2001 our directors and executive  officers and several large  stockholders  beneficially  own  approximately
40.3% of our  outstanding  common stock, on an  as-converted  basis.  As a result of their  ownership and positions,  our directors and
executive  officers  and these  stockholders  collectively  are able to  significantly  influence  all  matters  requiring  stockholder
approval,  including the election of directors and approval of significant  corporate  transactions.  Such  concentration  of ownership
may also have the effect of delaying or  preventing  a change in control of  Metawave.  In addition,  sales of  significant  amounts of
shares held by our directors and executive  officers and these  stockholders,  or the prospect of these sales,  could adversely  affect
the market price of our common stock.

Entities affiliated with one stockholder hold all of the outstanding shares of our Series A preferred stock and are entitled to elect
one member of the board of directors.  For a more detailed description of the risk associated with the outstanding Series A preferred
stock, see the above risk factor titled Preferred stock with preferential rights.

Our directors and executive officers and several large stockholders beneficially own approximately 40.3% of our outstanding
common stock, on an as-converted basis. As a result of their ownership and positions, our directors and executive officers and these
stockholders collectively are able to significantly influence all matters requiring stockholder approval, including the election of
directors and approval of significant corporate transactions.  Such concentration of ownership may also have the effect of delaying
or preventing a change in control of Metawave. In addition, sales of significant amounts of shares held by our directors and
executive officers and these stockholders, or the prospect of these sales, could adversely affect the market price of our common
stock.

Entities affiliated with one stockholder hold all of the outstanding shares of our Series A preferred stock and are entitled to
elect one member of the board of directors.  For a more detailed description of the risk associated with the outstanding Series A
preferred stock, see the prior risk factor titled "Preferred stock with preferential rights."

Charter and Anti-takeover provisions

Our Board of Directors has the authority to issue up to 9,872,827  shares of preferred  stock and to determine the price,  rights,
preferences,  privileges  and  restrictions,  including  voting  rights,  of those  shares  without any  further  vote or action by the
stockholders.  The  rights of the  holders of common  stock may be subject  to,  and may be  adversely  affected  by, the rights of the
holders of any  preferred  stock that may be issued in the future.  The  issuance of  preferred  stock may have the effect of delaying,
deferring or  preventing a change of control of Metawave  without  further  action by the  stockholders  and may  adversely  affect the
voting  and other  rights of the  holders of our  common  stock.  Further,  certain  provisions  of our  charter  documents,  including
provisions  eliminating  the ability of  stockholders  to take action by written  consent and limiting the ability of  stockholders  to
raise matters at a meeting of  stockholders  without giving advance  notice,  may have the effect of delaying or preventing  changes in
control or  management  of  Metawave,  which could have an adverse  effect on the market price of our stock.  In addition,  our charter
documents  do not  permit  cumulative  voting,  which may make it more  difficult  for a third  party to gain  control  of our Board of
Directors. Similarly, state laws in Washington related to corporate takeovers may prevent or delay a change of control of Metawave.

Item 3.  Quantitative and Qualitative Disclosure of Market Risk

Interest rate risk

We do not use derivative financial instruments in our investment portfolio.  We invest in high quality marketable securities,
primarily U.S. Government obligations and corporate obligations with maturates of less than three months.  Such securities are
subject to interest rate risk and will rise and fall in value if market interest rates change, however, we do not expect any material
loss from our marketable security investments and therefore believe that our potential interest rate exposure is not material.

Foreign currency risk

Currently our export sales are denominated in U.S. Dollars. At this time, we do not believe there will be material risks
related to fluctuations in foreign exchange rates.

Item 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures

The term  disclosure  controls and  procedures  is defined in Rules 13a-14 and 15d-14 of the  Securities and Exchange Act of 1934
    (Exchange Act).  These rules refer to the controls and other  procedures of a company that are designed to ensure that  information
    required to be disclosed by a company in the reports that it files under the Exchange Act are recorded,  processed,  summarized and
    reported within the required time periods.  Our Chief Executive Officer and our Vice President of Finance (our principal  financial
    and accounting  officer) have  evaluated the  effectiveness  of our disclosure  controls and procedures as of a date within 90 days
    before the filing of this quarterly  report (the Evaluation  Date),  and they have concluded that, as of the Evaluation  Date, such
    controls and  procedures  were effective at ensuring that required  information  will be disclosed on a timely basis in our reports
    filed under the Exchange Act.

(b) Changes in internal controls

We maintain a system of internal accounting controls that are designed to provide reasonable assurance that our books and records
accurately reflect our transactions and that our established policies and procedures are followed. For the quarter ended September
30, 2002, there were no significant changes in the Company ́s internal controls or in other factors that could significantly affect
internal controls.

