<PAGE>
                               BUSINESS AGREEMENT

The following exhibit, which was previously filed as Exhibit 10.25 to the 
Company's Annual Report on Form 10-K for the fiscal year ended March 31, 
1998, represents an amended request for confidential treatment.

<PAGE>

DIGITAL MICROWAVE CORPORATION
                                               BUSINESS AGREEMENT FINAL VERSION
-------------------------------------------------------------------------------

                               BUSINESS AGREEMENT

                                     BETWEEN

                        MICROELECTRONICS TECHNOLOGY INC.

                                       AND

                          DIGITAL MICROWAVE CORPORATION







                               DOCUMENT REFERENCE

                         JANUARY 26, 1998 FINAL VERSION



-------------------------------------------------------------------------------
DIGITAL MICROWAVE CONFIDENTIAL
                                                         Initials: DMC:________
                                    Page 1      Initials: Manufacturer:________


<PAGE>


                               BUSINESS AGREEMENT

     This Manufacturing Agreement, herein after called the "Agreement",
     effective as of the date of the last signature, made between Digital
     Microwave Corporation (DMC), a corporation organized under the laws of the
     state of California, USA, having its principal office at 170 Rose Orchard
     Way San Jose, CA 95134 USA, hereinafter called the "Purchaser" and:

     Microelectronics Technology Inc. (MTI)

     with offices at:

     1, Innovation Road II
     Hsinchu Science Based Industrial Park
     Hsinchu 300, Taiwan, R.O.C.
     hereinafter called the "Manufacturer";

     WITNESS:

     WHEREAS, the Purchaser is engaged in the design and selling of electronic
     and electromechanical products; and

     WHEREAS, the Manufacturer is an independent business organization engaged
     in the manufacturing and assembly of products similar to those designed and
     sold by the Purchaser, and desires to manufacture products for the
     Purchaser for sale.

     WHEREAS, The Purchaser and Manufacturer have on March 17, 1997 executed a
     Purchase Order Agreement in which Manufacturer agreed to manufacture
     products for the purchaser and both parties contemplated the execution of
     this manufacturing agreement.

     NOW, THEREFORE, in order to provide for effective service to Purchaser from
     Manufacturer for manufacture of products, and in consideration of the
     mutual promises herein contained, it is agreed as follows:

1.   PURPOSE
     The purpose of this Agreement is to set forth the terms and conditions
     applicable to purchases of Purchaser's Magnum, ClassicII and SpectrumII
     products, hereinafter referred to as 'Products' and listed herein on
     APPENDIX 'A', from Manufacturer by Purchaser. All documents issued by
     Purchaser or Manufacturer must incorporate this Agreement by reference. Any
     additional or different terms or conditions proposed by Purchaser or
     Manufacturer are not applicable unless expressly approved and agreed to in
     writing and signed by authorized representative of the other party.



                                     Page 2
<PAGE>


2.   THE PURCHASER RELATIONSHIP
     This Agreement does not constitute Manufacturer as an employee, agent, or
     legal representative of Purchaser for any purpose whatsoever. Manufacturer
     is not granted, nor shall it represent that it has been granted, any right
     or authority to assume or create any obligation or responsibility,
     expressed or implied, on behalf of, or in the name of, Purchaser, to incur
     debts or make collections for Purchaser or to bind Purchaser in any manner
     whatsoever. It being the intent of the parties hereto to create the
     relationship on the part of the Manufacturer of an independent contractor,
     for whose actions or failure to act, the Purchaser shall not be
     responsible.

3.   PRICE OF PRODUCTS TO PURCHASER
     The prices for Products are in U.S. dollars as set forth in APPENDIX G to
     this Agreement.  The prices will be reviewed every [*] months and changed
     as mutually agreed.  It is agreed that such changes to the prices for the
     subsequent [*] months will include a provision based upon exchange rate
     fluctuations between the U.S. Dollar and the Taiwan Dollar assuming a [*]%
     local Taiwan content and [*]% U.S. Dollar content.  The base rate upon
     contract signature is [*] Taiwan Dollar per U.S. Dollar.

