Document:

<PAGE>

                                                                   EXHIBIT 10.11

                      METAWAVE COMMUNICATIONS CORPORATION
                      -----------------------------------

                            MANUFACTURING AGREEMENT
                            -----------------------

     This agreement is made this /3rd/ day of September, 1998 between Metawave
Communications Corporation, a Delaware corporation ("Customer") and Powerwave
Technologies, Inc., a Delaware corporation ("Manufacturer").

                                    RECITALS
                                    --------

     Customer desires to have certain products manufactured by Manufacturer for
sale to Customer.  Manufacturer has the capability of manufacturing such
products and desires to do so for sale to Customer.

                                   AGREEMENT
                                   ---------

     In consideration of the foregoing and the agreements contained herein, the
parties agree as follows:

     1.  Definitions.
         -----------

         (a)   "Confidential Information" of a party shall mean any information
                ------------------------
disclosed by that party to the other pursuant to this Agreement which is in
written, graphic, machine readable or other tangible form and is marked
"Confidential," "Proprietary" or in some other manner to indicate its
confidential nature.  Confidential Information may also include oral information
disclosed by one party to the other pursuant to this Agreement, provided that
such information is designated as confidential at the time of disclosure and is
reduced to writing by the disclosing party within a reasonable time (not to
exceed thirty (30) days) after its oral disclosure, and such writing is marked
in a manner to indicate its confidential nature and delivered to the receiving
party.  Notwithstanding any failure to so identify it, however, all
Specifications shall be Confidential Information of Customer.

          (b)  "Inventory" shall mean raw materials and supplies necessary for
                ---------
the manufacture of Products pursuant to this Agreement.

          (c)  "Long-Lead Inventory" shall mean those items of Inventory
                -------------------
identified in writing by Manufacturer to Customer prior to beginning manufacture
of any particular type of Product that have a lead time from Manufacturer's
supplier longer than ninety (90) days.

          (d) "Products" shall mean the products manufactured by Manufacturer in
               --------
accordance with the Specifications pursuant to this Agreement, as set forth on
Exhibit A attached hereto.
---------

          (e) "Intellectual Property" shall mean (i) all rights held by Customer
               ---------------------
in its Confidential Information, including, but not limited to, patents,
copyrights, authors' rights, trademarks, tradenames, know-how and trade secrets,
irrespective of whether such rights arise

[***]  CERTAIN INFORMATION ON THIS PAGE(S) HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

<PAGE>

under U.S. or international intellectual property, unfair competition or trade
secret laws, and (ii) all rights held by Manufacturer in the Products and in its
Confidential Information, including, but not limited to, patents, copyrights,
authors' rights, trademarks, tradenames, know-how and trade secrets,
irrespective of whether such rights arise under U.S. or international
intellectual property, unfair competition or trade secret laws.

          (f)  "Purchase Order" shall mean a Customer Purchase Order in the form
                --------------
provided by the Customer or in a form mutually agreed to by the parties.

          (g) "Specifications" shall mean the specifications for the Products as
               --------------
provided by Customer and accepted by Manufacturer which are set forth in Exhibit
B, and may be revised from time to time upon mutual written agreement of the
parties.

     2.   Manufacture and Supply of Products.
          ----------------------------------

          (a)  Sale and Purchase. Manufacturer agrees to sell to Customer such
               -----------------
quantities of the Products meeting the Specifications as Customer may order in
accordance herewith.  Subject to the provisions of section 10 hereof, so long as
this Agreement remains in effect, Manufacturer agrees to satisfy 100% of
Customer's requirements for the Products under this Agreement.  Manufacturer
will be the sole supplier of Products to Customer which Customer purchases for
resale in its antenna systems to its cellular network operator customers
(hereinafter referred to as "Network Operators"), provided that Manufacturer
offers the Product(s) for sale.   The foregoing does not preclude (i) Customer
from designing and selling to Network Operators antenna systems which use
Products of another manufacturer if Manufacturer does not offer such Product for
sale, and (ii) Network Operators from purchasing a Product directly from
Manufacturer or from purchasing or utilizing the product of another manufacturer
for use with Customer's antenna system.

          (b)  Agreement to Manufacture.  Subject to section 2(a) of this
               ------------------------
Agreement, pursuant to Purchase Orders or changes to Purchase Orders issued by
Customer and accepted by Manufacturer, Manufacturer agrees to procure Inventory,
components and other supplies and to manufacture, test, assemble, and deliver
the Products pursuant to the Specifications for each such Product and to deliver
such Products to a location designated by Customer..  Manufacturer will not
place its name or any other marking not approved by Customer anywhere on the
exterior of the Products or their respective packaging material, except
markings, if any, which are required by law.

          (c)  Forecasts.  Manufacturer shall supply the quantities of Product
               ---------
meeting the Specifications on the Delivery Dates requested by Customer, provided
the Delivery Dates conform to the Product lead times and Customer forecasts set
forth herein.  On the tenth (10th) day of each month, Customer shall provide
Manufacturer with a rolling forecast in writing (the "Forecast") of Customer's
estimated aggregate purchase requirements of Product for the subsequent twelve-
month (12) period.  Subject to section 2(d) hereof, the initial six (6) weeks of
the Forecast shall be binding. Subject to these binding Forecast requirements,
if the Forecast for any period is less than the previous Forecast supplied for
the same period, the difference will be

                                      -2-
<PAGE>

considered canceled. Manufacturer shall use its best efforts to supply the
number of Products set forth in the Forecast.

          (d)  Purchase Orders.  All orders for Product shall be submitted to
               ---------------
Manufacturer in writing by mail or facsimile to the address set forth on the
signature page to this Agreement, and shall conform to the binding Forecasts in
accordance with Section 2(c).  Customer shall submit such Purchase Orders to
Manufacturer at least 30 business days prior to the date of requested delivery
("Delivery Date"), or such longer period of time as mutually agreed upon by the
  -------------
parties for Products incorporating Long-Lead Inventory.

          (e)  Order Forecast Variations.  For each Purchase Order, Customer
               --------------------------
shall be entitled, without penalty, to:  (i) upon forty-five (45) or more days'
prior notice, reschedule the scheduled delivery date for one hundred percent
(100%) of the quantity of Product ordered pursuant to such Purchase Order and/or
(ii) upon more than forty-five (45) days prior notice, increase the quantity of
Product ordered by an amount equal to an additional one hundred percent (100%)
of the quantity of Product ordered.  Such rescheduled Purchase Orders shall be
submitted in writing to Manufacturer, by mail or facsimile, and shall supersede
prior Purchase Orders to the extent such prior Purchase Orders conflict with the
rescheduled Purchase Order.

          (f)  Acceptance or Rejection of Purchase Orders.  Purchase Orders that
               ------------------------------------------
conform to binding Forecasts delivered to Manufacturer for the relevant period
shall be deemed accepted by Manufacturer upon receipt.  All other Purchase
Orders not rejected by Manufacturer within ten (10) working days of receipt by
Manufacturer shall be deemed accepted by Manufacturer effective upon receipt of
such Purchase Order.

          (g)  Engineering Changes.  Customer may request at any time, with at
               -------------------
least thirty (30) days' written notice, that Manufacturer incorporate an
engineering change into the Product.  Such request will include a description of
the proposed change sufficient to permit Manufacturer to evaluate its
feasibility.  Manufacturer's evaluation shall be in writing and shall state the
impact on delivery schedule and expected cost.  Manufacturer will not be
obligated to proceed with the engineering change until the parties have agreed
in good faith on the changes to the Specifications, Delivery Dates and Pricing
and upon the costs to be paid by Customer, including reassembly, retooling or
cost of Inventory on-hand and on-order that becomes obsolete as a result of the
Engineering Change.  Manufacturer will use all reasonable efforts to return all
unused Inventory for a full refund, to cancel pending orders and to take other
actions to reduce such costs to be paid by Customer.

     3.   Tooling.
          -------

          (a)  Tooling/Non-Recurring Expenses.  Manufacturer shall provide
               -------------------------------
tooling that is not specific to the Product at its own expense.  Customer shall
pay for or obtain and consign to Manufacturer for its use any Product-specific
tooling and other reasonably necessary non-recurring expenses specific to the
Product, as set forth in Manufacturer's quotation, and approved in writing by
Customer.

                                      -3-
<PAGE>

     4.   Product Shipment and Inspection.
          -------------------------------

          (a)  Shipments.  All Products delivered pursuant to the terms of this
               ---------
Agreement shall be suitably packed for shipment to avoid damage, marked for
shipment to Customer's destination specified in the applicable Purchase Order,
and Manufacturer shall use its best efforts to ensure that the Products are
received by Customer 0 days late, or 5 days prior to the delivery date set forth
on the Purchase Order (the "Delivery Date").  Shipment will be F.O.B.
Manufacturer's factory, at which time risk of loss and title will pass to
Customer.  All freight, insurance and other shipping expenses, as well as any
special packing expenses approved in writing by Customer and not included in the
original price quotation for the Products will be paid by Customer.

