Document:

Note:
Portions of this exhibit indicated by [*] are subject to a confidential
treatment request, and have been omitted from this exhibit. Complete, unredacted
copies of this exhibit have been filed with the Securities and Exchange
Commission as part of the Company’s confidential treatment request.

“AMENDMENT
AGREEMENT NO.3”

This
Amendment Agreement No. 3 to the FWA TASS, dated as of December 28, 2004 (the
“Amendment
Agreement No. 3”), is
entered by and between Airspan
Communications Limited
(“Airspan”) and
Axtel, S.A. de C.V. (“Axtel”)

WHEREAS, Axtel
and Nortel Networks Limited (“NN
Limited”) and
Nortel Networks de México, S.A. de C.V. (”NN
Mexico” and,
collectively with NN Limited, “Nortel
Networks”)
entered into a Purchase and License Agreement for FWA Equipment dated March 20,
2003, which was subsequently amended by Amendment No. 1 dated September 15, 2003
and by the Change Order dated December 5, 2003 (the “FWA
PLA”);

WHERAS, Nortel
Networks and Axtel entered into a Technical Assistance Support Services
Agreement for FWA Equipment dated March 20, 2003 (the “FWA
TASS”);

WHEREAS, Nortel
Networks, Airspan and Axtel entered into an Assignment and Assumption Agreement
dated December 23, 2003, by virtue of which Nortel Networks assigned all of its
rights and obligations under the FWA PLA and the FWA TASS to Airspan (the
“Assignment
Agreement”);

WHEREAS,
Airspan
and Axtel executed Amendment No.2 to the FWA PLA and the FWA TASS as of April
20, 2004.

WHEREAS,
Airspan
and Axtel (hereinafter referred to collectively as the “Parties” and
individually as a “Party”) have
been in discussions regarding several topics under the FWA TASS, including
prices and payment terms of the services, with the intent of setting forth their
agreements on such topics in an amendment to the FWA TASS;

WHEREAS, the
Parties, in light of the foregoing, wish to amend the FWA TASS in accordance
with the terms contained herein.

NOW
THEREFORE, in light
of the foregoing and pursuant to mutual covenants and agreements of which the
Parties acknowledge sufficient consideration, they hereby agree as
follows:

1.       DEFINITIONS
AND EFFECTIVENESS.

1.1 Capitalized
terms not specifically defined in this Amendment Agreement No. 3 shall have the
meaning ascribed to them in the FWA TASS, as the case may be.

 

1.2 The
Parties hereby agree that this Amendment Agreement No. 3 shall become binding on
each Party upon its execution. 

2. GENERAL
AGREEMENTS AND AMENDMENTS.

 

	
      2.1
      
	
      Change
      to the Price of the TASS Services for the Fourth Quarter of
      2004.
      The
      Parties hereby agree to modify the price of the TASS Services for the
      fourth quarter of 2004 set forth in the FWA TASS, which currently is for
      the total amount of [*] to the new price of [*] Dollars ([*] United Sates
      Dollars). 

	
      2.2
	
      Service
      Credit of US$[*].
      Airspan,
      for
      good and valuable consideration, the receipt and sufficiency of which are
      hereby acknowledged,
      hereby agrees to reimburse Axtel the amount US$[*] United States Dollars)
      of payments made by Axtel in the first three quarters of 2004 for
      technical assistance and support services provided by Airspan to Axtel
      under the FWA TASS in such period of time. 

This
reimbursement will be made through a pricing discount in the aggregate sum of
US$[*] United States Dollars), which will be applied against the payment of the
TASS Services to be performed by Airspan under the FWA TASS after the date of
this Amendment Agreement No. 3 (the “Service
Credit”). Axtel
hereby accepts this Service Credit discount. 

Within
(5) days of the date of this Amendment Agreement No. 3, Airspan shall deliver to
Axtel the Service Credit note for the amount of US$[*] Dollars, such note to be
dated no later than December 30, 2004.

	
      2.3
	
      Amendment
      of the Scope of Services under the FWA TASS.
      The
      Parties hereby agree to amend the scope of services under the FWA TASS, by
      replacing in its entirety Annex
      “B”
      (“Description of the Technical Assistance Support Services”) of the FWA
      TASS, with a new annex. The terms and conditions of the new Annex
      “B”
      are set forth in the document attached as Exhibit
      “A” of
      this Amendment Agreement No. 3.

	
      2.4
	
      New
      Prices and Payment Terms for Services under the FWA
      TASS.
      The
      Parties hereby amend the FWA TASS, by modifying the price and payment
      terms of the Services set forth in the FWA TASS for the years 2005 and
      2006, as follows:

 

	(i)  	
      For
      Year 2005.
      US$[*], for the Services to be provided by Airspan in year 2005, which
      shall be paid by Axtel as follows:

 

2

 

	·  	
      US$[*]
      for the first calendar quarter, on the last business day of such quarter;
      

	·  	
      US$[*]
      for the second calendar quarter, on the last business day of such
      quarter;

	·  	
      US$[*]
      for the third calendar quarter, on the last business day of such
      quarter;

	·  	
      US$[*]
      for the fourth calendar quarter, on the last business day of such
      quarter.

	·  	
      Axtel
      will issue an Irrevocable Purchase order for the 2005 TASS prior to
      15th
      January 2005 with the payment terms detailed
above.

	 	 

	·
     	
      Airspan
      shall deliver to Axtel the respective invoice of such quarter payment, at
      least thirty (30) days prior to such payment date (the last business day
      of such quarter). 

   

	(ii)  	
      For
      Year 2006.
      US$[*] for the Services to be provided by Airspan in year 2006, which
      shall be paid by Axtel as follows:

	·  	
      US$[*]
      for the first calendar quarter, on the last business day of such quarter;
      

	·  	
      US$[*]
      for the second calendar quarter, on the last business day of such
      quarter;

	·  	
      US$[*]
      for the third calendar quarter, on the last business day of such
      quarter;

	·  	
      US$[*]
      for the fourth calendar quarter, on the last business day of such
      quarter.

	·  	
      Axtel
      will issue an Irrevocable Purchase order for the 2006 TASS prior to
      15th
      January 2006 with the payment terms detailed
above.

	 	 

	·
     	
      Airspan
      shall deliver to Axtel the respective invoice of such quarter payment, at
      least thirty (30) days prior to such payment date (the last business day
      of such quarter). 

 

 

3

2

 

	
      3.
	
      CONTINUED
      EFFECT.
      

	
      3.1
	
      The
      Parties hereby agree that the present Amendment Agreement No. 3
      constitutes an amendment of some of the provisions of the FWA TASS, and
      except as amended and modified herein, all of the other terms and
      conditions of the FWA TASS shall remain in full force and
      effect.

IN
WITNESS WHEREOF, this
Amendment Agreement No. 3 is signed as of the date first above
written.

 

 

	
       AXTEL, S.A. DE
      C.V.
	 	
       AIRSPAN COMMUNICATIONS
      LIMITED

	 	 	 
	By:__________________________ 	 	By:__________________________ 
	Name: Alberto de Villasante
    Herbert 	 	Name: Peter Aronstam 
	
      Title:
      Legal Representative 
	 	
      Title:
      Senior Vice President 

 

 

4

 

Exhibit
A

DESCRIPTION
OF THE TECHNICAL ASSISTANCE SUPPORT SERVICES

 

 

 

  

1

Exhibit A
- Description of The Technical Assistance Support Services

Agreement
for the Provision of Technical Assistance Support Services for FWA Equipment
(December 2004)

“Exhibit
A”

DESCRIPTION
OF THE TECHNICAL ASSISTANCE SUPPORT SERVICES 

1.0 SERVICES
SUMMARY

This
package of services from the Airspan Support Services portfolio will
provide
remote
2nd
&
3rd level of
technical
assistance and
emergency recovery for Airspan
products in Axtel’s network. Axtel’s in house structure will perform the
Operations, Administration & Maintenance functions.

