Wave Wireless Corporation and WaveRider Communications have executed a letter of intent which sets forth the preliminary terms and conditions of a proposed merger transaction between Wave Wireless and WaveRider.

The proposed merger brings together Wave Wireless' SPEEDLAN(TM) family of 2.4GHz, 4.9GHz and 5.8GHz mesh networking products and WaveRider's Last Mile Solution(R) non-line-of-sight, fixed and mobile wireless 900MHz products to provide customers with a wide range of line-of-sight and non-line-of-sight products and services, and position the combined company as a leading worldwide provider of robust, wireless broadband applications and solutions.

Under the terms of the letter of intent, Charles W. Brown and T. Scott Worthington, WaveRider's Chief Executive Officer and Chief Financial Officer, will assume their respective positions in the newly merged company. The board of directors of the combined company will include three directors from each of WaveRider and Wave Wireless, and one newly appointed independent member. The companies expect to complete the proposed merger in the first quarter of 2006. The closing of the transaction is subject to certain conditions, including necessary regulatory, board and shareholder approvals, execution of a definitive merger agreement and the completion of due diligence.

"The proposed combination will result in a broad product offering that serves a large and diverse mix of customers located throughout the world," said Charles W. Brown, Chief Executive Officer of WaveRider Communications. "This will position the merged company to address multiple market opportunities with its enhanced service offerings and product portfolio, which will include fixed wireless, mesh and mobile wireless products for multiple applications serving the WISP, telecommunications, government, Homeland Security, safety and surveillance markets."

Wave Wireless Acting CEO Dan Rumsey said: "We believe that the merger of Wave Wireless and WaveRider is a superb strategic fit that brings together complementary business lines, engineering skills, sales and marketing capabilities and innovative technology recognized as best in its class. With the substantial cost savings resulting from the proposed merger, the new company will be well positioned to expand sales and marketing initiatives, achieve near term profitability, and increase shareholder value, as it capitalizes on the accelerating demand for robust high speed wireless connectivity solutions."

The non-binding letter of intent preliminarily calls for WaveRider's security holders to exchange their ownership interest in WaveRider for Wave Wireless common stock and securities convertible into Wave Wireless common stock, with the intent that each company's security holders would end up holding approximately 50% of the combined company on a fully diluted, as converted basis.