10-Q

		UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
		WASHINGTON, D.C. 20549
		FORM 10-Q
[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2001
[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From _____ to ____
Commission file number 0-24673
METAWAVE COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware                  (State or other jurisdiction of incorporation or organization)			91-1673152             (I.R.S. Employer Identification No.)
10735 Willows Road NE, Redmond, WA (Address of principal executive offices)			98052                (Zip Code)
(425) 702-5600 (Registrant's telephone number, including area code)
NOT APPLICABLE (Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
The number of shares outstanding of the registrant's common stock as of March 31, 2001 was 43,769,509.

			METAWAVE COMMUNICATIONS CORPORATION FORM 10-Q For the Quarter Ended March 31, 2001 INDEX
PART I.	FINANCIAL INFORMATION
Item 1.		Financial Statements		Page
		Consolidated Balance Sheets - March 31, 2001 and December 31, 2000		1
		Consolidated Statements of Operations - Three months ended March 31, 2001 and 2000		2
		Consolidated Statements of Cash Flows - Three months ended March 31, 2001 and 2000		3
		Notes to Consolidated Financial Statements		4
Item 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations		7
Item 3.		Quantitative and Qualitative Disclosure of Market Risk		11
PART II.	OTHER INFORMATION
Item 1.		Legal Proceedings		12
Item 2.		Changes in Securities and Use of Proceeds		12
Item 4.		Submission of Matters to a Vote of Security Holders		12
Item 6.		Exhibits and Reports on Form 8-K		12
Signature				13

	PART I.             Financial Information
Item 1. Financial Statements
	METAWAVE COMMUNICATIONS CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands, except share data)

				March 31		December 31,
				2001		2000
				(Unaudited)
ASSETS
Current assets:
	Cash and cash equivalents			$           30,059		$              37,921
	Accounts receivable, net			19,474		21,533
	Inventories			12,164		17,022
	Note receivable			2,690		--
	Prepaid expenses and other assets			4,598		2,448
Total current assets				68,985		78,924
Property and equipment, net				6,076		6,642
Goodwill, net				71,133		75,109
Other intangibles, net				5,377		6,308
Note receivable from officer				--		1,005
Other noncurrent assets				210		367
Total assets				$         151,781		$                8,355
				==========		===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable			$           16,352		$              17,568
	Accrued liabilities			2,845		2,604
	Accrued compensation			3,663		2,478
	Current portion of notes payable and capital lease obligations			2,676		2,914
	Deferred revenues			1,115		719
Total current liabilities				26,651		26,283
Notes payable and capital lease obligations less current portion				1,910		2,542
Total liabilities				28,561		28,825
Commitments
Stockholders' equity:
	Preferred stock, $.0001 par value:
		Authorized shares - 10,000,000 at March 31, 2001 and December 31, 2000;
		issued and outstanding shares - none		-		-
	Common stock, $.0001 par value :
		Authorized shares - 150,000,000 at March 31, 2001 and December 31, 2000;
		issued and outstanding shares - 43,769,509 and 43,483,300 at March 31, 2001 and December 31, 2000, respectively		321,508		321,451
	Deferred stock compensation			(6,796	)	(11,591	)
	Accumulated other comprehensive income			(297	)	(155	)
	Accumulated deficit			(191,195	)	(170,175	)
			Total stockholders' equity	123,220		139,530
			Total liabilities and stockholders' equity	$ 151,781		$            168,355
				==========		===========
See accompanying notes to consolidated financial statements.

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

		Three Months Ended March 31,
		2001		2000
Revenues		$                 11,567		$                  9,126
Cost of revenues		10,428		7,094
Gross profit		1,139		2,032
Operating expenses:
	Research and development	9,611		6,374
	Sales and marketing	3,417		2,343
	General and administrative	4,494		1,325
	Amortization of intangibles and goodwill	4,906		-
Total operating expenses		22,428		10,042
Loss from operations		(21,289	)	(8,010	)
Other income, net		407		216
Interest expense		(138	)	(154	)
Other income (expense), net		269		62
Net loss before cumulative effect of change in accounting principle		(21,020	)	(7,948	)
Cumulative effect on prior years of change in accounting principle		-		(764	)
Net loss		$              (21,020	)	$                (8,712	)
		============		============
Basic and diluted net loss per share before cumulative effect of change		$                  (0.49	)	$                  (3.09	)
	in accounting principle
Cumulative effect on prior years of change in accounting principle		-		$                  (0.30	)
Basic and diluted net loss per share		$                  (0.49	)	$                  (3.39	)
		============		============
Weighted average shares used in computation of basic and diluted		43,031		2,569
net loss per share
See accompanying notes to consolidated financial statements.

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

(Unaudited)

				Three Months Ended March 31,
				2001		2000
Operating Activities
Net loss				$               (21,020	)	$                (8,712	)
Adjustments to reconcile net loss to net cash used in
	operating activities:
		Depreciation and amortization expense		5,798		718
		Amortization of deferred stock compensation		3,854		762
		Other		44		-
Changes in operating assets and liabilities:
		Decrease in accounts receivable		2,059		1,547
		Increase in inventories		(5,108	)	(1,713	)
		Decrease (increase) in prepaids and other noncurrent assets		(988	)	67
		Increase in accounts payable, accrued liabilities,
			and accrued compensation	210		3,844
		Increase (decrease) in deferred revenues		396		(1,249	)
Net cash used in operating activities				(14,755	)	(4,736	)
Investing Activities
Net proceeds from sale of inventory and fixed assets				7,964		-
Purchases of equipment				(1,013	)	(790	)
Net cash provided by (used in) investing activities				6,951		(790	)
Financing activities
Net proceeds from exercise of common stock options				954		279
Principal payments on notes payable and capital lease obligations				(870	)	(354	)
Net cash provided by (used in) financing activities				84		(75	)
Net decrease in cash and cash equivalents				(7,720	)	(5,601	)
Effect of exchange rate changes on cash				(142	)	(67	)
Cash and cash equivalents at beginning of period				37,921		20,165
Cash and cash equivalents at end of period				$                30,059		$                14,497
				============		============
Noncash transactions and supplemental disclosures
Capital lease obligations incurred to purchase assets				$                          -		$                      426
Deferred stock compensation				-		2,532
Cash interest paid				125		116
Note receivable from manufacturing outsourcing				2,690		-
See accompanying notes to consolidated financial statements.

METAWAVE COMMUNICATIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.	Description of Business
	Metawave Communications Corporation, a Delaware corporation (the "Company") headquartered in Redmond, Washington, provides smart antenna systems and embedded solutions to wireless network operators facing capacity constraints in the wireless communications industry. The Company's SpotLight smart antenna systems consist of antennas that improve the reception and transmission of radio signals dynamically through the use of our proprietary software. The Company believes that wireless operators can increase overall network capacity, improve or maintain network quality, reduce network operating costs and better manage network infrastructure by implementing the SpotLight systems. As the demand for wireless services continues to grow, the Company intends to develop embedded solutions based on its proprietary technologies that address the associated network capacity problems faced by wireless network operators.
2.	Principles of Consolidation and Basis of Presentation
	The accompanying consolidated financial statements of Metawave Communications Corporation have been prepared in conformity with generally accepted accounting principles in the United States of America for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included have been condensed or omitted. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. We have used estimates in determining certain provisions, including the allowance for doubtful accounts receivable, inventory valuation, useful lives for property and equipment, and warranty accruals. Actual results may differ from these estimates. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with the audited financial statements of the Company as of and for the year ended December 31, 2001.
	The Company uses a 52-week fiscal year ending on the Sunday closest to December 31. The 2000 fiscal year ended on December 31, 2000, with each of the fiscal quarters representing a 13-week period. The first quarter of 2001 ended on April 1, 2001. For convenience of presentation, all fiscal periods in these financial statements are treated as ending on a calendar month end
3.	Revenue Recognition and 2000 Change in Revenue Recognition Accounting Principle
	The Company generates revenues through the sales of smart antenna systems and related installation and optimization services. System revenues are recognized when title to the system and risk of loss has been transferred to the customer and all customer acceptance conditions, if any, have been satisfied, and when collection is probable. During 2000, the Company began deferring that portion of equipment revenue that is billable after completion of installation and optimization services. The amount of revenues and gross profit deferred for the first quarter of 2001 was $1.2 million. The amount of revenues and gross profit deferred for the first quarter of 2000 was $203,000. The change in accounting principle also resulted in a charge of $764,000 for the cumulative effect of the change through the end of fiscal 1999 which was recognized in the first quarter of 2000.
	Service revenues, generally for installation and optimization, are recognized when the services have been performed and all customer acceptance conditions, if any, have been satisfied. Revenues from maintenance contracts are deferred and recognized ratably over the term of the agreement (which is typically one year). Any billings in excess of revenues are classified as deferred revenues and related systems are recorded as inventory.
4.	Manufacturing Outsourcing Arrangement
	During the first quarter of 2001, we entered into an exclusive, five-year supply agreement with Viasystems Group, Inc. ("Viasystems") to outsource substantially all of our domestic manufacturing operations to Viasystems. Viasystems is a leading global provider of electronics manufacturing services. Under the terms of the agreement, Viasystems purchased approximately $10.7 million of fixed assets and inventory. As part of the purchase price, we have accepted a $2.7 million short-term note from Viasystems, due on September 2, 2001. Pursuant to this agreement, Viasystems can return excess inventory included in the agreement, as determined by the Company and Viasystems, five months from the date of the agreement.
5.	Accounting for Derivative Instruments Cash Equivalents and Hedging Activities
	In June 1998, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities. In June 1999, the FASB issued Statement No. 137, Accounting for Derivative Instruments and Hedging Activities-Deferral of the Effective Date of FASB Statement No. 133. In June 2000, the FASB issued Statement No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities, an amendment of FASB Statement No. 133. Statement 133, as amended, establishes accounting and reporting standards requiring that all derivative instruments be recorded in the balance sheet as either assets or liabilities measured at their fair value. The statement requires that changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. Statement 133, as amended, is effective for the Company's fiscal year 2001. To date, we have not entered into any derivative financial instrument contracts. Therefore, the adoption of this statement did not have a material impact on the financial position or results of our operation.

6.	Inventories
			March 31, 2001	December 31, 2000
			(In thousands)
		Purchased parts	$                        70	$                     11,038
		Subassemblies	3,078	3,752
		Finished goods	9,016	2,232
			$                 12,164	$                     17,022
			=============	==============
	Purchased parts include purchased components and partially assembled units. Subassemblies primarily represent components that are assembled and ready for final configuration pending the detailed requirements for the specific customer.

7.	Line of Credit Agreement
	We have a credit facility with Imperial Bank. The facility provides for a revolving credit line of $10.0 million to support working capital with a $3.3 million sub-limit for issuance of trade-related commercial and standby letters of credit. Outstanding balances on the credit line bear interest at the bank's prime rate (8% as of March 31, 2001 and 9.5% as of December 31, 2000), and are secured by our accounts receivable. At March 31, 2001 and December 31, 2000, $3.3 million and $2.8 million, respectively, was outstanding related to the issuance of standby letters of credit for facilities and equipment. We are required to comply with certain covenants set forth in the line of credit agreement. We are currently in compliance with these covenants.
8.	Net Loss Per Share
	Basic and diluted net loss per share is calculated using the weighted average number of shares of common stock outstanding. The effect of stock options, warrants and convertible and redeemable preferred stock have not been included in the calculation of diluted net loss per share as their effect is antidilutive. Pro forma basic and diluted net loss per share is computed on the basis of the weighted average number of shares of common stock outstanding plus the pro forma effect of convertible preferred shares as if such shares were converted to common stock at the time of issuance. Antidilutive restricted stock, options and warrants not included in loss per share calculation was 6,699 and 3,151 in 2001 and 2000, respectively.

	March 31,
	2001		2000
	(Unaudited)
	(In thousands, except per share data)
Net loss	$                (21,020	)	$                (8,712	)
Weighted average shares outstanding:	============		============
Common Stock	43,031		2,569
Convertible and redeemable preferred stock	-		27,973
Pro forma weighted average shares outstanding	43,031		30,542
	============		============
Basic and diluted net loss per share before cumulative	$                  (0.49	)	$                  (3.09	)
Effect of change in accounting principle	============		============
Cumulative effect on prior years of change in accounting principle	$                          -		$                  (0.30	)
	============		============
Pro forma net loss per share	$                  (0.49	)	$                  (0.29	)
	============		============

9.	Retirement Plan
	We have a salary deferral (401(k)) plan for our employees. The plan allows employees to contribute a percentage of their pretax earnings annually, subject to limitations imposed by the Internal Revenue Service. Effective January 1, 2001, the plan also allows the Company to make 50% matching contributions up to 6% of eligible participants' eligible compensation.
10.	Business Segments
	The Company operates in one material segment as a manufacturer of wireless telecommunications equipment. Our GSM segment is not material at this time. While certain expenses for sales and marketing activities are incurred in various geographical regions, substantially all of our assets are located and the majority of our operating expenses are incurred at the corporate headquarters. Revenue information by geographic region is as follows:

	Three Months Ended
	March 31,
	2001	2000
	(In thousands)
United States	$                 4,069	$               4,054
Mexico	5,653	5,072
China	1,558	-
Korea	287	-
Total	$               11,567	$               9,126
	============	===========

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

Forward-Looking Statements

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

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

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

Overview

          The Company provides smart antenna systems and embedded solutions to wireless network operators and base station manufacturers facing capacity constraints in the wireless communications industry. From inception in January 1995 through December 31, 1997, our operating activities related primarily to conducting research and development, building market awareness, recruiting management and technical personnel and building an operating infrastructure. Shipment for commercial sale of our initial SpotLight system began late in the fourth quarter of 1997 and the Company first recognized revenues for the sale of our SpotLight system in the first quarter of 1998. Since the beginning of 1998, our operating activities have been focused on increasing sales, new product development and expanding manufacturing capacity. Since inception, the Company has incurred significant losses and as of March 31, 2001, had an accumulated deficit of $191.2 million.

          Our revenues are derived primarily from sales of our SpotLight systems, which includes the sale of hardware and the licensing of software, and from related installation and optimization services. The Company believes that substantially all of our revenues in the near and medium term will be derived from sales of our SpotLight systems.

          In addition to sales of our Spotlight systems, we intend to offer embedded smart antenna solutions to wireless equipment manufacturers that we believe will enhance wireless voice and data capacity. In the first quarter of 2001, we entered into an agreement with Samsung, a leading manufacturer of wireless infrastructure, to jointly develop a commercial base station that will incorporate our patented embedded smart antenna technology.

          At the end of first quarter 2001, we entered into an exclusive, five-year supply agreement with Viasystems Group, Inc. to outsource substantially all of our domestic manufacturing operations to Viasystems. Under the terms of the agreement, Viasystems purchased fixed assets and inventory for a total purchase price of $10.7 million. As part of the purchase price, we have accepted a $2.7 million short-term note from Viasystems, due on September 2, 2001. Pursuant to this agreement, Viasystems can return excess inventory included in the agreement, as determined by the Company and Viasystems, five months from the date of the agreement. At such time the purchase price will be adjusted.

          Further to this agreement, the Company is in discussions to sell its manufacturing operations located in Taipei, Taiwan to Viasystems.

Results of Operations - For the Three Months Ended March 31, 2001 and 2000

Revenues:

          Net revenue for the first quarter of 2001 increased 27% to $11.6 million from $9.1 million for the first quarter of 2000. The increase was lower than previously expected, due to (1) a general slowdown in the U.S. economy and telecom spending and (2) deferrals of sales orders we had previously anticipated to close in the first quarter of 2001. The Company's two largest customers in the first quarter of 2001 were Grupo Iusacell Celular S.A. de C.V. of Mexico and Alltel Communications, which accounted for 49% and 22% of our revenues, respectively. International sales of our systems for the three months ended March 31, 2001 accounted for 65% of total revenues.

Gross Profit:

          Gross profit for the first quarter of 2001 decreased to $1.1 million from $2.0 million in the first quarter of 2000. This decrease was primarily due to a $1.2 million one-time charge to cost of goods sold primarily related to outsourcing our manufacturing capabilities to Viasystems.

Research and Development:

          Research and development expense was $9.6 million, an increase of 50% from $6.4 million for the first quarter in 2001 over the comparable period in 2000. The increase in research and development expense was primarily due to continuing development and testing of SpotLight 2200 CDMA, SpotLight GSM systems, and embedded product development. In addition, we recognized additional research and development expenses of $2.2 million in the amortization of deferred stock compensation related to the Adaptive Telecom, Inc. acquisition.

Sales and Marketing:

          Sales and marketing expense increased 48% to $3.4 million for the three months ended March 31, 2001 from $2.3 million for the same period in 2000. The increase was primarily due to staffing realignments, adjusted sales compensation structure, and additional services to customers in 2001.

General and Administrative:

          Our general and administrative expenses consist primarily of salaries and benefits, fees for professional services, deferred compensation, rent and general office expenses. General and administrative expenses for the three months ended March 31, 2001 were $4.5 million, an increase of 246% from $1.3 million for the three months ended March 31, 2000. The increase was primarily due to additional staffing, professional services and an additional $1.6 million in amortization of deferred stock compensation from the acquisition of Adaptive Telecom.

Amortization of Intangibles and Goodwill:

          We recorded $4.9 million in the first quarter of 2001 for the amortization of intangibles and goodwill related to the acquisition of Adaptive Telecom.

Other Income (Expense), Net:

          Our total other income (expense), net amounted to an income of $269,000 in the three months ended March 31, 2001 compared to $62,000 in the three months ended March 31, 2000. The increase is the result of higher returns on investments.

Liquidity and Capital Resources

          For the three months ended March 31, 2001, we used net cash in operating activities of $14.8 million compared to $4.7 million for the same period in 2000. Our operating activities included major uses of cash to fund our net loss of $21.0 million, increased inventories of $5.1 million (excluding sales to Viasystems), and an increase of $1.0 million in prepaids and other noncurrent assets. We partially offset cash uses with a decrease of $2.1 million in accounts receivable, increases in accounts payable and accrued liabilities of $0.2 million, an increase in deferred revenues of $0.4 million and non-cash charges to depreciation and amortization of $5.8 million, and stock compensation expenses of $3.9 million.

          Our net cash provided by investing activities for the three months ended March 31, 2001 was $7.0 million as compared to net cash used in the three months ended March 31, 2000 of $0.8 million. Pursuant to the manufacturing outsourcing agreement with Viasystems, we received $7.9 million for payment of fixed assets and inventory. Net cash used in investing activities was primarily for the purchase of testing equipment, leasehold improvements, and customer support equipment to support our research and development, our customers, and Taiwan manufacturing efforts.

          Our net cash provided by financing activities for the three months ended March 31, 2001 was $84,000 compared to net cash used of $75,000 in the same period in 2000. For the three months ended March 31, 2001, we received $954,000 and issued 286,191 shares of common stock under our stock option plan.