     Prices set forth in this Agreement are exclusive of any and all Federal,
     State and local excise, sales, use or similar taxes. Where applicable such
     taxes shall be included on the invoices submitted by Manufacturer and paid
     by Purchaser. Purchaser shall in no event be liable for taxes levied on
     Manufacturer based upon its income.

4.   DELIVERY
     All Purchase Orders issued by Purchaser will be shipped according to the
     schedule provided in Purchaser's purchase order.

5.   ORDERING
     A.   Each purchase order from the Purchaser shall include the following:
          (1)  Quantity of each type Product purchased
          (2)  Description of each type Product purchased
          (3)  Assembly Control Document identifying applicable Document
               Revisions
          (4)  Unit price and Total Price for each item of Product
          (5)  Total Amount of Order
          (6)  Method of payment   Invoice address and billing contact
          (7)  Resale Certificate number for each state to which a shipment is
               being made
          (8)  Shipping Address
          (9)  Method of Shipment including if shipment is to be insured
          (10) Desired delivery schedule
          (11) Special instructions or markings
          (12) A statement that the order is governed by this Agreement


                                     Page 3
---------------
[*]   OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. THE MATERIAL HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>


     B. Within ten (10) working days after the receipt of an order from
     Purchaser, Manufacturer shall provide written acceptance or rejection of
     the order as issued.


6.   CANCELLATION OF ORDER
     The Purchaser with a [*]-day notice may cancel orders issued by Purchaser
     and received by Manufacturer in accordance with the terms and conditions of
     this Agreement.

7.   TERMS OF PAYMENT
     Payment is due and payable [*] ([*]) days from the date of the invoice.
     Purchaser agrees to make payments to Manufacturer in U.S. dollars through
     the issuance of an Electronic Funds Transfer (EFT) on a US bank in
     accordance with the terms of payment.

8.   CLAIMS FOR SHIPMENT DAMAGE
     Purchaser agrees to notify Manufacturer in writing of any shortages or
     rejection within  [*] ([*]) working days after receipt of Product and file
     a claim with the carrier for any shortage of packages or obvious damage
     caused by the carrier. If such shortage or rejection is due to the fault of
     Manufacturer, the Product will be replaced or repaired by Manufacturer. If
     Purchaser does not provide Manufacturer such notice within the [*] ([*])
     working day period, the Product will be presumed to have been accepted.

9.   WARRANTY
     Manufacturer warrants all Products sold under this Agreement to be free
     from defects in material and workmanship under normal and proper use for a
     period of [*] months from the date of shipment to Purchaser. Material
     defect warranty shall not apply to any material supplied to Manufacturer by
     Purchaser.

     THE FOREGOING WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES EXPRESSED,
     IMPLIED, OR STATUTORY, INCLUDING WARRANTY OF MERCHANTABILITY.

     Within the stated warranty period, Manufacturer will repair or replace, at
     its option, f.o.b. its  plant, any Product which is returned to its plant,
     shipping charges prepaid, provided inspection and examination discloses to
     Manufacturer's satisfaction that (a) the reported defects are within the
     warranty coverage, (b) the Product has not been tampered with, or (c) the
     Product has not been damaged due to misuse, improper storage or
     maintenance, negligence or accident. Manufacturer will return the warranty
     repaired Product, shipping prepaid, via the same type of service used by
     Purchaser to ship failed Product to the Manufacturer.



                                     Page 4

---------------
[*]   OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. THE MATERIAL HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>


     THE FOREGOING CONSTITUTES THE PURCHASER'S SOLE AND EXCLUSIVE REMEDY AND IS
     IN LIEU OF ANY AND ALL REMEDIES WHICH MAY BE AVAILABLE TO THE PURCHASER.