For
this
annually
contracted support package,
Airspan’ will
provide Technical and Support Services (the “Services”) to the
Airspan’ FWA Hardware and FWA Software installed in Axtel’s Network in Mexico
(excluding Hardware under warranty), such Services are described below:

 

	·  	
      Provide
      remote
      troubleshooting
      on Airspan
      supplied software
      and/or hardware 

 

	·  	
      Assist
      in resolving network fault issues that may be linked to AXTEL’s network
      operational procedures and methodologies

 

	·  	
      Assist
      AXTEL’s staff in determining fault-locating interface problems between
      Airspan hardware or software and other vendors’
  equipment

 

	·  	
      Perform
      REM software upgrades

 

The terms
and conditions for these services are set forth in this Exhibit B. 

Here
follows a description of the Services to be provided by Airspan: 

1.1 Technical
Support Services

Technical
Support Services, the foundation of the Airspan Support Services portfolio,
provides remote support for issues associated with the operation and maintenance
of Airspan products.
Technical
Support Services includes two levels of service:

 

	·  	
      Remote
      Technical Assistance

 

	·  	
      Emergency
      Recovery

 

Remote
Technical Assistance provides assistance to address network issues that are not
classified as emergency priority. Airspan will register and manage requests for
Technical Assistance during normal business days and business hours observed by
Airspan in the region where the service is being performed. 

Note:
Airspan classifies Technical Assistance case priorities as Business Critical,
Major, and Minor. Please refer to “1.1.6 Technical Support Case Priority
Classifications and Examples.”

Emergency
Recovery provides assistance to address emergency network issues. Airspan
will register and manage requests for Emergency Recovery 24 hours per day, seven
days per week including holidays observed by Airspan in the region where the
service is being performed.

Note:
Airspan classifies Emergency Recovery case priorities as E1 and E2. Please refer
to “1.1.6 Technical Support Case Priority Classifications and
Examples.”

2

 

Exhibit A
- Description of The Technical Assistance Support Services

Agreement
for the Provision of Technical Assistance Support Services for FWA Equipment
(December 2004) 

To
provide Remote Technical Assistance and Emergency Recovery, Airspan technicians
and engineers will provide support primarily by remote means. In a collaborative
effort with Axtel’s technical staff, these personnel will attempt to diagnose
and resolve issues related to the hardware, software, and/or documentation
supplied by Airspan as explained in this service description.

For both
Remote Technical Assistance and Emergency Recovery, where telephone support,
remote diagnosis, and all other means of restoring product operation have
failed, Airspan, upon Axtel’s request, and if Airspan determines that on-site
support is necessary and appropriate, will dispatch a trained and qualified
technical expert to Axtel’s premises to facilitate further
diagnosis.

	-  	
      Notwithstanding
      Airspan’ determination that on-site support is not necessary, Axtel will
      nevertheless have the right to require on site support from Airspan,
      provided
      that such on site support required by Axtel shall be at Axtel’s cost
      unless it is agreed that it was necessary for such support to be provided
      on site.

1.1.1 Technical
Assistance Deliverables

Resolution
activities, based on typical cases, may include: 

 

	·  	
      Remote
      Troubleshooting problems using diagnostic
utilities

 

	·  	
      Providing
      advice on how to detect and resolve hardware and network-related
      problems

 

	·  	
      Advising
      on issues requiring hardware replacement

 

	·  	
      Diagnosing
      issues related to Airspan products interfacing with non-Airspan
      products

 

Note:
Airspan will resolve the issue to the point of demonstrating that the problem is
attributable to the non-Airspan products and, under the coordination of Axtel, a
Airspan technician can be available to discuss the fault issue with the
appropriate vendor. 

 

	·  	
      Analyzing
      trace/log/dump/Operational Measurement (OM)
information

 

	·  	
      Remote
      telephone and/or email support to Airspan Second Level support (NTS) in
      troubleshooting, diagnosing and correcting failures by Airspan hardware
      and/or software to function as per the relevant Airspan product
      specifications in Axtel’s network.

 

	·  	
      Providing
      regular, on-going updates on case progress using an agreed-upon
      medium

 

	·  	
      Service
      Restoration and Resolution of the reported cases in accordance with
      Section 2.2.3 below of this Exhibit . 

 

1.1.2 Emergency
Recovery Deliverables

Airspan
Emergency Recovery teams respond to customer emergencies 24 hours a day, 365
days a year. Customer emergencies are cases that are classified as E1 or E2 in
accordance with Airspan Case Priority Classification. 

Note:
Please refer to “1.1.6 Technical Support Case Priority Classifications and
Examples.”

3

 

Exhibit A
- Description of The Technical Assistance Support Services

Agreement
for the Provision of Technical Assistance Support Services for FWA Equipment
(December 2004) 

 

Airspan
strives to immediately assign an engineer upon receipt of the call. Thereupon,
Airspan will provide continuous support as applicable until the service level is
restored to pre-incident operation. The Emergency Recovery team will be in
constant contact with Axtel throughout this case resolution activity, if
requested.

Note:
Please refer to “2.2 Call Center Access for Technical
Support.”

Following
service restoration, the E1/E2 case will be closed in agreement with Axtel and a
follow-up case (Major for E1 and Minor for E2) can be opened, if further
investigation or problem resolution activity is needed. Furthermore, Airspan
may, where applicable, conduct a root-cause analysis of the emergency incident,
which may be made available to Axtel.

1.1.3 Axtel
Responsibilities for Technical Support Services

For both
Technical Assistance and Emergency Recovery Axtel will be required
to:

 

	·  	
      Confirm
      that the products are installed, commissioned, used and maintained by
      knowledgeable and skilled people acting in
      accordance with
      the applicable product documentation from
Airspan

 

	·  	
      Replace
      hardware components during diagnosis or as remedial
    actions.

 

	·  	
      Generate
      performance/availability reports and associated trend
      analysis.

 

	·  	
      Gather
      data in a timely manner in support of Airspan’ diagnostic process when
      reasonably within the technical competency of
AXtel.

 

	·  	
      Identify
      issues requiring hardware replacement

 

	·  	
      If
      applicable, use all reasonable efforts to maintain hardware and software
      at the release or update level for supported hardware and software. This
      maintenance will need to be in accordance with policies and procedures
      published by Airspan. If Axtel is using a software version released prior
      to the then-current minimum supported version(s) and is therefore
      unsupported, then Axtel will need to upgrade to one of the then-current
      minimum supported versions in order to acquire rights to any known
      fix.

 

	·  	
      Perform
      software upgrades and/or patch applications, except for REM software
      upgrades unless otherwise agreed with
Airspan.

 

	·  	
      Except
      for those activities described in Exhibit D of this Agreement, acknowledge
      that any hardware / software upgrades / improvements or changes required
      to install or use a software fix, update, release, or any part thereof are
      charged separately from, and are in addition to, the charges of the
      current contract

 

	·  	
      Provide
      connectivity in a timely manner to the product(s) for Airspan to establish
      a data link for use by Airspan technical support group in order to conduct
      remote diagnosis and maintenance

 

Note:
Axtel and Airspan technical personnel will agree on the appropriate type of data
link based on network equipment and configuration as well as the appropriate
security measures to prevent unauthorized access. Axtel will be solely
responsible for security of the network. Airspan will not connect to Axtel’s
network without prior authorization and such connection will be solely to
provide technical support.

 

4

 

Exhibit A
- Description of The Technical Assistance Support Services

Agreement
for the Provision of Technical Assistance Support Services for FWA Equipment
(December 2004) 

 

	·  	
      Excuse
      Airspan from fault resolution for a period equal to such failure or delay,
      should Axtel fail or cause delay in providing
  connectivity

 

	·  	
      Designate
      and make available competent personnel to aid in problem diagnosis and
      provide electronic access to the affected product(s) to aid in problem
      investigation and resolution for all incidents. For E1/E2 Axtel personnel
      should be available to work together with Airspan technical expert
      throughout the process.

 

	·  	
      Axtel
      should provide their internal escalation process in order to inform all
      the contacts to Airspan.

