Cooperation Agreement

COOPERATION AGREEMENT


This Cooperation Agreement has been entered into as of this 3lst day of October 1996,


By and between


SAT (Societe Anonyme de Telecommunications) Networks and Telecommunications Division 11 rue Watt B.P. 370 75626 PARIS CEDEX 13 FRANCE


hereinafter referred to as "SAT"


and


INNOVA Gateway North, Building 2, 3325 South 116th Street, Seattle, Washington, 98168 USA


hereinafter referred to as "INNOVA"


WITNESSETH


WHEREAS since October 1992, the parties have led a fruitful cooperation in relation with the development, manufacture and commercialization of digital high frequency radiolinks, starting from INNOVA's design known as XP3 design.


WHEREAS INNOVA, on the basis of a new design, known as "XP4 design" is engaged in the process of developing digital high frequency radio links in the frequency range 13/38 GHz with bit rates 2 x 2, 4 x 2 and 8 x 2 Mbit/s.


WHEREAS SAT has completed the design or QPSK and 16-QAM modems operating a( 34 Mbps.


WHEREAS the Parties wish now to pursue their cooperation with the intention to make available to both of them a comprehensive range of high frequency radiolinks and - to that effect - enter into a cooperation agreement providing for coordinated development of products and grant of distribution fights and manufacturing licenses by each Party to the other to manufacture and/or commercialize products of said range when developed.


NOW THEREFORE, in consideration of the aforesaid premises and initial
covenants expressed in this Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged by SAT and INNOVA. the Parties hereto agree as follows:


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ARTICLE I - DEFINITTONS


Capitalized terms used herein have the following meanings:


1.1 "Products" shall mean die digital high frequency radio links (comprised
of a SIU unit, an ARU unit and an antenna), as well as the Hitless
Feature and the Supervisory System, whose development is complete or is
to be achieved hereunder by either of the parties with frequency ranges
and with bit rates as defined in Annex 1, and with the specifications;
of Innova developed Products described in Annex 2 of the Master
Purchase Agreement, and the specifications of SAT developed Products
described in Annex 5.


1.2 "SIU unit" shall mean the indoor unit of each Product.


1.3 "ARU unit" shall mean the outdoor unit of each Product (excluding
antenna).


1.4 "Hitless Feature" shall mean the hitless protection function to be
developed by SAT hereunder for enhancing a number of the Products as
listed in Annex 1, the specifications of which are set forth in Annex
5.


1.5 "Supervisory System" shall mean the software to be developed by SAT
hereunder for the purpose of allowing management of a network composed
of Products, the specifications of which are set forth in Annex 5.


1.6 "Development Program" shall mean the obligations of each of the parties
to exert their commercially reasonable efforts toward achieving or
completing the respective development of tasks assigned to them under
Annex I as to the Products, the Hitless Feature and the Supervisory
System.


1.7 "IPR" (Intellectual Property Rights) shall mean patents, patent
applications registered or unregistered designs, copyrights and all
other intellectual property protection (other than trademarks) wherever
in the world enforceable.


1.8 "Foreground Technology" shall mean all technical information generated
by the parties after the date of this Agreement pursuant to the
Development Program and all IPR issuing therefrom, pertaining to the
Products and Improvements thereto.


1.9 "Background Technology" shall mean any technical information, including
all IPR pertaining thereto existing at the date of this Agreement. that
is directly relevant to the Development Program but excluding any
Foreground Technology.


1.10 "INNOVA Developed Products" includes those Products as to which
development responsibility is assigned to INNOVA under Annex I
(excluding 13 GHz Products if INNOVA is released from responsibility
therefore under footnote 2 to Annex 1).


1.11 "SAT Developed Products" includes those Products as to which development
responsibility is assigned to SAT under Annex 1.


ARTICLE 2 - OBJECTIVES


The following objectives are the basis of the cooperation between the
Parties and shall govern the interpretation and implementation of the
terms of this Agreement:


(i) to reduce the investments required by each Party in research and
development and in setting up and maintaining commercial marketing and
distribution networks.