PART II. Other Information

Item 1.          Legal Proceedings

Beginning on March 18, 2002, a number of class action lawsuits have been filed against us and several  former
officers of the Company in the United States District Court for the Western District of Washington. The complaints were filed on
behalf of persons who purchased our common stock between April 2001 and March 2002. The complaints allege that the Company made false
and misleading statements or omissions in violation of Sections 10(b) and 20(a) and Rule 10b-5 of the Securities Exchange Act of
1934, and seek unspecified compensatory damages and other relief. Additional purchasers of our securities may assert claims similar
to these in the future.

On November 6, 2001, a class action lawsuit was filed in the United States District Court for the Southern District of New York
against us, certain officers and the directors of the Company and the underwriters who handled our April 26, 2000 initial
public offering of common stock. The complaint was filed on behalf of persons who purchased our common stock during the time period
beginning on April 26, 2000 and ending on December 6, 2000. The complaint alleges violations of the Securities Act of 1933 and the
Securities Exchange Act of 1934 primarily based on the assertion that there was undisclosed compensation received by our underwriters
in connection with our initial public offering. The individual defendants in this case were dismissed on October 9, 2002. The Company
and the underwrighters remain defendants in this case.

On May 14, 2002, Hencorp Technology (Shanghai) Group Co., Inc., a former distributor of Metawave's Spotlight GSM systems in
China, filed suit against Metawave Communications Corporation and its Chinese subsidiary, Metawave Communications and Trading
(Shanghai) Co., Inc. in Shanghai No.1 Intermediate People's Court alleging that Metawave owes it approximately $600,000 as a result
of certain verbal agreements regarding the purchase and sale of Spotlight GSM systems in China.

We intend to vigorously defend against these complaints. The results of litigation proceedings are inherently unpredictable,
however, and we are unable to provide assurance regarding the outcome of these complaints or possible damages that may be incurred.
The uncertainty associated with these substantial unresolved lawsuits could seriously harm our business and financial condition and
affect our ability to continue operations as a going concern. In particular, the continued defense of the lawsuits could result in
the diversion of our management's time and attention away from business operations, which could harm our business. In addition,
negative developments with respect to the lawsuits or the investigation could cause our stock price to decline significantly.
Moreover, although we are unable to determine the amount, if any, that we may be required to pay in connection with the resolution of
these lawsuits by settlement or otherwise, any such payment could seriously harm our financial condition and affect our ability to
continue business operations as a going concern. Our independent accountants have issued a "going concern" opinion in their report on
our financial statements for the year ended December 31, 2001, citing the uncertainties regarding these legal proceedings and the
resulting potential damages if the proceedings are successful. Accordingly, the uncertain outcome of these proceedings raises doubt
about our ability to continue as a going concern.

During the first quarter of
2001, the Company entered into an exclusive, five-year supply agreement with
Viasystems Group, Inc. (Viasystems) to outsource substantially all
of its manufacturing operations to Viasystems, a provider of electronics
manufacturing services. As of August of 2002 the Company and Viasystems have
mutually agreed to terminate the remainder of the supply agreement. Under the
provisions of this agreement we paid $3.5 million for all amounts owed
to Viasystems, remaining inventory commitments, additional inventory purchases
and the purchase of related fixed assets. In addition, Viasystems agreed to
dismiss a lawsuit it filed against the Company in June 2002 in King County
Superior Court seeking damages for various claims, including breach of contract.

In addition, from time to time we are subject to various other legal proceedings
that arise in the ordinary course of business. Although we cannot predict the
outcomes of these proceedings with certainty, we do not believe that the
disposition of these matters will have a material adverse effect on our
financial position, results of operations or cash flows.

Item 4.          Submission of Matters to a Vote of Security Holders

None

Item 5.          Other Information

In accordance with Section 10A(i)(2) of the Securities
Exchange Act of 1934, as added by Section 202 of the Sarbanes-Oxley Act of 2002 (the
"Act"), we are required to disclose the non-audit services approved by our Audit
Committee to be performed by Grant Thorton LLP. our external auditor. Non-audit services
are defined in the Act as services other than those provided in connection with
 an audit or a review of the financial statements of a company. Our Audit Committee
has approved the engagement of Grant Thorton for the non-audit services of preparing
 and reviewing our federal and selected state income tax returns.

Item 6.           Exhibits and Reports on Form 8-K

(a)         Exhibit Number

|3.1*    | Certificate of Incorporation of the Registrant.                                                                                                                               
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.2*    | Bylaws of the Registrant                                                                                                                                                      
|4.1*    | Form of Stock Certificate.                                                                                                                                                    
|10.37** | Amendment to Supply Agreement between the registrant
and Crown Castle dated September 26, 2002.                                                                               
|99.1    | Certification of Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted
                            pursuant to section 906 of the Sarbanes-Oxley Act of 2002. 
|99.2    | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
                            pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
|       

*    
  Previously
filed as an exhibit to Registrants registration statement on Form S-1,
File No. 333-30568, originally filed with the Commission on February 17, 2000,
as subsequently amended, and incorporated herein by reference.