 

	·  	
      Maintain
      a support agreement(s) with the third-party supplier(s) for such
      product(s), as Axtel sees fit.

 

	·  	
      Axtel’s
      in-house structure that performs first-line support will need to exhaust
      internal troubleshooting processes. First-level Operations,
      Administration, and Maintenance (OA&M) functions may include, but are
      not limited to: 

 

	-  	
      Performing
      day-to-day maintenance and network
operations

 

	-  	
      Monitoring
      network and system alarms

 

	-  	
      Performing
      diagnosis in accordance with instructions provided by Airspan and carrying
      out initial remedial actions, including remote
diagnosis

 

	-  	
      Operating
      and controlling Axtel’s internal help desk for logging and tracking fault
      inquiries, prioritizing events, and escalating, as required, to the
      Airspan technical support group

 

	-  	
      Providing
      local time templates and historical actions performed on each event as
      reference information to the Airspan technical support group
    .

 

1.1.4 Technical
Support Services Assumptions

For both
Technical Assistance and Emergency Recovery the following assumptions will
apply:

 

	·  	
      The
      Technical Support Services program covers all FWA Hardware and Software
      (except for Hardware under warranty) installed in Axtel’s network.
      

 

	·  	
      Airspan
      shall provide an annual product software release designed to enhance the
      functionality of the product and when appropriate it will include
      solutions to issues raised through the CNR process. The First Market
      Application of the annual product software release (including REM software
      upgrades) is further described in Exhibit D of this Agreement. The content
      of the 2003 annual release is described in Exhibit C to this Agreement.
      The content of subsequent years’ releases shall be agreed via the
      bi-monthly Product Enhancement Conferences and by the end of September of
      the previous year.

 

	·  	
      In
      the event that Axtel fails to comply with the requirements described in
      section 1.1.3 (Axtel Responsibilities for Technical Support), Airspan will
      advise Axtel of its non-compliance. Airspan and Axtel may then agree upon
      service to be provided at the then-current time-and-materials basis
      published by Airspan plus any travel and living expenses
      incurred.

 

	·  	
      Airspan,
      or a skilled, qualified third-party authorized by Airspan, will furnish
      this service.

 

5

 

Exhibit A
- Description of The Technical Assistance Support Services

Agreement
for the Provision of Technical Assistance Support Services for FWA Equipment
(December 2004) 

 

1.1.5 Technical
Support Services Exclusions

The
following exclusions will govern the delivery of both Technical Assistance and
Emergency Recovery:

	·  	
      Airspan
      is not responsible for products that have not been installed, commissioned
      or upgraded as per the applicable processes and
  procedures.

 

	·  	
      Airspan
      is not responsible for supporting non-Airspan supplied third-party
      product(s). Axtel
      will be responsible for maintaining support agreements with the
      OEM/third-party supplier for such
product(s).

 

	·  	
      Technical
      Support Services do not cover Airspan products not purchased from Airspan
      or from a Airspan authorized agent

 

	·  	
      Airspan
      will not be obliged to incorporate software corrections into software
      releases prior to the then-currently supported software release(s).
      Airspan reserves the right to incorporate software corrections into future
      software releases

 

	·  	
      Airspan
      support obligations are expressly conditional upon the products not being
      (i) subject to unusual mechanical stress or unusual electrical or
      environmental conditions; (ii) subject to misuse, accident or disaster
      including without limitation, fire, flood, water, wind, lightning or other
      acts of God; or (iii) altered or modified unless performed or authorized
      by Airspan

 

	·  	
      Airspan
      Products under Warranty are excluded from this Technical Support Services
      Pack. 

 

	·  	
      Products
      which have not been installed and commissioned by appropriately skilled
      and trained personnel using Airspan Procedures are excluded from this
      Technical Support Services Pack.

 

	·  	
      Technical
      Support Services will not be provided during installation and/or
      commissioning process.

 

1.1.6 Technical
Support Case Management

	·  	
      Airspan
      will measure the severity level of hardware or software incidents
      according to the following TL9000 Customer Severity classifications for
      Critical, Major, and Minor Hardware/Software problem reports. Only if it
      is not clear which severity level applies, then the severity level
      assigned by Axtel will be used. 

 

	·  	
      Airspan
      uses case priorities that correspond with the Customer Severity (TL9000)
      classifications. Notwithstanding the TL9000 Major Customer Severity
      definition, to provide increased focus on certain types of Major problems,
      Airspan uses additional case priority definitions: E2, Business Critical,
      and Major.

 

	·  	
      Airspan
      uses case priorities that correspond to the TL9000 Customer Severities as
      shown in the following table:

 

6

 

Exhibit A
- Description of The Technical Assistance Support Services

Agreement
for the Provision of Technical Assistance Support Services for FWA Equipment
(December 2004) 

 

 

	
      TL9000

      Customer
      Severity
	
      Airspan

      Case
      Priority

	
      Critical
	
      E1

	
      Major
	
      E2

	
      Business
      Critical

	
      Major

	
      Minor
	
      Minor

 

For more
detailed information about Technical Support Case Priority, Case Resolution
Objectives, Case Progress Status and Case Resolution Classification, please
refer to sections 2.2.3 to 2.2.7.

 

2.0 GENERAL

2.1 Holidays
Observed by Airspan

Please
refer to your local Airspan representative to get information of Local National
Holidays observed at
Customer’s location.

2.2 Call
Center Access for Technical Support

The
Airspan Call Center will function as a single point of contact for the receipt
of all support calls and inquiries. The remote support effort will begin with a
telephone call and will continue with the appropriate actions
to be taken according to Airspan Case Severity Classifications. 

The Call
Center will be available 24 hours a day, 365 days a year. General provisions for
accessing Technical Support services include:

 

	·  	
      Airspan
      may, where applicable, also provide a customer with the ability to open,
      view, and modify cases directly within the Airspan case-tracking system
      via .
      The customer will bear telecommunication facility charges and/or long
      distance toll charges with
      access to 

 

	   
      ·  	
      Where
      toll-free +access is not available, the customer will bear
      telecommunication facility charges and/or long distance toll charges for
      access to the Call Center 

 

	 ·  	
      All
      cases are logged into a Airspan case-tracking system. The case is
      time-stamped and a case reference number allocated. Furthermore, Airspan
      will request that the customer agree to a case priority level
    

 

	 ·  	
      E1
      and E2 priority cases are to be reported by telephone
  only

 

	·  	
      The
      Customer escalation of a case to higher levels of management within
      Airspan, shall be in accordance with the following escalation table:
      

 

“Airspan
Escalation Procedure”

7

 

Exhibit A
- Description of The Technical Assistance Support Services

Agreement
for the Provision of Technical Assistance Support Services for FWA Equipment
(December 2004) 

 

	 	
      Axtel’s
      NOC
	 
	 	 	 
	 	
      Call
      Center Airspan
	 
	 	 	 
	 	
      Airspan
      Technical Support Engineer
	 
	 	 	 
	 	
      Airspan
      Technical Support Manager.
	 
	 	 	 
	 	
      Airspan
      Technical Support Sr. Mgr.
	 
	 	 	 
	 	 	 
	
      Airspan
      Technical Support Director
	 	
      Airspan
      Customer Operation Leader

 

At
Closing Date, Airspan will provide Customer with the contact information of the
persons involved in this Escalation Procedures, as well from time to time, the
changes to such contact information will be provided to Customer.

2.2.1 Airspan
Technical Support Services Call Process 

When
calling Airspan for Technical Assistance or Emergency Recovery, the customer’s
representative will be asked to provide the following information:

 

	1.  	
      Company
      name 

 

	2.  	
      Caller
      name and phone number

 

	3.  	
      Personal
      Identification Number (PIN) or a unique Customer Purchase Order number or
      credit card number, if a PIN has not been
issued.

 

	4.  	
      Site
      Location/Site ID

 

	5.  	
      Product
      on which the problem is being reported

 

	6.  	
      Problem
      description and severity

 

A Call
Center agent will generate a Case Reference Number (CRN), which will be provided
to the customer for
tracking the case. Airspan technician will then team with the customer’s
representative to resolve the reported issue.