          (b)  Cancellation.  Customer may not cancel any portion of an accepted
               ------------
Purchase Order without Manufacturer's prior written approval, which will not be
unreasonably withheld. If the parties agree upon a cancellation, Customer will
pay Manufacturer for Products and Inventory affected by the cancellation as
follows:  100% of the cost of all Inventory in Manufacturer's possession and not
returnable to the vendor or usable for other customers, whether in raw form or
work in process..  Manufacturer will use reasonable commercial efforts,
including the mutual involvement of Customer, to return unused Inventory for a
full refund, net of restocking charges of such vendor and to cancel pending
orders.  Customer will be entitled to take delivery of all Products and
Inventory to be paid for by Customer under this section, promptly following
Manufacturer's receipt of payment therefor.

     5.   Payment Terms, Additional Costs and Price Changes.
          -------------------------------------------------

          (a)  Payment Terms.  Payment for any products, services or other costs
               -------------
to be paid by Customer hereunder are due thirty (30) days from the later of (i)
the date of invoice for Products delivered to Customer, and (ii) the delivery of
products to the Customer, and shall be made in lawful U.S. currency.

          (b)  Pricing. The prices for the Products shall be as set forth on
               ---------
Exhibit C hereto and will be reviewed quarterly or as requested by Customer.
Such prices are, and the price for each Product sold hereunder will be, as low
as the prices for like products supplied by Manufacturer to two of the five
largest base station equipment suppliers to the wireless infrastructure
industry.  For comparison purposes, Manufacturer may exclude non-recurring,
promotional sales.

          (c)  Additional Costs.
               ----------------

               (i)  Duties and Taxes. All prices quoted are exclusive of
                    ----------------
federal, state and local excise, sales, use and similar duties and taxes, and
Customer shall be responsible for all such items.

               (ii) Expediting Charges.  Customer shall be responsible for any
                    ------------------
expediting charges reasonably necessary because of a change in Customer's
requirements.

                                      -4-
<PAGE>

Manufacturer shall obtain approval from Customer for expediting charges prior to
incurring any such charge.

          (d)  Cost Reductions. Manufacturer may be requested by Customer to
               ---------------
institute a cost reduction plan which will be reviewed quarterly pursuant to
section 5(e) below.

          (e)  Quarterly Business Reviews. During each quarter, the parties will
               --------------------------
have a quarterly business review to review the prices of the Products, cost
reduction plans, quality, Forecasts and Delivery performance and to agree to any
modifications that may be necessary.

     6.   License Grants; Ownership Rights.
          --------------------------------

          (a)  Intellectual Property Rights.  Each party shall retain sole
               ----------------------------
ownership of, and all rights to, any Intellectual Property of any kind
previously owned by that party or created solely by that party. The parties
shall jointly own any Intellectual Property where both parties made substantial
contributions documented in writing prior to the creation of the Intellectual
Property.

          (b)  Trademarks.  In consideration of the fees set forth herein,
               ----------
Customer further grants to Manufacturer a non-exclusive license to use the
Trademarks on and in connection with the manufacture of the Products, and for
this purpose to affix, subject to Customer's prior written approval, the
Trademarks to or on the Products. Such trademark license shall expire or
terminate upon the expiration or termination of this Agreement..  The Trademarks
may only be used in association with the manufacture and distribution of the
Products pursuant to the terms of this Agreement.  Any and all uses of the
Trademarks shall be subject to the prior written approval of Customer.
Manufacturer shall not remove trademark notices from any Product without the
prior written consent of Customer.  Manufacturer shall not use the name,
Trademarks or logos associated with the Products in its business name.  For
purposes of the preceding paragraph, "Trademark" shall mean the trademarks that
are associated with the Product which are approved by Customer for use by
Manufacturer in the manufacture of the Products.

     7.  Confidential Information.
         ------------------------

         (a)   Nondisclosure and Nonuse.  Each party shall treat as confidential
               ------------------------
all Confidential Information of the other party, shall not use such Confidential
Information except as set forth in this Agreement, and shall use reasonable
efforts not to disclose such Confidential Information to any third party.
Without limiting the foregoing, each of the parties shall use at least the same
degree of care which it uses to prevent the disclosure of its own confidential
information of like importance to prevent the disclosure of Confidential
Information disclosed to it by the other party under this Agreement.  Each party
shall disclose Confidential Information of the other party only to its
directors, officers, employees, and consultants who are required to have such
information in order for such party to carry out the transactions contemplated
by this Agreement.  Each party shall promptly notify the other party of any
actual or suspected misuse or unauthorized disclosure of the other party's
Confidential Information. Each party agrees to hold

                                      -5-
<PAGE>

such Confidential Information in confidence for a period of three (3) years from
the date of receipt of same unless otherwise agreed to in writing by the
disclosing party.

          (b)  Exceptions.  Notwithstanding the above, neither party shall have
               ----------
liability to the other with regard to any Confidential Information of the other
which the receiving party can prove:

               (i)   was in the public domain at the time it was disclosed or
has entered the public domain through no fault of the receiving party;

               (ii)  was known to the receiving party, without restriction, at
the time of disclosure, as demonstrated by files in existence at the time of
disclosure;

               (iii) is disclosed with the prior written approval of the
disclosing party;

               (iv)  was independently developed by the receiving party without
any use of the Confidential Information, as demonstrated by files created at the
time of such independent development;

               (v)   becomes known to the receiving party, without restriction,
from a source other than the disclosing party without breach of this Agreement
by the receiving party and otherwise not in violation of the disclosing party's
rights; or

               (vi)  is disclosed pursuant to the order or requirement of a
court, administrative agency, or other governmental body; provided, however,
that the receiving party shall provide prompt notice of such court order or
requirement to the disclosing party to enable the disclosing party to seek a
protective order or otherwise prevent or restrict such disclosure.

          (c)  Return of Confidential Information.  Upon expiration or
               ----------------------------------
termination of this Agreement, each party shall promptly return all Confidential
Information of the other party. In addition, each party shall, upon written
request of the other party, return Confidential Information of such other party.

          (d)  Remedies.  Any breach of the restrictions contained in this
               --------
Section is a breach of this Agreement which may cause irreparable harm to the
nonbreaching party.  Any such breach shall entitle the nonbreaching party to
injunctive relief in addition to all legal remedies.

          (e)  Confidentiality of Agreement.  Each party shall be entitled to
               ----------------------------
disclose the existence of this Agreement, but agrees that the terms and
conditions of this Agreement shall be treated as Confidential Information and
shall not be disclosed to any third party; provided, however, that each party
may disclose the terms and conditions of this Agreement:

               (i)  as required by any court or other governmental body;

               (ii) as otherwise required by law;

                                      -6-
<PAGE>

               (iii) to legal counsel of the parties;

               (iv)  in confidence, to accountants, banks, and financing sources
and their advisors;

               (v)   in connection with the enforcement of this Agreement or
rights under this Agreement; or

               (vi)  in confidence, in connection with an actual or proposed
merger, acquisition, or similar transaction.

     8.   Indemnity.
          ---------

          (a)  Indemnification by Manufacturer.  Manufacturer agrees, at its own
               -------------------------------
expense, to indemnify the Customer against any damages, costs (including
attorneys' fees and costs) or other liability arising from any claim brought
against them with respect to any Products manufactured by Manufacturer, and any
reasonable out-of-pocket costs to Customer of any returned or failed Products
manufactured by Manufacturer, including all costs incurred as a result of a
Product withdrawal or recall (collectively "Customer Losses") to the extent such
                                            ---------------
Customer Losses are caused by Manufacturer's failure to manufacture the Products
in conformance with the Specifications and with Manufacturer's warranties as set
forth in this Agreement, or by Manufacturer's misconduct or negligence;
provided, with respect to any claim or action, that Customer provides (i) prompt
--------
written notice of such claim or action, (ii) sole control and authority over the
defense or settlement of such claim or action and (iii) proper and full
information and reasonable assistance to defend and/or settle any such claim or
action.

          (b)  Indemnification by the Customer.  Customer agrees, at its own
               -------------------------------
expense, to defend or at its option to settle any claim or action brought
against Manufacturer based on an allegation that the Specification provided by
Customer for a Product manufactured by Manufacturer pursuant to this Agreement
infringes any U.S. patent, or registered U.S. copyright, or registered U.S.
trademark  , trade secret, or other intellectual property right of any third
party, and to indemnify Manufacturer against any and all damages and costs,
including legal fees, that a court awards against Manufacturer under any such
claim or action; provided that Manufacturer provides Customer with (i) prompt
                 --------
written notice of such claim or action,  (ii)  sole control and authority over
the defense or settlement of such claim or action and (iii) proper and full
information and reasonable assistance to defend and/or settle any such claim or
action.  Notwithstanding the foregoing, Customer assumes no liability for
infringement claims with respect to any Product that is not manufactured in
conformance with the Specifications and with Manufacturer's warranties as set
forth in this Agreement.

          The foregoing states the entire liability and obligations of, and the
exclusive remedy of, the parties, with respect to any alleged or actual
infringement of patents, copyrights, trade secrets, trademarks or other
intellectual property rights.