**    
  We have requested Confidential treatment with respect to certain portions of this exhibit.

(b)         Reports on Form 8-K

|1. | Report on Form 8-K, as filed with the SEC on October 11, 2002, announcing a restructuring
and naming a new chief executive officer.
|-- | -----------------------------------------------------------------------------------------------------------------------------------

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.

|Date: | November 13, 2002 | METAWAVE COMMUNICATIONS CORPORATION,                                                                                                                                                                                                                                                                  
|----- | ----------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                   | /s/ Randy Scheer
                                                             Randy (Larry R.) Scheer
                                                             Vice President of Finance
                                                             (Principal Financial and Accounting Officer)

CERTIFICATIONS

|                                |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                           |  | 
|------------------------------- | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|I, Gary S. Flood, certify that:
|                                | 1. | I have reviewed this quarterly report on Form 10-Q of Metawave Communications Corporation;                                                                                                                                                                                                                                                                                                                                                           
|                                | 2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a
                    material fact necessary to make the statements made, in light of the circumstances under which such statements
                    were made, not misleading with respect to the period covered by this quarterly report;                                                                               
|                                | 3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly
                    present in all material respects the financial condition, results of operations and cash flows of the registrant
                    as of, and for, the periods presented in the quarterly report;                                                                                                   
|                                | 4. | The registrant ́s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
                    procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:                                                                                                                                                                                                         
|                                |    | a.                                                                                                                                                                                                                                                                                                                                                                                                                                                    | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including
                             its consolidated subsidiaries, is made known to us by others within those entities, particularly during
                             the period in which this quarterly report is being prepared;
|                                |    | b.                                                                                                                                                                                                                                                                                                                                                                                                                                                    | evaluated the effectiveness of the registrant ́s disclosure controls and procedures as of a date within 90 days prior to the
                            filing date of this quarterly report (the Evaluation Date); and                                                                                                                                
|                                |    | c.                                                                                                                                                                                                                                                                                                                                                                                                                                                    | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based
                           on our evaluation as of the Evaluation Date;                                                                                                                                                       
|                                | 5. | The registrant ́s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant ́s
                    auditors and the audit committee of the registrant ́s board of directors:                                                                                                                                                                                                                                
|                                |    | a.                                                                                                                                                                                                                                                                                                                                                                                                                                                    | All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant ́s
                             ability to record, process, summarize and report financial data and have identified for the registrant ́s
                             auditors any material weaknesses in internal controls; and 
|                                |    | b.                                                                                                                                                                                                                                                                                                                                                                                                                                                    | evaluated the effectiveness of the registrant ́s disclosure controls and procedures as of a date within 90 days prior to the
                             filing date of this quarterly report (the Evaluation Date ) and                                                                                                                               
|                                | 6. | The registrant ́s other certifying officers and I have indicated in this quarterly report whether or not there were
                    significant changes in internal controls or in other factors that could significantly affect internal controls
                    subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant
                    deficiencies and material weaknesses.

| |  |                                                                                                                                                                               
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | /s/ Gary S. Flood
                                                            Gary S.Flood
                                                            Chief Executive Officer

|                               |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                           |  | 
|------------------------------ | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|I, Randy Scheer, certify that:
|                               | 1. | I have reviewed this quarterly report on Form 10-Q of Metawave Communications Corporation;                                                                                                                                                                                                                                                                                                                                                           
|                               | 2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a
                    material fact necessary to make the statements made, in light of the circumstances under which such statements
                    were made, not misleading with respect to the period covered by this quarterly report;                                                                               
|                               | 3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly
                    present in all material respects the financial condition, results of operations and cash flows of the registrant
                    as of, and for, the periods presented in the quarterly report;                                                                                                   
|                               | 4. | The registrant ́s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
                    procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:                                                                                                                                                                                                         
|                               |    | a.                                                                                                                                                                                                                                                                                                                                                                                                                                                    | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including
                             its consolidated subsidiaries, is made known to us by others within those entities, particularly during
                             the period in which this quarterly report is being prepared;
|                               |    | b.                                                                                                                                                                                                                                                                                                                                                                                                                                                    | evaluated the effectiveness of the registrant ́s disclosure controls and procedures as of a date within 90 days prior to the
                            filing date of this quarterly report (the Evaluation Date); and                                                                                                                                
|                               |    | c.                                                                                                                                                                                                                                                                                                                                                                                                                                                    | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based
                           on our evaluation as of the Evaluation Date;                                                                                                                                                       
|                               | 5. | The registrant ́s other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant ́s
                    auditors and the audit committee of the registrant ́s board of directors:                                                                                                                                                                                                                                
|                               |    | a.                                                                                                                                                                                                                                                                                                                                                                                                                                                    | All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant ́s
                             ability to record, process, summarize and report financial data and have identified for the registrant ́s
                             auditors any material weaknesses in internal controls; and 
|                               |    | b.                                                                                                                                                                                                                                                                                                                                                                                                                                                    | evaluated the effectiveness of the registrant ́s disclosure controls and procedures as of a date within 90 days prior to the
                             filing date of this quarterly report (the Evaluation Date ); and                                                                                                                              
|                               | 6. | The registrant ́s other certifying officers and I have indicated in this quarterly report whether or not there were
                    significant changes in internal controls or in other factors that could significantly affect internal controls
                    subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant
                    deficiencies and material weaknesses.