          As of March 31, 2001, we had $30.1 million in cash and cash equivalents. We also had a revolving line of credit of $10.0 million with Imperial Bank. At March 31, 2001, $3.3 million was outstanding related to the issuance of standby letters of credit for facilities and equipment. In addition, we have a $6.0 million equipment lease arrangement with Transamerica, of which $2.0 remained available as of March 31, 2001.

          We believe that current capital resources are adequate to fund our operations for the next twelve months. We may be required to raise additional capital, which may not be available to us on acceptable terms. Any inability to obtain needed financing by us could have a material adverse effect on our business and operating results.

Recent Accounting Pronouncements

          In June 1998, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities. In June 1999, the FASB issued Statement No. 137, Accounting for Derivative Instruments and Hedging Activities-Deferral of the Effective Date of FASB Statement No. 133. In June 2000, the FASB issued Statement No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities, an amendment of FASB Statement No. 133. Statement 133, as amended, establishes accounting and reporting standards requiring that all derivative instruments be recorded in the balance sheet as either assets or liabilities measured at their fair value. The statement requires that changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. Statement 133, as amended, is effective for the Company's fiscal year 2001. To date, we have not entered into any derivative financial instrument contracts. Therefore, the adoption of this statement did not have a material impact on the financial position or results of our operation.

Factors Affecting Our Business Prospects and Operating Results

Limited Operating History

          We have a limited operating history which makes it difficult for you to evaluate our business and your investment. We were incorporated in 1995 and were in the development stage until late 1997, when we commenced shipment for commercial sale of our first SpotLight smart antenna system. We therefore have a limited operating history upon which an investor may evaluate our operations and future prospects. The revenue and profit potential of our business is unproven and our limited operating history makes our future operating results difficult to predict. Because our smart antenna systems and embedded solutions were introduced relatively recently, we are unable to predict with any degree of certainty whether our smart antenna systems will achieve widespread market acceptance. In view of our limited operating history, an investment in our common stock must be considered in light of the risks and uncertainties that may be encountered by early stage companies in the wireless communications equipment market. In addition, period-to-period comparisons of operating results may not be meaningful and operating results from prior periods may not be indicative of future performance.

Concentration of Customers

          Due to the highly concentrated nature of the wireless industry and the industry consolidation, we depend on a limited number of wireless network operators for substantially all of our revenues. The loss of a customer or a delay in an order from a customer could impair our operating results. The Company believes that the number of potential customers for future systems will be limited. In the first quarter of 2001, three customers accounted for 84% of our total revenues. Failure by us to capture a significant percentage of the wireless network operators as customers could cause our operating results to be significantly less than anticipated and lead to a decline in our stock price. Moreover, due to this customer concentration, any loss or reduced demand from our customers could cause our sales to fall significantly.

Complex and Lengthy Sales Cycle

          Because our contracts with new customers are subject to satisfying performance criteria, the timing of purchases is difficult to predict, and as a result, our revenue is unpredictable. We believe that the purchase of our SpotLight systems and embedded solutions is typically a strategic decision that requires approval at senior levels of customers' organizations, significant technical evaluation and a substantial commitment of customers' personnel, financial and other resources. Our contracts with new customers typically contain conditional acceptance provisions for the initial system sales, and we delay recognition of revenue until all conditions are satisfied, which causes our sales cycle to last up to 18 months and to vary substantially from customer to customer. This variability makes predicting our revenues difficult. Typically, performance of our systems must be accepted in an initial cell site or cluster of cell sites in a field trial prior to completing any additional sales to a particular wireless network operator. This makes the sales process associated with the purchase of our systems complex, lengthy and subject to a number of significant risks. We may incur substantial expenses and expend significant management and personnel resources in the process of a field trial. If we do not satisfy conditions in these contracts or if satisfaction of these conditions were delayed for any reason, revenues in any particular period could fall significantly below our expectations.

Uncertainties Related to Market Acceptance

          We believe that substantially all of our revenues in the foreseeable future will be derived from sales of our SpotLight systems. If our SpotLight systems fail to achieve broad market acceptance among our customers and potential customers, our revenues could fall below our and analysts' expectations which could cause our stock price to decline. In light of the relatively recent introduction of our SpotLight systems, in particular our SpotLight GSM system and the rapidly evolving nature of the wireless communications industry, we cannot predict with any degree of assurance whether our current or future smart antenna systems will achieve broad market acceptance. We must demonstrate that our systems and embedded solutions provide a cost-effective spectrum management solution that expands wireless network operators' capacity within each operator's unique network configuration and specifications. If our smart antenna systems do not achieve widespread acceptance with wireless network operators, we will be unable to increase our revenues as expected.

          In the first quarter of 2001, we signed our first royalty-bearing license agreement with Samsung to jointly develop a commercial base station, incorporating our embedded smart antenna technology for 2.5G and 3G CDMA networks. Failure of our embedded smart antenna solutions either to successfully integrate with next generation base station equipment or to significantly enhance wireless voice and data capacity could significantly reduce demand for these solutions. Given the rapidly evolving nature of the wireless communications industry, we cannot predict whether our embedded smart antenna solutions will achieve broad market acceptance. Our future growth is dependent in part upon the acceptance and success of our embedded smart antenna solutions. If our embedded smart antenna solutions do not achieve widespread acceptance with wireless network operators, our prospects for future growth will be adversely affected.

Delays in system installation

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

          In addition, as a result of our adoption of a change to our revenue recognition policy (see note 3 to our financial statements), we will defer revenues for that portion of the revenue derived from that system until the services are completed. These delays could contribute to fluctuations in our revenues from quarter to quarter and negatively affect our cash flow and business operations.

          Additionally, delays in installation may contribute to delays in obtaining new sales orders from customers as customers' inventory of uninstalled Spotlight systems increase. A significant reduction in order activity from customers could harm our business and operating results.

International Market Risks

          Our substantial sales of our SpotLight systems and embedded solutions in international markets subject us to various risks and costs which may harm our business. We anticipate that international sales of our SpotLight and embedded systems in Asia, Latin America and other international markets will continue to account for a significant portion of our revenues for the foreseeable future. Risks and associated costs inherent in our international business activities include:

          w      difficulties obtaining foreign regulatory approval or U.S. export licenses for our smart antenna systems and embedded solutions and technologies;

          w      unexpected changes in regulatory requirements relating to the telecommunications industry;

          w      greater difficulties collecting delinquent or unpaid accounts;

          w      lack of suitable export financing for our SpotLight systems;

          w      dependence upon independent sales representatives and other indirect channels of distribution of our SpotLight systems and embedded solutions;

          w      political and economic instability in the regions where we sell our SpotLight systems and embedded solutions;

          w      enforceability of contracts with foreign customers and distributors governed by foreign laws; and

          w      lack of experienced technical personnel familiar with our products in foreign markets.

Item 3. Quantitative and Qualitative Disclosure of Market Risk

Interest Rate Risk

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

Foreign Currency Risk

          Currently our export sales are denominated in U.S. Dollars. The continued development of our international operations will result in an increased market risk relative to foreign currencies. At this time, we do not believe there will be material risks related to fluctuations in foreign exchange rates.

PART II. Other Information

Item 1.          Legal Proceedings

                      None.

Item 2.          Changes in Securities and Use of Proceeds

(f)                  Use of Proceeds from Sale of Registered Securities

          In the second quarter of 2000, we completed an initial public offering of our common stock on April 25, 2000. Net proceeds from the offering amounted to $58.9 million and are invested in high quality short-term investments. As of March 31, 2001, we used approximately $2.5 million for acquisition related expenses and $51.2 million for working capital expenditures and $2.1 million for equipment purchases to fund our research and development activities. To date, we believe that we have used the offering proceeds in a manner consistent with the use of proceeds described in the registration statement. As of March 31, 2001, the remaining balance of approximately $3.1 million of the offering proceeds were invested in high quality short-term investments recorded as cash equivalents on the balance sheet.

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

                      None.

Item 6.          Exhibits and Reports on Form 8-K

(a)                  Exhibit Number

3.1*	Certificate of Incorporation of the Registrant.
3.2*	Bylaws of the Registrant.
4.1*	Form of Stock Certificate.
10.1X	Asset Purchase Agreement dated April 1, 2001 between the Registrant and Viasystems, Inc.
10.2X	Manufacturing Agreement dated April 1, 2001 between the Registrant and Viasystems, Inc.

                     ____________

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

X      Certain information in these exhibits has been omitted and filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request under 17 C.F.R. Sections 200.80(b)(4), 200.83 and 230.406.

(b)                  Reports on Form 8-K

      The Company did not file any reports on Form 8-K during the three months ended March 31, 2001.

SIGNATURE

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

Date:          May 14, 2001	METAWAVE COMMUNICATIONS CORPORATION
	/s/ Stuart W. Fuhlendorf
	Stuart W. Fuhlendorf
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

INDEX TO EXHIBITS

Exhibit Number

3.1*	Certificate of Incorporation of the Registrant.
3.2*	Bylaws of the Registrant.
4.1*	Form of Stock Certificate.
10.1X	Asset Purchase Agreement dated April 1, 2001 between the Registrant and Viasystems, Inc.
10.2X	Manufacturing Agreement dated April 1, 2001 between the Registrant and Viasystems, Inc.

                      ____________

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

X      Certain information in these exhibits has been omitted and filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request under 17 C.F.R. Sections 200.80(b)(4), 200.83 and 230.406.

EX-10.1

                    ASSET PURCHASE AGREEMENT


                             BETWEEN



                 METAWAVE COMMUNICATIONS CORPORATION

                               and

                        VIASYSTEMS, INC.
















                      ____________________

                    Dated as of April 1, 2001

                      ____________________



                            ARTICLE I
                Purchase of Manufacturing Assets

1.1  Purchase and Sale of Manufacturing Assets.                1
1.2  Excluded Assets.                                          2
1.3  Nonassignable Contracts or Permits.                       3

                           ARTICLE II
                    Assumption of Liabilities

2.1  Assumed Liabilities.                                      3

                           ARTICLE III
                         Purchase Price

3.1  Purchase Price.                                           4
3.2  Allocation of Purchase Price.                             4
3.3  Physical Inventory.                                       4
3.4  Put Right in Respect of Inventory.                        5

                           ARTICLE IV
                             Closing

4.1  Closing Date.                                             5
4.2  Proceedings at Closing                                    5

                            ARTICLE V
            Representations and Warranties of Seller

5.1  Organization and Power.                                   6
5.2  Authorization.                                            6
5.3  No Conflicts.                                             6
5.4  Consents and Approvals                                    6
5.5  No Third-Party Options                                    7
5.6  Legal Compliance.                                         7
5.7  Litigation; Orders.                                       7
5.8  Permits.                                                  7
5.9  Financial Statements.                                     7
5.10 Inventory.                                                8
5.11 Absence of Changes.                                       8
5.12 Title to Manufacturing Assets.                            8
5.13 Sufficiency and Condition of Manufacturing Assets.        8
5.14 Intellectual Property.                                    8
5.15 Real Property.                                            9
5.16 Environmental Matters.                                    9
5.17 Benefit Plans.                                           10
5.18 Labor and Employment Matters.                            10
5.19 Disclosure.                                              10
5.20 No Other Representations.                                11

                           ARTICLE VI
           Representations and Warranties of Purchaser

6.1  Organization and Power.                                  11
6.2  Authorization.                                           11
6.3  No Conflicts.                                            11
6.4  Consents and Approvals                                   12
6.5  Financial Condition                                      12
6.6  Disclosure                                               12

                           ARTICLE VII
                      Pre-Closing Covenants

7.1  Access.                                                  12
7.2  Conduct of the Manufacturing Operations.                 12
7.3  Notifications.                                           13
7.4  Governmental Filings.                                    13
7.5  Injunctions.                                             13
7.6  Satisfaction of Conditions.                              13
7.7  Confidentiality.                                         14

                          ARTICLE VIII
                      Conditions to Closing
8.1  Conditions Precedent to Obligations of Purchaser and
     Seller.                                                  14
8.2  Additional Conditions Precedent to Obligations of
     Purchaser.                                               14
8.3  Additional Conditions Precedent to Obligations of
     Seller.                                                  14

                           ARTICLE IX
                       Closing Deliveries

9.1  Seller's Deliveries.                                     15
9.2  Purchaser's Deliveries.                                  15

                            ARTICLE X
                     Post-Closing Covenants

10.1 Discharge of Business Obligations                        16
10.2 Payments Received                                        16
10.3 Maintenance of Books and Records                         16
10.4 Transfer Taxes                                           17
10.5 Employee and Employee Benefits Plans                     17
10.6 Repurchase Rights                                        18
10.7 Sale of Taiwan Manufacturing Facilities                  18
10.8 Release of Liens                                         19

                           ARTICLE XI
                  Survival and Indemnification

11.1 Survival of Representations and Warranties.              19
11.2 Limitations of Liability.                                19
11.3 Indemnification.                                         20
11.4 Defense of Claims.                                       20
11.5 Exclusive Remedy.                                        22

                           ARTICLE XII
                           Termination

12.1 Termination.                                             22
12.2 Effect of Termination.                                   22

                          ARTICLE XIII
                    Miscellaneous Provisions

13.1 Amendments                                               22
13.2 Assignment                                               23
13.3 Binding Effect                                           23
13.4 Construction                                             23
13.5 Counterparts                                             23
13.6 Entire Agreement                                         23
13.7 Expenses                                                 23
13.8 Finder's Fee, etc.                                       24
13.9 Further Assurances.                                      24
13.10 Governing Law                                           24
13.11 Headings                                                24
13.12 Jurisdiction                                            24
13.13 Notices                                                 24
13.14 Passage of Title; Risk of Loss.                         25
13.15 Press Releases                                          25
13.16 Severability                                            26
13.17 Third-Party Beneficiaries                               26
13.18 Waiver                                                  26
                     EXHIBITS AND SCHEDULES


Exhibit A Manufacturing Agreement
Exhibit B Form of Promissory Note
Exhibit C Sublease
Exhibit D-1    Transition Services Agreement
Exhibit D-2    Transition Services Agreement

Schedule 1.1(a)          Tangible Personal Property
Schedule 1.1(b)          Inventories
Schedule 1.1(c)          Contracts
Schedule 1.1(d)          Permits
Schedule 2.1        Assumed Liabilities
Schedule 5.3        No Conflicts
Schedule 5.4        Consents and Approvals
Schedule 5.7        Litigation; Orders
Schedule 5.9        Financial Statements
Schedule 5.10       Inventory
Schedule 5.11       Absence of Changes
Schedule 5.12       Title to Manufacturing Assets
Schedule 5.14       Intellectual Property
Schedule 5.15       Real Property Leases
Schedule 5.16       Environmental Matters
Schedule 5.17       Benefit Plans
Schedule 5.18       Labor and Employment Matters
Schedule 6.4        Consent and Approvals
Schedule 7.2        Conduct of Manufacturing Operations
Schedule 10.5(e)    Stock Options

                    GLOSSARY OF DEFINED TERMS

"Accountants"                                         Section 3.3
"affiliate"                                          Section 13.4
"Agreed Allocation"                                   Section 3.2
"Agreement"                                              preamble
"Asset Value"                                         Section 3.3
"Assumed Liabilities"                                 Section 2.1
"Benefit Plan"                                       Section 5.17
"Cessation of Business"                              Section 10.6
"Closing"                                             Section 4.1
"Closing Date"                                        Section 4.1
"Closing Statement"                                   Section 3.3
"COBRA"                                           Section 10.5(b)
"Code"                                                Section 3.2
"Contracts"                                        Section 1.1(c)
"Default"                                             Section 5.3
"Direct Claim"                                    Section 11.4(d)
"Employee"                                           Section 5.17
"Environmental Laws"                                 Section 5.16
"Environmental Permits"                              Section 5.16
"ERISA"                                              Section 5.17
"Excess Inventory"                                 Section 3.4(a)
"Excess Inventory Determination Date"              Section 3.4(a)
"Excluded Assets"                                     Section 1.2
"Facility"                                               recitals
"Financial Statements"                                Section 5.9
"Former Employee"                                    Section 5.17
"GAAP"                                                Section 5.9
"Governmental Entity"                                 Section 5.3
"Historical Statements of Assets"                     Section 5.9
"Indemnifiable Losses"                            Section 11.2(a)
"Indemnifying Party"                              Section 11.2(a)
"Indemnitee"                                      Section 11.2(a)
"Indemnity Payment"                               Section 11.2(a)
"Intellectual Property"                              Section 5.14
"Inventories"                                      Section 1.1(b)
"Inventory Purchase Price"                            Section 3.1
"Law"                                                 Section 5.3
"Liens"                                              Section 5.12
"Manufacturing Agreement"                                recitals
"Manufacturing Assets"                                Section 1.1
"Manufacturing Cost Statements"                       Section 5.9
"Manufacturing Operations"                               recitals
"Metawave Taiwan"                                    Section 10.7
"Note"                                                Section 3.1
"Order"                                               Section 5.3
"P&L Statements"                                      Section 5.9
"Permits"                                          Section 1.1(d)
"Permitted Liens"                                    Section 5.12
"person"                                             Section 13.4
"Purchase Price"                                      Section 3.1
"Purchaser"                                              preamble
"Purchaser Documents"                                 Section 6.2
"Purchaser's Notice"                                 Section 10.6
"Real Property"                                   Section 5.15(a)
"Real Property Leases"                            Section 5.15(a)
"Seller"                                                 preamble
"Seller Documents"                                    Section 5.2
"Seller's Notice"                                    Section 10.6
"Software"                                         Section 1.1(c)
"Statement of Assets"                                 Section 5.9
"Statement of Assets Date"                            Section 5.9
"Taiwan Manufacturing Assets"                        Section 10.7
"Taiwan Permits"                                     Section 10.7
"Taiwan Purchase Agreement"                          Section 10.7
"Tangible Personal Property"                       Section 1.1(a)
"Third Party Claim"                               Section 11.2(a)
"TPP Purchase Price"                                  Section 3.1
"Transfer Documents"                               Section 9.1(a)
"Unadjusted Purchase Price"                           Section 3.1
"Viasystems Taiwan"                                  Section 10.7
"WARN Act"                                        Section 10.5(b)


                   ASSET PURCHASE AGREEMENT

     THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made  as
of April 1, 2001, between Metawave Communications Corporation,  a
Delaware corporation ("Seller"), and Viasystems, Inc., a Delaware
corporation ("Purchaser").

     WHEREAS,  Seller currently conducts manufacturing operations
("Manufacturing  Operations") to manufacture smart  antennas  for
the  wireless  communications industry designed and  marketed  by
Seller  at  its  facility  located in  Redmond,  Washington  (the
"Facility");

     WHEREAS,  on  the  terms and subject to the  conditions  set
forth  herein,  Seller desires to sell, transfer, and  assign  to
Purchaser,  and  Purchaser desires to acquire and  purchase  from
Seller, all of the Manufacturing Assets;

     WHEREAS,  on  the  terms and subject to the  conditions  set
forth  herein,  Seller  desires  to  assign  to  Purchaser,   and
Purchaser desires to assume, the Assumed Liabilities; and

     WHEREAS, as a condition precedent to the consummation of the
transactions  contemplated by this Agreement, each  of  Purchaser
and   Seller  desire  to  execute  and  deliver  a  Manufacturing
Agreement  in substantially the form of Exhibit A ("Manufacturing
Agreement").