10.  TITLE TO GOODS,  RISK OF LOSS,  AND INSURANCE
     Shipments are made Ex Works (Incoterms 1990) Manufacturer's Premises,
     shipment, freight collect. Title passes to Purchaser and Purchaser assumes
     risk of loss upon delivery to the carrier at the premises, the carrier
     acting as purchaser's agent.

     Purchaser shall own title to all NRE property and other property provided
     to Manufacturer by Purchaser associated with this Agreement. Manufacturer
     agrees to exercise reasonable care in the use and custody of such property.
     Manufacturer shall maintain sufficient insurance to cover Purchaser's cost
     of such property.
     Proof of insurance for material and property shall be provided to Purchaser
     at the first of each calendar quarter.

11.  RESPONSIBILITIES OF PURCHASER
     A.   Purchaser shall provide Manufacturer drawings and documentation in an
          acceptable format and in sufficient detail to permit Manufacturer to
          perform the work covered by this Agreement.
     B.   Purchaser shall provide Manufacturer a non-binding rolling six-month
          forecast for all Products listed in APPENDIX 'A'.
     C.   Purchaser shall assist Manufacturer in analyzing test results,
          reviewing procedures and formulating plans to improve throughput,
          yield, and quality for all Products.
     D.   Purchaser shall provide supplied material, as listed in APPENDIX 'B',
          at a mutually agreed to schedule.

12.  RESPONSIBILITIES OF  MANUFACTURER
     A.   APPENDIX 'C' lists the Scope of Work for this Agreement.
     B.   Manufacturer shall provide Purchaser a list, with prices, of the top
          20% highest cost components, subassemblies or labor items for each
          Product upon request of Purchaser.
     C.   Manufacturer shall use Purchaser's Approved Vendor List (AVL) for all
          material required to be purchased by Manufacturer under this
          Agreement.
     D.   During the term of this Agreement, Manufacturer shall use commercially
          reasonable efforts to enhance and cost reduce the manufacturing
          process for the Products. Manufacturer shall report on cost reduction
          efforts at the first of every quarter.

13.  TERM
     The term of this Agreement shall be [*] ([*]) from the effective date of
     this Agreement, and will be automatically renewed for successive [*] terms
     thereafter. This Agreement may otherwise be terminated as hereinafter
     provided:


                                     Page 5

---------------
[*]   OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. THE MATERIAL HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>


     A.   Manufacturer may immediately terminate this Agreement at any time, for
          [*].

     B.   Purchaser may immediately terminate this agreement at any time, for
          [*].

     C.   Either party hereto may terminate this Agreement, without cause upon
          giving to the other [*] days prior written notice. The Manufacturer in
          accordance with the Agreement will fulfill any outstanding orders
          placed by Purchaser in place at the time of termination.

     D.   Notice of termination hereunder shall be sent by Certified or
          Registered Mail, return receipt requested.

     E.   In the event of termination as herein provided, Manufacturer shall
          return to Purchaser all Purchaser Product information, documentation,
          software, firmware, drawings, test fixtures and test equipment
          Purchaser may have supplied or paid for in connection with this
          Agreement.

14.  FORCE MAJEURE
     Manufacturer will exercise every reasonable effort to meet any quoted or
     agreed upon shipment date or dates. Manufacturer shall not, however, be
     liable for any loss or damage, including consequential damages, due to
     delays or failure to ship resulting from any cause beyond its reasonable
     control, such as, but not limited to, securing necessary export licenses,
     compliance with government law or regulation, acts of God, acts or
     omissions of the Purchaser, acts of civil or military authority, judicial
     action, defaults of subcontractors or vendors, labor disputes, failure or
     delays in transportation, embargoes, wars or riots, or the inability of
     carriers to make scheduled deliveries

15.  ACCEPTANCE AND INSPECTION
     The basic acceptance criteria for Products shall be [*]. Products shall
     also conform to Manufacturer's [*].