| |  |                                                                                                                                                                                                                                                                                                      
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | /s/ Randy Scheer
                                                             Randy (Larry R.)Scheer
                                                             Vice President of Finance
                                                             (Principal Financial and Accounting Officer)

INDEX TO EXHIBITS

Exhibit Number

|3.1*    | Certificate of Incorporation of the Registrant.                                                                                                                               
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.2*    | Bylaws of the Registrant                                                                                                                                                      
|4.1*    | Form of Stock Certificate.                                                                                                                                                    
|10.37** | Amendment to Supply Agreement between the registrant
and Crown Castle dated September 26, 2002.                                                                               
|99.1    | Certification of Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted
                            pursuant to section 906 of the Sarbanes-Oxley Act of 2002..
|99.2    | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
                            pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
|       

*    
  Previously
filed as an exhibit to Registrants registration statement on Form S-1,
File No. 333-30568, originally filed with the Commission on February 17, 2000,
as subsequently amended, and incorporated herein by reference.

**    
  We have requested Confidential treatment with respect to certain portions of this exhibit.

Exhibit 10.37

FIFTH AMENDMENT TO
                                       SMARTSHARE SYSTEM PURCHASE AGREEMENT

|                                                                                                                                                                                                        |                                                                                        |  | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------- |  | 
|                                                                                                                                                                                                        | This FIFTH  AMENDMENT TO SMARTSHARE  SYSTEM PURCHASE  AGREEMENT
  (Fifth  Amendment)
|is made as of this
26 day of September, 2002, by and between METAWAVE  COMMUNICATIONS  CORPORATION,  a Delaware corporation  (Metawave),
and CROWN CASTLE MW CORP., a Delaware corporation (Crown).

R E C I T A L S:

|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                   
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                       | WHEREAS,  Metawave and Crown are parties to the SmartShare System Purchase  Agreement,  dated February 26,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|2002 as
amended pursuant to a First Amendment to SmartShare System Purchase Agreement dated June 28, 2002, the Second
Amendment to SmartShare System Purchase Agreement dated July 3, 2002, the Third Amendment to SmartShare System
Purchase Agreement dated July 16, 2002 and the Fourth Amendment to SmartShare System Purchase Agreement dated
July 31, 2002  (the Purchase Agreement), which the parties seek to further amend.
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                       | NOW, THEREFORE,  in consideration of mutual promises,  covenants and conditions,  Metawave and Crown                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|agree as follows:                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                       | 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Except as  modified  herein,  all  defined  terms  used in the  Fourth  Amendment  shall have the meaning ascribed
 to them in the Purchase Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                       | 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | In Section 2 of the Purchase Agreement, certain definitions shall be amended as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | ICP  Delivery  Date  shall mean the date
 as to each ICP upon  which  Metawave delivers such ICP to                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Crown,  which date shall be no later than  October 15, 2002 with respect to
         the first 1+2 Product,  November  10, 2002 with  respect to the second 1+2 Product,  December 15,
         2002 for the PCS Product and  February  15, 2003 for the 2+2  Product.  Pursuant to Section  8.1,
         Metawave  may inform  Crown in writing that (a) the  anticipated  ICP  Delivery  Date for the 1+2
         Product  shall be on a date  earlier  than  October 15, 2002 (or November 10, 2002 in the case of
         the second 1+2 Product),  (b) the  anticipated  ICP Delivery Date for the PCS Product shall be on
         a date earlier than  December 15, 2002,  and (c) the  anticipated  ICP Delivery  Date for the 2+2
         Product shall be on a date earlier than February 15, 2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Initial  Orders shall Purchase Orders issued by Crown pursant to
section 8.1 of this Agreement and as                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | shall mean the Purchase  Orders  issued by Crown  pursuant to section
         8.1 of this  Agreement  and as  specifically  reflected  in  Appendix  1.  The  reference  to 1+2
         Product,  PCS Product or 2+2  Product  for  purposes  of each  Initial  Order shall only  include
         Products of such items.  Notwithstanding the definition of Products,  the Parties acknowledge
         that the Initial  Orders,  as defined hereby,  may or may not include PCS Expansion  Antennas and
         Tenant Expansion Kits, which may be ordered by Crown in its sole discretion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Performance  Evaluation  Period  shall  mean  a  period  of  fifteen  (15)  days  that
         commences  on the day           
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | after  Crown  notifies Metawave  in writing  that the  Initial  Commercial
         Products  have been  installed,  (which shall be the date of  installation  of the first ICP with
         respect to the 1+2 Product),  are operational  for testing  purposes and are ready for evaluation
         in accordance with the Product Performance Criteria set forth in Exhibits B and C.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
                  Prototype  Evaluation  Period shall  mean a  period  ending  at the end of the day on
         September  26,
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 2002 with respect to the 1+2  Product,  and  forty-five  (45) days for each of the
         PCS  Product  or 2+2  Product  during  which  period  each  such  Product  will be  evaluated  in
         accordance with the  Specifications set forth in Exhibit B and Product  Performance  Criteria set
         forth in Section 5 of Exhibit C.  Such period will commence on the Prototype Receipt Date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 1+2 Product  Initial  Order shall mean the  Purchase  Order issued by Crown
 pursuant to Section  8.1                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | of this  Agreement for fifteen (15) 1+2  Products,  to be delivered by Metawave to
         Crown over a thirty (30) day period  commencing  after the date of Performance  Acceptance of the
         first 1+2 Product.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                       | 3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Section 8.1.1 of the Agreement is amended in its entirety to read as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 8.1.1    1+2  Product  Initial  Order.   Simultaneously   with  the  execution  of  this
                  Agreement and Exhibits D and E, Crown will issue the 1+2 Product  Initial  Order,  which
                  shall be subject to the terms and  conditions  of this  Agreement.  Crown ́s  obligations
                  respecting  the 1+2  Product  Initial  Order  shall  not  commence  until  (i)  Metawave
                  notifies  Crown of the ICP Delivery  Date for such Product,  and (ii)  expiration of the
                  Prototype  Evaluation  Period with  respect to the 1+2 Product  Prototype.  On or before
                  expiration of the Prototype  Evaluation  Period for the 1+2 Product,  Crown shall either
                  (i)  indicate  Crown ́s  acceptance  of the  anticipated  ICP  Delivery  Date for the 1+2
                  Product,  thereby  waiving all rights to cancel or  terminate  the 1+2  Product  Initial
                  Order  except as  otherwise  expressly  permitted in this  Agreement,  or (ii)  indicate
                  Crown ́s  rejection  of the  anticipated  ICP  Delivery  Date and cancel the 1+2  Product
                  Initial Order and/or this Agreement (the Crown ICP Date  Termination),  in which event
                  Crown shall not have  liability to  Metawave,  including  no  liability  for  Metawave ́s
                  development,  production  or other costs  associated  with the 1+2  Product  and/or this
                  Agreement.
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                       | 4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Section 8.2 shall be amended as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                       | 8.2     Performance  Acceptance.  The  Performance  Evaluation  Period for each of the first 1+2
         Product,  PCS  Product  and 2+2 Product  shall be subject to any  postponements  due to (i) Force
         Majeure or (ii) delays  attributable to Metawave  (including,  without  limitation,  any delay in
         delivery of the second 1+2 Product ICP to Crown).  In the event that the  Performance  Evaluation
         Period has not begun within thirty (30) days after the date the Initial  Commercial  Products are
         delivered to Crown (such delivery to be evidenced by the proof of delivery  certificate  supplied
         by  Metawave ́s  shipping  agent)  and such  delay is not due to an  event  of  Force  Majeure,  a
         Metawave  Event  of  Default  or any  other  act or  omission  of  Metawave  (including,  without
         limitation,  any delay in  delivery  of the second 1+2  Product  ICP to Crown),  the  Exclusivity
         Period (as  defined in section  8.3  hereof)  for the  applicable  Product  shall be reduced by a
         number of days equal to the number of days of delay up to fifteen (15) days.  If the  Performance
         Evaluation  Period  has not  begun  within  forty-five  (45)  days  after  the date  the  Initial
         Commercial  Products  are  delivered  to  Crown  and  such  delay is not due to an event of Force
         Majeure,  a Metawave  Event of Default or any other act or omission of Metawave,  the 1+2 Initial
         Exclusivity  Period, PCS Initial  Exclusivity Period and the 2+2 Initial  Exclusivity Period, for
         the  applicable  Product shall be cancelled in its entirety and no  additional  extensions of the
         Exclusivity  Period for that  Product  (as set forth in section  8.3.1.1,  8.3.2.1  and  8.3.3.1)
         shall be available to Crown.
|                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                       | Upon  satisfaction  of the  Product  Performance  Criteria  at any time  during  the  Performance
         Evaluation  Period for the Initial  Commercial  Products  related to the first 1+2  Product,  PCS
         Product or 2+2 Product,  as the case may be, Crown and Metawave  shall execute a  certificate  of
         Performance  Acceptance  (in the form set forth in  Exhibit  C). If  Performance  Acceptance  has
         been certified,  to the extent that there are no uncured Events of Default by either Party,  both
         Parties will perform their  obligations  under the  applicable  Initial Order and Metawave  shall
         issue an invoice to Crown for the amount due on the Initial  Commercial  Products  related to the
         particular  Product  subject  to  Performance  Acceptance,  which  amount  will be  based  on the
         Purchase  Prices set forth in Exhibit D. In the event that  Performance  Acceptance  has not been
         certified  by the end of a  Performance  Evaluation  Period  (without  taking  into  account  any
         extension  relating  to delay in  delivery  of the second 1+2  Product  ICP to Crown),  due to an
         Event of  Default  by  Metawave  or an act or  omission  of  Metawave,  Metawave  shall  incur an
         incremental  late fee that will be  assessed at the  beginning  of each week after the end of the
         applicable  Performance  Evaluation Period and calculated as a percentage of the value of the 1+2
         Product  Initial Order,  PCS Product  Initial Order or 2+2 Product Initial Order, as the case may
         be,  subject to any changes made to the  applicable  Initial Order prior to the expiration of the
         Prototype Evaluation Period, as follows:                                                                                              