8

 

Exhibit A
- Description of The Technical Assistance Support Services

Agreement
for the Provision of Technical Assistance Support Services for FWA Equipment
(December 2004) 

 

	2.2.2  	
      Call
      Center Phone Numbers

Customer
sites in Latin America will access the Airspan technical support organizations
by calling:

 

Tel: +
(1) 561
893-8679

 

Available
24 hours a day, 365 days a year

email:
from the
Airspan Web Site :://www.airspan.com/Ultra/ContactForm/supportform.asp

 

2.2.3 Technical
Support Response Times

Once
Axtel has opened a CRN at the Airspan’ Call Center and depending on the Severity
Classification, a Airspan Technical Support (NTS) Engineer will contact the
Axtel’s representative as per the terms set forth in Table 2.2.3 below :

 

“Table
2.2.3”

 

	
      TL9000
      Severity Classification
	
      Actions
	
       

      Response
      Times 
	
       

      Target
      Service restoration time
	
      Resolution
      Targets

      Based
      on RQMS*

	
      Business
      Hours
	
      Non
      - Business Hours

	
      E1
      (*1)
	
      Worked
      continuously (7 x 24) until resolution or workaround is
      provided
	15
      min 
	30
      min
	
      7
      Hr
	24
      hr

	
      E2
      (*1)
	
      Worked
      continuously (7 x 24) until resolution or workaround is
      provided
	15
      min
	30
      min 
	
      8
      Hr
	10
      Days 

	
      Business
      Critical and Major (*2)
	
      Worked
      during normal business days and business hours. 
	 

      2
      hrs
	Next
      Business 

      Day
	
      24
      Hr
	30
      Days 

	
      Minor
      (*2)
	
      Worked
      during normal business days and business hours.
	Next
      Business Day 
	Next
      Business Day 
	
      30
      Days
	180
      days

 

(*1) This
Service is provided 7 x 24

 

(*2) This
Service is provided in Normal Business Hours

 

Note: The
times set forth in Table
2 - R above,
are subject to Airspan and Customer working together in conjunction on a
reasonable efforts basis to find a workaround for services restoration and
resolution within the target times. These times do not represent an obligation
or performance indicator. 

 

* RQMS -
Reliability
and Quality Measurements for Telecommunications Systems.

2.2.4 Technical
Support Case Priority

 

9

 

Exhibit A
- Description of The Technical Assistance Support Services

Agreement
for the Provision of Technical Assistance Support Services for FWA Equipment
(December 2004) 

 

Problem
reports will be classified as set forth in the tables below:

 

	
      TL9000
      Severity
      Classification 
	 	
      Airspan
      Case Priority & Definition
	 	
      Examples

	 	 	 	 	 
	
      Critical
	 	
      E1
	 	
      » Total
      or partial network element outage 

	 	 	
      Problems
      that severely affect service, and require  or  
	 	
      » A
      reduction in capacity or traffic handling capability such that expected
      loads cannot be handled

	 	 	day of the week
      capacity/traffic, billing and 	 	
      »
      Failure resulting in dynamic routing, switching capability or transport
      loss 

	 	 	maintenance
      capabilities immediate corrective  	 	
      »
      Any loss of safety or emergency capability (e.g., emergency calls such as
      911 in North America) 

	 	 	action, regardless of time of
day	 	
      »
      Loss of the system’s ability to perform automatic system
      reconfiguration 

	 	 	 	 	
      »
      Inability to restart the system 

	 	 	 	 	
      »
      Loss of billing/accounting capability 

	 	 	 	 	
      »
      Corruption of billing or system databases that requires service affecting
      corrective actions 

 

Other
problems that severely affect service, capacity/traffic, billing, and
maintenance capabilities or are jointly viewed by Airspan and the customer as
critical

	
      TL9000
      Severity Classification 
	 	
      Airspan
      Case Priority & Definition
	 	
      Examples

	 	 	 	 	 
	
      Major
	 	
      E2
	 	
      »
      Loss of redundancy of critical functions 

	 	 	Problems that result in
      potential service 	 	
      »
      Loss of protection switching capability

	 	 	degradation and/or
      total outage. Serious situation not involving service degradation
      in   	 	
      »
      Short outages equivalent to system or subsystem outages not seriously
      impacting service with accumulated duration of
   greater
      than two minutes in any 24-hour period, or that continue to repeat during
      longer periods 

	 	 	a live environment, but leading to a total or 	 	
      » A
      reduction in provisioned capacity of 5% and for a cumulative duration of
      more than 10 minutes per 24 hours 

	 	 	partial loss of
      redundancy. 	 	
      »
      Repeated degradation of DS1/E1 or higher rate spans or
      connections 

	 	 	 	 	
      »
      Loss of system’s ability to perform automatic system
      reconfiguration 

	 	 	 	 	
      »
      Loss of system’s ability to perform automatic system
      reconfiguration 

	 	 	 	 	
      »
      Loss of access to maintenance or recovery
  operations 

	 	 	 	 	
      »
      Any loss of functional visibility and/or diagnostic
      capability 

	 	 	 	 	
      »
      Loss of system’s ability to provide any required system critical/major
      alarms 

	 	 	 	 	» Total loss of access to
      provisioning 

 

 

10

 

Exhibit A
- Description of The Technical Assistance Support Services

Agreement
for the Provision of Technical Assistance Support Services for FWA Equipment
(December 2004) 

 

	
      TL9000
      Severity Classification 
	 	
      Airspan
      Case Priority & Definition
	 	
      Examples

	 	 	 	 	 
	
      Major
	 	
      Business
      Critical
	 	
      »
      The customer has been given a work-around but the situation still requires
      constant attention due to the temporary 
   nature of the
      work-around 

	 	 	
      Problems
      that result in a major degradation of system or service 
	 	
      »
      Software application/migration issues that gate the introduction of new
      services or functionality

	 	 	performance that
      impacts service quality or significantly impairs 	 	
      »
      Billing error rates that exceed specifications 

	 	 	network operator
      control or operational effectiveness. Overall network 	 	» Corruption of system or billing
      databases 
	 	 	is degraded resulting
      in severe limitations to operations or network management software product
      has major feature that is not working properly with only difficult
      workaround.    	 	 

 

 

	
      TL9000
      Severity Classification 
	 	
      Airspan
      Case Priority & Definition
	 	
      Examples

	 	 	 	 	 
	
      Major
	 	
      Major
	 	
      »
      Degradation of any capacity/traffic measurement function; degradation of
      functional visibility and/or diagnostic capability

	 	 	
      Problems
      that result in conditions that seriously 
	 	
      »
      Degradation of access for maintenance or recovery
    operations

	 	 	affect system
      operation, maintenance and 	 	
      »
      Degradation of the system’s ability to provide any required system
      critical/major alarms 

	 	 	administration, etc.
      and require immediate 	 	
      »
      Loss of access for routine administrative
activity 

	 	 	attention. The urgency
      is less than in a   	 	
      »
      Any system failure without direct immediate
impact 

	 	 	Business Critical
      situation because of a lesser  	 	
      »
      Intermittent degradation of services; partial loss of access to
      provisioning 

	 	 	immediate or impending
      effect on system   	 	
      »
      Software application/migration issues that do not impact
      service 

	 	 	performance, customers,
      and the customer’s  	 	
      »
      Reduction in any capacity/traffic measurement
    function 

	 	 	operation and
      revenue.  	 	
      »
      Any loss of functional visibility and/or diagnostic
      capability 

	 	 	 	 	
      »
      Any significant increase in product-related customer trouble
      reports 

	 	 	 	 	
      »
      Follow-up to E1 customer problems 

	 	 	 	 	
      »
      Other problems that disrupt or prevent routine system activities, or
      problems that are jointly viewed as Major events by 
  
      Airspan and the customer 

 

11

 

Exhibit A
- Description of The Technical Assistance Support Services

Agreement
for the Provision of Technical Assistance Support Services for FWA Equipment
(December 2004) 

 

	
      TL9000
      Severity Classification 
	 	
      Airspan
      Case Priority & Definition
	 	
      Examples

	 	 	 	 	 
	
      Minor
	 	
      Minor
	 	
      »
      Service analysis, recorded announcements, operational measurements,
      maintenance program, or network management
   problems; or
      system-related documentation inaccuracies, that do not affect call
      processing 

	 	 	
      Problems
      do not significantly impair the 
	 	
      »
      Test equipment failures for which a backup or manual alternative can be
      employed 

	 	 	functioning of 
      the system and do not 	 	» Circuit pack testing
      problems 
	 	 	significantly affect
      service to customers. These problems are tolerable during system
      use.    	 	 