          (c)  No Other Liability.  NOTWITHSTANDING ANYTHING TO THE CONTRARY
               ------------------
HEREIN, NEITHER PARTY NOR ITS AGENT(S), REPRESENTATIVE(S) OR

                                      -7-
<PAGE>

EMPLOYEE(S) SHALL BE LIABLE TO THE OTHER PURSUANT TO THIS AGREEMENT FOR AMOUNTS
REPRESENTING LOSS OF REVENUES, LOSS OF PROFITS, LOSS OF BUSINESS OR INDIRECT,
CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES OF THE OTHER PARTY, HOWEVER CAUSED
AND ON ANY THEORY OF LIABILITY, EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. THE LIABILITY OF CUSTOMER, ITS AGENT(S),
REPRESENTATIVE(S) AND EMPLOYEE(S) TO THE MANUFACTURER FOR DAMAGES OR ALLEGED
DAMAGES WHETHER IN CONTRACT OR TORT (INCLUDING STRICT LIABILITY AND NEGLIGENCE)
WITH RESPECT TO THIS AGREEMENT IS LIMITED TO AND SHALL NOT EXCEED THE AMOUNTS
PAID BY CUSTOMER TO MANUFACTURER UNDER THIS AGREEMENT DURING THE TWELVE (12)
MONTHS IMMEDIATELY PRECEDING THE EVENT AND/OR PRODUCT GIVING RISE TO THE
DAMAGES.

     9.   Warranty and Disclaimer.
          -----------------------

          Manufacturer warrants that all Products will conform to the
Specifications set forth herein (or as may otherwise be mutually agreed upon in
writing), and will be free from defects in material and workmanship for a period
of fifteen (15) months from date of shipment to Customer.  In the case of
shipments directly to a customer site, the warranty period shall also begin on
the date of shipment from the Manufacturer.  In the event of a failure under
warranty, Manufacturer will repair or replace the Product(s), at it's option,
within thirty (30) days notice of such non-compliance.  Manufacturer shall bear
the  transportation charges for Products returned under these warranty
conditions.  If the Product is not found defective by Manufacturer, then
Customer will bear the expense to return the Product to its facility.  Except
for the foregoing expressly stated warranties, manufacturer makes no express or
implied warranties relating to the products covered by this agreement.
Manufacturer expressly disclaims any implied warranties of merchantability or
fitness for a particular purpose.

     10.  Term and Termination.
          --------------------

          (a)  Term.  This Agreement shall become effective on the date of this
               ----
Agreement and shall continue for a period of eighteen (18) months; this
Agreement shall be extended automatically at the end of the initial term or
subsequent terms for an additional 18 month term, unless within thirty (30) days
prior to the end of the initial term or a renewal term, a party gives written
notice to the other party of its intention to terminate the Agreement.

          (b)  Termination for Convenience.  This Agreement may be terminated at
               ---------------------------
any time with or without cause by either party upon the giving of not less than
one hundred eighty (180) days' written notice by registered mail to the other
party.

          (c)  Termination for Cause.  Either party may cancel this Agreement at
               ---------------------
any time if the other party breaches any term hereof and fails to cure such
breach within ten (10) business days after notice of such breach or if the other
party shall be or becomes insolvent, or if either party makes an assignment for
the benefit of creditors, or if there are instituted by or against either party
proceedings in bankruptcy or under any insolvency or similar law or for
reorganization, receivership or dissolution.

                                      -8-
<PAGE>

          (d)  Termination Liability.  Neither party shall be liable in any
               ---------------------
manner on account of the termination or cancellation of this Agreement.  The
rights of termination and cancellation as set forth herein are absolute.  Both
Customer and Manufacturer are aware of the possibility of expenditures necessary
in preparing for performance hereunder and the possible losses and damages which
may occur to each in the event of termination or cancellation.  Both parties
clearly understand that neither shall be liable for damages of any kind
(including but not limited to special, incidental or consequential damages) by
reason of the termination or cancellation of this Agreement.

          (e)  Obligations Upon Termination.  The termination or expiration of
               ----------------------------
this Agreement shall in no way relieve either party from its obligations to pay
the other any sums accrued hereunder prior to such termination or expiration.

          (f)  Survival of Certain Provisions.  Notwithstanding anything to the
               ------------------------------
contrary in this Agreement, the following sections shall survive termination of
this Agreement:  1, 5, 6,7,8,9,10, and 11.

     11.  Miscellaneous.
          -------------

          (a)  Amendments and Waivers. Any term of this Agreement may be amended
               ----------------------
or waived only with the written consent of the parties or their respective
successors and assigns. Any amendment or waiver effected in accordance with this
Section 11(a) shall be binding upon the parties and their respective successors
and assigns.

          (b)  Successors and Assigns. Manufacturer or Customer shall not assign
               ----------------------
any of its rights, obligations or privileges (by operation of law or otherwise)
hereunder without the prior written consent of the other party, which shall not
be unreasonably withheld, except to a successor entity into which either party
shall have sold or transferred all or substantially all its assets. Subject to
the foregoing, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective permitted successors and assigns
of the parties. Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.

          (c)  Governing Law.  This Agreement and all acts and transactions
               --------------
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Washington, without giving effect to principles of conflicts of law.

          (d)  Counterparts.  This Agreement may be executed in two or more
               ------------
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

          (e)  Titles and Subtitles.  The titles and subtitles used in this
               --------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

                                      -9-
<PAGE>

          (f)  Notices.  Any notice required or permitted by this Agreement
               -------
shall be in writing and shall be deemed sufficient upon receipt, when delivered
personally or by courier, overnight delivery service or confirmed facsimile, or
forty-eight (48) hours after being deposited in the regular mail as certified or
registered mail (airmail if sent internationally) with postage prepaid, if such
notice is addressed to the party to be notified at such party's address or
facsimile number as set forth below, or as subsequently modified by written
notice.

                                     -10-
<PAGE>

     Customer: Metawave Communications Corporation

               PO Box 97069
               10735 Willows Road NE
               Redmond, WA  98073
               fax:  (425) 702-5971
               Attention:  VP, Operations
               Copy to:  General Counsel

          Manufacturer:  Powerwave Technologies, Inc.

               2026 McGaw Avenue
               Irvine, CA 92614
               fax: (949) 757-6670
               Attention: President and Chief Executive Officer
               Copy to: Chief Financial Officer

          (g)  Severability.  If one or more provisions of this Agreement are
               ------------
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith, in order to maintain the economic position enjoyed
by each party as close as possible to that under the provision rendered
unenforceable.  In the event that the parties cannot reach a mutually agreeable
and enforceable replacement for such provision, then (i) such provision shall be
excluded from this Agreement, (ii) the balance of the Agreement shall be
interpreted as if such provision were so excluded and (iii) the balance of the
Agreement shall be enforceable in accordance with its terms.

          (h)  Entire Agreement.  This Agreement is the product of both of the
               ----------------
parties hereto, and constitutes the entire agreement between such parties
pertaining to the subject matter hereof, and merges all prior negotiations and
drafts of the parties with regard to the transactions contemplated herein.  Any
and all other written or oral agreements existing between the parties hereto
regarding such transactions are expressly canceled.

          (i)  Independent Contractors.  The relationship of Manufacturer and
               -----------------------
Customer established by this Agreement is that of independent contractors, and
nothing contained in this Agreement will be construed (i) to give either party
the power to direct and control the day-to-day activities of the other, (ii) to
constitute the parties as partners, joint venturers, co-owners or otherwise as
participants in a joint or common undertaking, or (iii) to allow either party to
create or assume any obligation on behalf of the other for any purpose
whatsoever.

          (j)  Force Majeure.  If the performance of this Agreement or any
               -------------
obligations hereunder is prevented, restricted or interfered with by reason of
fire or other casualty or accident, strikes or labor disputes, war or other
violence, any law, order, proclamation,  regulation, ordinance, demand or
requirement of any government agency, or any other act or condition beyond the
reasonable control of the parties hereto, the party so affected upon giving

                                     -11-
<PAGE>

prompt notice to the other parties shall be excused from such performance during
such prevention, restriction or interference.

                                     -12-
<PAGE>

     The parties have executed this Agreement as of the date first set forth
above.