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(ii) to increase the sales of both Parties by enabling each Party to
add the other's range of Products to its own.


ARTICLE 3 - DEVELOPMENT PROGRAM


3.1 Each Party shall exert commercially reasonable efforts to complete the
development activities allocated to it in Annex I in accordance with
the Time Schedule set forth in the same Annex. Failure to comply with
the said Time Schedule and cost objectives shall not be deemed a breach
of or have any other consequences under this Agreement (except as
stated in Section 9.2(i)), provided the non-complying party actually
exerted commercially reasonable efforts to reach compliance.


3.2 In connection with their respective development activities under this
Agreement, the Parties shall, to the extent commercially reasonable,
endeavour to maximize compatibility and commonality in Product design
and component standardization and to adopt a common Product
architecture, common technological solutions and a common approach to
mechanical designs and standards to the end that Products will be
compatible with the different practices used in each Party's domestic
market.


3.3 SAT also agrees to assist INNOVA, at INNOVA's request, for the purpose
of optimizing the design of tile INNOVA Developed Products. preparing
their manufacturability and the incorporation of tile Hitless Feature,
by sending experts at INNOVA's request to INNOVA's location for periods
to be mutually agreed.


3.4 To insure maximum efficiency in carrying-out the Development Program
activities and facilitate the communication of relevant information and
experiences between them, tile efforts of the Parties will be guided
and coordinated through a Coordinating Committee which will be
organized and function as hereinafter provided in Article 8 below.


3.5 All development costs and expenses incurred by each party in performing
tasks allocated to it under tile Development Program shall be borne by
that Party, except that for experts sent by SAT in accordance with
paragraph 3.3 above, INNOVA shall reimburse SAT for expenses thus
incurred at cost (salaries, social charges, travel, lodging and
subsistence).


3.6 Quality-Assurances


(i) Audits:


Each party may at any reasonable time carry out QA audits in other
Party's and/or other Party subcontractor's facilities in order to
assess the conformance level of that Party to international Quality
Standards ISO 9001 and/or ISO 9002. The auditing Party shall give to
the other one reasonable prior notice of the dates oil which these
audits will take place. All audits and inspections shall be performed
in such a manner as not to delay (lie current work of the Audited
Party.


(ii) Design Evaluation and Control:


Verification of design prototypes in accordance with mutually agreed
specifications and test level will be accomplished through periodic
design reviews. These reviews will be held as needed and will be
attended by those functions necessary to adequately ensure design
compliance.


Prior to these reviews and not later than two (2) weeks before, the
Party in charge of the design will have made available the relevant
test reports to the other Party.


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ARTICLE 4 - OWNERSHIP OF TECHNOLOGY - RIGHT OF USE FOR DEVELOPMENT


Each Party will retain all IPR in its existing Background Technology
and in the Foreground Technology developed by that Party hereunder,
including the Improvements referred to in paragraph 6.5 below. Each
Party will also be entitled to ownership of all IPR in any Foreground
Technology developed jointly by the Parties hereunder with respect to
the Products.


To the extent necessary or useful for the performance of other Party's
obligations under the Development Program, each Party's Background
Technology and Foreground Technology shall be made available to such
other Party and such other Party is granted a temporary license to use
the same on a cost-free basis for the limited purpose of performance of
its obligations under the Development Program. With regard to the other
Party's use thereof for manufacturing purposes, provisions of Article 6
herebelow shall apply.


ARTICLE 5 - DISTRIBUTION RIGHTS


5.1 For each Product whose development is complete and manufacture started
by the Party to which its development is allocated by Annex I (in this
Article the "Supplying Party") said party hereby appoints the other
party (in this Article "the Purchasing Party") as its distributor as
follows :


SAT shall have (i) exclusive distribution rights to the Products in
SAT's exclusive territories (as defined below) and (ii) subject to
specific arrangements for U.K. described below, non exclusive
distribution rights to the Products in the rest of the world except
INNOVA's exclusive territories (as defined below).