     NOW,  THEREFORE, in consideration of the foregoing  recitals
and  the  representations, warranties, covenants, and  agreements
herein contained, and other good and valuable consideration,  the
receipt  and  sufficiency of which are hereby  acknowledged,  the
parties hereto hereby agree as follows:

                            ARTICLE I
                Purchase of Manufacturing Assets

     1.1   Purchase  and Sale of Manufacturing  Assets.   On  the
terms  and  subject to the conditions set forth  herein,  at  the
Closing, Seller will sell, transfer, convey, assign, and  deliver
to  Purchaser, and Purchaser will purchase and accept, all right,
title,  and interest of Seller in and to the rights, assets,  and
properties  of  the  Manufacturing Operations specified  in  this
Section 1.1 (collectively, the "Manufacturing Assets"):

          (a)   Tangible  Personal Property.  All  machinery  and
     equipment,  tools,  artwork,  test  equipment,   spare   and
     maintenance  parts, furniture, fixtures, jigs, dies,  office
     equipment,   vehicles,  and  all  other  tangible   personal
     property of the Manufacturing Operations owned by Seller and
     located at the Facility (subject to any exceptions listed on
     Schedule  1.1(a)) as of the Closing, and all other  tangible
     personal  property owned by Seller as of the Closing  listed
     on  Schedule  1.1(a)  (collectively, the "Tangible  Personal
     Property");

          (b)    Inventories,  Stores,  and  Supplies.   All  raw
     materials,  components,  packaging  materials,  stores   and
     supplies, and samples (collectively, "Inventories")  located
     at  the  Facility  (subject  to  any  exceptions  listed  on
     Schedule  1.1(b))  and  all  other  Inventories  listed   on
     Schedule 1.1(b);

          (c)   Contract  Rights.  Subject to  Section  1.3,  all
     rights and incidents of interest of Seller as of the Closing
     in  and  to  all  supply  agreements,  commitments,  orders,
     leases,  software  licenses  (the  "Software"),  and   other
     contracts   and  legally  binding  contractual  rights   and
     obligations  that are necessary to operate the Manufacturing
     Operations,  in  each  case  as listed  on  Schedule  1.1(c)
     (collectively, "Contracts");

          (d)      Governmental    Licenses,     Permits,     and
     Approvals.   Subject to Section 1.3 and except for  Seller's
     license to do business from the city of Redmond, Washington,
     all rights and incidents of interest in and to all licenses,
     permits,  franchises, authorizations, orders, registrations,
     certificates,  variances,  approvals,  and  similar   rights
     issued  to  Seller  by  any  Governmental  Entity  that  are
     necessary to operate the Manufacturing Operations, as listed
     on Schedule 1.1(d) (collectively, "Permits"); and

          (e)  Books and Records.

               (i)   All books, records, reports, documents,  and
          files of Seller relating exclusively or principally  to
          the Manufacturing Operations, in original or copy form,
          including  purchase and sales records,  accounting  and
          financial   data,   property   records,   manufacturing
          records,  product  engineering, and drawings  that  are
          necessary   to  operate  the  Manufacturing  Operations
          (provided,  however, that extracts pertaining  only  to
          the  Manufacturing  Operations  will  be  furnished  to
          Purchaser where such records also reflect other aspects
          of Seller's businesses); and

               (ii)  All  records  of  Seller  relating  to   the
          employment of all former Employees of Seller  who  have
          accepted employment with Purchaser.

     1.2   Excluded Assets.  Notwithstanding any other  provision
of   this  Agreement  to  the  contrary,  the  following  rights,
properties, and assets (collectively, the "Excluded Assets") will
not be included in the Manufacturing Assets:

          (a)    Cash.    All  cash,  bank  accounts,  marketable
     securities,  and other cash equivalents of Seller,  wherever
     located;

          (b)   Receivables.  All accounts receivables  or  notes
     receivable  for  services provided or products  manufactured
     and  sold by Seller in connection with the operation of  the
     Manufacturing Operations prior to the Closing Date;

          (c)   Ordinary  Course Dispositions.  All tangible  and
     intangible  personal  property  of  Seller  disposed  of  or
     consumed in the ordinary course of business consistent  with
     the  past  practice  of  Seller between  the  date  of  this
     Agreement and the Closing Date and as permitted hereunder;

          (d)   Terminated  Contracts.  All Contracts  that  have
     terminated  or  expired prior to the  Closing  Date  in  the
     ordinary  course  of  business  consistent  with  the   past
     practice of Seller and as permitted hereunder;

          (e)     Corporate   Governance   Documents.    Seller's
     corporate  seal, minute books, charter documents,  corporate
     stock  record  books, and such other books  and  records  as
     pertain   to   the   organization,   existence,   or   share
     capitalization  of  Seller, and  duplicate  copies  of  such
     records  as are necessary to enable Seller to file  its  tax
     returns  and  reports  as  well  as  all  other  records  or
     materials relating to Seller generally and not involving  or
     relating to the Manufacturing Assets or the operation of the
     Manufacturing Operations;

          (f)   Insurance Contracts.  Contracts of insurance, and
     all  insurance proceeds or claims made by Seller,  including
     those  relating to property or equipment repaired, replaced,
     or restored by Seller, prior to the Closing Date;

          (g)   Tax Refunds.  Seller's rights to any and all  tax
     refunds  relating  to  the operation  of  the  Manufacturing
     Operations prior to the Closing Date;

          (h)  Claims.  All of Seller's rights, claims, or causes
     of   action   against   third  parties   relating   to   the
     Manufacturing Assets or the Manufacturing Operations arising
     prior to the Closing Date;

          (i)  This Agreement.  All of Seller's rights under this
     Agreement; and

          (j)   Other  Assets.   All  other  assets,  properties,
     interests,  and rights of Seller not specifically identified
     in Section 1.1.

     1.3  Nonassignable Contracts or Permits.

          (a)   Nonassignability.  Without limiting or  otherwise
     affecting  the rights of Purchaser pursuant to Article  VIII
     or  XI,  to  the extent that any Contract or  Permit  to  be
     assigned pursuant to the terms of Section 1.1(c) or 1.1.(d),
     as the case may be, is not capable of being assigned without
     the   consent,  approval,  or  waiver  of  a  third   person
     (including a Governmental Entity), nothing in this Agreement
     will  constitute  an  assignment or require  the  assignment
     thereof except to the extent provided in this Section 1.3.

          (b)     Seller    to   Use   Commercially    Reasonable
     Efforts.   Notwithstanding  any  other  provision  of   this
     Agreement  to the contrary, Seller will not be obligated  to
     assign to Purchaser any of its rights and obligations in and
     to   any  of  the  Contracts  or  Permits  referred  to   in
     Section  1.3(a) without first having obtained all  consents,
     approvals,  and  waivers  necessary  for  such  assignments;
     provided,  however,  that Seller will use  its  commercially
     reasonable  efforts to obtain all such consents,  approvals,
     and  waivers prior to and, if the Closing occurs, after  the
     Closing Date.

          (c)  If Waivers or Consents Cannot Be Obtained.  To the
     extent that the consents, approvals, and waivers referred to
     in  Section  1.3(a) are not obtained by Seller, Seller  will
     use  its  commercially reasonable efforts to (i) provide  to
     Purchaser  the  financial  and  business  benefits  of   any
     Contract  or  Permit referred to in Section  1.3(a)  to  the
     extent   relating  to  the  Manufacturing   Operations   and
     (ii)  enforce, at the request of Purchaser, for the  account
     of  Purchaser, any rights of Seller arising from or relating
     to any such Contract or Permit (including the right to elect
     to  terminate in accordance with the terms thereof upon  the
     advice  of Purchaser).  After the Closing, Seller shall  not
     terminate, modify, or amend any Contract or Permit  referred
     to  in  Section  1.3(a)  without Purchaser's  prior  written
     consent (which consent shall not be unreasonably withheld).

                           ARTICLE II
                    Assumption of Liabilities

     2.1  Assumed Liabilities.  As of the Closing, Purchaser will
assume  and  thereafter  in due course  pay  and  fully  satisfy,
subject to Section 1.3, as and when the same shall become due and
payable,  all  obligations of Seller arising under the  executory
portion  (as  of  the  Closing Date) of all Contracts  listed  on
Schedule  1.1.(c);  provided, however, that  Purchaser  does  not
hereby  assume  any  liability or obligation for  any  breach  or
failure  to  perform or any alleged breach or alleged failure  to
perform  by  Seller  under such Contracts prior  to  the  Closing
(collectively, the "Assumed Liabilities").

                           ARTICLE III
                         Purchase Price

     3.1   Purchase  Price.   At  the  Closing,  in  addition  to
assuming  the  Assumed  Liabilities,  as  consideration  for  the
Manufacturing Assets and the covenants of Seller included herein,
Purchaser will pay to Seller an aggregate amount equal to the sum
of  (i) [*], which amount represents the sum of the estimated net
book  value  of the Tangible Personal Property as of the  Closing
Date  (the  "TPP Purchase Price"), and (ii) [*], and  (iii)  [*],
which  amount  represents the estimated net  book  value  of  the
Inventories  as  of  the  Closing Date (the  "Inventory  Purchase
Price" and, together with the TPP Purchase Price and the [*], the
"Unadjusted   Purchase  Price"  and,  as  adjusted  pursuant   to
Sections  3.3  and 3.4, the "Purchase Price").  The TPP  Purchase
Price, [*], and [*] of the Inventory Purchase Price shall be paid
by  check or wire transfer of immediately available funds to such
account  as  shall  have been designated by Seller  to  Purchaser
prior  to  the  Closing.  The balance of the  Inventory  Purchase
Price (i.e., [*]) shall be paid in the form of a promissory  note
in  substantially the form of Exhibit B (the "Note"), subject  to
any adjustments required by Section 3.3 or 3.4.

     3.2   Allocation  of Purchase Price.  Purchaser  and  Seller
shall  negotiate  in  good faith with the  goal  of  reaching  an
agreement  in  respect of the allocation of  the  Purchase  Price
among  the  Manufacturing Assets.  In the event an  agreement  in
respect  of  the  allocation  of the Purchaser  Price  among  the
Manufacturing Assets is reached by Purchaser and Seller  ("Agreed
Allocation"),  then  Purchaser and  Seller  shall  file  all  tax
returns,   including   any  information   returns   pursuant   to
Section  1060  of the Internal Revenue Code of 1986,  as  amended
(the  "Code"), and the regulations thereunder on a basis that  is
consistent  with  the Agreed Allocation.  If  any  tax  authority
challenges the Agreed Allocation, the party receiving  notice  of
such challenge shall give the other prompt written notice thereof
and  the  parties  shall  cooperate  in  order  to  preserve  the
effectiveness of the Agreed Allocation.

     3.3   Physical Inventory.  Purchaser will conduct a physical
inventory  of the Inventories and the Tangible Personal  Property
as of the Closing Date within 30 days after the Closing Date.  As
soon as practicable, but in no event more than 30 days after  the
Closing   Date,  Purchaser  will  deliver  to  Seller  a  closing
statement  (the  "Closing Statement") reflecting the  Inventories
and  Tangible Personal Property as established pursuant  to  such
physical  inventory and valued in accordance with  GAAP.   Within
30  days  after  delivery of the Closing Statement,  Seller  will
either  accept the Closing Statement as final or will submit  its
written   objections,  in  reasonable  detail,  to  such  Closing
Statement.    After  delivery  of  objections  to   the   Closing
Statement,  the  parties hereto will attempt  in  good  faith  to
expeditiously resolve such objections, in which case the  Closing
Statement,  with  any  such agreed adjustments,  will  be  deemed
final.   If  the  parties  hereto  are  unable  to  resolve   the
objections  within 30 days after the delivery of the  objections,
such  objections  will  be  submitted to  a  mutually  acceptable
internationally  recognized firm of certified public  accountants
which  has not performed any auditing or consulting services  for
either  Purchaser  or  Seller  in the  previous  12  months  (the
"Accountants")  for  resolution as promptly  as  practicable,  in
which case the Closing Statement, with any adjustments determined
by  such firm of certified public accountants, shall be final and
binding  on the parties.  The total value of the Inventories  and
Tangible  Personal  Property as set forth in  the  final  Closing
Statement  is  referred to as the "Asset Value."   If  the  Asset
Value  exceeds [*], Purchaser shall pay such difference to Seller
as  an  adjustment to the Unadjusted Purchase Price by increasing
the  principal  amount of the Note.  If the Asset Value  is  less
than  [*],  Seller shall pay such difference to Purchaser  as  an
adjustment  to  the  Unadjusted Purchase Price  by  reducing  the
principal  amount  of  the  Note  and,  if  the  amount  of  such
adjustment exceeds the principal amount of the Note, by  promptly
making  a  cash payment to Purchaser in an amount  equal  to  the
amount such adjustment exceeds the principal amount of the Note.

     3.4  Put Right in Respect of Inventory.

          (a)   [*]  after  the  Closing Date ("Excess  Inventory
     Determination  Date"),  Purchaser and  Seller  will  make  a
     determination  of  all  Inventory remaining  at  the  Excess
     Inventory  Determination Date ("Excess Inventory").   Seller
     shall  pay  to  Purchaser  an  amount  equal  to  the  value
     attributable to all such Excess Inventory (i.e., the  amount
     paid  for  such Excess Inventory by Purchaser) that  is  not
     then  subject  to  a  Binding Forecast (as  defined  in  the
     Manufacturing Agreement) as an adjustment to the  Unadjusted
     Purchase  Price.  Such adjustment to the Unadjusted Purchase
     Price  shall be accomplished by a reduction in the principal
     amount  of  the  Note and, if the amount of such  adjustment
     exceeds the principal amount of the Note, by promptly making
     a cash payment to Purchaser in an amount equal to the amount
     such  adjustment exceeds the principal amount of  the  Note.
     All  Excess  Inventory  that is not  subject  to  a  Binding
     Forecast on the Excess Inventory Determination Date shall be
     held  by  Purchaser as consigned goods for  the  benefit  of
     Seller.   Excess  Inventory that is  subject  to  a  Binding
     Forecast  shall continue to be held by Purchaser  until  the
     first  anniversary  of the Closing Date unless  such  Excess
     Inventory is earlier used by Purchaser.

          (b)   On  the  [*] of the Closing Date,  Purchaser  and
     Seller  will  make  a determination of all remaining  Excess
     Inventory  on  such date and Seller shall  promptly  pay  to
     Purchaser  in  cash the value attributable  to  such  Excess
     Inventory  (i.e., the amount paid for such Excess  Inventory
     by  Purchaser)  as an adjustment to the Unadjusted  Purchase
     Price).  All Excess Inventory in existence on the [*] of the
     Closing  Date  shall  be returned to  Seller.   Such  Excess
     Inventory will be physically transferred by Purchaser  to  a
     designated area located at the Facility.

          (c)   In the event the parties hereto fail to agree  on
     any   such   determination   of   Excess   Inventory,   such
     determination  shall  be submitted to  the  Accountants  for
     determination,  which  determination  shall  be  final   and
     binding.

          (d)   Purchaser shall maintain separate records listing
     each  item of Excess Inventory returned to Seller under this
     Section 3.4.

                           ARTICLE IV
                             Closing

     4.1   Closing  Date.   On  the  terms  and  subject  to  the
conditions set forth herein, the closing of the sale and purchase
of  the Manufacturing Assets (the "Closing") shall take place  at
the   offices  of  Seller,  10735  Willows  Road,  NE,   Redmond,
Washington  98052, at 10:00 A.M., local time, on April 1, 2001 or
on  the  first business day after the date on which  all  of  the
conditions  contained  in Article VIII  have  been  satisfied  or
waived,  as  applicable, or at such other place or at such  other
time or date as may be mutually agreed to in writing by Purchaser
and  Seller.   The  date of the Closing is  referred  to  as  the
"Closing Date."

     4.2   Proceedings at Closing.  All actions to be  taken  and
all  documents  to  be  executed  and  delivered  by  Seller   in
connection with the consummation of the transactions contemplated
at  the  Closing  shall be reasonably satisfactory  in  form  and
substance  to  Purchaser and its counsel; and all actions  to  be
taken and all documents to be executed and delivered by Purchaser
in   connection   with  the  consummation  of  the   transactions
contemplated  at the Closing shall be reasonably satisfactory  in
form and substance to Seller and its counsel.  All actions to  be
taken  and  all  documents to be executed and  delivered  by  the
parties hereto at the Closing shall be deemed to have been  taken
and executed and delivered simultaneously, and no action shall be
deemed  taken  nor any document executed or delivered  until  all
have been taken, executed, and delivered.

                            ARTICLE V
            Representations and Warranties of Seller

     Seller  hereby  makes  the  following  representations   and
warranties to Purchaser, each of which is true and correct as  of
the  date hereof and shall be true and correct as of the  Closing
Date, and shall be unaffected by any investigation heretofore  or
hereafter made by Purchaser.

     5.1   Organization and Power.  Seller is a corporation  duly
organized, validly existing, and in good standing under the  Laws
of  the  State  of Delaware.  Seller has the requisite  corporate
power  and  authority  to  own,  lease,  or  otherwise  hold  the
Manufacturing Assets owned, leased, or otherwise held by  it  and
to  carry  on the Manufacturing Operations as currently conducted
by  it.  Seller is in good standing and duly qualified to conduct
business  as a foreign corporation in every state of  the  United
States in which its ownership or lease of property or conduct  of
the Manufacturing Operations makes such qualifications necessary,
except  where the failure to be so qualified would not  or  could
not  reasonably be expected to have a material adverse effect  on
the Manufacturing Operations.

     5.2   Authorization.   Seller has  the  requisite  corporate
power  to  execute and to deliver this Agreement and  each  other
agreement, certificate, instrument, and document contemplated  by
this  Agreement  to  be  executed by it in  connection  with  the
consummation of the transactions contemplated hereby and  thereby
(all  such  other  agreements,  certificates,  instruments,   and
documents to be executed by it being collectively referred to  as
the   "Seller   Documents")  and  to  perform  the   transactions
contemplated  hereby  and thereby to be  performed  by  it.   The
execution  and  delivery  by Seller of this  Agreement  and  each
Seller  Document  and the performance by it of  the  transactions
contemplated hereby and thereby to be performed by it  have  been
(or  at  the  time of execution will be) duly authorized  by  all
necessary corporate action on the part of Seller.  This Agreement
has  been  (and each Seller Document will be) duly  executed  and
delivered by duly authorized officers of Seller and, assuming the
due  execution  and delivery of this Agreement  and  each  Seller
Document  by  the  other  party or  parties  hereto  or  thereto,
constitutes  (and, in the case of each Seller Document,  will  at
the  Closing  constitute) the valid and  binding  obligations  of
Seller  enforceable against Seller in accordance with its  terms,
except   as   may   be   limited   by   bankruptcy,   insolvency,
reorganization, moratorium, or other similar Laws  affecting  the
enforcement  of  creditors'  rights in  general  and  subject  to
general   principles  of  equity  (regardless  of  whether   such
enforceability  is  considered in  a  proceeding  at  law  or  in
equity).