CUSTOMER:                                    MANUFACTURER:

METAWAVE COMMUNICATIONS                      POWERWAVE TECHNOLOGIES, INC.
CORPORATION

By:      ____________________________        By:     __________________________

Name:    Robert H. Hunsberger                Name:   __________________________
         ----------------------------

Title:   Chief Executive Officer             Title:  __________________________
         ----------------------------

                                     -13-
<PAGE>

                                   Exhibit A
                                   ---------

                                   Products

Customer P/N    Manufacturer P/N     Description
-------------------------------------------------------------------------

127-0015-02     MCA9107-50           AMP,LPA,800-960MHZ,50W,FCC
127-0001-02     MCA9114-30           AMP,LPA,800-960MHZ,30W,EMI IMPROV
245-0006-01     MCR4100-4-4          LPA RACK ASSY
209-3004-01     600-00428-01         KIT,BRACKET,MATRIX INSTALLATION

                                      -14-
<PAGE>

                                   Exhibit B
                                   ---------

                            Product Specifications

Electrical 127-0015-02

[***]

[***]  CERTAIN INFORMATION ON THIS PAGE(S) HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

                                      -15-
<PAGE>

Electrical 127-0001-02

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Parameter                       Min        Max  Unit       Conditions
-------------------------------------------------------------------------------------------------------------------
<S>                            <C>        <C>   <C>        <C>
Frequency of operation          869        894  MHz        All specifications shall be met across this range
                                                           unless otherwise specified.
-------------------------------------------------------------------------------------------------------------------
Gain                           56.5       57.5  dB         Measured at 880MHz.
-------------------------------------------------------------------------------------------------------------------
Gain Flatness                     0         .5  dB
-------------------------------------------------------------------------------------------------------------------
Gain Variation (Temp)          -0.5       +0.5  dB         From 25(degrees)C, across specified temperature range
-------------------------------------------------------------------------------------------------------------------
Gain Variation (Volts)         -0.2       +0.2  dB         From 27V, across specified voltage range
-------------------------------------------------------------------------------------------------------------------
Phase                           175        185  Deg.       Measured at 880MHz, 25(degrees)C, any power level.
                                                           Electrical delay of 50.772 nS.
-------------------------------------------------------------------------------------------------------------------
Phase Tracking                  -10        +10  Deg.       From 25(degrees)C, across specified temperature range
-------------------------------------------------------------------------------------------------------------------
Output Power (avg.)              30             Watt       1 to 96 Carriers
-------------------------------------------------------------------------------------------------------------------
IMD                                        -57  dBc        4 carriers, phase peaked, equal carrier spacing
                                                           100KHz to 25 MHz.  Any power up to maximum average
                                                           output power.
-------------------------------------------------------------------------------------------------------------------
                                           -60  dBc        As above except 4 carriers, phase random.
-------------------------------------------------------------------------------------------------------------------
Input Return Loss                          -12  dB         At any output power level
-------------------------------------------------------------------------------------------------------------------
Output Return Loss                         -18  dB         At any output power level
-------------------------------------------------------------------------------------------------------------------
Harmonic Output                            -50  dBc        At any number of carriers, any power level
-------------------------------------------------------------------------------------------------------------------
Spurious                                   -60  dBc        820 MHz to 900 MHz
-------------------------------------------------------------------------------------------------------------------
                                           -50  dBc        All other frequencies
-------------------------------------------------------------------------------------------------------------------
Radiated Emissions                         -80  dBm        Using calibrated close field probe in contact with any
                                                           external surface of the module
-------------------------------------------------------------------------------------------------------------------
Power Supply Voltage             25         30  Volt       27V Nominal
-------------------------------------------------------------------------------------------------------------------
Power Supply Current                        20  Amp        At maximum RF power out.
-------------------------------------------------------------------------------------------------------------------
Communications                                             RS485 interface for control and status
-------------------------------------------------------------------------------------------------------------------
Alarming and status                                        Visual indication on front panel and over
                                                           communications bus
-------------------------------------------------------------------------------------------------------------------
Hot Swap Capable                                           Unit shall be capable of being replaced without
                                                           shutting down power.
-------------------------------------------------------------------------------------------------------------------
FCC Compliance                                             CFR 47, Part22
-------------------------------------------------------------------------------------------------------------------
</TABLE>

Mechanical/Environmental

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Parameter                Requirement
-------------------------------------------------------------------------------------------------------------------
<S>                      <C>
Humidity                 From 5% to 95% R.H. not to exceed .024 grams of water per gram of dry air
                         (non-condensing)
-------------------------------------------------------------------------------------------------------------------
Operating temperature    0(degree) to +50(degrees) Celsius, room ambient
-------------------------------------------------------------------------------------------------------------------
Storage temperature      -40(degrees) to +65(degrees) Celsius, room ambient
-------------------------------------------------------------------------------------------------------------------
Shock and vibration      Belcore specification TR-NWT-000063 Zone 3 (no ceiling braces)
-------------------------------------------------------------------------------------------------------------------
Acoustical noise         Acoustic noise specification ISO-3743
-------------------------------------------------------------------------------------------------------------------
Mounting                 Field replaceable, removable from front of 25-inch rack mounting frame
-------------------------------------------------------------------------------------------------------------------
Weight                   No more than 35 lbs
-------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      -16-
<PAGE>

                                   Exhibit C
                                   ---------

                                    Pricing

 Customer Part Number      Manufacturer Part Number        Price
----------------------------------------------------------------------------
[***]

[***]  CERTAIN INFORMATION ON THIS PAGE(S) HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
                                      -17-<PAGE>

                                                                   EXHIBIT 10.12

     Certain information in this Exhibit has been omitted and filed separately
with the Securities and Exchange Commission pursuant to a confidential treatment
request.

<PAGE>

     Unredacted version filed confidentially with the Securities and Exchange
Commission
<PAGE>

                     METAWAVE COMMUNICATIONS CORPORATION/

                               GTE Wireless Inc.

                              Purchase Agreement

                           Document Number #1003-PA

                      Metawave Communications Corporation
                             10735 Willows Road NE
                          Redmond, WA 98073-9769 USA
                               Tel. 425 702-5600
                               Fax 425 702-5970
                            http://www.metawave.com
<PAGE>

                               TABLE OF CONTENTS

1.  AGREEMENT..............................................................   3

2.  DEFINITIONS............................................................   3

3.  PURCHASE ORDERS / CANCELLATIONS........................................   5

4.  SHIPPING, TITLE, RISK OF LOSS..........................................   6

5.  INVOICES AND PAYMENT...................................................   6

6.  WARRANTY...............................................................   8

7.  OBLIGATIONS OF CUSTOMER................................................   9

8.  INFRINGEMENT INDEMNITY.................................................  10

9.  INDEMNIFICATION........................................................  11

10. TERM AND TERMINATION...................................................  11

11. ASSIGNMENT.............................................................  11

12. NOTICES................................................................  12

13. COMPLIANCE WITH LAWS...................................................  12

14. FORCE MAJEURE..........................................................  12

15. GOVERNING LAW; DISPUTE RESOLUTION......................................  13

16. CONFIDENTIALITY........................................................  13

17. GENERAL PROVISIONS.....................................................  14

       EXHIBIT A: PRODUCTS AND SERVICES PRICING

       EXHIBIT B: PRODUCT SPECIFICATIONS

       EXHIBIT C: PERFORMANCE ACCEPTANCE PROCEDURE

       EXHIBIT D: PRODUCT MAINTENANCE PROGRAM

       EXHIBIT E: SOFTWARE LICENSE

       EXHIBIT F: COMMISSIONING CERTIFICATE

                                       2
<PAGE>

                      METAWAVE COMMUNICATIONS CORPORATION
                               PURCHASE AGREEMENT

          THIS PURCHASE AGREEMENT (this "Agreement") is made as of this eighth
     day of September, 1998 (the "Effective Date") between Metawave
     Communications Corporation, a Delaware corporation ("Seller"), and GTE
     Mobilnet of California Limited Partnership, by GTE Wireless Incorporated,
     its General Partner on its behalf and its Affiliates ("Customer").

          The parties, in consideration of the mutual covenants, agreements and
     promises of the other set forth in this Agreement and intending to be
     legally bound, agree as follows:

1.   AGREEMENT

          Seller agrees to sell to Customer, and Customer agrees to purchase by
     submitting a Customer Purchase Order to Seller, the Products and Services
     identified on Exhibit A to this Agreement in accordance with the
     specifications and the terms and conditions hereof and at the Purchase
     Prices set forth in Exhibit A.  Notwithstanding any other provision of this
     Agreement or any other contract between the parties to the contrary, the
     provisions of this Agreement shall apply to all Purchase Orders for the
     Products and Services during the term of this Agreement unless the parties
     expressly agree by written modification to this Agreement that the
     provisions of this Agreement shall not apply.  Any different or
     inconsistent terms in any acknowledgment, confirmation, invoice, Purchase
     Order or other communication from one party to the other shall be deemed
     objected to without need of further notice of objection and shall be of no
     effect and not in any circumstance binding upon either party unless
     expressly accepted by both parties in writing.

2.   DEFINITIONS

           As used in this Agreement, the following terms shall have the
     meanings set forth below:

           "Affiliate" shall mean any partnership, corporation or other entity
     which is incorporated in the United States and in which GTE Wireless
     Incorporated, directly or indirectly, owns more than fifty percent (50%) of
     the voting shares, or owns a controlling interest.

           "Change Order" shall mean any subsequent change to a Purchase Order
     initiated by either party and mutually agreed to by both parties, including
     but not limited to, changes in Site configuration and Products and Services
     needed at the Site.

           "Commissioning" shall mean the procedures required to place the
     Product into commercial service at a particular Site as described in the
     Product system manual and the

                                       3
<PAGE>

     completion of which for Follow-on Orders is shown by evidence of Customer's
     signature on the Commissioning Certificate attached hereto as Exhibit F.

          "Follow-on Order" shall mean any Purchase Order in excess of the
     Initial Order submitted by Customer.

          "Initial Order" shall mean Customer's initial purchase of one or more
     Products (and any associated Services) for deployment in the Customer's
     California market and ordered as a part of this Purchase Agreement and as
     described in Exhibit A.

