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                         SECOND AMENDMENT TO CREDIT AGREEMENT

     THIS SECOND AMENDMENT TO CREDIT AGREEMENT ("AMENDMENT"), dated as of 
July 22, 1998, effective as of June 30, 1998, is entered into by and between 
DIGITAL MICROWAVE CORPORATION (the "COMPANY") and BANK OF AMERICA NATIONAL 
TRUST AND SAVINGS ASSOCIATION (the "BANK").

                                       RECITALS

     A.   The Company and the Bank are parties to a Credit Agreement dated as 
of June 30, 1997, as amended by a First Amendment to Credit Agreement dated 
as of June 1, 1998 (as so amended, the "CREDIT AGREEMENT"), pursuant to which 
the Bank has extended certain credit facilities to the Company.

     B.   The Company has requested that the Bank agree to certain amendments 
of the Credit Agreement.

     C.   The Bank is willing to amend the Credit Agreement, subject to the 
terms and conditions of this Amendment.

     NOW, THEREFORE, for valuable consideration, the receipt and adequacy of 
which are hereby acknowledged, the parties hereto hereby agree as follows:

     1.   DEFINED TERMS.  Unless otherwise defined herein, capitalized terms 
used herein shall have the meanings, if any, assigned to them in the Credit 
Agreement.

     2.   AMENDMENTS TO CREDIT AGREEMENT.

          (a)  Section 1.01 of the Credit Agreement shall be amended as follows:

               (i)    The definition of "Availability Period" shall be amended
                      in its entirety to read as follows:

                      ""AVAILABILITY PERIOD":  the period commencing on the
                      date of this Agreement and ending on the date that is the
                      earlier to occur of (a) September 30, 1998 and (b) the
                      date on which the Bank's commitment to extend credit
                      hereunder terminates."

               (ii)   The definition of "Final Maturity Date" shall be amended
                      in its entirety to read as follows:

                      ""FINAL MATURITY DATE":  (a) in respect of any Advances,  
                      September 30, 1998; (b) in respect of any commercial
                      letters of   credit, March 31, 1999; (c) in respect of any
                      standby letters of credit, October 29, 1999; and (d) in
                      respect of any Bank Guaranties, October 29, 1999."

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          (b)    Section 7.01(k) of the Credit Agreement shall be amended
     in its entirety to read as follows:

                      "(k) other unsecured indebtedness not to exceed
                      $7,500,000."

          (c)    Section 7.16 of the Credit Agreement shall be amended in
     its entirety to read as follows:

                 "7.16  CONSECUTIVE QUARTERLY LOSSES; LOSSES IN ONE
          QUARTER.  Consecutive Quarterly Losses; Losses in One Quarter.
          The Borrower on a consolidated basis shall not incur, (a) any
          quarterly net or operating losses in any two consecutive fiscal
          quarters or (b) any quarterly net or operating loss in excess of
          5% of consolidated Tangible Net Worth computed as of the last day
          of the immediately preceding fiscal quarter; PROVIDED, THAT, the
          Borrower may incur on a one-time basis (i) a consecutive
          quarterly net and operating loss for the two consecutive quarters
          ending March 31 and June 30, 1998, and (ii) for the quarter
          ending June 30, 1998, a quarterly net or operating loss in excess
          of 5% of consolidated Tangible Net Worth computed as of the last
          day of the immediately preceding fiscal quarter, PROVIDED,
          FURTHER, THAT each of the net and operating loss for the quarter
          ending June 30, 1998 may not exceed $15,000,000."

     3.   REPRESENTATIONS AND WARRANTIES.  The Company hereby represents and
warrants to the Bank as follows:

          (a)  As of the Effective Date, no Default or Event of Default has
     occurred and is continuing.