     5.3   No  Conflicts.   The execution and  delivery  of  this
Agreement  does not (and of each Seller Document will  not),  and
neither   the   performance  by  Seller   of   the   transactions
contemplated  hereby or thereby to be performed by  it,  nor  the
consummation of the transactions contemplated hereby or  thereby,
will   (i)  conflict  with  the  charter  or  bylaws  (or   other
organizational or governance documents) of Seller, (ii) except as
set forth on Schedule 5.3, conflict with, result in any violation
of,  constitute a default (with or without notice, lapse of time,
or   both  ("Default"))  under,  or  give  rise  to  a  right  of
termination, cancellation, or acceleration of, or any  obligation
or  to  loss  of  a benefit under, any Contract,  (iii)  violate,
constitute  a Default under, or cause the forfeiture, impairment,
non-renewal,   revocation,   or   suspension   of   any   Permit,
(iv)  violate  any order, judgment, decree, writ,  or  injunction
("Order")  of  any  federal,  state  or  local  court,  tribunal,
arbitrator,   or  governmental,  administrative,  or   regulatory
agency,  authority, or body or any instrumentality  or  political
subdivision thereof ("Governmental Entity") applicable to Seller,
(v)  violate  any  domestic or foreign law,  statute,  ordinance,
rule,  or regulation ("Law") applicable to Seller, or (vi) result
in  the creation of any Lien upon any of the Manufacturing Assets
other  than  a Permitted Lien, except in the case of clause  (vi)
above,  where  such  Lien would not or could  not  reasonably  be
expected  to  have a material adverse effect on the Manufacturing
Operations.

     5.4   Consents  and  Approvals.   Except  as  set  forth  on
Schedule   5.4,   no   consent,  approval,  waiver,   order,   or
authorization of, or registration, declaration, or  filing  with,
or  notice to, any third person or Governmental Entity (including
any consent, approval, waiver, or authorization in respect of any
Contract or Permit) is required to be obtained or made by  or  in
respect  of Seller in connection with the execution and  delivery
of   this  Agreement  or  any  Seller  Document  by  Seller,  the
performance by Seller of the transactions contemplated hereby  or
thereby  to  be  performed  by it, or  the  consummation  of  the
transactions  contemplated hereby or thereby,  other  than  those
already obtained.

     5.5  No Third-Party Options.  There is no existing agreement
with, option or right of, or commitment to, any person to acquire
any  of  the Manufacturing Assets or any interest therein, except
for those contracts entered into in the normal course of business
consistent  with  past  practice  in  respect  of  the  sale   of
Inventory.

     5.6   Legal  Compliance.  To Seller's knowledge, Seller  has
complied in all material respects with each Law and Order binding
on  it or on any of the Manufacturing Assets and is not currently
in  violation  of any such Law or Order.  To Seller's  knowledge,
the  Manufacturing Operations are not being conducted in material
violation of any Law or Order.

     5.7    Litigation;   Orders.   Except  as   set   forth   on
Schedule  5.7,  there is no claim or judicial  or  administrative
action,  suit, proceeding, or investigation pending  or,  to  the
best  of  Seller's knowledge, threatened (i) that  questions  the
validity   of   this  Agreement  or  any  Seller  Document,   the
performance  by  it  of the obligations to  be  performed  by  it
hereunder  or thereunder, or the consummation of the transactions
contemplated hereby or thereby, or (ii) relating to  the  conduct
of  the Manufacturing Operations (as now conducted or as proposed
to  be  conducted)  against or affecting Seller  or  any  of  the
Manufacturing  Assets.   There is no Order  of  any  Governmental
Entity binding on Seller or any of the Manufacturing Assets.

     5.8   Permits.  Seller owns, holds, possesses,  or  lawfully
uses  in  the conduct of the Manufacturing Operations all Permits
that  are  in  any  manner  necessary  for  the  conduct  of  the
Manufacturing  Operations  as  currently  conducted  or  for  the
ownership and use of the Manufacturing Assets.  All such  Permits
are  set forth on Schedule 1.1(d).  Seller is not in Default  and
has  not  received any notice of any claim of Default, in respect
of  any  such Permits.  All such Permits are renewable  by  their
respective  terms in the ordinary course of business without  the
need  to comply with any special qualification procedures  or  to
pay  any amounts other than routine filing fees.  No such  Permit
will   be   adversely  affected  by  the  consummation   of   the
transactions  contemplated  hereby.   No  shareholder,  director,
officer,  employee, or former employee of Seller or  any  of  its
affiliates,  or  any other person, owns or has  any  proprietary,
financial,  or other interest (direct or indirect) in any  Permit
that  Seller  owns, possesses, or uses in the  operation  of  the
Manufacturing  Operations as now or previously  conducted  or  as
proposed to be conducted.

     5.9   Financial  Statements.  Attached as Schedule  5.9  are
true,   correct,  and  complete  copies  of  (i)  the   unaudited
statements of manufacturing costs of the Manufacturing Operations
for  the  fiscal year ended December 31, 2000 and for  the  month
ended  February  28, 2001 (collectively, the "Manufacturing  Cost
Statements"),  (ii)  the unaudited statement  of  assets  of  the
Manufacturing Operations as of December 31, 2000 (the "Historical
Statement  of  Assets"),  and (iii) the  unaudited  statement  of
assets  of the Manufacturing Operations as of February  28,  2001
(the "Statement of Assets").  The date of the Statement of Assets
is  referred to as the "Statement of Assets Date."  Except as set
forth  on  Schedule 5.9, the Manufacturing Cost  Statements,  the
Historical  Statement  of  Assets, and the  Statement  of  Assets
(collectively, the "Financial Statements") have been prepared  in
accordance  with  U.S.  generally accepted accounting  principles
consistently  applied ("GAAP") and fairly present  the  financial
condition,  assets and liabilities, and results of operations  of
the  Manufacturing Operations as of the dates and for the periods
indicated therein, subject to the explanatory notes set forth  in
Schedule 5.9.

     5.10  Inventory.   The inventory shown on the  Statement  of
Assets  consists  of items usable and saleable  in  the  ordinary
course of business and is stated in accordance with the inventory
accounting policies described in Schedule 5.10.

     5.11   Absence   of   Changes.   Except  as   described   on
Schedule  5.11,  since  the Statement of  Assets  Date,  (i)  the
Manufacturing  Operations  have been conducted  in  the  ordinary
course, consistent with past practice, (ii) Seller has not  taken
any action that would have constituted a violation of Section 7.2
if  Section  7.2  had applied to Seller since  the  Statement  of
Assets  Date,  and (iii) there has not been any material  adverse
change   in   the  Manufacturing  Operations  or  the   financial
condition,   or  results  of  operations,  of  the  Manufacturing
Operations,  nor  has  there  been,  to  Seller's  knowledge  and
exclusive  of general business or economic conditions, any  event
or circumstance that would be reasonably likely to cause any such
change.

     5.12 Title to Manufacturing Assets.  Except as set forth  on
Schedule 5.12, Seller has, and after the Closing, Purchaser  will
have,  good,  valid,  and marketable title to  the  Manufacturing
Assets  free  and  clear  of  all title  defects  or  objections,
mortgages,  liens, claims, charges, pledges, security  interests,
or   other  encumbrances  of  any  nature  whatsoever,  including
licenses,   leases,  chattel,  or  other  mortgages,   collateral
security  arrangements, pledges, title imperfections,  defect  or
objection  liens,  conditional and installment sales  agreements,
easements, encroachments, or restrictions of any kind  and  other
title  or  interest  retention  arrangements,  reservations,   or
limitations  of  any nature (collectively, "Liens"),  other  than
(i)  mechanics', carriers', workmen's, repairmen's, or other like
Liens  arising  or  incurred in the ordinary course  of  business
consistent with past practice and that will be discharged  as  of
the Closing Date and (ii) Liens for taxes, assessments, and other
governmental  charges that are not due and payable  or  that  may
thereafter  be  paid without penalty.  The items referred  to  in
clauses  (i)  and (ii) of the immediately preceding sentence  are
referred to as "Permitted Liens."

     5.13 Sufficiency and Condition of Manufacturing Assets.

          (a)   The  Manufacturing Assets constitute all  of  the
     rights, assets, and properties of every kind, character, and
     description  that are used in or necessary  to  conduct  the
     Manufacturing Operations as currently conducted.

          (b)   All  of  the  Manufacturing Assets  are  in  good
     operating condition and repair, subject to normal  wear  and
     maintenance,  are usable in the regular and ordinary  course
     of  business,  and conform in all material respects  to  all
     applicable  Laws and Permits relating to their construction,
     use, and operation.

          (c)  No person other than Seller owns any equipment  or
     other  tangible assets or properties located at the Facility
     or   necessary   to  the  operation  of  the   Manufacturing
     Operations,  and no affiliate of Seller is  engaged  in  the
     conduct   of  the  Manufacturing  Operations  as   currently
     conducted or as proposed to be conducted.

     5.14   Intellectual  Property.   The  intellectual  property
licensed  by  Seller to Purchaser pursuant to  the  Manufacturing
Agreement  ("Intellectual  Property")  constitutes  all  of   the
intellectual property rights used by Seller in its conduct of the
Manufacturing Operations as presently conducted.  Except  as  set
forth  on  Schedule  5.14,  Seller  has  good,  marketable,   and
exclusive  title  to,  and the valid and  enforceable  power  and
unqualified  right  to use, the Intellectual Property,  free  and
clear  of all Liens, and to license the same to Purchaser and  no
person other than Seller has any right or interest of any kind or
nature  in  or  in  respect of the Intellectual Property  or  any
portion  thereof  or any rights to use, market,  or  exploit  the
Intellectual  Property  or any portion thereof.   Except  as  set
forth  in Schedule 5.14, there are no pending or, to the best  of
Seller's  knowledge, threatened, actions of any nature  affecting
the  Intellectual Property.  Schedule 5.14 lists all  notices  or
claims currently pending or received by Seller that relate in any
manner   to   the   Manufacturing  Operations  and   that   claim
infringement  of any domestic or foreign letters  patent,  patent
applications,   patent  licenses,  software  licenses,   know-how
licenses,  trade names, trademark registrations and applications,
service    marks,   copyrights,   copyright   registrations    or
applications,  trade secrets, technical knowledge,  know-how,  or
other  confidential proprietary information.  Except as set forth
on  Schedule  5.14, there is, to best of Seller's  knowledge,  no
reasonable  basis  upon which any claim may be  asserted  against
Seller  for  infringement or misappropriation of any domestic  or
foreign  letters  patent,  patents, patent  applications,  patent
licenses,  software  licenses, know-how  licenses,  trade  names,
trademark  registrations  and applications,  trademarks,  service
marks, copyrights, copyright registrations or applications, trade
secrets,  technical  knowledge, know-how, or  other  confidential
proprietary  information held or owned by  another  person.   All
letters  patent, registrations, and certificates  issued  by  any
Governmental Entity relating to any of the Intellectual  Property
and  all  licenses and other Contracts pursuant to  which  Seller
uses  any of the Intellectual Property, are valid and subsisting,
have  been  properly maintained and neither Seller, nor,  to  the
best  of  Seller's  knowledge, any other person,  is  in  Default
thereunder.

     5.15 Real Property.

          (a)   Seller does not own the real property upon  which
     the Facility is located or any other real property necessary
     for the conduct of the Manufacturing Operations as currently
     conducted  and  as proposed to be conducted.  Schedule  5.15
     sets  forth a complete list of all real property  leased  or
     subleased by Seller in connection with the operation of  the
     Manufacturing  Operations  or otherwise  necessary  for  the
     operation of the Manufacturing Operations or the use of  the
     Facility  (the  "Real Property").  Seller has  delivered  to
     Purchaser  true  and  correct  copies  of  all  leases   and
     subleases  relating  to  the Real Property  ("Real  Property
     Leases").  Except as set forth on Schedule 5.15, Seller  has
     a  valid  leasehold interest in all Real Property, free  and
     clear of all Liens (other than Permitted Liens).

          (b)   Schedule 5.15 describes each Real Property  Lease
     by  listing  the  name  of the landlord  or  sublandlord,  a
     description  of  the leased premises, the  commencement  and
     expiration dates of the current term, the security deposited
     by  Seller  with the landlord or sublandlord,  if  any,  the
     monthly  rental  (including base and all additional  rents),
     and  whether Seller may assign the Real Property  Lease,  or
     sublease the underlying Real Property, to Purchaser.

          (c)   Each Real Property Lease is, and at Closing shall
     be,  in  full  force and effect and, except as  contemplated
     hereby,  has  not been assigned, modified, supplemented,  or
     amended  (other  than as previously provided to  Purchaser),
     and  neither  of  Seller  nor, to  Seller's  knowledge,  the
     landlord or sublandlord under any Real Property Lease is  in
     Default  under any Real Property Lease, and no  circumstance
     or  state of facts currently exists that, with the giving of
     notice  or  passage  of  time, or  both,  would  permit  the
     landlord  or  sublandlord under any Real Property  Lease  to
     terminate any Real Property Lease (other than expiration  of
     the term of any such Real Property Lease).

          (d)   No  covenants, easements, or rights of way impair
     in  any  material respect the uses of the Real Property  for
     their  intended use and for the purposes for which they  are
     now utilized.

          (e)   At  the Closing, Seller shall sublease  the  Real
     Property  to  Purchaser  (and  shall  deliver  to  Purchaser
     original   copies   of  all  consents  required   for   such
     subleases).

     5.16   Environmental  Matters.   Except  as   disclosed   on
Schedule  5.16, (i) Seller possesses all permits, authorizations,
and   approvals  required  by  applicable  Law  relating  to  the
protection  of or the regulation of the human health and  safety,
environment  or  natural resources (collectively,  "Environmental
Laws")  to  operate  the  Manufacturing Operations  as  currently
conducted (collectively, "Environmental Permits"), which  permits
are  valid, in good standing, and can and will be transferred  to
Purchaser  as  of  the Closing; (ii) Seller  in  respect  of  the
Manufacturing  Operations  is  in material  compliance  with  all
Environmental Laws and Environmental Permits; (iii) there are  no
claims, actions, suits, or proceedings pending or, to the best of
Seller's knowledge, threatened against Seller in respect  of  the
Manufacturing  Operations  alleging  the  violation  of  or  non-
compliance with Environmental Laws; (iv) Seller is not  aware  of
any  fact, circumstance, or condition at any of the real property
or  arising  out  of or relating to the Manufacturing  Operations
prior  to Closing that could reasonably be expected to result  in
the  owner  or operator of the Manufacturing Operations incurring
liabilities under Environmental Laws; and (v) Seller has provided
Purchaser  with  copies of all environmental, health  and  safety
assessments,  audits, investigations, analyses,  and  other  such
reports relating to the Manufacturing Operations that are in  the
possession, custody, or control of Seller.

     5.17  Benefit Plans.  Seller has no obligation or  liability
(contingent or otherwise) arising from or relating to any benefit
plan  or arrangement except as listed on Schedule 5.17.  "Benefit
Plan" means each employee benefit plan as defined in Section 3(3)
of  the  Employee  Retirement Income Security  Act  of  1974,  as
amended  ("ERISA"), maintained by, or on behalf  of  or  for  the
benefit  of Seller, or to which Seller contributes, is  obligated
to  contribute or has contributed within six years  of  the  date
hereof  and under which any person presently employed  by  Seller
primarily  in  the  conduct of the Manufacturing  Operations  (an
"Employee")  or  formerly so employed by Seller  or  any  of  its
predecessors  (a "Former Employee") participates or  has  accrued
any  rights,  or under which Seller is liable in  respect  of  an
Employee  or  Former Employee.  The terms "Employee" and  "Former
Employee"  include,  where  applicable,  the  beneficiaries   and
dependents of an Employee or Former Employee.

     5.18 Labor and Employment Matters.

          (a)   Except as set forth on Schedule 5.18, no employee
     or  consultant  of  Seller  involved  in  the  Manufacturing
     Operations has executed any employment or similar agreement.
     To  Seller's knowledge, no officer or key employee,  or  any
     group   of   key  employees  of  Seller  involved   in   the
     Manufacturing  Operations, currently  intends  to  terminate
     his,  her, or their employment with Seller.  Except  as  set
     forth  in Schedule 5.18, the employment of each officer  and
     employee  of Seller involved in the Manufacturing Operations
     is  terminable at the will of Seller.  Seller does not  have
     any unfair labor practice charge or complaint pending or, to
     Seller's   knowledge,  threatened  against  it  before   the
     National  Labor Relations Board.  To Seller's knowledge,  no
     officer   or   consultant   of  Seller   involved   in   the
     Manufacturing Operations is in violation of any term of  any
     employment,   consultant,  non-disclosure,  non-competition,
     confidentiality, or other similar agreement.

          (b)   Seller  is  not  is  a  party  to  any  labor  or
     collective bargaining agreement, and no employees of  Seller
     are  represented  by  any  labor organization.   Within  the
     preceding  three years, there has been no representation  or
     certification    proceeding   or    petition    seeking    a
     representation proceeding, pending or, to the  knowledge  of
     Seller,  threatened to be brought or filed with the National
     Labor  Relations Board or any other labor relations tribunal
     or  authority.   Within the preceding three  years,  to  the
     knowledge  of Seller, there has been no organizing  activity
     involving  Seller in respect of any group  of  employees  of
     Seller involved in the Manufacturing Operations.

     5.19  Disclosure.  No representation or warranty  of  Seller
contained in this Agreement, and no statement contained in any of
the  Financial Statements, the Seller Documents, or the Schedules
hereto  contains  or  will  contain any  untrue  statement  of  a
material  fact, or omits or will omit to state any material  fact
necessary, in light of the circumstances under which  it  was  or
will  be  made, in order to make the statements herein or therein
not  misleading or necessary in order fully and fairly to provide
the  information  required to be provided in any  such  document.
Any projections provided by Seller to Purchaser in respect of the
Manufacturing Operations are based upon a variety of  assumptions
relating  to the Manufacturing Operations that, though considered
to  be  reasonable by Seller, may not be realized and are subject
to significant uncertainties and contingencies, many of which are
beyond the control of Seller.  To the best of Seller's knowledge,
Seller  has  not failed to disclose to Purchaser  any  fact  that
would  reasonably be determined to have a material adverse effect
on  the business, financial condition, results of operations,  or
prospects  of the Manufacturing Operations, or that is  otherwise
material  to  the  Manufacturing Operations or the  Manufacturing
Assets.

     5.20  No Other Representations.  Except as specifically  set
forth  in  this  Article  V, Seller makes  no  representation  or
warranty  in  respect  of  the Manufacturing  Operations  or  the
transactions contemplated hereby.

                           ARTICLE VI
           Representations and Warranties of Purchaser

     Purchaser  hereby  makes the following  representations  and
warranties to Seller, each of which is true and correct as of the
date hereof and shall be true and correct as of the Closing Date.