          "Performance Acceptance" shall mean, for the Initial Order,
     Customer's written notification to Seller of the Certificate of Performance
     Acceptance specified in Exhibit C, that the Products satisfy the
     Performance Criteria set forth in Exhibit C.

          "Performance Acceptance Procedure" shall mean, for the Initial Order,
     the testing procedures and protocols used to determine Product performance
     levels as described in Exhibit C.

          "Performance Criteria" shall mean the [**] set forth in Exhibit C,
     Section 3.7.3. to be [**] for the [**] Products [**] Initial Order [**]
     Performance Evaluation Period.

          "Performance Evaluation Period" shall mean the [**] in Exhibit C
     3.7.2.1. [**] Products will [**] in [**] Performance Criteria.

          "Products" shall mean the SpotLight(TM) 2000 spectrum management
     systems, consisting of hardware and Software, listed in Exhibit A hereto or
     any additional products set forth in any amendments thereto as may be
     subsequently agreed to from time to time by Seller and Customer.

          "Purchase Order" shall mean any purchase order Customer may deliver to
     Seller for the purchase of the Products and/or Services which incorporates
     the terms and conditions of this Agreement and which has been accepted by
     Seller.

          "Purchase Price" shall mean the price of the Products and the price of
     the Services shown in Exhibit A or any other amount set forth in any
     amendments to Exhibit A as may be subsequently agreed to from time to time
     by Seller and Customer.

          "Services" shall mean the engineering services set forth in Exhibit A
     or any additional services set forth in any amendments to Exhibit A as may
     be subsequently agreed to from time to time by Seller and Customer.

          "Site" shall mean each of the Customer cell site locations at which a
     Product is installed.

[***] CERTAIN INFORMATION ON THIS PAGE(S) HAS BEEN OMITTED AND FILED SEPARATELY
      WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
      RESPECT TO THE OMITTED PORTIONS.

                                       4
<PAGE>

          "Site Survey" shall mean the survey of a Site performed by Seller to
     determine the Product configuration and scope of services required for the
     proper installation and Commissioning of the Product.

          "Software" shall mean the (i) object-code computer programs embedded
     in the Product which control and monitor the operation of the Product
     ("Embedded System Software"), and (ii) the Lamplighter/TM/ PC-based
     graphical user interface computer program for the Product, and all
     Features, Major Releases, Point Releases, and Software Patches (as such
     terms are defined in Exhibit D), other updates and modifications to such
     Software (the "Software Updates") and any documentation in support thereof.

          "Software License" shall mean the software license set forth in
     Exhibit E.

          "Specifications" shall mean the specifications for the Products set
     forth in Exhibit B and incorporated herein.

3.   PURCHASE ORDERS/CANCELLATIONS

     a.  When Customer wishes to purchase Products and Services pursuant to this
         Agreement, Customer shall notify the Designated Representative of
         Seller specified in Section 12 hereof. Seller's Designated
         Representative (or his agents) shall, with a representative of
         Customer, conduct a Site Survey for each Site to determine the
         configuration, Products, scope of Services and any other ancillary
         equipment required for each Site. The Designated Representative shall
         then develop an equipment list and price sheet for the Products and
         Services required for each Site using the prices set forth in Exhibit A
         (the "Quotation").

     b.  Following receipt of the Quotation, Customer shall order Products and
         Services by submitting a Purchase Order to which the Quotation shall be
         attached and made a part thereof. The Purchase Order shall also include
         the desired delivery date and whether partial deliveries are
         acceptable. Purchase Orders should be submitted by Customer to Seller
         at least 90 days prior to date of delivery for such Products and
         Services. Upon receipt of the Purchase Order, Seller shall have five
         (5) business days to accept or reject the Purchase Order in writing.

     c.  In the event that the Customer submits a Purchase Order without a
         Quotation, such Purchase Order shall be subject to completion of a Site
         Survey by Seller. If following the completion of the Site Survey,
         Seller determines that Product configurations and or the Services set
         forth in the Purchase Order must be changed, Seller shall, within ten
         (10) days of completion of the Site Survey, notify Customer with a
         written proposal for changes to the Purchase Order. Upon receipt,
         Customer shall have five (5) business days to accept or reject the
         written proposal for changes. If accepted, Customer shall execute a
         written Change Order to reflect the required changes identified by the
         Site Survey. If Customer rejects the Change Order Customer may cancel
         the Purchase Order subject to Section 3(d) below.

                                       5
<PAGE>

     d.  Customer may cancel or delay delivery of a Product contained in any
         Purchase or Change Order prior to Seller's shipment of the Product
         subject to the terms herein. Any such cancellation or delay must be
         made by written notification. If Customer directs such cancellation or
         delay with less than 30 days written notice from the delivery date
         specified in Purchase Order or Change Order, Customer shall pay to
         Seller any reasonable costs associated with such cancellation or delay
         provided, however, that any such costs shall not exceed in the
         aggregate ten percent (10%) of the Purchase Price of each canceled or
         delayed Product. Customer shall not be obligated to pay any such costs
         if Customer timely exercises its cancellation rights under section 3(c)
         hereof.

     e.  Within thirty days following execution of this Agreement, Customer
         shall give Seller a non binding forecast of Customer's estimated
         requirements for the Products and Services for the forthcoming twelve
         (12) months such forecast shall be updated by Customer on a monthly
         basis.

4.   SHIPPING, TITLE, RISK OF LOSS

     a.  Unless otherwise instructed by Customer, and subject to Section 3,
         Seller shall ship all Products to the destination designated in a
         Purchase Order on or before the delivery date(s) specified in a
         Purchase Order and render invoices in accordance with Section 5 below.
         Customer is responsible for the payment of all reasonable shipping
         charges, except as noted in Section 4(b) below.

     b.  Products shall be packed by Seller, at no additional charge to
         Customer, in containers adequate to prevent damage during reasonable
         shipping, handling and storage. Customer shall be responsible for
         payment of any warehousing or storage charges for the Products
         following delivery of the Products to Customer.

     c.  For the Initial Order, title to and risk of loss or damage to Products
         sold by Seller to Customer hereunder shall pass to Customer upon
         Performance Acceptance. For all Follow-on Orders title to and risk of
         loss or damage to Products sold by Seller to Customer hereunder shall
         pass to Customer upon shipment of Products to Customer. Title to
         Software shall remain with Seller in all cases pursuant to the terms of
         the Software License attached as Exhibit E hereto.

5.   INVOICES AND PAYMENT

     a.  For the Products in the Initial Order only, the payment schedule shall
         be as follows:

         1.  Seller shall render an invoice for one hundred percent (100%) of
             the Purchase Price of the Products and one hundred percent (100%)
             of the Purchase Price of the Services associated with such Products
             upon Performance Acceptance.

                                     6
<PAGE>

         2.  In the event that Performance Acceptance for the Products in the
             Initial Order does not occur and Seller has indicated in writing
             that it will no longer pursue Performance Acceptance, Customer
             shall have the option of either (i) completing the purchase of the
             Products in which case Seller shall render an invoice for the
             balance due or (ii) returning the Products to the Seller. If
             Customer chooses to return the Products to Seller, Seller shall de-
             install such Products at Seller's expense and repair any damage to
             or reverse any modifications to the Customer's equipment at the
             Site caused by Seller during installation of the Products and
             during the Performance Evaluation Period. Seller shall arrange for
             and pay the costs of shipping and assumes the risk of loss and
             damage to Products during shipment of the Products back to its
             headquarters in Redmond, Washington.

     b.  For Follow-on Orders for Products, to be installed by Seller, Seller
         shall render invoices as follows: (i) [**] of the Purchase Price of
         each Product upon shipment of a Product to Customer, and (ii) [**] of
         the Purchase Price of each Product and one hundred percent (100%) of
         any associated Services promptly following the Commissioning of a
         Product. For Follow-on Orders, to be installed by Customer, Seller
         shall invoice Customer for one hundred percent (100%) of the Purchase
         Price of each Product upon shipment of Product to Customer.

     c.  For Follow-on-Orders for Services only, Seller shall render invoices
         for 100% of the Purchase Price upon the completion of the Services, or
         on alternative milestones based upon mutual agreement of the parties.

     d.  All invoices shall be computed on the basis of the prices set forth
         in Exhibit A (including any applicable discounts) and shall identify
         and show separately quantities of Products, type of Services, total
         amounts for each item, shipping charges, insurance charges, applicable
         sales or use taxes and total amount due. Customer shall promptly pay
         Seller the amount due within thirty (30) days of the date of receipt of
         the invoice, except for the Initial Order only which shall be due
         ninety (90) days of the date of receipt of the invoice. Customer shall
         pay a late fee at the rate of one and one-half percent (1.5%) of the
         amount due for each month or portion thereof that the amount remains
         unpaid.

     e.  Excluding income, business and licensing taxes, Customer shall be
         responsible for the payment of all sales, use and any other taxes
         applicable specifically to the sale of the Products and Services
         provided by the Seller pursuant to this Agreement. When Seller is
         required by law to collect such taxes, 100% thereof will be added to
         invoices as separately stated charges and paid by Customer in
         accordance with this section.

     f.  If Customer disputes any invoices rendered or amount paid, Customer
         will so notify Seller, and the parties will use their reasonable
         efforts to resolve such

[***] CERTAIN INFORMATION ON THIS PAGE(S) HAS BEEN OMITTED AND FILED SEPARATELY
      WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
      RESPECT TO THE OMITTED PORTIONS.