SAT's exclusive territories include France (including DOM-TOM),
Andorra, Monaco, Hungary, Poland and Italy. Accordingly, INNOVA shall
not sell itself the Products and, to the extent it may legally do so,
shall not permit any reseller of Products, whether on an OEM, private
label or distribution basis to (i) advertise the Products or canvas or
solicit orders for the Products (ii) open branches for the supply
and/or support of the Products or (iii) maintain distribution depots
for the Products, in SAT's exclusive territories. INNOVA recognizes
SATs right to enter into distribution agreements for the Products with
third parties in non-exclusive territories.


INNOVA shall have (i) exclusive distribution rights to the Products in
INNOVA's exclusive territories (as defined below) and (ii) subject to
specific arrangements for U.K. described below, non exclusive
distribution rights to the Products in the rest of the world except
SAT's exclusive territories.


INNOVA's exclusive territories include USA, Canada. New-Zealand,
Australia and Mexico. Accordingly, SAT shall not sell itself the
Products and, to the extent it may legally do so, shall not permit any
reseller of Products, whether on an OEM. private label or distribution
basis to (i) advertise the Products or canvas or solicit orders for the
Products (ii) open branches for the supply and/or support of the
Products or (iii) maintain distribution depots for the Products, in
INNOVA's exclusive territories. SAT recognizes INNOVA's right to enter
into distribution agreements for the Products with third parties in
non-exclusive territories.


Specific arrangements for U.K.:


INNOVA retains the right to appoint its subsidiary "INNOVA Europe
Limited." as exclusive distributor of INNOVA developed Products in U.K.
but undertakes to cause "INNOVA Europe Limited." to supply, subject to
the terms and conditions or this Agreement taken as a whole, INNOVA
Developed Products on a non-exclusive basis to SAT as an authorized
reseller for U.K.


On its part, SAT does not grant INNOVA the right to distribute SAT
Developed Products in U.K. but undertakes to supply, subject to the
terms and conditions of this Agreement taken as a whole, SAT Developed
Products on a non-exclusive basis to "INNOVA Europe Limited." as an
authorized reseller for U.K.


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Provisions of Section 5.4. below as well as the pricing and other Wins
and conditions set forth in Annex 2 hereof shall apply to transactions
hereabove contemplated between SAT and "INNOVA Europe Limited."


5.2 Products to be supplied by the Supplying Party to the Purchasing Party
hereunder shall be supplied for a price (hereinafter "Transfer Price")
representing an agreed percentage of the market price (hereinafter
"Market Price") determined by the parties for each of the Products.


Annex 2 hereto sets forth the agreed percentages for calculating the
Transfer Price, based on the Market Price of such Product as mutually
determined by the Parties for the first twenty-four months after the
effective date of this Agreement. Thereafter for each successive period
of twelve: (12) months during the term of this Agreement and thirty
(30) days before expiration of the current period, the Parties shall
meet and review the available market data and determine in good faith
the Market Price of each Product applicable for the new twelve months
period. In addition, the Parties may agree to review the Transfer
Prices at any other time, but no earlier than twelve (12) months after
the effective date of this Agreement. The conclusions of each such
meeting shall be reduced to writing in the form of an amendment to this
Agreement concerning the Transfer Prices.


The Transfer Price for each Product is meant "CIP airport of final
destination" (Seattle or Paris airport as the case may be) according to
1990 Incoterms of the International Chamber of Commerce.


US dollar shall be the accounting, invoicing and payment currency for
all transactions effected under this Article.


5.3 Notwithstanding any other provisions of this Agreement, in no event
shall the Supplying Party grant to any reseller of Products sold by the
Supplying Party, whether on an OEM, private label or distribution
basis, pricing or other terms and conditions of purchase more favorable
than those granted to the Purchasing Party under like circumstances
without offering immediately those more favorable terms and conditions
as to subsequent transactions with the Purchasing Party.


5.4 The Purchasing Party shall sell the Products under trademarks and
product names of the Purchasing Party or the Purchasing Party's
customers. To that effect, the Supplying Party agrees that all Products
supplied by the Supplying Party shall bear such logos and trademarks as
instructed by the Purchasing Party.