     6.1   Organization  and Power.  Purchaser is  a  corporation
duly organized, validly existing, and in good standing under  the
Laws  of  the State of Delaware, and has the requisite  corporate
power  and authority to own, lease, or otherwise hold the  assets
owned,  leased,  or  otherwise held by it and  to  carry  on  its
business as currently conducted by it.

     6.2   Authorization.  Purchaser has the requisite  corporate
power  to  execute and to deliver this Agreement and  each  other
agreement, certificate, instrument, and document contemplated  by
this  Agreement  to  be  executed by it in  connection  with  the
consummation of the transactions contemplated hereby and  thereby
(all  such  other  agreements,  certificates,  instruments,   and
documents  to  be  executed by it being hereinafter  collectively
referred  to  as, the "Purchaser Documents") and to  perform  the
transactions  contemplated hereby and thereby to be performed  by
it.   The  execution and delivery by Purchaser of this  Agreement
and  each  Purchaser Document and the performance by  it  of  the
transactions  contemplated hereby and thereby to be performed  by
it  have  been  (or  at  the  time of  execution  will  be)  duly
authorized  by  all necessary corporate action  on  the  part  of
Purchaser.  This Agreement has been (and each Purchaser  Document
will  be) duly executed and delivered by duly authorized officers
of Purchaser and, assuming the due execution and delivery of this
Agreement  and  each  Purchaser Document by the  other  party  or
parties hereto or thereto, constitutes (and, in the case of  each
Purchaser Document, will at the Closing constitute) the valid and
binding obligations of Purchaser enforceable against Purchaser in
accordance   with  its  terms,  except  as  may  be  limited   by
bankruptcy,  insolvency,  reorganization,  moratorium,  or  other
similar  Laws affecting the enforcement of creditors'  rights  in
general  and  subject to general principles of equity (regardless
of  whether such enforceability is considered in a proceeding  at
law or in equity).

     6.3   No  Conflicts.   The execution and  delivery  of  this
Agreement does not (and of each Purchaser Document will not), and
neither   the   performance  by  Purchaser  of  the  transactions
contemplated  hereby or thereby to be performed by  it,  nor  the
consummation of the transactions contemplated hereby or  thereby,
will  (i)  conflict  with  the charter or  bylaws  of  Purchaser,
(ii)  conflict  with, result in any violation  of,  constitute  a
Default   under,  or  give  rise  to  a  right  of   termination,
cancellation, or acceleration of, or any obligation or to loss of
a  benefit  under, any note, bond, mortgage, indenture,  license,
agreement, or other document or obligation to which Purchaser  is
a  party or by which Purchaser's assets or properties are  bound,
or  (iii)  violate any Order of any Governmental  Entity  or  Law
applicable to Purchaser.

     6.4   Consents  and  Approvals.   Except  as  set  forth  on
Schedule   6.4,   no   consent,  approval,  waiver,   order,   or
authorization of, or registration, declaration, or  filing  with,
or notice to, any third person or Governmental Entity is required
to  be  obtained  or  made  by  or in  respect  of  Purchaser  in
connection  with the execution and delivery of this Agreement  or
any Purchaser Document by Purchaser, the performance by Purchaser
of   the  transactions  contemplated  hereby  or  thereby  to  be
performed   by  it,  or  the  consummation  of  the  transactions
contemplated hereby or thereby.

     6.5   Financial  Condition.   Purchaser  has  the  resources
(financial and otherwise) to operate the Manufacturing Operations
as  proposed  to  be  conducted  pursuant  to  the  Manufacturing
Agreement.

     6.6  Disclosure.  No representation or warranty of Purchaser
contained in this Agreement, and no statement contained in any of
the  Purchaser  Documents  contains or will  contain  any  untrue
statement of a material fact, or omits or will omit to state  any
material  fact  necessary, in light of  the  circumstances  under
which  it  was  or will be made, in order to make the  statements
herein or therein not misleading or necessary in order fully  and
fairly to provide the information required to be provided in  any
such  document.  To the best of Purchaser's knowledge,  Purchaser
has not failed to disclose to Seller any fact that is material to
Purchaser's  ability  to  perform  its  obligations   under   the
Manufacturing  Agreement or operate the Manufacturing  Operations
or the Manufacturing Assets.

                           ARTICLE VII
                      Pre-Closing Covenants

     7.1   Access.  Prior to the Closing, upon reasonable  notice
from  Purchaser  to Seller, Seller will afford to  the  officers,
attorneys,   accountants,  or  other  authorized  representatives
(including  environmental consultants)  of  Purchaser  reasonable
access during normal business hours to the employees, facilities,
and the books and records of the Manufacturing Operations and  of
Seller  relating to the Manufacturing Operations so as to  afford
Purchaser full opportunity to make such review, examination,  and
investigation  of the Manufacturing Operations as  Purchaser  may
reasonably  desire to make, including an environmental evaluation
of the Manufacturing Operations and the Facility.  Purchaser will
be  permitted  to make extracts from or to make  copies  of  such
books  and  records as may be reasonably necessary in  connection
therewith.  Prior to the Closing, Seller will promptly furnish or
cause  to  be  furnished  to  Purchaser  such  available  updated
financial and operating data and other information pertaining  to
the Manufacturing Operations as Purchaser may reasonably request.

     7.2  Conduct of the Manufacturing Operations.  Except as set
forth  on  Schedule 7.2 or as otherwise consented to by Purchaser
in  writing  (which consent shall not be unreasonably  withheld),
prior  to the Closing, Seller will, in respect of its conduct  of
the Manufacturing Operations:

          (a)   (i) conduct the Manufacturing Operations only  in
     the  ordinary  course of business and consistent  with  past
     practice, (ii) maintain the Manufacturing Assets in at least
     as  good  condition (reasonable wear and tear  excepted)  as
     they  are  being  maintained as  of  the  date  hereof,  and
     (iii)  use its commercially reasonable efforts to  keep  the
     Manufacturing  Operations intact and maintain  the  goodwill
     associated with the Manufacturing Operations;

          (b)   not  fail  to  pay  or  discharge  when  due  any
     liabilities  of  which the failure to pay or discharge  will
     cause  any material damage or risk of material loss  to  it,
     any  of  the  Manufacturing  Assets,  or  the  Manufacturing
     Operations;

          (c)   not purchase, sell, lease, or dispose of, or make
     any  contract for the purchase, sale, lease, or  disposition
     of,  or subject to Lien, any Manufacturing Assets other than
     in the ordinary course of the Manufacturing Operations;

          (d)   not  grant  to any Employee of the  Manufacturing
     Operations  any increase in compensation or in severance  or
     termination pay, grant any severance or termination pay,  or
     enter  into  any  employment agreement  with  any  Employee,
     except  (i) as may be required or permitted under employment
     or   termination  agreements  or  established  policies   or
     practices   of   Seller  in  effect  on  the  date   hereof,
     (ii) increases in compensation or severance pay or grants of
     severance  or  termination  pay occurring  in  the  ordinary
     course  of  business  consistent  with  past  practice,   or
     (iii)  grants of so-called "stay bonuses" so long as  Seller
     shall   remain   obligated  to  pay  any   amounts   granted
     thereunder;

          (e)   not  adopt  or  amend any  collective  bargaining
     agreements in respect of the Manufacturing Operations;

          (f)    except   as  expressly  contemplated   by   this
     Agreement,  not  make  or suffer any material  amendment  or
     termination of any Contract or Permit, whether or not in the
     ordinary course of business;

          (g)   not  take or omit to take any action  that  would
     render any representation or warranty of Seller in Article V
     materially  untrue  or incorrect if such  representation  or
     warranty  were  made  immediately after  the  taking  of  or
     failure to take such action; and

          (h)   not agree, in writing or otherwise, to do any  of
     the foregoing.

     7.3   Notifications.   Each  of Seller  and  Purchaser  will
provide  prompt written notice to the other party (in  any  event
within  five  business  days) after any  change  in  any  of  the
information contained in its representations and warranties  made
in  Article  V  or  VI, as the case may be, or  any  Exhibits  or
Schedules hereto and shall promptly furnish any information  that
the  other party may reasonably request in relation to  any  such
change; provided, however, that such notice shall not operate  to
cure  any  breach of the representations and warranties  made  in
Article  V or VI, as the case may be, or any Exhibit or  Schedule
hereto.

     7.4   Governmental Filings.  Each of the parties hereto will
use  its  commercially  reasonable  efforts  to  obtain,  and  to
cooperate  with  the  other  in  obtaining,  all  authorizations,
consents, orders, and approvals of Governmental Entities that may
be or become necessary in connection with the consummation of the
transactions contemplated by this Agreement, prior  to  or  after
the  Closing,  and to take all reasonable actions  to  avoid  the
entry  of  any  Order of any Governmental Entity prohibiting  the
consummation of the transactions contemplated hereby.

     7.5  Injunctions.  Without limiting the generality or effect
of  any  provision of Section 7.4 or Article VIII, if any  United
States,  state,  or  foreign court having jurisdiction  over  any
party  hereto  issues or otherwise promulgates any injunction  or
other  Order prior to the Closing that prohibits the consummation
of  the transactions contemplated hereby, the parties hereto will
use their respective commercially reasonable efforts to have such
injunction  or  other Order dissolved or otherwise eliminated  as
promptly  as  practicable and, prior to or after the Closing,  to
pursue the underlying litigation diligently and in good faith.

     7.6   Satisfaction  of  Conditions.   Without  limiting  the
generality or effect of any provision of Article VIII,  prior  to
the Closing, each of the parties hereto will use its commercially
reasonable  efforts  with due diligence  and  in  good  faith  to
satisfy  promptly all conditions required hereby to be  satisfied
by  such  party  in  order to expedite the  consummation  of  the
transactions contemplated hereby.

     7.7  Confidentiality.  Each of the parties hereto will treat
in  confidence  all  documents, materials, and other  information
(including  information relating to supply and  sales  agreements
and  relationships  with third persons) disclosed  by  any  other
party hereto that is not its affiliate, whether during the course
of the negotiations leading to the execution of this Agreement or
thereafter, in its investigation of the other parties and in  the
preparation   of  agreements,  schedules,  and  other   documents
relating  to  the  consummation of the transactions  contemplated
hereby.   Prior  to  the  Closing, and in  the  event  that  this
Agreement is terminated, no party hereto will use any information
furnished by any other party hereto that is not its affiliate  in
its  or any of its affiliates' businesses.  If this Agreement  is
terminated,  each of the parties hereto will use its commercially
reasonable  efforts to return at the request of any  other  party
hereto  all  originals  and  copies of non-public  documents  and
materials  that  have  been furnished  in  connection  with  this
Agreement  and  will  make  no further  use  thereof  or  of  the
information furnished hereunder.

                          ARTICLE VIII
                      Conditions to Closing

     8.1   Conditions Precedent to Obligations of  Purchaser  and
Seller.   The  respective obligations of each  of  Purchaser  and
Seller  under  this  Agreement  to  consummate  the  transactions
contemplated  hereby will be subject to the satisfaction,  at  or
prior to the Closing, of all of the following conditions:

          (a)    each  approval,  consent,  or  waiver   of   any
     Governmental  Entity  or  other person  identified  with  an
     asterisk on Schedule 5.4 or 6.4 as being a condition of  the
     Closing shall have been obtained; and

          (b)  there shall not have been entered a preliminary or
     permanent injunction, temporary restraining order, or  other
     Order  of  any  Governmental Entity,  the  effect  of  which
     prohibits the Closing.

     8.2   Additional  Conditions  Precedent  to  Obligations  of
Purchaser.  The obligations of Purchaser under this Agreement  to
consummate  the transactions contemplated hereby will be  subject
to  the  satisfaction, at or prior to the Closing, of all of  the
following  conditions, any one or more of which may be waived  at
the option of Purchaser.

          (a)   Accuracy of Representations and Warranties.  Each
     of  the  representations and warranties of Seller  contained
     herein shall be true and correct in all material respects on
     and as of the Closing Date with the same force and effect as
     though the same had been made on and as of the Closing  Date
     other  than  any  such representations and  warranties  that
     specifically relate to an earlier date.

          (b)   Performance  of  Covenants.   Seller  shall  have
     performed and complied with the covenants and provisions  of
     this Agreement required to be performed or complied with  by
     it between the date hereof and the Closing Date.

          (c)   Closing Deliveries.  Seller shall have  delivered
     to  Purchaser each item set forth in Section 9.1 required to
     be delivered by it on or before the Closing Date.

     8.3   Additional  Conditions  Precedent  to  Obligations  of
Seller.   The  obligations  of Seller  under  this  Agreement  to
consummate  the transactions contemplated hereby will be  subject
to  the  satisfaction, at or prior to the  Closing,  of  all  the
following  conditions, any one or more of which may be waived  at
the option of Seller.

          (a)   Accuracy of Representations and Warranties.  Each
     of the representations and warranties of Purchaser contained
     herein shall be true and correct in all material respects on
     and as of the Closing Date with the same force and effect as
     though the same had been made on and as of the Closing  Date
     other  than  any  such representations and  warranties  that
     specifically relate to an earlier date.

          (b)   Performance of Covenants.  Purchaser  shall  have
     performed and complied with the covenants and provisions  of
     this Agreement required to be performed or complied with  by
     it between the date hereof and the Closing Date.

          (c)    Closing   Deliveries.   Purchaser   shall   have
     delivered  to  Seller  each item set forth  in  Section  9.2
     required  to  be  delivered by it on or before  the  Closing
     Date.

                           ARTICLE IX
                       Closing Deliveries

     9.1   Seller's  Deliveries.   At the  Closing,  Seller  will
deliver to Purchaser the following, at the expense of Seller  and
in proper form for recording when appropriate:

          (a)    Transfer   Documents.   Such  bills   of   sale,
     assumption  agreements, assignments,  deeds,  consents,  and
     other   good   and   sufficient  instruments   of   transfer
     (collectively,   "Transfer   Documents")    conveying    and
     transferring to Purchaser title to the Manufacturing  Assets
     and obligations for the Assumed Liabilities as Purchaser may
     reasonably request;

          (b)  Sublease.  A sublease covering the sublease of the
     Facility located in Redmond, Washington in substantially the
     form of Exhibit C;

          (c)    Manufacturing   Agreement.   The   Manufacturing
     Agreement  in  substantially the  form  of  Exhibit  A  duly
     executed by Seller;

          (d)   Transition  Services  Agreements.   A  transition
     services   agreement  covering  the  provision  of   certain
     transition  services by Purchaser to Seller in substantially
     the  form of Exhibit D-1 and a transition services agreement
     covering  the  provision of certain transition  services  by
     Seller to Purchaser in substantially the form of Exhibit  D-
     2, in each case duly executed by Seller;

          (e)   Officer's Certificate.  An officer's certificate,
     dated  as  of  the  Closing Date, duly executed  by  a  duly
     authorized officer of Seller certifying that:  (i) the  duly
     executed  copy of the resolutions of the board of  directors
     of  Seller  authorizing  and  approving  the  execution  and
     delivery of this Agreement and each Seller Document and  the
     consummation  of  the transactions contemplated  hereby  and
     thereby  as attached thereto are true, correct, and complete
     and  have  not  been  modified or withdrawn;  and  (ii)  the
     conditions set forth in Sections 8.2(a) and 8.2(b) are fully
     satisfied; and

          (f)   Releases.   All  documents as  are  necessary  to
     release all Liens on the Manufacturing Assets.

     9.2  Purchaser's Deliveries.  At the Closing, Purchaser will
deliver to Seller the following, at the expense of Purchaser:

          (a)  Purchase Price.  The Unadjusted Purchase Price  in
     accordance with Section 3.1;

          (b)  Sublease.  A sublease covering the sublease of the
     Facility located in Redmond, Washington in substantially the
     form of Exhibit C duly executed by Purchaser;

          (c)    Manufacturing   Agreement.   The   Manufacturing
     Agreement  in  substantially the  form  of  Exhibit  A  duly
     executed by Purchaser;

          (d)   Promissory  Note.  The Note in substantially  the
     form of Exhibit B duly executed by Purchaser;

          (e)   Transition  Services  Agreements.   A  transition
     services   agreement  covering  the  provision  of   certain
     transition  services by Purchaser to Seller in substantially
     the  form of Exhibit D-1 and a transition services agreement
     covering  the  provision of certain transition  services  by
     Seller to Purchaser in substantially the form of Exhibit  D-
     2, in each case duly executed by Purchaser;

          (f)   Officer  Certificate.  An officer's  certificate,
     dated  as  of  the  Closing Date, duly executed  by  a  duly
     authorized   officer  of  Purchaser  certifying   that   the
     conditions set forth in Sections 8.3(a) and 8.3(b) are fully
     satisfied.

                            ARTICLE X
                     Post-Closing Covenants

     10.1 Discharge of Business Obligations.  From and after  the
Closing Date, Seller shall pay and discharge, in accordance  with
past  practice  but  not  less  than  on  a  timely  basis,   all
obligations and liabilities incurred prior to the Closing Date in
respect  of  the  Manufacturing Operations or  the  Manufacturing
Assets (except for the Assumed Liabilities).

     10.2  Payments Received.  After the Closing, each of  Seller
and  Purchaser will hold and promptly transfer and deliver to the
other, from time to time as and when received by them, any  cash,
checks  with  appropriate endorsements (using their  commercially
reasonable  efforts  not to convert such checks  into  cash),  or
other property that they may receive on or after the Closing that
properly  belongs  to  the other party, including  any  insurance
proceeds, and will account to the other for all such receipts.

     10.3  Maintenance of Books and Records.  Each of Seller  and
Purchaser  shall  preserve until the seventh anniversary  of  the
Closing  Date  all records possessed or to be possessed  by  such
party  relating  to  any  of the assets  or  liabilities  of  the
Manufacturing Operations or the Manufacturing Assets prior to the
Closing  Date.   After  the  Closing  Date,  where  there  is   a
legitimate  purpose, such party shall provide the  other  parties
with access, upon prior reasonable written request specifying the
need therefor, during regular business hours, to (i) the officers
and  employees  of such party and (ii) the books of  account  and
records  of  such party, but, in each case, only  to  the  extent
relating  to  the  assets,  liabilities,  or  business   of   the
Manufacturing Operations prior to the Closing Date, and the other
parties  and their representatives shall have the right  to  make
copies  of  such books and records; provided, however,  that  the
foregoing  right  of access shall not be exercisable  in  such  a
manner  as  to interfere unreasonably with the normal  operations
and business of such party; provided, further, that as to so much
of  such information as constitutes trade secrets or confidential
business information of such party, the requesting party and  its
officers, directors, and representatives will use due care to not
disclose  such information except to the extent such  information
(i)  is  required to be disclosed pursuant to an Order or request
of  a Governmental Entity having competent jurisdiction (provided
the party seeking to disclose such information provides the other
party  or  parties  with  reasonable  prior  notice  thereof)  or
(ii)  which can be shown to have been generally available to  the
public other than as a result of a breach of this Section 10.3.