                                       7
<PAGE>

         dispute expeditiously. Provided that Customer so notifies Seller of a
         disputed invoice and there is a good faith basis for such dispute, the
         time for paying the portion of the invoice in dispute shall be extended
         by a period of time equal to the time between Seller's receipt of such
         notice from Customer and the resolution of such dispute.

6.   WARRANTY

     a.  Seller warrants, for the Initial Order, for a period of [***] from the
         date of Performance Acceptance and for all Follow-on Orders, for a
         period of [***] from the shipment of a Product to Customer (the
         "Warranty Period") that (i) all Products furnished hereunder will be
         free from defects in materials, workmanship and title, (ii) all
         Products will conform in all material respects to the documentation and
         specifications provided by the Seller herein, (iii) the media on which
         the Software is contained will be free from defects in material and
         workmanship under normal use, and (iv) the Software will conform in all
         material respects to the documentation provided by Seller. The
         warranties in this Agreement are given in lieu of all other warranties
         express or implied which are specifically excluded, including, without
         limitation, implied warranties of merchantability and fitness for a
         particular purpose.

     b.  Seller represents that, in connection with Calendar-Related data and
         Calendar-Related processing of Date Data or of any System Date, the
         Product will not malfunction, will not cease to function, will not
         generate incorrect data, and will not produce incorrect results. Seller
         further represents that, in connection with providing Calendar-Related
         data to and accepting Calendar-Related data from other automated,
         computerized, and/or software systems and users via user interfaces,
         electronic interfaces, and data storage, the Product represents dates
         without ambiguity as to century. Seller further represents that Seller
         has verified through testing that the Products are century compliant
         and that testing included, without limitation, each of the following
         specific dates and the transition to and from each date: December 31,
         1998; January 1, 1999; September 9, 1999; September 10, 1999; December
         31, 1999; January 1, 2000; February 28, 2000; February 29, 2000; March
         1, 2000; December 31, 2000; January 1, 2001; December 31, 2004; and
         January 1, 2005. These representations survive the expiration or
         earlier termination of this Agreement. For purposes of this section,
         "Calendar-Related" refers to date values based on the Gregorian
         calendar, as defined in Encyclopedia Britannica, 15th edition, 1982,
         page 602, and to all uses in any manner of those date values, including
         without limitation manipulations, calculations, conversions,
         comparisons, and presentations; "Date Data" means any Calendar-Related
         data value in the inclusive range January 1, 1900 through December 31,
         2094, which the Product uses in any manner; and "System Date" means any
         Calendar-Related data value in the inclusive range January 1, 1985
         through December 31, 2094 (including the natural transition between
         such values), which the Product shall be able to use as its current
         date while operating.

[***] CERTAIN INFORMATION ON THIS PAGE(S) HAS BEEN OMITTED AND FILED SEPARATELY
      WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
      RESPECT TO THE OMITTED PORTIONS.

                                       8
<PAGE>

     c.  Customer and Seller shall handle all warranty claims in accordance with
         the procedures set forth in Exhibit D hereto (Product Maintenance). The
         actions taken by Seller under the Product Maintenance Program
         procedures set forth in Exhibit D shall be the full extent of Seller's
         liability and Customer's exclusive remedy with respect to a claim under
         this Section 6.

     d.  This warranty does not apply to any claim which arises out of any of
         the following: (i) the Product is used in other than its normal and
         customary manner; (ii) the Product has been subject to misuse,
         accident, neglect or damage by Customer; (iii) the Product has been
         installed, Commissioned, optimized or moved from its original
         installation site by any person other than Seller or a person who has
         been certified by Seller through completion of a Seller-sponsored
         training course to provide such services; (iv) unauthorized alterations
         or repairs have been made to the Product, or parts have been used in
         the Product which are not approved by Seller; (v) the Product is not
         maintained pursuant to Seller maintenance programs or under the
         supervision of a person who has been certified by Seller to provide
         such maintenance service through completion of a Seller-sponsored
         training course; (vi) an event of Force Majeure has occurred; (vii) the
         failure of third party antennas, antenna lines or interconnection
         facilities not provided by Seller at the Site.

7.   OBLIGATIONS OF CUSTOMER

     In addition to performing the other obligations set forth in this
     Agreement, Customer shall:

     a.  Procure from appropriate regulatory authorities all zoning approvals,
         necessary permits and station licenses as may be required to install
         and operate Customer's wireless system incorporating the Products prior
         to the date agreed by the parties for the commencement of installation
         of those Products;

     b.  Prepare the Site for the installation of the Product and performance of
         the Services as specified in the Scope of Work to be mutually agreed by
         both parties for each Site prior to the date agreed by the parties for
         the commencement of installation of those Products;

     c.  Agree with Seller on a date for the commencement of Services and in the
         event that the commencement of Services is delayed due to the failure
         of Customer to comply with the foregoing obligations, Seller shall be
         entitled to recover reasonable costs and expenses associated with
         mobilizing and compensating Seller personnel during the delay.

     d.  Provide safe and secure access to the Sites for Sellers employees
         during the performance of Services.

                                       9
<PAGE>

8.   INFRINGEMENT INDEMNITY

     a. Seller shall indemnify and hold harmless Customer against any and all
        liabilities, losses, costs, damages and expenses, including reasonable
        attorney's fees, associated with any claim or action for actual or
        alleged infringement by any Product or Software supplied in accordance
        with this Agreement of any United States patent, trademark, copyright,
        trade secret or other intellectual property right incurred by Customer
        as a result of Customer's use of such Products or Software in accordance
        with this Agreement provided that (i) Customer promptly notifies Seller
        in writing of the claim, (ii) Customer gives Seller full opportunity and
        authority to assume sole control of the defense and all related
        settlement negotiations, and (iii) Customer gives Seller information and
        assistance for the defense (Customer will be reimbursed for reasonable
        costs and expenses incurred in rendering such assistance, against
        receipt of invoices therefor). Subject to the conditions and limitations
        of liability stated in this Agreement, Seller shall indemnify and hold
        harmless Customer from all payments, which by final judgments in such
        claims, may be assessed against Customer on account of such alleged
        infringement and shall pay resulting settlements, costs and damages
        finally awarded against Customer by a court of law, arbitration or other
        adjudication of the claim.

     b. Customer agrees that if the Products or Software become, or in Seller's
        opinion are likely to become, the subject of such a claim, Customer will
        permit Seller, at Seller's option and expense, either to procure the
        right for Customer to continue using such Products or Software or to
        replace or modify same so that they become non-infringing as long as
        they continue to conform in all material respects to the specifications
        contained in this Agreement and Exhibits, and, if neither of the
        foregoing alternatives is available on terms which are acceptable to
        Seller, Customer shall at the written request of Seller, return the
        infringing or potentially infringing Products or Software and all the
        rights thereto at Seller's expense. Customer shall receive a refund of
        the prorated undepreciated portion of the Purchase Price actually paid
        by Customer to Seller for the returned portion of the Products. The
        Purchase Price shall be straight-line depreciated over a five (5) year
        period.

     c. Seller shall have no obligation to Customer with respect to any claim of
        patent or copyright infringement which is based upon (i) adherence to
        specifications, designs or instructions furnished by Customer, (ii) the
        combination, operation or use of any Products supplied hereunder with
        products, software or data with which the Products are not intended to
        be used or for which the Products are not designed, (iii) the alteration
        of the Products or modification of any Software made by any party other
        than Seller; or (iv) the Customer's use of a superseded or altered
        release of some or all of the Software if infringement would have been
        avoided by the use of a subsequent unaltered release of the Software
        that is provided to the Customer.

                                      10
<PAGE>

9.   INDEMNIFICATION

          Seller shall indemnify Customer, its employees and directors, and each
     of them, against any loss, damage, claim, or liability, arising out of, as
     a result of, or in connection with the use of the Product in accordance
     with this Agreement or the acts or omissions, negligent or otherwise, of
     Seller in the performance of this Agreement, or a contractor or an agent of
     Seller or an employee of anyone of them, except where such loss, damage,
     claim, or liability arises from the sole negligence or willful misconduct
     of Customer, agents or its employees. Seller shall, at its own expense,
     defend any suit asserting a claim for any loss, damage or liability
     specified above, and Seller shall pay any costs, expenses and attorneys'
     fees that may be incurred by Customer in connection with any such claim or
     suit or in enforcing the indemnity granted above, provided that Seller (i)
     is given prompt notice of any such claim or suit and (ii) full opportunity
     to assume control of the defense or settlement. Customer shall, at its
     discretion, have the right to reasonably participate in the defense and
     settlement of any claim asserted against Customer, including, but not
     limited to, choice of counsel and any settlement, but Seller shall have
     final authority to choose counsel and determine whether or not to settle a
     claim. Neither Seller nor Customer shall not be liable to the other for
     indirect or consequential damages, including but not limited to lost
     profits or revenue.