|            |                            
|----------- | ---------------------------
|Late By     | Weekly Incremental Late Fee
|One week    | XX                         
|Two weeks   | XX                         
|Three weeks | XX                         
|Four weeks  | XX                         
|Five weeks  | XX                         
|Six weeks   | XX                         

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| | As an example,  if Performance  Acceptance occurs at any time during the sixth week after the end
         of the Performance  Evaluation Period for the PCS Product,  Metawave shall be assessed a late fee
         equal to XX of the value of the PCS Product  Initial  Order  subject to any changes made to the
         applicable  Initial  Order prior to the  expiration of the  Prototype  Evaluation  Period for any
         such  Product.  Any late fees that are  assessed on Metawave  pursuant to this  Section 8.2 shall
         be credited to and allocated  among the 1+2 Product  Initial Order,  PCS Product Initial Order or
         2+2 Product Initial Order as Crown deems appropriate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
| | Furthermore,  if Performance  Acceptance has not occurred but Crown elects to accept  delivery of
         the 1+2 Products,  PCS Products or 2+2 Products from Metawave,  as the case may be, the late fees
         referenced  above shall accrue  until the earliest of one of the  following  events  occurs:  (i)
         the  end of the  sixth  week  following  the end of the  Performance  Evaluation  Period  for the
         particular  Product,  (ii)  Performance  Acceptance  for such  Product  or  (iii)  any of the 1+2
         Product,  PCS  Product or 2+2  Product,  as  applicable  deployed  by Crown for use by a customer
         generates  rental  revenues for Crown.  Notwithstanding  Crown ́s  acceptance of a Product  during
         the  period in which  Performance  Acceptance  has not  occurred,  Crown  shall have the right to
         terminate this Agreement as set forth in the following paragraph.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
| | If  Performance  Acceptance  does  not  occur by the end of the  sixth  week  after  the end of a
         Performance  Evaluation  Period for any of the first 1+2  Product,  PCS  Product or 2+2  Product,
         Crown may, in its sole  discretion,  (i) terminate this Agreement in its entirety,  in which case
         Metawave shall pay to Crown the  Liquidated  Damages amount set forth in Section 14.4 (in lieu of
         late fees)  within five (5) days from the  termination  of the  Agreement,  (ii)  terminate  this
         Agreement  as to the  specific  Initial  Order  relating  to the  Product  for which  Performance
         Acceptance has not occurred,  in which case Metawave  shall pay to Crown the  Liquidated  Damages
         amount set forth in Section  14.4 (in lieu of late  fees),  within five (5) days from the date of
         termination of this Agreement  with respect to any such specific  Initial Order,  or (iii) accept
         the accrued  late fees and elect to purchase the 1+2 Product,  PCS Products or 2+2  Products,  as
         the case may be, under the  applicable  Initial Order until such date as  Performance  Acceptance
         for any such  Product  occurs;  provided,  that  Crown  shall  continue  to have the  ability  to
         terminate  this  Agreement  with no  liability  to  Crown  during  such  time as the  Performance
         Acceptance  has not  occurred.  If Crown elects to not terminate the Agreement in its entirety or
         as to a specific  Initial  Order and proceed  under clause (iii) above,  Metawave  shall have the
         right to terminate its obligation  under this Agreement with respect to the specific  Product for
         which  Performance  Acceptance has not occurred (with all other  obligations under this Agreement
         to  continue  except  that  Metawave  shall have the right to  terminate  this  Agreement  in its
         entirety  if Crown  elects to  proceed  under  clause  (iii) with  respect  to the 1+2  Product),
         provided,  however,  that Metawave shall pay to Crown the Liquidated  Damages amount set forth in
         Section  14.4  within  five (5) days from the  termination  of the  Agreement  under (i) and (ii)
         above.  Termination  of this  Agreement  as to any  Product  shall not  terminate  Crown ́s  prior
         obligations  relating to any other Product  after  Performance  Acceptance  as to the  unaffected
         Product.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
| | If,  however,  the  failure  to  achieve  Performance  Acceptance  by the  end  of a  Performance
         Evaluation  Period for any of the 1+2  Product,  PCS  Product or 2+2  Product is the result of an
         Event of Default by Crown, or an act or omission of Crown or its test  customer(s)  participating
         in the testing of the applicable  Initial Commercial  Products which interrupts such testing,  or
         an event of Force  Majeure  (a Delay  Event),  then such late fees  shall not begin to  accrue,