     10.4  Transfer  Taxes.   All sales,  use,  transfer,  stamp,
conveyance, value added, or other similar taxes, duties, excises,
or  governmental  charges  imposed by  any  taxing  jurisdiction,
domestic  or foreign, and all recording or filing fees,  notarial
fees,  and  other  similar costs of Closing  in  respect  of  the
transfer  of the Manufacturing Assets or otherwise on account  of
this  Agreement or the transactions contemplated hereby  will  be
borne  by  Seller.  Seller will indemnify Purchaser  against  any
liability,  direct  or  indirect, for  any  such  taxes,  duties,
excises,  or  governmental charges imposed  on  Purchaser  or  in
respect of the Manufacturing Assets that are attributable to  any
taxable  periods  ending on or prior to the Closing  Date  or  in
respect  of  the  allocable portion of any  taxable  period  that
includes but does not end on the Closing Date.  Seller will  also
indemnify Purchaser against all liabilities for taxes relating to
the  business  or  assets of Seller for  any  period  or  portion
thereof  ending  prior to the Closing Date, to  the  extent  that
Purchaser's  liability for any such taxes directly  results  from
the  failure  of  Seller to notify any taxing  authority  of  the
transactions  contemplated  by this Agreement.   Purchaser  shall
cooperate with Seller to minimize such liability.

     10.5 Employee and Employee Benefits Plans.

          (a)   Seller  shall  terminate its  employment  of  all
     employees of the Manufacturing Operations effective  as  May
     1,  2001.   Purchaser shall offer employment, as of  May  1,
     2001,  to all employees of the Manufacturing Operations  who
     Purchaser  deems  necessary to support  the  performance  of
     Purchaser's  obligations under the Manufacturing  Agreement,
     on   terms  and  conditions  of  employment  established  by
     Purchaser;  provided, however, that Purchaser will  endeavor
     to   employ   such  personnel  in  sufficient  numbers   (as
     determined  by Purchaser in its sole discretion)  to  ensure
     compliance  with  its  obligations under  the  Manufacturing
     Agreement.  Purchaser will provide Seller with notice of the
     employees  it will offer employment to as soon as reasonably
     practicable after the Closing Date.

          (b)   Seller  shall  retain and  shall  be  exclusively
     responsible  for,  and  shall indemnify  and  hold  harmless
     Purchaser,   its  officers,  directors,  stockholders,   and
     affiliates  against, any obligation or liability (contingent
     or  otherwise)  arising, on or before May 1, 2001,  from  or
     relating  to (i) the employment or termination of employment
     of  any  person  of the Manufacturing Operations,  (ii)  any
     employee  compensation  or  severance  or  benefit  plan  or
     arrangement  of any person of the Manufacturing  Operations,
     (iii)  Part 6 of Title I of ERISA and Section 4980B  of  the
     Code   arising   in  connection  with  its   employment   or
     termination  of employment of any person and their  eligible
     beneficiaries ("COBRA"), and (iv) the Workers Adjustment and
     Retraining Notification Act ("WARN Act").

          (c)   Purchaser  shall be exclusively responsible  for,
     and  shall indemnify and hold harmless Seller, its officers,
     directors,   stockholders,  and  affiliates   against,   any
     obligation  or liability (contingent or otherwise)  arising,
     after May 1, 2001, from or relating to (i) the employment or
     termination of employment of any person of the Manufacturing
     Operations,  (ii) any employee compensation or benefit  plan
     or  arrangement of any employee of Purchaser,  (iii)  COBRA,
     and (iv) the WARN Act.

           [*]

           [*]

     10.6 Repurchase Rights.  In the event Purchaser proposes  to
liquidate  the  Manufacturing Operations pursuant to  proceedings
under  Chapter 7 of the United States Bankruptcy Code within  [*]
years  after  the  Closing  Date  or  otherwise  dispose  of  the
Manufacturing Assets (other than to an affiliate) and  cease  the
Manufacturing  Operations (a "Cessation of Business"),  Purchaser
shall give written notice ("Purchaser's Notice") of such proposed
Cessation of Business to Seller.  Within ten business days  after
its receipt of Purchaser's Notice, Seller may notify Purchaser in
writing ("Seller's Notice") that Seller desires to purchase  all,
but  not  less  than all, the Manufacturing Assets, which  notice
shall  state  that Seller unconditionally agrees to purchase  the
Manufacturing  Assets,  for  its then-fair  market  value,  at  a
closing  date not less than [*] and nor more than [*]  after  the
date of Seller's Notice, in which event Purchaser and Seller will
proceed  with  such repurchase transaction.  If Seller  does  not
deliver  Seller's Notice within ten business days after  Seller's
receipt  of Purchaser's Notice, then Purchaser shall be  free  to
carry  out  the  Cessation  of Business without  any  restriction
hereunder.

     10.7 Sale of Taiwan Manufacturing Facilities.

          (a)   As soon as reasonably practicable after the  date
     hereof,   Seller,   Metawave  Communications   Taiwan   Ltd.
     ("Metawave Taiwan"), and Purchaser or a direct or  indirect,
     wholly-owned  subsidiary of Purchaser ("Viasystems  Taiwan")
     will  enter  into an asset purchase agreement  (the  "Taiwan
     Purchase  Agreement") on substantially the  same  terms  and
     conditions  as  set  forth herein (to the extent  relevant),
     pursuant  to  which  Metawave Taiwan  will  sell,  transfer,
     convey,  assign,  and  deliver to  Purchaser  or  Viasystems
     Taiwan, and Purchaser or Viasystems Taiwan, as the case  may
     be,  will  purchase and accept from Metawave Taiwan  all  of
     Metawave  Taiwan's  right, title, and interest  of  Metawave
     Taiwan  in and to all of the manufacturing assets  that  are
     necessary to operate the manufacturing operations located at
     Metawave  Taiwan's facility in Taipei, Taiwan  (the  "Taiwan
     Manufacturing Assets").

          (b)   In  consideration  for the  Taiwan  Manufacturing
     Assets, Purchaser or Viasystems Taiwan will pay to Seller or
     its designee at the closing of the transactions contemplated
     by  the Taiwan Purchase Agreement, an aggregate amount equal
     to  the  sum  of  (i)  the net book value  of  the  tangible
     personal property as of the closing date plus (ii)  the  net
     book value of the inventories as of the closing date.

          (c)   The  closing of the transactions contemplated  by
     the  Taiwan  Purchase  Agreement shall  be  subject  to  the
     additional  condition precedent that Viasystems  shall  have
     formed   a   direct  or  indirect,  wholly-owned  subsidiary
     organized  under the laws of Taiwan and that such subsidiary
     shall  have  obtained  all  consents,  approvals,  licenses,
     authorizations,   registrations,  and   permits   from   all
     applicable Taiwan governmental authorities necessary to  own
     and/or  operate  the Taiwan Manufacturing Assets  and/or  to
     conduct    the    manufacturing   operations    in    Taiwan
     (collectively, the "Taiwan Permits").  Viasystems shall  use
     reasonable  commercial efforts to form such  subsidiary  and
     obtain   the  Taiwan  Permits  as  promptly  as  practicable
     following the Closing hereunder.

     10.8  Release of Liens.  Seller shall, within 45 days  after
the Closing Date, obtain a release of all of the Liens listed  on
Schedule 5.12.

                           ARTICLE XI
                  Survival and Indemnification

     11.1  Survival of Representations and Warranties.   Each  of
the  representations and warranties contained in  this  Agreement
will survive the Closing and remain in full force and effect  for
18  months after the Closing Date, except for the representations
and  warranties  contained  in (i)  Sections  5.16,  which  shall
survive  the  Closing and remain in effect  for  the  statute  of
limitation period applicable thereto and (ii) Section 5.12  which
shall  survive  the Closing and remain in full force  and  effect
indefinitely.  Any claim in respect of any of such  matters  that
is  not  asserted  by  notice given as herein  provided  relating
thereto  within  such  specified period of survival  may  not  be
pursued  and is hereby irrevocably waived after such  time.   Any
claim  for  an Indemnifiable Loss asserted within such period  of
survival  as  herein provided will be timely  made  for  purposes
hereof.

     11.2 Limitations of Liability.

          (a)   For  purpose  of this Agreement,  (i)  "Indemnity
     Payment"  means any amount of Indemnifiable Losses  required
     to  be  paid  pursuant to this Agreement, (ii)  "Indemnitee"
     means  any  person  entitled to indemnification  under  this
     Agreement,  (iii)  "Indemnifying  Party"  means  any  person
     required  to  provide indemnification under this  Agreement,
     (iv)  "Indemnifiable  Losses" means  any  and  all  damages,
     losses,  liabilities, obligations, costs, and expenses,  and
     any   and  all  claims,  demands,  or  actions,  suits,   or
     proceedings   (by  any  person  including  any  Governmental
     Entity),  including the costs and expenses of  any  and  all
     actions,    suits,   proceedings,   demands,    assessments,
     judgments, settlements, and compromises relating thereto and
     including   reasonable  attorneys'  fees  and  expenses   in
     connection therewith, and (v) "Third Party Claim" means  any
     claim,  action, suit, or proceeding made or brought  by  any
     person who or which is not a party to this Agreement.

          (b)   Notwithstanding any other provision hereof or  of
     any applicable Law, no Indemnitee will be entitled to make a
     claim against an Indemnifying Party in respect of any breach
     of  a representation or warranty under Section 11.3(a)(i) or
     11.3(b)(i)  unless and until the aggregate  amount  of  such
     claims  in  respect  of  breaches of  representations  being
     asserted  for Indemnifiable Losses under Section  11.3(a)(i)
     or  11.3(b)(i), as applicable, exceeds [*], in  which  event
     the  Indemnitee  will be entitled to make  a  claim  against
     Indemnifying  Party  to the extent of  the  full  amount  of
     Indemnifiable Losses.

          (c)    Notwithstanding  any  other  provision  of  this
     Agreement   to   the  contrary,  the  total  indemnification
     obligations  in  respect of a breach  of  representation  or
     warranty  of  each  of Seller under Section  11.3(a)(i)  and
     Purchaser under Section 11.3(b)(i) will not exceed [*].

     11.3 Indemnification.

          (a)   Subject  to Sections 11.1 and 11.2,  Seller  will
     indemnify,  defend,  and  hold harmless  Purchaser  and  its
     directors,   officers,  partners,  employees,  agents,   and
     representatives  from and against any and all  Indemnifiable
     Losses to the extent relating to, resulting from, or arising
     out of:

               (i)   any breach of any representation or warranty
          of Seller contained in this Agreement;

               (ii) any breach or nonfulfillment of any agreement
          or   covenant  of  Seller  under  the  terms  of   this
          Agreement;

               (iii)     any liability or obligation of Seller or
          its affiliates other than any Assumed Liability; and

               (iv)  the  conduct of the Manufacturing Operations
          or  any portion thereof, or the use or ownership of any
          of the Manufacturing Assets, prior to the Closing Date.

          (b)   Subject to Sections 11.1 and 11.2, Purchaser will
     indemnify,  defend,  and  hold  harmless  Seller   and   its
     directors,   officers,  partners,  employees,  agents,   and
     representatives  from and against any and all  Indemnifiable
     Losses to the extent relating to, resulting from, or arising
     out of:

               (i)   any breach of any representation or warranty
          of Purchaser contained in this Agreement;

               (ii) any breach or nonfulfillment of any agreement
          or  covenant  of  Purchaser under  the  terms  of  this
          Agreement;

               (iii)     any Assumed Liability; and

               (iv)  the  conduct of the Manufacturing Operations
          or  any portion thereof or the use or ownership of  any
          of the Manufacturing Assets after the Closing Date.

     11.4 Defense of Claims.

          (a)  If any Indemnitee receives notice of the assertion
     or  commencement  of  any  Third Party  Claim  against  such
     Indemnitee  in  respect  of which an Indemnifying  Party  is
     obligated  to provide indemnification under this  Agreement,
     the  Indemnitee will give such Indemnifying Party reasonably
     prompt  written notice thereof, but in any event  not  later
     than  20  days  after receipt of such notice of  such  Third
     Party  Claim.   Such notice will describe  the  Third  Party
     Claim  in  reasonable  detail, will include  copies  of  all
     material  written  evidence thereof and  will  indicate  the
     estimated   amount,  if  reasonably  practicable,   of   the
     Indemnifiable Loss that has been or may be sustained by  the
     Indemnitee.  The Indemnifying Party will have the  right  to
     participate  in  or,  by  giving  written  notice   to   the
     Indemnitee, to assume, the defense of any Third Party  Claim
     at  such  Indemnifying  Party's  own  expense  and  by  such
     Indemnifying Party's own counsel (reasonably satisfactory to
     the  Indemnitee), and the Indemnitee will cooperate in  good
     faith in such defense.

          (b)  If, within ten days after giving notice of a Third
     Party   Claim   to   an  Indemnifying  Party   pursuant   to
     Section 11.4(a), an Indemnitee receives written notice  from
     the  Indemnifying  Party  that the  Indemnifying  Party  has
     elected  to assume the defense of such Third Party Claim  as
     provided  in  the  last  sentence of  Section  11.4(a),  the
     Indemnifying Party will not be liable for any legal expenses
     subsequently  incurred by the Indemnitee in connection  with
     the   defense  thereof;  provided,  however,  that  if   the
     Indemnifying Party fails to take reasonable steps  necessary
     to  defend diligently such Third Party Claim within ten days
     after receiving written notice from the Indemnitee that  the
     Indemnitee  believes the Indemnifying Party  has  failed  to
     take  such  steps  or  if  the Indemnifying  Party  has  not
     undertaken  fully to indemnify the Indemnitee in respect  of
     all   Indemnifiable  Losses  relating  to  the  matter,  the
     Indemnitee  may assume its own defense, and the Indemnifying
     Party  will  be liable for all reasonable costs or  expenses
     paid or incurred in connection therewith.  Without the prior
     written  consent  of the Indemnitee, the Indemnifying  Party
     will  not enter into any settlement of any Third Party Claim
     that  would  lead  to liability or create any  financial  or
     other obligation on the part of the Indemnitee for which the
     Indemnitee is not entitled to indemnification hereunder.  If
     a  firm  offer is made to settle a Third Party Claim without
     leading to liability or the creation of a financial or other
     obligation  on  the  part of the Indemnitee  for  which  the
     Indemnitee is not entitled to indemnification hereunder  and
     the  Indemnifying Party desires to accept and agree to  such
     offer,  the Indemnifying Party will give written  notice  to
     the  Indemnitee to that effect.  If the Indemnitee fails  to
     consent to such firm offer within ten days after its receipt
     of  such  notice, the Indemnitee may continue to contest  or
     defend  such  Third  Party Claim and,  in  such  event,  the
     maximum liability of the Indemnifying Party as to such Third
     Party  Claim  will not exceed the amount of such  settlement
     offer,  plus  costs  and expenses paid or  incurred  by  the
     Indemnitee through the end of such ten-day period.

          (c)   A failure to give timely notice or to include any
     specified   information  in  any  notice  as   provided   in
     Section  11.4(a) or 11.4(b) will not affect  the  rights  or
     obligations  of any party hereunder except and only  to  the
     extent  that, as a result of such failure, any  party  which
     was  entitled  to  receive such notice was deprived  of  its
     right  to recover any payment under its applicable insurance
     coverage  or  was  otherwise damaged as  a  result  of  such
     failure.

          (d)   The  Indemnifying Party will  have  a  period  of
     30  days within which to respond in writing to any claim  by
     an  Indemnitee on account of an Indemnifiable Loss that does
     not result from a Third Party Claim (a "Direct Claim").   If
     the  Indemnifying Party does not so respond within such  30-
     day  period, the Indemnifying Party will be deemed  to  have
     rejected such claim, in which event the Indemnitee  will  be
     free  to  pursue  such remedies as may be available  to  the
     Indemnitee  on  the terms and subject to the  provisions  of
     this Article XI.

          (e)   If  the amount of any Indemnifiable Loss, at  any
     time  subsequent to the making of an Indemnity  Payment,  is
     reduced  by  recovery,  settlement, or  otherwise  under  or
     pursuant  to  any  insurance coverage, or  pursuant  to  any
     claim,  recovery, settlement, or payment by or  against  any
     other  person, the amount of such reduction, less any costs,
     expenses,   premiums,  or  taxes  incurred   in   connection
     therewith will promptly be repaid by the Indemnitee  to  the
     Indemnifying Party.  Upon making any Indemnity  Payment  the
     Indemnifying  Party will, to the extent  of  such  Indemnity
     Payment,  be  subrogated  to all rights  of  the  Indemnitee
     against  any  third person that is not an affiliate  of  the
     Indemnitee in respect of the Indemnifiable Loss to which the
     Indemnity Payment relates; provided, however, that  (i)  the
     Indemnifying  Party  shall then be in  compliance  with  its
     obligations  under  this  Agreement  in  respect   of   such
     Indemnifiable  Loss  and (ii) until the Indemnitee  recovers
     full  payment of its Indemnifiable Loss, any and all  claims
     of  the Indemnifying Party against any such third person  on
     account  of  such Indemnity Payment will be  subrogated  and
     subordinated in right of payment to the Indemnitee's  rights
     against  such third person.  Without limiting the generality
     or   effect  of  any  other  provision  hereof,  each   such
     Indemnitee  and  Indemnifying Party will duly  execute  upon
     request all instruments reasonably necessary to evidence and
     perfect  the  above-described subrogation and  subordination
     rights.

     11.5  Exclusive Remedy.  The indemnification  provisions  of
this Article XI shall be the sole and exclusive remedy of a party
after  the  Closing  Date for any breach of  any  of  the  terms,
conditions, warranties, representations, or covenants  herein  or
any  right,  claim,  or  cause  of  action  arising  out  of  the
transactions contemplated hereby except to the extent such  claim
or cause of action is based on fraud or fraudulent inducement.

                           ARTICLE XII
                           Termination

     12.1  Termination.  Notwithstanding any other  provision  of
this  Agreement to the contrary, this Agreement may be terminated
at  any  time  prior  to  the Closing,  if,  in  the  case  of  a
termination  pursuant to Section 12.1(b) or  12.1(c),  the  party
seeking to terminate is not then in material Default or breach of
this Agreement:

          (a)   by  the  mutual written consent of Purchaser  and
     Seller;

          (b)   by  either Purchaser or Seller, by written notice
     to  the other, if the Closing shall not have occurred on  or
     before April 1, 2001;

          (c)   by  either Purchaser or Seller if, prior  to  the
     Closing Date, the other party is in material breach  of  any
     representation,  warranty, covenant, or agreement  contained
     herein  and  such breach shall not be cured within  15  days
     after  the  date of notice of default served  by  the  party
     claiming such material breach;

          (d)   by  either Purchaser or Seller, by written notice
     to  the  other,  if there shall have been entered  a  final,
     nonappealable injunction or other Order of any  Governmental
     Entity  restraining or prohibiting the consummation  of  the
     transactions  contemplated  hereby  or  any  material   part
     thereof.