10.  TERM AND TERMINATION

          The term of this Agreement shall be three (3) years from the Effective
     Date. If either party is in material default of any of its obligations
     under this Agreement and such default continues for thirty (30) days after
     written notice thereof by the party not in default, the nondefaulting party
     may cancel this Agreement. In addition, a party may cancel this Agreement
     if a petition in bankruptcy or under any insolvency law is filed by or
     against the other party and is not dismissed within sixty (60) days of the
     commencement thereof.

11.  ASSIGNMENT

     a. Any assignment by either party to this Agreement or any other interest
        hereunder without the other party's prior written consent, shall be
        void, except assignment to a person or entity who acquires all or
        substantially all of the assets, business or stock of Seller, whether by
        sale, merger or otherwise.

     b. Customer shall not (i) assign, sublicense or otherwise transfer the
        Software License set forth in Exhibit E, to any third party other than
        an Affiliate without the prior consent of the Seller, (ii) purchase a
        Product solely for the purpose of reselling or distributing it to
        another party, (iii) transport, relocate, or otherwise transfer the
        Products or the Software outside the United States, or (iv) permit its
        directors, officers, employees, agents or any other third person to
        modify, copy, decompile, disassemble or reverse engineer the Products or
        the Software.

     c. Subject to the provisions of paragraphs a, and b above, this Agreement
        shall inure to the benefit of and be binding upon the respective
        successors and assigns, if any, of the parties hereto.

                                      11
<PAGE>

12.  NOTICES

          Except as otherwise specified in this Agreement, all notices or other
     communications hereunder shall be deemed to have been duly given when made
     in writing and delivered in person or deposited in the United States mail,
     postage prepaid, certified mail, return receipt requested, or by a
     reputable overnight courier service providing proof of delivery, or by
     confirmed facsimile transmission and addressed as follows:

     To Seller:                                To Customer:

     Metawave Communications                   GTE Mobilnet of California
     Corporation                               12677 Alcosta Blvd
     10735 Willows Road NE                     Dept. 500, PO Box 5011
     Redmond, WA 98073                         San Ramon, CA 94583-0811

     Attn.: Richard Henderson                  Attn.: Hal Horton, Manager
     VP, Sales                                 Area Programs
     Copy to: Kathy Surace-Smith               Copy to: Randy Golden
     General Counsel                           Regional Counsel
     Fax: 425 702 5976                         Fax: 925 904 3624

          Seller's Designated Representative for Section 3 shall be Mike
     Kavanagh or Mike Lewandowski.

          The address to which notices or communications may be given to either
     party or the names of the Designated Representatives may be changed by
     written notice given by such party to the other pursuant to this Section
     12.

13.  COMPLIANCE WITH LAWS

          Seller shall comply with all applicable federal, state and local laws,
     regulations and codes, including the procurement of permits and licenses
     when needed, in the performance of this Agreement.

14.  FORCE MAJEURE

          Except for payment of moneys due, neither party shall be liable for
     delays in delivery or performance or for failure to manufacture, deliver or
     perform resulting from acts beyond the reasonable control of the party
     responsible for performance. Such acts shall include, but not be limited to
     (a) acts of God, acts of a public enemy, acts or failures to act by the
     other party, acts of civil or military authority, governmental priorities,
     strikes or other labor disturbances, hurricanes, earthquakes, fires,
     floods, epidemics, embargoes, war, riots, and loss or damage to goods in
     transit; or (b) inability to obtain necessary products, components,
     services or facilities on account of causes beyond the reasonable control
     of the delayed party or its suppliers. In the event of any such delay, the
     date(s) of delivery or performance shall be extended for as many days are
     reasonably required due to the delay. If

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<PAGE>

     such delay continues for 45 days, either party may terminate the Purchase
     Order affected by the event by providing written notice.

15.  GOVERNING LAW; DISPUTE RESOLUTION

     a. This Agreement and each Purchase Order shall be construed in accordance
        with the internal laws of the State of California, without regard to its
        choice of law provisions.

     b. Any and all disputes arising between the parties shall be resolved in
        the following order: (i) by good faith negotiation between
        representatives of Customer and Seller who have authority to fully and
        finally resolve the dispute to commence within ten (10) days of the
        request of either party; (ii) in the event that the parties have not
        succeeded in negotiating a resolution of the dispute within ten (10)
        days after the first meeting, then the dispute will be resolved by
        nonbinding mediation to be held in a mutually agreed location in the
        United States, using a mutually agreed upon non-affiliated neutral party
        having experience with or knowledge in the wireless communications
        equipment industry to be chosen within twenty (20) days after written
        notice by either party demanding mediation (the costs therefor to be
        shared equally); and (iii) if within sixty (60) days of the initial
        demand for mediation by the parties, the dispute cannot be resolved by
        mediation, then a party may institute litigation in a court having
        subject matter jurisdiction, and the parties expressly consent and
        submit themselves to the personal jurisdiction of such court. If
        compliance with this section would result in expiration of any statute
        of limitations for the filing of a court action, the statute of
        limitations shall be tolled for the period of time required to comply
        with this section.

16.  CONFIDENTIALITY

     a. During the term of this Agreement and thereafter it may be necessary for
        Seller and Customer to mutually exchange certain information, data and
        proprietary material relating to marketing, sales, technical, financial
        and other matters involving the Products, this Agreement or the
        relationship between the Seller and Customer. In order to be treated as
        confidential hereunder ("Confidential Information"), information
        disclosed in writing shall be marked as confidential or proprietary, and
        the disclosing party shall indicate the confidential nature of oral
        information at the time of disclosure and provide written confirmation
        thereof within fifteen (15) days following such disclosure. All
        Confidential Information shall:

        1. Be received and retained in the strictest confidence by the parties
           and will be deemed to be proprietary information of the disclosing
           party and the recipient(s) agree(s) that it will not disclose it to
           third parties and further will treat such information, data or
           material as proprietary using the same degree of care that it (or
           they) would normally use in protecting its (or their) own proprietary
           information; and

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<PAGE>

        2. Be used by the parties hereto solely for the purpose of implementing
           this Agreement.

     b. This provision shall not apply to any Confidential Information which:
        (i) is known by the receiving party prior to the date of disclosure by
        the disclosing party, and is not subject to or in violation of an
        obligation of confidentiality; (ii) is or become public knowledge other
        than by default of the receiving party; (iii) is obtained by the
        receiving party from a bona-fide third party having free right of
        disposal of such information; (iv) is wholly and independently developed
        by receiving party without reference to the Confidential Information; or
        (v) the receiving party is required to disclose pursuant to any law,
        regulation or a valid order of a court or other governmental body or any
        political subdivision thereof, provided, however, that the recipient of
        the information shall first have given notice to the disclosing party
        and made a reasonable effort to obtain a protective order requiring that
        the information and/or documents so disclosed be used only for the
        purposes for which the order was issued.

     c. Subject to the foregoing, this Agreement shall also be treated
        confidentially by all parties hereto.

     d. This section shall survive any termination of the Agreement for a period
        of three (3) years.

17.  GENERAL PROVISIONS

     a. Seller and Customer may issue a joint press release concerning the
        execution of this Agreement. Such press release shall be subject to
        prior review and written approval by both parties, not to be
        unreasonably withheld.

     b. Any waiver by any party of any breach or failure to comply with any
        provision of this Agreement by the other party must be in writing and
        shall not be construed as, or constitute, a continuing waiver or such
        provision, or a waiver of any other provision of this Agreement.

     c. If any of the provisions of this Agreement shall be invalid or
        unenforceable, such invalidity or unenforceability shall not invalidate
        or render unenforceable the entire Agreement, but rather the entire
        Agreement shall be construed as if not containing the particular invalid
        or unenforceable provisions, and the rights and obligations of Seller
        and Customer shall be construed and enforced accordingly.

     d. This Agreement, including all Exhibits which are attached to and hereby
        incorporated into this Agreement, shall constitute the entire agreement
        between Customer and Seller with respect to the subject matter hereof
        and supersedes all prior agreements, covenants, arrangements,
        communications, representations or warranties, whether oral or written,
        by any party or any officer, employee or representative of any party
        with respect to the subject matter hereof.

                                      14
<PAGE>

     e. Any amendment or modification of this Agreement or any Exhibit must be
        in writing and signed by a duly authorized representative of each of the
        parties.

     f. This Agreement applies only to sales of Products and Services in the
        United States.

     g. Each party shall comply with all applicable U.S. and foreign export
        control laws and regulations and shall not export or re-export any
        technical data or products except in compliance with the applicable
        export control laws and regulations of the U.S. and any foreign country.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized representatives.

Metawave Communications Corporation       GTE Mobilnet of California Limited
                                          Partnership by GTE Wireless, Inc., its
                                          General Partner

By:/S/ Richard Henderson                  By: /S/ Annette M. Jacobs

Name: Richard Henderson                   Name:  Annette M. Jacobs

Title: Vice President Sales               Title:  Area President, California
       and Marketing

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<PAGE>

                           SOFTWARE LICENSE AGREEMENT

                                   EXHIBIT E

                           TO THE PURCHASE AGREEMENT

                                    BETWEEN

                 METAWAVE COMMUNICATIONS CORPORATION ("SELLER")

                                      AND

                                GTE ("CUSTOMER")

1.   DEFINITIONS

     "Agreement" shall mean the Purchase Agreement between Seller and Customer
     executed concurrently herewith, and the Exhibits attached thereto,
     including this Exhibit E (Software License).