2.2.5 Case
Resolution Objectives

 

Airspan
Technical Support case resolution targets are based in Airspan best efforts and
set according to the following TL9000 standard. The Case Resolution Objectives
are described in Table 2.2.3 above. 

 

2.2.6 Case
Progress Status

Airspan
Technical Support use the following status to differentiate the case conditions
during the evolution of the case investigation. A set of status, its related
meaning and its relationship with the case age, are defined in the table
below:

 

	
       

      Status
	 	
       

      Description
	 	
       

      Airspan
      Clock

	Newly
      Opened
	 	
      This
      status is the default. It signifies that no work has been done on the
      case.
	 	Start

	WIP
      Level 1
	 	
      This
      status is used when a NTS Engineer is actively working on the
      Case.
	 	Not
      Stopped

	WIP
      Level 2
	 	
      This
      status is used when a Second Level Support Engineer is actively working a
      case

      *
      Second Level Support: Software Support, Product Support.
	 	Not
      Stopped

	Escalated
      To Design
	 	
      This
      status is used when a Design Engineer is actively working on the
      case
	 	Not
      Stopped

	Answer
      From Design
	 	
      Design
      Engineer has concluded its investigation and has replied back to the NTS
      Engineer
	 	Not
      Stopped

	With
      A Customer
	 	
      During
      the course of conducting their research, the NTS Engineer may need
      additional information or activity from the Customer. The "With a
      Customer” status is assigned when the NTS Engineer is waiting on a
      Customer response in order to continue investigation
	 	Stopped

 

 

12

 

Exhibit A
- Description of The Technical Assistance Support Services

Agreement
for the Provision of Technical Assistance Support Services for FWA Equipment
(December 2004) 

 

	
       

      Status
	 	
       

      Description
	 	
       

      Airspan
      Clock

	Interim
      Solution
	 	
       

      If
      a temporary solution is provided that eliminates the customers pain until
      a permanent solution can be delivered, RQMS requirements allow the case to
      be set to an “IS” status during this window of time if approved by the
      Customer. In calculating case age, this interval will be discounted if the
      permanent fix was delivered on the negotiated commitment date. If the
      permanent fix does not resolve the reported problem, case status shall be
      changed to Work in Progress (Level 1 or 2). If the case is returned to a
      Work in Progress (Level 1 or 2) status after using the IS, the IS time
      period will be added to the RQMS age of the case.
	 	Stopped

	Future
      Deliverable
	 	
      Customer
      agrees to live with the problem condition and that the fix will be
      delivered as part of a future Airspan product release (software release,
      maintenance release, documentation release or hardware revision.
      Requirements to use this status include Customer consent; fix
      identification, and delivery commitment. This status code does not add
      time to the RQMS age of the case unless the solution fails and the case is
      moved back to Work in Progress (Level 1 or 2) status. If the case is
      returned to a Work in Progress (Level 1 or 2) status after using the FD,
      the FD time period will be added to the RQMS age of the
    case.
	 	Stopped

	Solution
      Delivered
	 	
      Solution
      Delivered or available for testing and verification. If the delivered
      solution does not resolve the reported problem, the status will be changed
      to Work in Progress (Level 1 or 2). If the case is returned to a Work in
      Progress (Level 1 or 2) status after using the SD status, the SD time
      period will be added to the RQMS age of the case.
	 	Stopped

	Pending
      OEM Vendor
	 	
      The
      case has been handed over to an OEM Vendor for resolution
	 	Not
      Stopped

 

2.2.7 Case
Resolutions Classifications

Airspan
Technical Support case resolutions: which shall be mutually agreed for each
case: 

 

	·  	
      Cannot
      Reproduce:
      After 60 days and a reasonable effort, a problem has not been observed in
      the Network, is not reproducible or sufficient information has not been
      provided to adequately troubleshoot the problem and isolate the root
      cause

 

	·  	
      Customer
      Process:
      Human errors are present or the customer has failed to follow procedures
      recommended and documented by Airspan

 

	·  	
      Design
      Intent:
      The functionality required by customer does not align with the design
      specifications of the product set forth in Agreement, in which case
      Airspan shall make clear to Axtel which is such design specification
      (i.e., the functionality is unsupported), and the issue can only be
      resolved through new development efforts subject to a separate product
      development agreement and charges.

 

	·  	
      External
      Cause:
      Issue caused by non-Airspan products

 

	·  	
      Hardware
      Deficiency: A
      problem is isolated to defective
      hardware materials or workmanship or substantial nonconformance to
      specifications published by Airspan 

 

	·  	
      Hardware
      Failure: A
      problem is caused by a hardware component failure that falls within Mean
      Time Between Failure (MTBF) limitations

 

13

 

Exhibit A
- Description of The Technical Assistance Support Services

Agreement
for the Provision of Technical Assistance Support Services for FWA Equipment
(December 2004) 

 

	·  	
      Airspan
      Literature:
      Required Airspan technical document does not exist or the contents of an
      existing document are in error [for example, an incomplete Airspan
      Technical Publication (NTP)]

 

	·  	
      Airspan
      Process: A
      problem occurs as a result of a Airspan process
  deficiency

 

	·  	
      Opened
      in Error:
      The case should not have been opened

 

	·  	
      Scheduled
      Event:
      An outage occurs resulting from planned maintenance, installation, or
      manual initialization, including such activities as parameter loads,
      software/firmware changes, and other OA&M
activities

 

	·  	
      Software
      Deficiency: A
      problem is isolated to a software design deficiency.

 

	2.3  	
      Airspan
      Conditions for Services Provided Outside of the Scope of this Technical
      Support Services Pack

If a
customer requests a service that is neither part of the scope of the Technical
Support Service nor within the control or responsibility of Airspan and if
Airspan agrees to perform the service, then Airspan will charge customer at the
per-occurrence rate schedule to perform such services as published by Airspan.

On
Site/Remote Technical Assistance & On Site/Remote Emergency Recovery Out of
Scope Services may be provided on a per-occurrence
basis only when:

 

	·  	
      Support
      is needed for efforts not covered under a contract support program (such
      as the one proposed herein)

 

Note:
Axtel must
have a Airspan Support Contract in place, as the one proposed herein, to be able
to request any Per-Occurrence Support Services. It is not intended to offer the
Per-Occurrence Support Services separately from a Airspan Support
Contract.

Technical
Support Out of
Scope situations
can include

 

	·  	
      On-site
      visits to a customer’s system sites, when the visit is at the request of
      the customer but is not deemed necessary by Airspan. This includes site
      visits requested by the customer for support when resolution could have
      otherwise been achieved from a remote location. This is subject to the
      terms set forth in Section 1.1 above. 

 

	·  	
      Requests
      to investigate issues pertaining to software features that are either
      outside the functionality as defined in the Airspan Technical Publications
      (NTPs) or are outside standards supported by
Airspan

 

Note:
Airspan periodically reviews the deployment of its products based on technology,
market deployment, and support requirements. Airspan then nominates products
that would no longer be supported as of a specified date and changes the status
to “nominated EOL.” Airspan will notify customers of EOL product intentions well
in advance through the distribution of Product Portfolio Simplification/Product
Service Information (PSI) bulletins as well as Airspan Feature Planning
Guides.