     12.2  Effect of Termination.  If this Agreement  is  validly
terminated  pursuant to Section 12.1, this Agreement, except  for
Sections  7.7  and 12.1 and Article XIII, shall become  null  and
void and of no further force or effect and all obligations of the
parties hereto shall terminate and there shall be no liability or
obligation  of  any  party hereto, except that  nothing  in  this
Section  12.2  shall  relieve any party from  liability  for  its
Default  or breach of any representation, warranty, covenant,  or
agreement under this Agreement prior to its termination.

                          ARTICLE XIII
                    Miscellaneous Provisions

     13.1  Amendments.  This Agreement may be amended,  modified,
or supplemented at any time only pursuant to a written instrument
executed by each of the parties hereto.

     13.2   Assignment.   This  Agreement  and  the  rights   and
obligations  hereunder  shall  not  be  assigned,  delegated,  or
otherwise transferred (whether by operation of law, by merger, by
contract, or otherwise) without the prior written consent of  the
other  party  hereto; provided, however, that (i) Purchaser  may,
without   obtaining   the  prior  written  consent   of   Seller,
(A)  assign,  delegate,  or otherwise  transfer  its  rights  and
obligations  hereunder  to  any direct or  indirect  wholly-owned
subsidiary  of Purchaser, or (B) make a collateral assignment  of
its  rights  hereunder to any institutional lender to  Purchaser,
and (ii) Purchaser or Seller, as the case may be, may assign this
Agreement to any person acquiring all or substantially all of the
assets  or  stock  of Purchaser or Seller, as the  case  may  be;
provided, further, that notwithstanding any such assignment,  the
assignor  shall  remain  liable for the performance  of  all  its
obligations  under  this Agreement.  Seller  shall  execute  such
acknowledgements  of such assignments and collateral  assignments
in  such forms as Purchaser or any such institutional lender  may
from  time to time reasonably request.  Any attempted assignment,
delegation, or transfer in violation of this Section  13.2  shall
be void and of no force or effect.

     13.3 Binding Effect.  Except as otherwise expressly provided
herein,  this  Agreement shall be binding upon and inure  to  the
benefit of the parties hereto and their respective successors and
permitted assigns.

     13.4    Construction.    All   references   to   "Articles,"
"Sections,"  "Schedules,"  and  "Exhibits"  contained   in   this
Agreement   are,   unless   specifically   indicated   otherwise,
references to articles, sections, schedules, or exhibits of or to
this  Agreement.  Whenever in this Agreement the singular  number
is used, the same shall include the plural where appropriate (and
vice  versa),  and words of any gender shall include  each  other
gender  where  appropriate.   As  used  in  this  Agreement,  the
following   words   or  phrases  have  the  meanings   indicated:
(i) "day" means a calendar day; (ii) "business day" means any day
other  than  Saturday,  Sunday, or any  day  on  which  banks  in
Seattle,  Washington  are required or authorized  by  Law  to  be
closed  for business; (iii) "U.S." or "United States"  means  the
United  States  of  America; (iv) "dollar" or  "$"  means  lawful
currency  of  the United States; (v) "including,"  "include,"  or
derivatives   thereof   means  "including  without   limitation";
(vi)  references in this Agreement to specific Laws (such as  the
Code  and ERISA), or to specific sections or provisions of  Laws,
apply to the respective U.S. or state Laws that bear the names so
specified  and  to  any  succeeding Law,  section,  or  provision
corresponding  thereto;  (vii)  "person"  means  any  individual,
corporation,   partnership,  joint  venture,  limited   liability
company, trust, unincorporated association, or other legal entity
or   form  of  business  or  Governmental  Entity;  (viii)   each
accounting term not otherwise defined in this Agreement  has  the
meaning   assigned   to   it  in  accordance   with   GAAP;   and
(ix) "affiliate" has the meaning given that term in Rule 12b-2 of
Regulation  12B  under the Securities Exchange Act  of  1934,  as
amended.

     13.5  Counterparts.   This  Agreement  may  be  executed  in
multiple  counterparts, each of which when so executed  shall  be
deemed  to  be an original and all of which taken together  shall
constitute one and the same instrument.

     13.6  Entire  Agreement.   This  Agreement  (including   the
Exhibits  and Schedules hereto) constitutes the entire  agreement
of  the  parties hereto in respect of the subject matter  hereof,
and  supersedes all prior agreements or understandings, among the
parties hereto in respect of the subject matter hereof.

     13.7  Expenses.   Except  as  otherwise  expressly  provided
herein,  each  party  hereto  will pay  its  respective  expenses
incurred  in  connection with this Agreement and in preparing  to
consummate and consummating the transactions contemplated hereby,
whether   or   not  the  transactions  contemplated  hereby   are
consummated.

     13.8  Finder's  Fee, etc.  There are no brokers  or  finders
involved  in  this  Agreement  or the  transactions  contemplated
hereby,  and each party hereto shall indemnify and hold  harmless
the  other  party hereto against and in respect of any claim  for
brokerage  or  other  commissions or  fees  in  respect  of  this
Agreement or to the transactions contemplated hereby based in any
way  on  agreements, arrangements, or understandings  claimed  to
have  been  made by Purchaser, on the one hand, or by Seller,  on
the other hand, with any third party.

     13.9  Further Assurances.  From time to time,  as  and  when
requested  by any party hereto, the other party will execute  and
deliver,  or  cause  to  be  executed  and  delivered,  all  such
documents  and  instruments  as may be  reasonably  necessary  to
consummate the transactions contemplated hereby.

     13.10      Governing Law.  This Agreement shall be enforced,
governed,  and construed in all respects in accordance  with  the
laws  of  the  State of Washington without giving effect  to  the
conflict-of-law principles of such State.

     13.11      Headings.   The article and section  headings  of
this  Agreement are for convenience of reference only  and  shall
not be deemed to alter or affect the meaning or interpretation of
any provision hereof.

     13.12     Jurisdiction.  The parties hereto to shall try  to
come  to  an amicable settlement of any dispute, controversy,  or
claim  arising  out  of  or relating to this  Agreement,  or  the
breach,  termination, or validity thereof  by  first  seeking  to
resolve the dispute by negotiation of the appropriate officers of
each  party, with the request for resolution being passed to each
officer  at  the next higher level of authority in turn.   Should
the  parties fail to settle any such matter amicably, the  matter
shall  be  submitted to non-binding mediation to be conducted  in
Seattle,  Washington by a mutually agreed non-affiliated  neutral
party.   In  the  event  mediation is unsuccessful,  the  parties
hereto  agree  that  any action, suit, or proceeding  seeking  to
enforce any provision of, or based on any matter arising  out  of
or  relating  to, this Agreement or the transactions contemplated
hereby  can  only  be brought in federal court  sitting  in  King
County,  Washington or, if such court does not have jurisdiction,
any  district court sitting in King County, Washington, and  each
party  hereto hereby consents to the jurisdiction of such  courts
(and  of the appropriate appellate courts therefrom) in any  such
action,  suit,  or  proceeding and  irrevocably  waives,  to  the
fullest extent permitted by Law, any objection that it may now or
hereafter  have  to the laying of the venue of any  such  action,
suit,  or  proceeding in any such court or that any such  action,
suit,  or  proceeding that is brought in any such court has  been
brought in an inconvenient forum.

     13.13        Notices.    Any   notice,   demand,    request,
instruction,  correspondence,  or  other  document  required   or
permitted to be given hereunder by any party to the others  shall
be  in  writing and delivered (i) in person, (ii) by a nationally
recognized overnight courier service requiring acknowledgment  of
receipt  of  delivery,  (iii) by United  States  certified  mail,
postage  prepaid  and  return  receipt  requested,  or  (iv)   by
facsimile, as follows:

          If to Seller, to:

               Metawave Communications Corporation
               10735 Willows Road, NE
               Redmond, Washington  98052
               Attention:  Stuart Fuhlendorf
               Facsimile No.:  (425) 702-5993

          with   a  copy  to  (which  shall  not  constitute
     notice):

               Metawave Communications Corporation
               10735 Willows Road NE
               Redmond, Washington  98052
               Attention:  Kathryn Surace-Smith
               Facsimile No.:  (425) 702 5983

          If to Purchaser, to:

               Viasystems, Inc.
               101 South Hanley Road, Suite 400
               St. Louis, Missouri  63105
               Attention:  David M. Sindelar
               Facsimile No.:  (314) 746-2299

          with a   copy   to  (which  shall  not  constitute
               notice):

               Weil, Gotshal & Manges LLP
               100 Crescent Court, Suite 1300
               Dallas, Texas  75201-6905
               Attention:  R. Scott Cohen
               Facsimile No.:  (214) 746-7777

     Notice  shall  be deemed given, received, and effective  on:
(i) if given by personal delivery or courier service, the date of
actual  receipt by the receiving party, or if delivery is refused
on  the  date  delivery was first attempted;  (ii)  if  given  by
certified  mail,  the third day after being so mailed  if  posted
with  the  United States Postal Service; and (iii)  if  given  by
facsimile,  the  date on which the facsimile  is  transmitted  if
confirmed by transmission report during the transmitter's  normal
business  hours,  or at the beginning of the  next  business  day
after  transmission  if  confirmed at any  time  other  than  the
transmitter's  normal  business hours.  Any  person  entitled  to
notice may change any address or facsimile number to which notice
is  to  be given to it by giving notice of such change of address
or  facsimile  number  as provided in this  Section  13.13.   The
inability  to  deliver  notice  because  of  changed  address  or
facsimile number of which no notice was given shall be deemed  to
be  receipt of the notice as of the date such attempt  was  first
made.

     13.14      Passage  of  Title; Risk of Loss.   Legal  title,
equitable title, and risk of loss in respect of the Manufacturing
Assets will not pass to Purchaser until such Manufacturing Assets
are transferred to Purchaser at the Closing, which transfer, once
it  has  occurred, will be deemed effective for tax,  accounting,
and  other computational purposes as of 11:59 P.M. (Pacific Time)
on the Closing Date.

     13.15     Press Releases.  No party hereto shall disclose or
issue  or  cause  the publication of any press release  or  other
public   announcement  in  respect  of  this  Agreement  or   the
transactions  contemplated  hereby  without  the  prior   written
consent  of the other parties hereto, which consent will  not  be
unreasonably   conditioned,  delayed,  or   withheld;   provided,
however, that nothing herein will prohibit any party hereto  from
issuing  or  causing  publication of any such  press  release  or
public announcement to the extent that such party determines such
action  to be required by Law or the rules of any national  stock
exchange  applicable to it or its affiliates, in which event  the
party  making  such  determination will, if  practicable  in  the
circumstances, use commercially reasonable efforts to  allow  the
other  party  reasonable  time to  comment  on  such  release  or
announcement in advance of its issuance.

     13.16      Severability.  If any provision of this Agreement
or   the   application  of  such  provision  to  any  person   or
circumstance shall be held (by a court of competent jurisdiction)
to be invalid, illegal, or unenforceable under the applicable Law
of  any jurisdiction, (i) the remainder of this Agreement or  the
application  of such provision to other persons or  circumstances
or  in  other  jurisdictions shall not be affected  thereby,  and
(ii) such invalid, illegal, or unenforceable provision shall  not
affect  the validity or enforceability of any other provision  of
this Agreement.

     13.17      Third-Party Beneficiaries.  Except  as  expressly
provided  in  Article  XI, nothing express  or  implied  in  this
Agreement  is  intended or shall be construed to confer  upon  or
give   any  person  other  than  the  parties  hereto  and  their
respective  successors  and  permitted  assigns  any  rights   or
remedies under of by reason of this Agreement or the transactions
contemplated hereby.

     13.18      Waiver.   The  rights and remedies  provided  for
herein  are cumulative and not exclusive of any right  or  remedy
that may be available to any party whether at law, in equity,  or
otherwise.   No  delay,  forbearance, or neglect  by  any  party,
whether  in one or more instances, in the exercise or any  right,
power,  privilege, or remedy hereunder or in the  enforcement  of
any  term or condition of this Agreement shall constitute  or  be
construed  as  a  waiver  thereof.  No waiver  of  any  provision
hereof,  or  consent  required  hereunder,  or  any  consent   or
departure  from this Agreement, shall be valid or binding  unless
expressly and affirmatively made in writing and duly executed  by
the  party  to  be  charged with such waiver.   No  waiver  shall
constitute or be construed as a continuing waiver or a waiver  in
respect of any subsequent breach or Default, either of similar or
different nature, unless expressly so stated in such writing.

                            * * * * *

    [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


     IN  WITNESS  WHEREOF, the parties hereto have executed  this
Agreement as of the date first above written.

                              METAWAVE COMMUNICATIONS CORPORATION



                              By:  /s/ Stuart W. Fuhlendorf
                              Name:          Stuart W. Fuhlendorf
                              Title:    Chief Financial Officer



                              VIASYSTEMS, INC.



                              By:  /s/ James G. Powers
                              Name:     James G. Powers
                              Title:    EVP - Business
                              Development

EX-10.2

                METAWAVE COMMUNICATIONS CORPORATION

                     MANUFACTURING AGREEMENT

     This Manufacturing Agreement (this "Agreement") is made this
1st day of April, 2001 between Metawave Communications
Corporation, a Delaware corporation ("METAWAVE"), and Viasystems,
Inc., a Delaware corporation ("VIASYSTEMS").

                            RECITALS

     METAWAVE desires to have certain products of its design
manufactured by VIASYSTEMS for sale to METAWAVE.  VIASYSTEMS has
the capability of manufacturing such products and desires to do
so for sale to METAWAVE.

                            AGREEMENT

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

1.   Definitions.

     (a)  "Affiliate" shall mean any entity that directly or
indirectly controls, is under common control with, or is
controlled by, one of the parties to this Agreement.  An entity
shall be deemed to be in control of another entity only if, and
for so long as, it owns or controls more than fifty-one percent
(51%) of the shares of the subject entity entitled to vote in the
election of the directors (or, in the case of an entity that is
not a corporation, for the election of the corresponding managing
authority).

     (b)  "B Stock Inventory" shall mean those Products or items of
Inventory that have been identified as having been previously in
commercial use and have been refurbished to meet the
Specifications.  B Stock Inventory cannot be sold or represented
as new material.

     (c)  "Confidential Information" of a party shall mean any
information disclosed by that party to the other pursuant to this
Agreement or pursuant to either of the Transition Services
Agreements of even date herewith between the parties 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 METAWAVE.

      (d)  "Cost" shall mean the actual purchase price of Inventory or
a service or the actual cost incurred in the manufacture, test or
assembly of a Product, and does not include an administrative or
similar mark-up.

      (e)  "Intellectual Property" shall mean (i) with respect to
METAWAVE, all rights held by METAWAVE 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, and (ii) with respect to VIASYSTEMS, all
rights held by VIASYSTEMS 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)  "Inventory" shall mean all raw materials, components and
supplies necessary for the manufacture of Products pursuant to
this Agreement.

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

      (h)  "Products" shall mean all products (i) designed by METAWAVE
or its Affiliates or (ii) marketed by METAWAVE or its Affiliates,
and in each case in respect of which METAWAVE or its Affiliates
originally held, or have subsequently acquired, manufacturing
rights, including, without limitation, the products identified in
Exhibit A hereto and any modifications or replacements thereof or
substitutions therefor, but subject to delayed applicability to
the extent described in Exhibit A, but excluding antenna panels
and linear power amplifiers.

      (i)  "Purchase Order" shall mean a METAWAVE Purchase Order in the
form mutually agreed by the parties hereto.

      (j)  "Specifications" shall mean the specifications for the
Products as provided by METAWAVE and accepted by VIASYSTEMS, and
as revised from time to time upon mutual agreement of the parties
hereto.

      (k)  "Trademarks" shall mean the trademarks that are associated
with the Product which are approved in writing by METAWAVE from
time to time for use by VIASYSTEMS in the manufacture of the
Products.

2.   Manufacture and Supply of Products.

     (a)  Agreement to Manufacture.  Pursuant to Purchase Orders or
changes to Purchase Orders issued by METAWAVE or its Affiliates
and accepted by VIASYSTEMS, VIASYSTEMS agrees to procure
Inventory 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 METAWAVE or
its Affiliates.  METAWAVE or its Affiliates, as the case may be,
agrees to purchase, and VIASYSTEMS agrees to supply, all
manufacture, test and assembly services for the Products required
by METAWAVE and its Affiliates on a global basis during the term
of this Agreement exclusively from VIASYSTEMS, subject to
Sections 12(e) and 12(f); provided, however, that METAWAVE and
its Affiliates reserve the right to purchase supply, manufacture,
test, and assembly services for the Products (or components
therefor) from a third party from an alternate manufacturer
during any exclusivity period hereunder solely for development
and testing purposes only, provided that such Products are not
used in METAWAVE's business for commercial resale.

     (b)  [*]

     (c)  Purchase Orders.  All Purchase Orders shall be submitted to
VIASYSTEMS in writing by electronic transmission, 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(b).  METAWAVE shall submit such
Purchase Orders to VIASYSTEMS at least [*] prior to the date of
requested delivery ("Delivery Date"), or such longer period as
mutually agreed upon by the parties hereto for Products
incorporating Long-Lead Inventory.

     (d)  [*]

     (e)  Acceptance or Rejection of Purchase Orders.  All Purchase
Orders shall be deemed accepted unless rejected by VIASYSTEMS, in
writing, within [*] after receipt by VIASYSTEMS if such Purchase
Order conforms to the Binding Forecast.  If such Purchase Orders
do not conform to the Binding Forecasts then the parties hereto
shall agree upon a Delivery Date.  In the event of a conflict
between the terms of a Purchase Order and this Agreement, this
Agreement shall control.

     (f)  Engineering Changes.  METAWAVE may request at any time that
VIASYSTEMS incorporate an engineering change into a Product.
Such request will include a description of the proposed change
sufficient to permit VIASYSTEMS to evaluate its feasibility.
VIASYSTEMS' evaluation shall be in writing and shall state the
impact on delivery schedule and expected Cost. [*].

     (g)  Manufacturing Process.  VIASYSTEMS will utilize
manufacturing processes and productions methods approved by
METAWAVE, which approval shall not be unreasonably withheld.
VIASYSTEMS will employ proper equipment, machinery and production
methods to ensure that the Products will at all times meet the
Specifications. VIASYSTEMS commits to ensure that all processes
which contribute to the development, production and services of
Product remain ISO registered.  Any failure to do so shall be
considered a material breach of this Agreement. [*].

     (h)  Monitoring of Production.  METAWAVE shall have the right,
upon [*] advance written notice, during normal business hours and
in such a manner so as to not unreasonably interfere with the
business of VIASYSTEMS, to [*].  All representatives of METAWAVE
conducting such inspections shall comply with all applicable
safety and security rules of VIASYSTEMS.

     (i)  Product Identification.  VIASYSTEMS will not place its name
or any other marking not approved by METAWAVE anywhere on the
Products or their respective packaging material, except markings,
if any, that are required by law or markings appearing on
VIASYSTEMS Components (as defined below).