          (b)  The execution, delivery and performance by the Company of this 
     Amendment have been duly authorized by all necessary corporate and other 
     action and do not and will not require any registration with, consent or 
     approval of, notice to or action by, any Person (including any 
     governmental authority) in order to be effective and enforceable.  The 
     Credit Agreement as amended by this Amendment constitutes the legal, 
     valid and binding obligations of the Company, enforceable against it in 
     accordance with its respective terms, without defense, counterclaim or 
     offset.

          (c)  As of the Effective Date, all representations and warranties 
     of the Company contained in the Credit Agreement are true and correct.

          (d)  The Company is entering into this Amendment on the basis of 
     its own investigation and for its own reasons, without reliance upon the 
     Bank or any other Person.

     4.   EFFECTIVE DATE.  This Amendment will become effective as of June 
30, 1998 (the "EFFECTIVE DATE"), PROVIDED THAT the Bank has received from the 
Company on or before July 31, 1998 a duly executed original (or, if elected 
by the Bank, an executed facsimile copy) of this Amendment.

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     5.   RESERVATION OF RIGHTS.  The Company acknowledges and agrees that 
the execution and delivery by the Bank of this Amendment shall not be deemed 
to create a course of dealing or otherwise obligate the Bank to forbear or 
execute similar amendments under the same or similar circumstances in the 
future.

     6.   MISCELLANEOUS.

          (a)  Except as herein expressly amended, all terms, covenants and
     provisions of the Credit Agreement are and shall remain in full force and
     effect and all references therein and in the other Credit Documents to such
     Credit Agreement shall henceforth refer to the Credit Agreement as amended
     by this Amendment.  This Amendment shall be deemed incorporated into, and a
     part of, the Credit Agreement.

          (b)  This Amendment shall be binding upon and inure to the benefit 
     of the parties hereto and thereto and their respective successors and 
     assigns.  No third party beneficiaries are intended in connection with 
     this Amendment.

          (c)  This Amendment shall be governed by and construed in 
     accordance with the law of the State of California.

          (d)  This Amendment may be executed in any number of counterparts, 
     each of which shall be deemed an original, but all such counterparts 
     together shall constitute but one and the same instrument.  Each of the 
     parties hereto understands and agrees that this document (and any other 
     document required herein) may be delivered by any party thereto either 
     in the form of an executed original or an executed original sent by 
     facsimile transmission to be followed promptly by mailing of a hard copy 
     original, and that receipt by the Bank of a facsimile transmitted 
     document purportedly bearing the signature of the Company shall bind the 
     Company, with the same force and effect as the delivery of a hard copy 
     original.  Any failure by the Bank to receive the hard copy executed 
     original of such document shall not diminish the binding effect of 
     receipt of the facsimile transmitted executed original of such document 
     which hard copy page was not received by the Bank.

          (e)  This Amendment, together with the Credit Agreement, contains 
     the entire and exclusive agreement of the parties hereto with reference 
     to the matters discussed herein and therein.  This Amendment supersedes 
     all prior drafts and communications with respect thereto.  This 
     Amendment may not be amended except in accordance with the provisions of 
     Section 9.05 of the Credit Agreement.

          (f)  If any term or provision of this Amendment shall be deemed 
     prohibited by or invalid under any applicable law, such provision shall 
     be invalidated without affecting the remaining provisions of this 
     Amendment or the Credit Agreement, respectively.

          (g)  Company covenants to pay to or reimburse the Bank, upon 
     demand, for all reasonable costs and expenses (including allocated costs 
     of in-house counsel) 

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     incurred in connection with the development, preparation, negotiation, 
     execution and delivery of this Amendment.

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

                                       DIGITAL MICROWAVE CORPORATION

                                       By:       /s/ CARL A. THOMSEN
                                          -----------------------------------
                                       Name:  Carl A. Thomsen
                                       Title: Vice President, Chief Financial 
                                              Officer and Secretary

                                       BANK OF AMERICA NATIONAL TRUST
                                       AND SAVINGS ASSOCIATION

                                       By:       /s/ DEBRA G. STAIGER
                                          -----------------------------------
                                       Name:  Debra G. Staiger
                                       Title: Vice President















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