         they will be  suspended  during the period that such Delay Event is not cured.  In  addition,  as
         soon as the Delay  Event is  discovered,  any late fees that may have  accrued  during  the Delay
         Event  shall be  cancelled  for the period that the Delay  Event was  ongoing.  The length of the
         Performance  Evaluation  Period  shall be extended  by the number of days of the Delay  Event(s).
         Once such Delay Event is cured,  such late fees shall begin to accrue,  or continue to accrue, as
         the case may be.  This process shall apply for each separate Delay Event.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
| | If  Crown  chooses  to  terminate  this  Agreement  pursuant  to  this  Section,  Metawave  shall
         de-install  any  Initial  Commercial  Products  at  Metawave ́s  risk and  expense  and repair any
         reasonable  damage to  Crown ́s  equipment  at the site  caused by  Metawave  during  installation
         and/or removal of the Initial Commercial  Products.  Metawave shall arrange for and pay the costs
         of shipping  and assume the risk of loss and damage to the  Initial  Commercial  Products  during
         shipment back to its headquarters in Redmond, Washington or otherwise.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
| | 5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Section 8.3.1 shall be amended as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 8.3.1  Crown  Exclusivity  for  the  1+2  Product.  Except  for  the  permitted  actions
                  contemplated  in Section  8.3.4,  Crown shall have the  exclusive  right to purchase the
                  1+2 Products (including  Prototypes,  Initial Commercial Product and Ancillary Products)
                  from  Metawave  commencing  on the Effective  Date and  terminating  on the later of (i)
                  fifteen  (15) days after the date of  Performance  Acceptance  of the first 1+2  Product
                  (the 1+2  Initial  Exclusivity  Period),  (ii) twenty (20) days after  delivery of the
                  second 1+2 Product ICP to Crown  or (iii) December 15, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
| | 6.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Section 14.4 shall be amended as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 14.4 Liquidated  Damages.  To the extent that Crown  terminates this Agreement  pursuant
                  to Sections 8.2 or 10.6.1 of this  Agreement or Metawave  terminates  this  Agreement as
                  to a particular Product or in its entirety,  as applicable,  pursuant to Sections 8.2 or
                  14.3  (any  such  partial  or  total  termination  of  this  Agreement   constituting  a
                  Termination Event),  Metawave shall pay to Crown liquidated damages in an amount equal
                  to XX of the 1+2 Product  Initial  Order and XX
                  of the PCS Product  Initial Order if such  Termination  Event occurs with respect to the
                  1+2  Product,  XX of the PCS  Product  Initial  Order if such  Termination
                  Event  occurs  with  respect  to the PCS  Product  only,  or XX  of the 2+2
                  Product Initial Order if such  Termination  Event occurs with respect to the 2+2 Product
                  Initial  Order only, as  applicable,  at the time of  termination  plus (i) in the event
                  that a  Termination  Event  occurs with  respect to the 1+2  Product,  the amount of XX
                  or  (ii)  in  the  event  a
                  Termination  Event  occurs with  respect to the PCS  Product,  the amount of XXX,
                as liquidated  damages which shall be
                  the maximum  amount  payable  under this  Section  14.4 (in each case,  the  Liquidated
                  Damages),  which amounts the Parties agree are reasonable  and  appropriate in light of
                  the  difficulty  of  calculating  the total damages that may be suffered by Crown due to
                  such  termination.  If a  Termination  Event has not  occurred  with  respect to the 1+2
                  Product  and  the  Initial  Commercial  Products  related  to a  1+2  Product  has  been
                  delivered to Crown and has passed  Performance  Acceptance,  then any Liquidated Damages
                  applicable  to the 1+2 Product  Initial  Order  expire,  and cannot be assessed  against
                  Metawave in the event a  Termination  Event  occurs  with  respect to the PCS Product or
                  2+2 Product.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
| | 7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Appendix 1 is replaced and substituted with an Initial Order (Amended).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 
| | 8.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Except to the  extent  hereby  specifically  amended  and  revised,  the  Purchase  Agreement  is
confirmed  and  remains in full force and  effect in all  respects.  This Fifth  Amendment  shall be  attached  and
become part of the Agreement.
:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