3.   Components; Tooling.

     (a)  [*]

     (b)  METAWAVE Supplied Components.  METAWAVE may supply
components to VIASYSTEMS, at VIASYSTEMS' expense, upon the
written consent of VIASYSTEMS.  Such components, including
provision for failed parts, shall be delivered to VIASYSTEMS not
later than [*] prior to the scheduled Delivery Date for the
related Products to METAWAVE.  Should METAWAVE be unable to meet
such delivery requirements, METAWAVE may, at its option, request
VIASYSTEMS to either (i) ship Products to METAWAVE absent the
supplied parts on or after [*] from the scheduled Delivery Date
or (ii) hold the Products pending receipt of such components from
METAWAVE.  Under these circumstances METAWAVE will give written
notification to VIASYSTEMS prior to the scheduled Delivery Date,
and VIASYSTEMS may invoice METAWAVE for such Products on or after
[*] from the scheduled Delivery Date, or on such other terms as
equitably agreed by the parties hereto. [*].

     (c)  [*]

     (d)  Title to Consigned Inventory Supplied by METAWAVE.  All
components furnished by METAWAVE shall remain METAWAVE's property
and be kept segregated.  VIASYSTEMS agrees to be responsible for
any loss or damage to such components while in VIASYSTEMS'
possession or under VIASYSTEMS' control.  METAWAVE may inspect,
inventory, and authenticate the amount of components that are
furnished under this Agreement during VIASYSTEMS' normal business
hours so long as such activities do not unreasonably interfere
with VIASYSTEMS' business.  VIASYSTEMS shall provide METAWAVE
reasonable access to the premises wherein all such components are
located. [*].

     (e)  [*]

4.   Product Shipment, Delivery and Inspection.

     (a)  Shipments.

          (i)  All Products delivered pursuant to the terms of this
Agreement shall be packaged in accordance with packaging
instructions provided by METAWAVE and shall include a complete
packlist and all test data as required in the Product
Specification.  If such instructions are not provided by METAWAVE
for a specific Product, the Product shall be suitably packed for
shipment to avoid damage.  Each box and every pallet of the
Product shall be marked for shipment with the end customer name,
end customer purchase order, cell site name, ship to address and
any other specific information as specified on the Purchase
Order.  All orders must be shipped complete.  Any partial
shipments must be approved in writing by METAWAVE.  Upon shipment
of the Product, VIASYSTEMS will send a copy of the packlist,
applicable Product serial numbers, the freight carrier and
waybill reference number (all in electronic format) to METAWAVE
Order Entry to confirm shipment.

          (ii) The Product will be shipped to METAWAVE's destination
specified in the applicable Purchase Order, and received by
METAWAVE [*] to the Delivery Date.  The Delivery Date will be
deemed to occur upon shipment [*], at which time risk of loss and
title will pass to METAWAVE.  All freight, insurance and other
shipping expenses will be paid by METAWAVE, as well as any
special packing expenses approved in writing by METAWAVE and not
included in the original price quotation for the Products. [*].

     (b)  [*]

     (c)  Product Inspection and Acceptance.  The Products delivered
by VIASYSTEMS will be inspected and tested as required by
METAWAVE within [*] following the Delivery Date or [*] (the
"Acceptance Period").  If Products are found to be defective in
material or workmanship and/or fail to meet the Specifications,
METAWAVE may reject such Products during the Acceptance Period.
Products not rejected during the Acceptance Period will be deemed
accepted.  METAWAVE may return rejected Products upon receipt of
a Return Material Authorization ("RMA") number from VIASYSTEMS.
[*].

5.   In Market Spares Support, Refurbished Product, After
Warranty Repair.

     (a)  [*]

     (b)  VIASYSTEMS will maintain established procedures for the
repair and refurbishment of returned Product held as B Stock
Inventory.  METAWAVE shall provide on the date hereof its current
procedures for repair and refurbishment of returned Product.
VIASYSTEMS will maintain B Stock Inventory in a separate
inventory location and offer B Stock Inventory to fulfill orders
for METAWAVE engineering use, or warranty replacement after the
Acceptance Period.

     (c)  VIASYSTEMS will repair METAWAVE Product after the warranty
period expires at the reasonable request of METAWAVE.  METAWAVE
will pay the cost of repair. VIASYSTEMS will not repair the
Product until approval of the estimated cost is received from
METAWAVE.  VIASYSTEMS will maintain the capability to repair or
replace Product for [*] after the Product is discontinued, or if
earlier, through the remaining term of this Agreement, and during
such period METAWAVE will be entitled to make a final lifetime
buy of such Products at the prices established pursuant to this
Agreement, with delivery schedules for such purchase to be
negotiated by the parties at the time of order placement.

6.   Payment Terms, Additional Costs and Price Changes.

     (a)  Payment Terms.  Payment for any products, services or other
costs to be paid by METAWAVE hereunder are due [*] from the date
of invoice for Products and shall be made in lawful U.S.
currency.

     (b)  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 [*] shall be responsible for all such items.

          (ii) [*]

     (c)  Price; Price Changes.  The initial purchase prices for the
Products identified on Exhibit A hereto are set forth on Exhibit
B hereto.  The initial purchase price for any new Product and the
purchase price for any significant change or re-design to an
existing Product shall be established by mutual good faith
agreement of the parties and shall be based upon [*].

          (i)  [*]

          (ii) [*]

          (iii) [*]

     (d)  Regular Business Reviews.  The parties will have regular
business reviews, as mutually agreed, to review the Costs and
prices of the Products, Bill of Materials, Inventory strategy,
cost reduction plans, quality, Forecasts and delivery performance
and to mutually develop any modifications that may be necessary.

7.   License Grants; Ownership Rights.

     (a)  Nonexclusive License.  During the term of this Agreement,
VIASYSTEMS shall be deemed to have been granted by METAWAVE a
[*], to use that part of METAWAVE's Intellectual Property
required to manufacture the Products for sale to METAWAVE
pursuant to the terms of this Agreement. [*].

     (b)  Software.  All METAWAVE owned software that METAWAVE
provides to VIASYSTEMS under the license set forth in this
Section 7 is and shall remain the property of METAWAVE.
VIASYSTEMS shall have a [*] this software during the term of this
Agreement solely for the purpose of manufacturing Product for
sale to METAWAVE pursuant to the terms of this Agreement.  All
software developed by VIASYSTEMS to support the process tooling
or otherwise shall be and remain the property of VIASYSTEMS
unless funded by METAWAVE, in which case such software shall be
owned by METAWAVE and VIASYSTEMS shall assign all its right,
title and interest in such software to METAWAVE and shall
cooperate with METAWAVE, at METAWAVE's expense, before and after
the termination of this Agreement, to permit METAWAVE to obtain
and enforce the full benefits, enjoyment, rights and title
throughout the world in such software. [*].

     (c)  Intellectual Property Rights.  Except as set forth in
Sections 6(a) and 6(b), 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.
(d)  Trademarks.  In consideration of the fees set forth herein,
METAWAVE further grants to VIASYSTEMS 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
METAWAVE'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 METAWAVE.  VIASYSTEMS shall not
remove trademark notices from any Product without the prior
written consent of METAWAVE.  VIASYSTEMS shall not use the name,
Trademarks or logos associated with the Products in its business
name.

8.   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 commercially 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.

     (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 by employees of the
receiving party who had no access to 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 of
competent jurisdiction; 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 8 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 of
competent jurisdiction;

         (ii) as otherwise and to the extent required by law (including
the federal securities laws and regulations promulgated
thereunder);

        (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.

9.   Indemnity.

     (a)  METAWAVE Indemnification.  METAWAVE shall indemnify, defend
and hold harmless VIASYSTEMS and its officers, directors,
employees and agents from any loss, claim, cost or damage,
including reasonable attorney and accountant's fees, arising out
of any claim, action, bodily injury and/or property damage based
on [*]; provided that:

          (i)  METAWAVE is given prompt written notice of the such claim or
action and complete authority for the defense or settlement of
same (provided that METAWAVE shall not enter into any settlement
without the prior written consent of VIASYSTEMS, which consent
shall not be unreasonably withheld), on the understanding that in
all events VIASYSTEMS shall have the right at its own expense to
participate in such defense or settlement through counsel of its
own choosing;

         (ii) VIASYSTEMS provides such information and assistance in the
defense or  settlement of the claim as may be reasonably
requested by METAWAVE;

        (iii)     VIASYSTEMS complies with any settlement or court order
made in connection with any such claim; and

         (iv) METAWAVE shall not be responsible for any cost, expense or
compromise incurred or made by VIASYSTEMS without METAWAVE's
prior written consent, such consent not to be unreasonably
withheld.

     (b)  METAWAVE Intellectual Property Infringement Indemnity.
METAWAVE shall indemnify, defend and hold harmless VIASYSTEMS and
its officers, directors, employees and agents from any loss,
claim, cost or damage, including reasonable attorney and
accountant's fees, arising out of any suit or proceeding based on
a claim that [*], provided that:

          (i)  the claim arises as a result of [*] under this Agreement;

         (ii) METAWAVE is given prompt written notice of the such claim or
action and complete authority for the defense or settlement of
same (provided that METAWAVE shall not enter into any settlement
without the prior written consent of VIASYSTEMS, which consent
shall not be unreasonably withheld), on the understanding that in
all events VIASYSTEMS shall have the right at its own expense to
participate in such defense or settlement through counsel of its
own choosing;

        (iii) VIASYSTEMS provides such information and assistance in
the defense or settlement of the claim as may be reasonably
requested by METAWAVE;

         (iv) VIASYSTEMS complies with any settlement or court order made
in connection with any such claim;

          (v)  METAWAVE provides prompt notice to VIASYSTEMS if METAWAVE
becomes aware that any Product or portion thereof (or the
manufacturing thereof) infringes any copyright, mask work,
patent, or trade secret, whether foreign or domestic; and

         (vi) METAWAVE shall not be responsible for any cost, expense or
settlement incurred or made by VIASYSTEMS without METAWAVE's
prior written consent, such consent not to be unreasonably
withheld.
     [*]

     (c)  VIASYSTEMS Indemnification.  VIASYSTEMS shall indemnify,
defend and hold harmless METAWAVE and its officers, directors,
employees and agents from any loss, claim, cost or damage, [*],
arising out of any claim, action, bodily injury and/or property
damage based on [*], provided that:

          (i)  VIASYSTEMS is given prompt written notice of the such claim
or action and complete authority for the defense or settlement of
same (provided that VIASYSTEMS shall not enter into any
settlement without the prior written consent of METAWAVE, which
consent shall not be unreasonably withheld), on the understanding
that in all events, METAWAVE shall have the right at its own
expense to participate in such defense or settlement through
counsel of its own choosing;

        (ii) METAWAVE provides such information and assistance in the
defense or settlement of the claim as may be reasonably requested
by VIASYSTEMS;

       (iii)     METAWAVE complies with any settlement or court order
made in connection with any such claim; and

        (iv) VIASYSTEMS shall not be responsible for any cost, expense or
settlement incurred or made by METAWAVE without VIASYSTEMS' prior
written consent, such consent not to be unreasonably withheld.

     This Section and Section 10(f) state the entire liability of
VIASYSTEMS with respect to all claims, damages, demands and loss
whatsoever from or in respect of the infringement, violation or
misappropriation of any intellectual or industrial property or
other proprietary right of any third person.

10.  Warranty; Insurance and Disclaimer; Limitation of Liability.

     (a)  VIASYSTEMS warrants that the Products as delivered will [*].

     (b)  VIASYSTEMS will obtain and maintain during the term of this
Agreement, in addition to insurance in such amounts as is [*].
VIASYSTEMS shall provide METAWAVE with ten days' prior written
notice of material changes, cancellations or renewals of such
policy.  Subject to the other provisions of this Agreement,
VIASYSTEMS covenants that during the term of this Agreement, it
will at all times be properly insured in accordance with
applicable law.

     (c)  VIASYSTEMS will [*] within [*] after notice of such non-
compliance. [*].

     (d)  These warranties shall not apply to [*], VIASYSTEMS, or its
Affiliates, subcontractors or designees) or which shall have been
subject to [*].

     (e)  VIASYSTEMS MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED,
WITH RESPECT TO THE PRODUCTS MANUFACTURED UNDER THIS AGREEMENT,
AND DISCLAIMS ALL OTHER WARRANTIES, INCLUDING, WITHOUT
LIMITATION, THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE AND NON-INFRINGEMENT.

     (f)  IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR
[*].

11.  Contingency Plan.  By [*], the parties hereto will jointly
develop and mutually agree upon a written plan (a "Contingency
Plan") that addresses their plans on how VIASYSTEMS will continue
to perform its obligations under this Agreement in case of an
unforeseen catastrophe, including a force majeure condition, or
any other condition in which VIASYSTEMS will be unable to produce
and ship Product for [*].  The Contingency Plan will identify
VIASYSTEMS' alternative manufacturing location(s), if any, and
include the estimated time for the implementation of the
Contingency Plan and production of Product.

12.  Term and Termination.

     (a)  Term.  This Agreement shall become effective on the date of
this Agreement and shall continue for a period of [*]; thereafter
this Agreement shall be extended automatically at the end of the
initial term or subsequent terms for up to [*] so long as
VIASYSTEMS has satisfactorily achieved pricing, delivery and
quality performance requirements (as reasonably established by
the parties) during the preceding twelve-month period.

     (b)  Termination for Cause.

          (i)  Either party may terminate this Agreement at any time if (A)
if the other party makes a general assignment for the benefit of
creditors, or (B) if there are instituted by the other party
proceedings in bankruptcy or under any insolvency or similar law
or for reorganization, receivership or dissolution or such a
proceeding is commenced against the other party and is not set
aside within ninety (90) days of its commencement.

         (ii) In the event of a material breach of this Agreement, the non-
defaulting party may notify the defaulting party of such default
within 30 days after the occurrence thereof.  Such notice will
specify in reasonable detail any such default.  Upon receipt of
such notice, the parties shall meet and jointly develop, in good
faith, an action plan (the "Action Plan") as soon as reasonably
practicable but in no event later than 30 days after the
defaulting party's receipt of the notice of default.  The Action
Plan shall set forth the steps to be implemented to enable the
defaulting party to cure the default and prospectively comply
with the terms and conditions of this Agreement.  The defaulting
party shall implement the Action Plan as soon as reasonably
practicable but in no event later than 90 days after the Action
Plan has been mutually agreed to by the parties or within such
longer period as may be specified in the Action Plan.  If the
defaulting party does not comply with the terms of the Action
Plan, the non-defaulting party may terminate this Agreement, in
addition to any other rights and remedies it may have, at law or
at equity.

     (c)  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 METAWAVE and VIASYSTEMS 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.

     (d)  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.  Upon termination or expiration,
METAWAVE shall be responsible for the Products and Inventory in
existence at the date of such termination or expiration in the
same manner as for cancellation as set forth in Section 4(b).

     (e)  Termination of Exclusivity.  METAWAVE's obligation to
exclusively use VIASYSTEMS during the term of this Agreement, as
specified in Section 2(a), may be terminated by written notice
delivered by METAWAVE to VIASYSTEMS in the event:

          (i)  the Defect Threshold, as reported by VIASYSTEMS to METAWAVE
within [*] after each fiscal quarter, is exceeded for [*]; or

         (ii) VIASYSTEMS' [*], as reported by VIASYSTEMS to METAWAVE
within [*] after VIASYSTEMS files the applicable financial
statements with the Securities and Exchange Commission, is
negative for [*].

The foregoing termination right shall expire unless exercised
within [*] after such right accrues, provided that the failure to
exercise such right shall not affect the ability of METAWAVE to
exercise any newly-accrued termination right in the future.

     (f)  [*]

     (g)  Survival of Certain Provisions.  Notwithstanding anything to
the contrary in this Agreement, the following Sections shall
survive termination of this Agreement:  1, 7(c), 8, 9, 12(g), and
13.

13.  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 13(a) shall be binding
upon the parties and their respective successors and permitted
assigns.

     (b)  Successors and Assigns.  Neither METAWAVE nor VIASYSTEMS
shall 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, provided that (i) VIASYSTEMS may delegate
its obligations hereunder to one or more direct or indirect
wholly-owned subsidiaries of VIASYSTEMS and (ii) METAWAVE or
VIASYSTEMS, as the case may be, may assign this Agreement to any
person acquiring all or substantially all of the assets or stock
of such party; provided, further, that notwithstanding any such
assignment, the assignor shall remain liable for the performance
of all of its obligations hereunder.  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.

     (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.

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

                    [Signature page follows.]

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

METAWAVE:                        VIASYSTEMS:

METAWAVE COMMUNICATIONS          VIASYSTEMS, INC.
   CORPORATION

By:  /s/ Stuart W. Fuhlendorf    By:  /s/ James G. Powers

Name:     Stuart W. Fuhlendorf   Name:     James G. Powers
               (print)                          (print)

Title:Chief Financial Officer    Title:EVP-Business Development

Address:  10735 Willows Road NE  Address:9825 S W Sunshine Court
Redmond, WA  98052                       Beaverton, OR  97005
Copy of notices to:              Copy of notices to:  Vice
Susan Jackson, VP Global         President - Sales
Manufacturing                    Fax Number:  (503) 641-9145
Fax Number:  (425) 702-5971      Copy of notices to:  Vice
And to General Counsel           President - Sales
Fax No.:  (425) 702-5983         (503) 520-1960



                            Exhibit A

                            Products


[*]




















The Products identified on this Exhibit A, in the form appended
to the Agreement on April 1, 2001, constitute all of the current
Products of METAWAVE, all of which are currently manufactured at
METAWAVE's manufacturing facilities located in Redmond,
Washington, and Taipei, Taiwan.  VIASYSTEMS is acquiring the
Redmond, Washington manufacturing facility concurrently with the
execution of this Agreement, and will hereafter acquire the
Taipei, Taiwan manufacturing facility, with the closing of the
latter acquisition expected to be completed within [90 day] from
the date of this Agreement.  The Products denoted above by an
asterisk represent the Products currently manufactured at
METAWAVE's Taipei, Taiwan manufacturing facility.  This Agreement
will become effective as to such Products immediately upon the
consummation of the purchase of the Taipei, Taiwan manufacturing
facility by VIASYSTEMS.  During the interim period prior to such
purchase, METAWAVE will continue to manufacture all of such
Products internally at the Taipei, Taiwan manufacturing facility.
The Agreement shall become effective as to all Products not
denoted by an asterisk immediately.



                            Exhibit B

                             Pricing

See attachment


Prior   to  the  closing  of  the  purchase  and  sale   of   the
manufacturing  assets  of Metawave's Taiwan  subsidiary  ("Taiwan
Operations")  as  contemplated  by  Section  10.7  of  the  Asset
Purchase  Agreement,  Viasystems will  verify  that  the  [*]  as
previously delivered to Viasystems (the "Projected Demand").   In
the  event  such  [*], then the [*] as set forth  above  will  be
negotiated in good faith and agreed to among the parties to [*].



                            Exhibit C

                         Quality Metrics

(1)  [*] at each test point in the manufacturing process,

(2)  [*] Per Unit

(3)  [*] issued,

(4)  [*] received,

(5)  Test results from [*] to be tested.

(6)  [*] in both [*]

(7)  Ongoing status of [*].