Nothing contained in this Agreement shall be construed as granting
either Party a license under any trade marks and trade names of the
other Party without the prior written consent of that Party.


5.5 Additional terms and conditions applicable to the purchase of Products
hereunder are set forth in Annex 2. Unless otherwise agreed in relation
to a specific project and acknowledged by both parties in writing, the
terms and conditions set forth in this Article 5 and Annex 2 hereto
shall be applicable to all orders for the purchase of Products. Such
terms and conditions shall apply in preference to and supersede any
terms and conditions referred to hi the Purchasing Party's purchase
orders or the Supplying Party's conditions of sale.


ARTICLE 6 - MANUFACTURING LICENCES


6.1 Subject to the limitations and conditions set forth below, each Party
hereby grants to the other party (in this Article "the Licensed Party")
licenses (which licenses shall be exclusive with respect to each Party's
exclusive territories) (without right to sublicense) to use, solely in
the respective exclusive territories of the Licensed Party as described
in Article 5. 1, the Background and Foreground Technology owned by the
First Party (in this Article "the Licensing Party") for the sole and
only purpose of manufacturing (partially or entirely) per paragraph 6.2,
(lie Product developed by the Licensing Party.


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Such licenses include the right of direct access to manufacturers of
custom design parts or components included in the Products, the right
to make adaptations, enhancements and improvements to the object of the
license as well as the right to have boards or subassemblies
manufacturing subcontracted worldwide and the right to sell the
Products so manufactured (and to sublicense the Supervisory System) on
an exclusive or non-exclusive basis respectively in the exclusive and
non exclusive territories allocated to the Licensed Party in Article
5. 1.


6.2 The licenses thus granted are either "unconditional", meaning that they
may be exercised by the Licensed Party at any time after completion of
development of the object of the license ("Unconditional Licenses") or
"conditional", meaning that they may not be exercised until certain
circumstances have taken place as described in more detail in
subparagraph (b) below ("Conditional Licenses").


(a) Unconditional Licenses include


(i) a license from INNOVA to SAT to use the interfaces and all
Background and Foreground Technology pertaining to the SIU and the
SIU-to-ARU interface developed by INNOVA for the INOVA Developed
Products, for the purpose of developing any product below 15 GHz. This
license will become a license for the purpose of manufacturing any
product below 15 GHz within SAT's exclusive territories as soon as all
the information, specified in Annex 3, relevant to the license of the
16,x2 M/s 13 GHz, product as described in (a) (ii) is given by SAT to
INNOVA.


(ii) a license from SAT to INNOVA to use the interfaces and all
Background and Foreground Technology pertaining to the SIU and the
SIU-to-ARU interface developed by SAT for the SAT Developed Products,
for the purpose of deve1oping and manufacturing any product above 15
GHz within INNOVA's exclusive territories.


(iii) a license from INNOVA to SAT to use INNOVA's Background and
Foreground Technology pertaining to 18/23/26/38GHz Products with bit
rates 2 x 2, 4 x 2 and 8 x 2 for tile purpose of manufacturing in
France and installing in France quantities of the above defined
Products which do not exceed oil a quarterly basis thirty percent (30%)
of SAT's quarterly sales of radio links.


(iv) a license front SAT to INNOVA to use for all purposes SAT's
Background and Foreground Technology pertaining to the Hitless Feature.


(v) a license from SAT to INNOVA to use for all purposes SAT's
Background and Foreground Technology pertaining to the Supervisory
System (object code and such portion of the source code which is
relevant to INNOVA's applications).


(b) Conditional Licenses include :


(i) a license from INNOVA to SAT to use INNOVA's Background and
Foreground Technology pertaining to 13 and 15 GHz Products with bit
rates 2 x 2, 4 x 2 and 8 x 2 for the purpose of manufacturing such
Products in France.