 

	·  	
      Assistance
      in set-up and usage of Operational Measurements
(OMs)

 

	·  	
      System
      performance assessment

 

	·  	
      Training
      on product hardware maintenance

 

14

 

Exhibit A
- Description of The Technical Assistance Support Services

Agreement
for the Provision of Technical Assistance Support Services for FWA Equipment
(December 2004) 

 

	·  	
      Training
      on general office operations/maintenance
procedures

 

	·  	
      Training
      on test equipment and troubleshooting
procedures

 

	2.3.1  	
      Per-Occurrence
      Repair Services

 

Airspan
Networks will register and manage requests for Return and Replace service during
Airspan’ normal business days and hours in the location where the service is
being performed. 

Upon
receiving Axtel’s request, Airspan will allocate a part request number (also
known as a Return Material Authorization number) to each FRU to be replaced and
will notify Axtel in writing of the relevant part request number.

Following
allocation of the part request number(s) Airspan will repair or replace the unit
and will deliver the repaired unit or an equivalent to Axtel within 60 days of
receipt by Airspan at the place where the repair or replacement is carried out
(the “R&R
Time Limit”).

On-site
repair and on-site replacement services by Airspan are not included with the
Return and Replace Service.

1.2.1 Like
for Like Replacement

Airspan,
at its own cost and expense, shall provide within 60 days after the Effective
Date of this Agreement and maintain in Axtel warehouses to be notified to
Airspan in writing the following amount of Products (the “Stock
Products”):
1  The
amount of Stock Products set forth in this Exhibit B is the same amount set
forth in Annex G of the FWA PLA therefore, Airspan is obligated under both
agreements to deliver only this amount no twice of such amount, provided that,
any delays in the repair and return, either under the FWA PLA and/or under this
agreement, shall increase the Stock Products as provided under such
agreements.

	
      Ref
	
      Part
      Number
	
      Description
	
      Quantities

	 	 	 	 
	
      1
	
      NTEG72AD
	
      TBM
	
      16

	
      2
	
      NTEG77EC
	
      TMU
	
      16

	
      3
	
      NTED4575
	
      TPM
	
      8

	
      4
	
      NTEG63AA
	
      TTM
	
      8

	
      5
	
      NTEG73AA
	
      NMM
	
      4

	
      6
	
      NTEG74BA
	
      OVPM
	
      12

	
      7
	
      NTEG71HA
	
      TPM-PD
	
      12

These
Stock Products shall be kept by Axtel in its own facilities in México and Axtel
shall manage such Stock Products at its sole discretion to create a replacement
process for damaged parts as a “Like for Like” replacement process.

The
Parties hereby agree that Airspan shall be obligated to increase the Stock
Products by one piece of the respective part number, if Airspan is more than
five (5) days late under section 1.2 of Part Two above, in the repair and return
of such part (this shall be accounted by pieces).

 

1 The
amount of Stock Products set forth in this Exhibit B is the same amount set
forth in Annex G of the FWA PLA therefore, Airspan is obligated under both
agreements to deliver only this amount no twice of such amount, provided that,
any delays in the repair and return, either under the FWA PLA and/or under this
agreement, shall increase the Stock Products as provided under such
agreements.

 

15

 

Exhibit A
- Description of The Technical Assistance Support
Services

Agreement
for the Provision of Technical Assistance Support Services for FWA Equipment
(December 2004)

 
1.2.2 Axtel
Responsibilities for Return and Replace Services

Axtel
will be required to:

 

	·  	
      Pay
      the expense of shipping a defective FRU to Airspan’s warehouse or logistic
      center defined for this purposes.

 

	·  	
      Use
      the specifically-assigned part request number(s) provided by Airspan and
      include completed Airspan Fault Report Forms when returning any
      FRU

 

	·  	
      Adhere
      to Airspan’ packing instructions (including anti-static precautions) when
      returning the defective unit. The packing instructions will be included
      with the return instructions accompanying the replacement
    FRU

 

	·  	
      Put
      the replacement FRU into service once it has been returned by Airspan to
      Axtel.

 

	·  	
      As
      a separate and additional charge, each Base Station item returned for
      repair will be charged individually. Invoicing at the beginning of each
      month for units delivered to Airspan for repair during the previous
      month.

 

	·  	
      The
      Individual Base Station element return & repair included
      are:

 

	-  	
      TPM
      

 

	-  	
      TTM
      

 

	-  	
      TBM
      

 

	-  	
      NMM
      

 

	-  	
      TMU
      

 

	-  	
      OVPM

 

	·  	
      As
      a separate and additional charge, an RTU Repair & Return service will
      be offered through one of two options. Axtel will elect one of these two
      options by the Closing Date for the year 2003 and by December
      15th of
      the prior year for each year thereafter. Both options are detailed in the
      Price Summary (Exhibit “A”).

 

	·  	
      Airspan
      repair cases resulting in “no fault found” to be charged at 50 % of the
      Airspan’ full repair rates. Axtel will pay the handling fee of units
      determined by Airspan to be beyond economic repair. Return and repair
      turnaround time shall be 60 days. 

 

	·  	
      Airspan
      will not provide a hardware emergency replacement
  service.

 

	2.3.2  	
      Axtel
      Order Process for FWA Repair
Services

 

16

 

Exhibit A
- Description of The Technical Assistance Support
Services

Agreement
for the Provision of Technical Assistance Support Services for FWA Equipment
(December 2004)

 

This
process supports the delivery of Airspan FWA Repair Services for
AXtel.

Customers
of Airspan who request a hardware repair service should have the
following required information ready when placing a repair order with
Airspan:

 

	1.  	
      Customer
      or distributor name

	2.  	
      Customer
      ID (Project #, Site ID)

	3.  	
      Requestor
      name, phone and fax number, and e-mail
address 

	 4.  	
      Customer
      ship to address 

	5.  	
      Part
      number (PEC or CPC or manufacturer’s part
number)

	6.  	
      Quantity
      (quantity of one per serial number)

	7.  	
      Serial
      number of the defective part(s) being returned (if
    applicable)

	8.  	
      Warranty
      status

	9.  	
      Confirmation
      of the availability of a fully completed Airspan fault report form for
      said product.

	10.  	
      Any
      additional information about product (system type or software
      release)

	11.  	
      Any
      special shipping instructions

Upon
receiving the customer’s request and after any diagnostics assistance, Airspan
will allocate a part request number to each FRU to be repaired and notify the
customer of the relevant part request number.

This part
request number, also known as the Return Material Authorization (RMA) number, is
critical for tracking individual orders and must be referenced on failure tags,
shipping/packing lists, returned defectives, and any correspondence or inquiries
concerning the order. 

The
customer’s representative can call in, fax or e-mail a Repair Service order
directly to Airspan the UK using the following contact means:

 

Office
hours (Monday through Friday from 9:00 a.m. to 6:00 p.m. (Local time)
+
44-1895-467397

 

Faxes

All faxed
orders will be processed and assigned an RMA# by the close of the next business
day. 

To obtain
a parts request form by e-mail, please send an e-mail message to any of the
above addresses and note “repair order form” in the subject/title field. A form
will be sent automatically.

Place the
PO number in the subject/title field when e-mailing a completed parts request
form back to Airspan. For order confirmation, Airspan will respond with an RMA
number to all e-mail orders by the next business day.

 

2.3.3.
 Package
Labeling Instructions and Addresses for Returns

 

17

 

Exhibit A
- Description of The Technical Assistance Support
Services

Agreement
for the Provision of Technical Assistance Support Services for FWA Equipment
(December 2004) 

 

Circuit
packs should be packed in anti-static containers designed specifically for the
circuit packs in order to avoid damage during shipment. Other parts should be
individually wrapped in either anti-static packaging or packaging specifically
designed for that product to avoid damage during shipment. Airspan will inform
customers of any improper packaging, which will void the warranty.

 

All
materials should be returned pre-paid and sent to the appropriate Airspan repair
facility. The customer should use discretion in selecting shipping methods.
Airspan recommends that customers insure all packages to cover possible loss or
damage during shipping, regardless of warranty status.