[signature page follows]

|                                                                                                                 |                                                                                          |                               
|---------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------- | ------------------------------
|                                                                                                                 | IN WITNESS  WHEREOF,  the Parties hereto have caused this Fifth  Amendment to Smartshare
|System  Purchase Agreement to be executed by their duly authorized representatives as of the date written above.
|                                                                                                                 |                                                                                          |                               
|                                                                                                                 | CROWN CASTLE MW CORP.                                                                    | METAWAVECOMMUNICATIONS CORP   
|                                                                                                                 |                                                                                          |                               
|                                                                                                                 | By: /s/ E. Blake Hawk                                                                    | By:/s/ Richard Henderson      
|                                                                                                                 | Name: E. Blake Hawk                                                                      | Name: Richard Henderson       
|                                                                                                                 | Title: Executive Vice President                                                          | Title: Vice President of Sales

APPENDIX
1
INITIAL ORDER (AMENDED)[Replaces and substituted in its entirety for Initial Order]

|            |                                                                                  |                |                                                                         
|----------- | -------------------------------------------------------------------------------- | -------------- | ------------------------------------------------------------------------
|BILL TO:    | Crown Castle MW Corp.or its designee510 Bering Drivesuite500Houston, Texas 77057 | ORDER NO:DATE: | 001B9/17/02                                                             
|VENDOR:     | Metawave CommunicationsCorporation                                               | SHIP TO:       | Crown Castle USA Inc.resource Center2656 Idlewood RoadCarnegie, PA 15106
|ENTERED BY: | Julie Birch                                                                     
|TAKEN BY:   |                                                                                 
|BUYER NAME: | Crown Castle MW Corp.                                                            | DELIVERY:      | Crown Castle USA Inc.resource Center2656 Idlewood RoadCarnegie, PA 15106

|              |          |     |  |       |            
|------------- | -------- | --- |  | ----- | -----------
|Required Date | Ship Via | FOB |  | Terms | Order Req.#
|12/15/02      | Ground   |     |  |       |            

|          |     |                                                  |          |           |           |          
|--------- | --- | ------------------------------------------------ | -------- | --------- | --------- | ---------
|ITM#      | P/N | Description                                      | AMT      | UM        | UNITCST   | EXTENSION
|1+22+2PCS |     | 1+2 Product Unit2+2 Product UnitPCS Product Unit | 15150150 | $US$US$US | XXXXXXXXX | XXXXXXXXX

THIS PURCHASE ORDER IS
SUBJECT TO ALL THE TERMS AND CONDITIONS OF THAT CERTAIN SMARTSHARE SYSTEM
PURCHASE AGREEMENT DATED FEBRUARY 26, 2002 (THE "PURCHASE AGREEMENT") BY AND
BETWEEN METAWAVE COMMUNICATIONS CORPORATION AND CROWN CASTLE MW CORP, AND IS
INCORPORATED HEREIN FOR ANY AND ALL PURPOSES. THE PARTIES AGREE THAT ANY
ADDITIONAL, DIFFERENT OR CONFLICTING TERMS AND CONDITIONS CONTAINED IN ANY
QUOTE, SOLICITATION, PURCHASE ORDER, AGREEMENT OR DOCUMENTATION EXCHANGED BY THE
PARTIES THAT CONFLICT WITH THE TERMS OF THE PUCHASE AGREEMENT SHALL NOT BE
BINDING ON THE PARTIES AND ARE HEREBY REJECTED, UNLESS THE PARTIES EXPRESSLY AND
SPECIFICALLY AGREE TO SUCH CHANGES.

|                          | XXX         
|------------------------- | ------------
|AUTHORIZED REPRESENTATIVE | TOTAL ORDER:
|                          |             
|                          |             
|METAWAVE COMMUNICATIONS   |             

Exhibit 99.1

Metawave Communications Corporation

CERTIFICATION PURSUANT TO
                                                        18 U.S.C. SECTION 1350,
                                                        AS ADOPTED PURSUANT TO
                                             SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the
Quarterly Report of Metawave Communications Corporation (the
Company) on Form 10-Q for the quarter ended June 30, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the
Report), I, Gary S. Flood, Chief Executive Officer
 of the Company, certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that
to my knowledge:

(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and result
                of operations of the Company.

/s/ Gary S. Flood
Gary S. Flood
November 11, 2002

Exhibit 99.2

Metawave Communications Corporation

CERTIFICATION PURSUANT TO
                                                        18 U.S.C. SECTION 1350,
                                                        AS ADOPTED PURSUANT TO
                                             SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the
Quarterly Report of Metawave Communications Corporation (the
Company) on Form 10-Q for the quarter ended June 30, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the
Report), I, Randy Scheer, Vice President of Finance (Principal
Financial and Accounting Officer) of the Company, certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that to my knowledge:

(1)      The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)      The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.

/s/Randy Scheer
Randy (Larry R.) Scheer
Vice President of Finance (Principal Financial and Accounting Officer)
November 11, 2002