(ii) a license from INNOVA to SAT to use INNOVA's Background and
Foreground Technology pertaining to 18, 23, 26 and 38 GHz Products with
bit rates 2 x 2. 4 x 2 and 8 x 2 for the purpose of manufacturing in
France quantities of the above derailed Products without the quantity
limitations set forth for the same tinder (a)(iii) above (Unconditional
License).


(iii) a license from SAT to INNOVA to use SAT's Background and
Foreground Technology pertaining to 7, 8, 13 and 15 GHz Products with
bit rates 8 x 2 and 16 x 2 (I + 1) for the purpose of manufacturing
such products in the U.S.A.


(c) Exercise Rights for Conditional Licenses


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The rights under the licenses described in (b)(i) above they be
exercised by the Licensed Party only after SAT has placed with INNOVA
in the framework of a master purchase agreement to be concluded
immediately upon signature hereof (the Master Purchase Agreement),
accepted deliveries for and fully paid for purchase orders specifying
the supply of an aggregate quantity of at least ***** (*****) terminals
with bit rata (es 2 x 2, 4 x 2 and 8 x 2 upon terms and conditions set
forth in Article 5 and Annex 2 hereof.


Subject to the cure provisions below, the rights under each of the
licenses described in (b)(ii) and (iii) above may be exercised by the
Licensed Party only after one (or more) of the following conditions has
taken place and only with respect to the particular Product(s) to which
the following conditions pertain:


- discontinuation of manufacture by the Licensing Party of any
Product to which the Conditional License applies, and of which the
Licensed Party has either ordered and paid for more than *****
units in the six months preceding discontinuation. or has continued
-- within one month after the Licensing Party's notice of planned
discontinuation -- to purchase more than ***** units within 12
months following such notice.


- delay (for any reason other than as specified in Section 10.2) of
at least three (3) months after the agreed shipment date in the
delivery to the Licensed Party of at least twenty five percent (25
%) of the agreed quantities of Products to which the Conditional
License applies and for which a purchase order has been placed and
acknowledged under Article 5.


- refusal (or lack of acknowledgment for a period exceeding 21 days)
of a purchase order placed by the Licensed Party under and in
accordance with the provisions of Article 5, except under the
circumstances in which rejection is permitted by Annex 2.


- a failure to comply with the "most favoured customer" clause set
forth in Article 5.3 in respect of any Product(s) to which the
Conditional License applies,


- an imposition of Transfer Prices exceeding those currently stated
in Annex 2, unless mutually agreed upon.


- When a new ETSI standard becomes applicable, and after discussions
between the Parties to determine how and at what Market and
calculated Transfer Price the Product to which the Conditional
License applies can be inside compliant to this new ETSI standard,
one of the following conditions has taken place :


- the Product can be made compliant at the agreed recalculated
Transfer Price, yet two (2) months after the Licensed Party's
requests, the Licensing Party has not confirmed in writing its
intention to make the Product compliant with the new ETSI
standard; or


- the Product can be made compliant at the agreed recalculated
Transfer Price, yet the Product is not compliant nine (9)
months after the date when the new ETSI standard becomes
applicable.


For the purpose of this provision the relevant ETSI standards shall
be those cited in Annex III of the Master Purchase Agreement.


None of the above conditions shall result in a Conditional License
becoming exercisable unless, thirty (30) days after receipt by the
Licensing Party of a written notice to remedy such condition, the
Licensing Party has not cured such condition.


None of the above conditions shall result in a Conditional License
becoming exercisable if the condition has taken place with respect to a
quantity of Products having an aggregate purchase price below *****
(*****) US Dollars in any single incident.


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None of the above conditions shall result in a Conditional License
becoming exercisable as long as the Licensed Party is in a state of
material breach of this Agreement.


6.3. In order to allow each Licensed Party to exercise without delay its
rights under the Unconditional or Conditional Licenses granted to it as
set forth in paragraphs 6.1 and 6.2 above as soon as authorized under
this Agreement, each Licensing Party undertakes to deliver to the
Licensed Party as soon as available (and at the latest one month after
first manufacturing release of the corresponding Product) all technical
data (and thereafter any amendments t ...