 

A
completed Airspan fault report must be filled out and attached to each returned
item to assist in failure assessment and problem tracking. Fault reports are
sent with each replacement shipment. Customers can obtain additional supplies by
contacting the Airspan Customer Support Center. 

 

Airspan
will inform customers of any discrepancy in return shipments. Any discrepancy,
whether it is quantity (more or less), product returned not matching what was
ordered, inability to determine complete order information, or non-suitable
packaging, would be noted and addressed. 

In the
case of Product replaced at Airspan discretion, and which would be returned with
a different Serial Number to Axtel, the proper documentation shall be provided
by Airspan for Axtel’s asset controls to evidence which serial number is
replaced.

Defective
Return Packing Slips

Defective
return packing slips should be used to return all defective parts to
Airspan. Airspan
will provide defective return packing slips for use to return shipments. A copy
of the defective return packing slip should be placed in all the cartons and
attached outside. This duplication will aid in processes and proper
identification of returned material. The RMA number and the PO number should be
clearly marked on the outside of each box. If a customer supplies a packing
slip, the following information must be included on the shipping/packing list
for proper handling:

Item
(Information Required)

	1.  	
      From
      (Company name, return address, and telephone
number)

	2.  	
      Ship
      Date (Date parts are shipped from the
customer)

	3.  	
      Ship
      via (Carrier or Enterprise name)

	4.  	
      Waybill
      number (Carrier or Enterprise tracking
number

	5.  	
      Number
      of Cartons (Number of cartons being sent on
shipment)

	6.  	
      Customer’s
      PO# (Provided, if applicable)

	7.  	
      Repair
      order number (RMA# issued by Call Center when order is
    placed)

	8.  	
      Site
      ID or Project number 

	9.  	
      Item
      Number

	10.  	
      Quantity
      ordered

	11.  	
      Quantity
      returned

	12.  	
      Airspan
      Part number

	13.  	
      Description
      of item

	14.  	
      Serial
      number (The serial number for each item in the
shipment)

	15.  	
      Shipment
      requested by (Signature of the customer’s
  representative)

 

Repair
Facility Addresses

RSS’s
equipment should be sent to Solectron Guedalajara and for Base Stations to
Solectron Dumfermline

Attn:
Airspan Hardware Support Representative

62530.000002
MIAMI 273757v1
This
address may be modified from time to time by Airspan.

18NEXMED,
INC.

AGREEMENT
EVIDENCING THE GRANT OF A 

NON-QUALIFIED
STOCK OPTION UNDER THE 

NEXMED,
INC. RECOGNITION AND RETENTION 

STOCK
INCENTIVE PLAN TO _______________

Agreement
(this "Agreement") effective as of November 1, 2004 (the "Grant Date"), between
NexMed, Inc., a Nevada corporation (the "Company"), and _________
("Grantee").

1.
  Grant
of Option. Pursuant
to the NexMed, Inc. Recognition and Retention Stock Incentive Plan (the "Plan"),
the Company hereby grants to Grantee, as of the Grant Date, a non-qualified
stock option (the "Option"), to purchase an aggregate of ______
shares (the
"Option Shares") of Common Stock of the Company (the "Common Stock") at a price
of $_____ per share subject to adjustment and the other terms and conditions set
forth herein and in the Plan.

2.  Grantee
Bound by Plan. Enclosed
is a copy of the Plan, which is incorporated herein by reference and made a part
hereof. The Plan shall govern all aspects of this Agreement except as otherwise
specifically stated herein. Grantee hereby acknowledges receipt of a copy of the
Plan and agrees to be bound by all the terms and provisions thereof. Unless
otherwise defined herein, capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Plan. The Plan should be carefully
examined before any decision is made to exercise this Option.

3.  Exercise
of Option. (a)
Vesting. Subject
to the earlier termination of the Option as provided herein and in the Plan, the
Option may be exercised, by written notice to the Company at any time and from
time to time after the Grant Date, but, except as otherwise provided below, such
Option shall not be exercisable for more than the number of Option Shares which
are then vested. This Option shall vest in _______ installments as
follows:

(i)  ___% of
the Stock Option Shares (which represents _______ Stock Option Shares) shall
vest immediately;

(ii)  ___% of
the Stock Option Shares (which represents _______ Stock Option Shares) shall
vest on the date of the ____ Annual Meeting of Shareholders.

(b) Early
Expiration of Option. (i)
Upon the termination of the Grantee's service with the Company (including any
subsidiary thereof) for any reason, including death, any portion of the Option
granted hereunder that is not vested and exercisable on the date of such
termination shall automatically expire and be forfeited as of such date and the
vested portion of the Option shall expire in accordance with subsections (ii)
and (iii) of Section 3(b), or, in the event of the Grantee's death, Section 5,
as applicable;

1

(ii) In
the event that the Grantee's service with the Company (including any subsidiary
thereof) is terminated for Cause, the Grantee shall automatically forfeit his
right to exercise any portion of the Option granted hereunder which shall
automatically be cancelled effective on the date of such
termination.

 

(iii) If,
however, the Grantee's service is terminated for any reason other than for
Cause, any portion of the Option granted hereunder that is vested but has not
been exercised as of the date of such termination shall automatically expire, if
not exercised, on the ninetieth (90th) day
following Grantee’s termination of service with the Company, provided, however,
that if the Grantee’s service terminates due to his retirement or permanent
disability, the portion of the Option that is vested but has not been exercised
as of the date of the Grantee’s termination of service due to retirement or
permanent disability shall remain exercisable, subject to the terms and
conditions of Section 3 (c) of this Agreement, for a period of one year
following the date of the Grantee’s termination of service with the Company.

(c)  Normal
Expiration of Option. This
Option shall not be exercisable after the tenth anniversary of the Grant Date.
This Option may not be exercised for a fraction of a share of Common Stock.
Unvested Options are subject to cancellation as provided in the
Plan.

 

(d)  Accelerated
Vesting. All of
the Grantee's outstanding but unvested stock options shall vest immediately upon
the occurrence of a Change in Control (as defined in Appendix A
hereto).

4.  Conditions
to Exercise. This
Option may not be exercised by Grantee unless the following conditions are
met:

(a)
Securities
Requirements. Legal
counsel for the Company must be satisfied at the time of exercise that the
issuance of Option Shares upon exercise will be in compliance with the
Securities Act of 1933, as amended (the "Securities Act") and applicable United
States federal, state, local and foreign laws; and

 

(b) Payment
of Exercise Price. At the
time of exercise of all or any portion of the Option, the Grantee must pay the
full purchase price for the Option Shares being purchased hereunder (i) in cash
(or by certified check) or (ii) by delivery of shares of Common Stock previously
acquired by the Grantee or (iii) through a combination of option (i) and (ii).
Details with respect to the methods for exercise, payment and delivery of Option
Shares, including requirements for the payment of withholding taxes applicable
thereto are as set forth in the Plan.

5.  Transferability. This
Option may not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of by Grantee, except by will or the laws of descent and
distribution (in which case, such transferee shall succeed to the rights and
obligations of Grantee hereunder). During Grantee's lifetime, the Option shall
only be exercisable by Grantee. If Grantee or anyone claiming under or through
Grantee attempts to violate this Section 5, such attempted violation shall be
null and void and without effect, and the Company's obligation hereunder shall
terminate. If at the time of Grantee's death this Option has not been fully
exercised, Grantee's estate or any person who acquires the right to exercise
this Option by bequest or inheritance or by reason of Grantee's death may, at
any time within one year after the date of Grantee's death (but in no event
after the expiration of two years from the Grant Date), exercise this Option
with respect to the number of shares, determined under Section 3 above, as to
which Grantee could have exercised the Option at the time of Grantee's death.
The applicable requirements of Section 4 above must be satisfied in full at the
time of such exercise.