     "Software" shall mean the (i) object-code computer programs embedded in the
     SpotLight System which control the operation of the SpotLight System
     ("Embedded System Software"), and (ii) the LampLighter PC-based graphical
     user interface computer program used to monitor the operation of a
     SpotLight System and all Features, Major Releases, Point Releases, Software
     Patches (as such terms are defined in Exhibit D Product Maintenance
     Program), updates and modifications ("Software Updates") and any
     documentation in support thereof.

     "SpotLight System" shall mean a single SpotLight(TM) 2000 spectrum
     management system as described in Exhibit B.

     Any terms not defined herein shall have the same meanings as in the
     Agreement and the Exhibits thereto.

2.   SCOPE

     Pursuant to the Agreement, Software will be delivered by Seller to Customer
     for use with a SpotLight System according to the terms of the Agreement and
     this Exhibit. Customer shall then become a licensee with respect to such
     Software.

3.   LICENSING GRANT

     3.1  Concurrent with execution of the Agreement, and subject to the terms
          and conditions set forth herein, Seller grants to Customer a
          revocable, non-exclusive and non-transferable license under Seller's
          applicable proprietary rights to use Software delivered to Customer
          hereunder to routinely operate and monitor the SpotLight System with
          which the Software was delivered.

     3.2  The Software licensing fees for the most current versions of the
          Embedded System Software and LampLighter Software (available at the
          time of purchase of a

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<PAGE>

          SpotLight System) are included in the Purchase Price of a SpotLight
          System. Software Updates are available under the Software Maintenance
          Program described in Exhibit D or for additional licensing fees.

4.   LIMITATIONS ON USE OF SOFTWARE

     4.1  Without the prior written consent of Seller, Customer shall only use
          the Software in conjunction with a single SpotLight System delivered
          to Customer under the terms of the Agreement.

     4.2  The license granted to Customer in Section 3 is personal and may only
          be transferred to another SpotLight or site or another entity in
          accordance with Section 11(b) of the Agreement.

     4.3  The Software is subject to laws protecting patents, trade secrets,
          know-how, confidentiality and copyright.

     4.4  Customer shall not translate, modify, adapt, decompile, disassemble,
          or reverse engineer the Software or any portion thereof.

     4.5  Unless otherwise expressly agreed by Seller, Customer shall not permit
          its directors, officers, employees or any other person under its
          direct or indirect control, to write, develop, produce, sell, or
          license any software that performs the same functions as the Software
          by means directly attributable to access to the Software (e.g. reverse
          engineering or copying).

     4.6  Customer shall not export the Software from the United States without
          the written permission of Seller. If written permission is granted for
          export of the Software, then Customer shall comply with all U.S. laws
          and regulations for such exports and shall hold Seller harmless,
          including legal fees and expenses for any violation or attempted
          violation of the U.S. export laws.

     4.7  Customer acknowledges that Seller owns the Software and that any
          rights therein not specifically granted in this License are the
          exclusive property of Seller.

5.   RIGHT TO COPY, PROTECTION AND SECURITY

     5.1  Software provided hereunder may be copied (for back-up purposes only)
          in whole or in part, in printed or machine-readable form for
          Customer's internal use only, provided, however, that no more than
          three (3) printed copies and three (3) machine-readable copies shall
          be in existence at any one time without the prior written consent of
          Seller, other than copies electronically resident in SpotLight
          Systems.

     5.2  With reference to any copyright notice of Seller associated with
          Software, Customer agrees to include the same on all copies it makes
          in whole or in part. Seller's copyright notice may appear in any of
          several forms, including machine-readable form. Use of a copyright
          notice on the Software does not imply that such has been published or
          otherwise made generally available to the public.

     5.3  Customer agrees to keep confidential, in accordance with the terms of
          the Agreement or a non disclosure agreement signed by the parties, and
          not provide or otherwise make available in any form any Software or
          its contents, or any portion

                                    2 of 4
<PAGE>

          thereof, or any documentation pertaining to the Software, to any
          person other than employees of Customer or Seller.

     5.4  Software is the sole and exclusive property of Seller and no title or
          ownership rights to the Software or any of its parts, including
          documentation, is transferred to Customer.

     5.5  Customer acknowledges that it is the responsibility of Customer to
          take all reasonable measures to safeguard Software and to prevent its
          unauthorized use or duplication.

6.   REMEDIES

     Customer acknowledges that violation of the terms of this Exhibit or the
     Agreement shall cause Seller irreparable harm for which monetary damages
     may be inadequate, and Customer agrees that Seller may, in addition to any
     other legal or equitable remedy, seek temporary or permanent injunctive
     relief without the need to prove actual harm in order to protect Seller's
     interests.

7.   TERM

     Unless otherwise terminated, pursuant to Section 8 hereof, the term of the
     license granted pursuant to Section 3 herein shall be perpetual.

8.   TERMINATION

     8.1  The license granted hereunder may be terminated by Customer upon one
          (1) month's prior written notice.

     8.2  Seller may terminate the license granted hereunder if Customer is in
          material default of any of the terms and conditions of this Exhibit E
          and such termination shall be effective if Customer fails to correct
          such default within thirty (30) days after written notice thereof by
          Seller, provided, however, that if such default cannot reasonably be
          cured within thirty (30) days after written notice by Seller, and
          Customer diligently commences to correct such default within such
          thirty (30) days of written notice, the termination by Seller shall
          become effective if Customer fails to correct such default within
          ninety (90) days of such written notice. The provisions of Sections 4
          and 5 herein shall survive termination of any such license.

     8.3  In the event that Customer is required to return the Software,
          pursuant to Section 8(b) of the Purchase Agreement, or in the event
          that Customer returns a SpotLight System pursuant to Section 5(a)(2)
          of the Purchase Agreement, this license shall terminate immediately
          upon such return of the Software or Product to Seller.

     8.4  Within one (1) month after termination of the license granted
          hereunder, Customer shall furnish to Seller a document certifying that
          through its best efforts and to the best of its knowledge, the
          original and all copies in whole or in part of all Software, in any
          form, including any copy in an updated work, have been returned to
          Seller or destroyed. With prior written consent from Seller, Customer
          may retain one (1) copy for archival purposes only.

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<PAGE>

9.   RIGHTS OF THE PARTIES

     9.1  Nothing contained herein shall be deemed to grant, either directly or
          by implication, estoppel, or otherwise, any license under any patents,
          patent applications or copyrights of Seller except as expressly
          granted herein.

     9.2  Rights in programs or operating systems of third parties, if any, are
          further limited by their license agreements with such third parties,
          which agreements are hereby incorporated by reference thereto and made
          a part hereof as if fully set forth herein.  Customer agrees to abide
          thereby.

     9.3  During the term of the license granted pursuant to Section 3 herein
          and for a period of one (1) year after expiration or termination,
          Seller, and where applicable, its licensor(s), or their
          representatives may, upon reasonable prior notice to Customer, a)
          inspect the files, computer processors, equipment, facilities and
          premises of Customer during normal working hours to verify Customer's
          compliance with this Agreement, and b) while conducting such
          inspection, copy and/or retain all Software, including the medium on
          which it is stored and all documentation that Customer may possess in
          violation of the license or the Agreement.

     9.4  Customer acknowledges that the provisions of this Exhibit E are
          intended to inure to the benefit of Seller and its licensors and their
          respective successors in interest. Customer acknowledges that Seller
          or its licensors have the right to enforce these provisions against
          Customer, whether in Seller's or its licensor's name.

10.  LIMITATIONS ON SOFTWARE

     Customer understands that errors occur in Software and Seller makes no
     warranty that the Software will perform without error. Customer agrees that
     it is Customer's responsibility to select and test the Software to
     determine that is meets Customer's needs. Customer accepts the Software "as
     is" subject to the warranty set forth in Section 6 of the Purchase
     Agreement.

11.  SOFTWARE OBJECT CODE AND DOCUMENTATION

     In the event Seller becomes insolvent, ceases to carry on business on a
     regular basis or fails to perform its maintenance obligations herein and
     Customer purchases Seller's annual Hardware and Software Product
     Maintenance Program, then Seller shall immediately furnish to Customer the
     latest version of Product object code and documentation, training materials
     and any necessary information to enable Customer to maintain such Products
     or contract with others for such work.

12.  ENTIRE UNDERSTANDING

     12.1  This Exhibit E is a part of, and is to be read together with, the
           Agreement which contains additional terms and conditions, warranties
           and indemnities applicable to the Software.

     12.2  Notwithstanding anything to the contrary in other agreements,
           purchase orders or order acknowledgments, the Agreement, the Software
           specifications set forth in Exhibit B and this Exhibit E set forth
           the entire understanding and obligations regarding use of Software,
           implied or expressed.

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