2

6.  Administration. Any
action taken or decision made by the Company, the Board or the Committee or its
delegates arising out of or in connection with the construction, administration,
interpretation or effect of the Plan or this Agreement shall lie within its sole
and absolute discretion, as the case may be, and shall be final, conclusive and
binding on Grantee and all persons claiming under or through Grantee. By
accepting this grant or other benefit under the Plan, Grantee and each person
claiming under or through Grantee shall be conclusively deemed to have indicated
acceptance and ratification of, and consent to, any action taken under the Plan
by the Company, the Board or the Committee or its delegates.

7.  No
Rights as Stockholder. Unless
and until a certificate or certificates representing shares of Common Sock shall
have been issued to Grantee (or any person acting under Section 5 above),
Grantee shall not be or have any of the rights or privileges of a stockholder of
the Company with respect to shares of Common Stock acquirable upon exercise of
the Option.

8.  Investment
Representation. Grantee
hereby acknowledges that the shares of Common Stock which Grantee may acquire by
exercising the Option shall be acquired for investment without a view to
distribution, within the meaning of the Securities Act, and shall not be sold,
transferred, assigned, pledged or hypothecated in the absence of an effective
registration statement for the shares of Common Stock under the Securities Act
and applicable state securities laws or an applicable exemption from the
registration requirements of the Securities Act and any applicable state
securities laws. Grantee also agrees that the shares of Common Stock which
Grantee may acquire by exercising the Option will not be sold or otherwise
disposed of in any manner which would constitute a violation of any applicable
securities laws, whether federal or state.

9.  Listing
and Registration of Common Stock. The
Company, in its discretion, may postpone the issuance and/or delivery of shares
of Common Stock upon an exercise of this Option until registration, or other
qualification of such shares under any state and/or federal law, rule or
regulation as the Company may reasonably in good faith consider
appropriate.

10.  Notices. Any
notice hereunder to the Company shall be addressed to the Company, NexMed, Inc.,
350 Corporate Blvd., Robbinsville, NJ 08691, Attention: Secretary, and any
notice hereunder to Grantee shall be addressed to Grantee at Grantee's last
address on the records of the Company, subject to the right of either party to
designate at any time hereafter in writing some other address. Any notice shall
be deemed to have been duly given when delivered personally, one day following
dispatch if sent by reputable overnight courier, fees prepaid, or three days
following mailing if sent by registered mail, return receipt requested, postage
prepaid and addressed as set forth above.

3

11.  Binding
Effect. This
Agreement shall be binding upon and inure to the benefit of any successors to
the Company and all persons lawfully claiming under Grantee.

12.  Governing
Law. The
validity, construction, interpretation administration and effect of the Plan,
and of its rules and regulations, and rights relating to the Plan and to this
Agreement, shall be governed by the substantive laws, but not the choice of law
rules, of the State of Nevada.

IN
WITNESS WHEREOF, the Company and the Grantee have executed this Agreement as of
the date first above written.

	 	NexMed,
      Inc.
      

      

      

      ______________________

 

4

GRANTEE
ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE NEXMED, INC.
RECOGNITION AND RETENTION STOCK INCENTIVE PLAN WHICH IS INCORPORATED HEREIN BY
REFERENCE, SHALL CONFER UPON GRANTEE ANY RIGHT WITH RESPECT TO CONTINUATION OF
SERVICE BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH GRANTEE’S RIGHT
OR THE COMPANY’S RIGHT TO TERMINATE SERVICE AT ANY TIME, WITH OR WITHOUT
CAUSE.

 

Grantee
acknowledges receipt of a copy of the Plan and represents that he is familiar
with the terms and provisions thereof, and hereby accepts this Option subject to
all of the terms and provisions of the Plan thereof except as otherwise
specifically stated in this Option Agreement. Grantee has reviewed the Plan and
this Option Agreement in this entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Option Agreement and fully understands
all provisions of this Option Agreement. Grantee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Board upon
any questions arising under the Plan.

	 	GRANTEE

      

      

      

      ______________________

 

 

5

 

Appendix
A

Change
in Control

For the
purpose of this Agreement, a "Change in Control" shall be deemed to have taken
place if: 

A. Individuals
who, on the date hereof, constitute the Board (the "Incumbent Directors") cease
for any reason to constitute at least a majority of the Board, provided that any
person becoming a director subsequent to the date hereof, whose election or
nomination for election was approved by a vote of at least two-thirds of the
Incumbent Directors then on the Board (either by a specific vote or by approval
of the proxy statement of the Company in which such person is named as a nominee
for director, without written objection to such nomination) shall be an
Incumbent Director; provided,
however,
that, no
individual initially elected or nominated as a director of the Company as a
result of an actual or threatened election contest with respect to directors or
as a result of any other actual or threatened solicitation of proxies or
consents by or on behalf of any person other than the Board shall be deemed to
be an Incumbent Director; 

B. Any
"Person" (as such term is defined in Section 3(a)(9) of the Securities Exchange
Act of 1934 (the "Exchange Act") and as used in Sections 13(d)(3) and 14(d)(2)
of the Exchange Act) is or becomes a "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 25% or more of the combined voting power of the Company's
then outstanding securities eligible to vote for the election of the Board (the
"Voting Securities"); provided,
however,
that, the
event described in this paragraph B shall not be deemed to be a Change in
Control by virtue of any of the following acquisitions: (i) by the Company or
any subsidiary of the Company in which the Company owns more than 25% of the
combined voting power of such entity (a "Subsidiary"), (ii) by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
Subsidiary, (iii) by any underwriter temporarily holding the Company's Voting
Securities pursuant to a public offering of such Voting Securities, (iv)
pursuant to a Non-Qualifying Transaction (as defined in paragraph C immediately
below), (v) pursuant to any acquisition by Executive or by any Person which is
an "affiliate" (within the meaning of 17 C.F.R. § 230.405) of Executive (an
"Excluded Person"); 

C. The
consummation of a merger, consolidation, statutory share exchange or similar
form of corporate transaction involving the Company or any of its Subsidiaries
that requires the approval of the Company's stockholders, whether for such
transaction or the issuance of securities in the transaction (a "Business
Combination"), unless immediately following such Business Combination: (i) more
than 25% of the total voting power of (A) the corporation resulting from such
Business Combination (the "Surviving Corporation"), or (B) if applicable, the
ultimate parent corporation that directly or indirectly has beneficial ownership
of 100% of the voting securities eligible to elect directors of the Surviving
Company (the "Parent Corporation"), is represented by the Company's Voting
Securities that were outstanding immediately prior to such Business Combination
(or, if applicable, is represented by shares into which the Company's Voting
Securities were converted pursuant to such Business Combination), and such
voting power among the holders thereof is in substantially the same proportion
as the voting power of the Company's Voting Securities among the holders thereof
immediately prior to the Business Combination, (ii) no Person (other than (A)
any employee benefit plan (or related trust) sponsored or maintained by the
Surviving Corporation or the Parent Corporation or (B) an Excluded Person is or
becomes the beneficial owner, directly or indirectly, of 25% or more of the
total voting power of the outstanding voting securities eligible to elect
directors of the Parent Corporation (or, if there is no Parent Corporation, the
Surviving Corporation) and (iii) at least a majority of the members of the board
of directors of the Parent Corporation (or, if there is no Parent Corporation,
the Surviving Corporation) following the consummation of the Business
Combination were Incumbent Directors at the time of the Board's approval of the
execution of the initial agreement providing for such Business Combination (any
Business Combination which satisfies all of the criteria specified in (i), (ii)
and (iii) above shall be deemed to be a "Non-Qualifying Transaction");

6

D. A sale of
all or substantially all of the Company's assets, other than to an Excluded
Person; 

E. The
stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company; or 

F. Such
other events as the Board may designate. 

Notwithstanding
the foregoing, a Change in Control of the Company shall not be deemed to occur
solely because any person acquires beneficial ownership of more than 25% of the
Company's Voting Securities as a result of the acquisition of the Company's
Voting Securities by the Company which reduces the number of the Company's
Voting Securities outstanding; provided,
that, if
after such acquisition by the Company such person becomes the beneficial owner
of additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person, a
Change in Control of the Company shall then occur.

7

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