     Products, which fail to meet the acceptance criteria, will not be accepted
     and be returned to Manufacturer for corrective action. All such Products
     shall be tracked by Manufacturer's RMA system. Manufacturer shall provide
     monthly reports on the status of all RMAs.



                                     Page 6

---------------
[*]   OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. THE MATERIAL HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>


16.  NO RIGHTS
     Manufacturer agrees that it will not in any manner represent that it has
     ownership of the trade name "Digital Microwave Corporation." or any other
     trade name or trademark used by Purchaser to identify the Products or used
     in connection with the Products. Manufacturer further agrees that it will
     not register or attempt to register any such trade names or trademarks
     under the laws of any jurisdiction, and will not at any time do, or cause
     to be done, any act or thing contesting, or in any way impairing or tending
     to impair, any part of Purchaser's right, title, and interest in such trade
     names or trademarks, whether or not they are registered in the
     jurisdictions in which Manufacturer is located or does business.

     Nothing in this Agreement shall be construed as granting to Manufacturer or
     conferring on Manufacturer any rights by license or otherwise to
     Purchaser's patent, trademark, copyright know how or other proprietary or
     confidential rights.

17.  COMPUTER SOFTWARE
     Any and all computer software delivered hereunder is and shall remain the
     sole and exclusive property of Purchaser, or Purchaser's suppliers, and
     shall be held in trust and confidence by the Manufacturer for Purchaser, or
     Purchaser's suppliers. The Manufacturer shall have a non-exclusive license
     to use such computer software solely in conjunction with the execution of
     this Agreement. The Manufacturer's license to use such computer software
     shall terminate upon termination of this Agreement. All copies of the
     software shall be returned to Purchaser upon termination of this Agreement.

18.  NO WAIVER AT RIGHTS
     A failure by one of the parties to this Agreement to assert its rights for
     or upon any breach of this Agreement shall not be deemed a waiver of such
     rights, nor shall any such waiver be implied from the acceptance of any
     payment. No waiver in writing by one of the parties hereto, with respect to
     any right, shall extend to or affect any subsequent breach, either of like
     or different kind, or impair any right consequent thereon.

19.  INDEMNIFICATION
     Manufacturer shall defend, indemnify and hold Purchaser harmless from
     personal injury, expense or property damage, including attorney's fees
     incurred by any employee, agent, invitee or licensee of Manufacturer, or
     any other person, regardless of how caused if arising out of the
     manufacture, assembly, test, use, or possession of the Products procured
     hereunder unless such loss was caused solely by the gross negligence or
     willful misconduct of Purchaser, its employees, or its authorized agents.


                                     Page 7
<PAGE>


20.  TAXES
     All price set forth in this agreement are exclusive of any sales, use,
     excise, property or any other taxes imposed by any government applicable to
     the sale, use or delivery of the products, including import duties on the
     Equipment, now or hereafter enacted, all of which will be paid by purchaser
     separately or added by Manufacturer to the invoice where Manufacturer is
     required by law to collect the same, unless purchaser provides Manufacturer
     with a proper tax exemption certificate.

21.  LIMITATION OF LIABILITY
     Neither Party or its suppliers shall be liable for any indirect,
     incidental, special, or consequential damages, including but not limited
     to, loss of profits or revenue, or cost of substituted facilities,
     equipment or services which arise out of performance or failure to perform
     any obligation contained within this agreement, whether the claim is in
     contract, tort (including negligence), strict liability or otherwise, even
     if such party has been advised of the possibility of such damages.

     Manufacturer or its suppliers shall not be liable for indirect, incidental,
     special, or consequential damages and in no event shall the liability of
     the Manufacturer arising in connection with any Products purchased under
     this Agreement exceed the actual amount paid by Purchaser to Manufacturer
     for Products delivered.

22.  NON COMPETE
     Manufacturer agrees that it is not involved in any business as of the date
     of this Agreement, nor will it enter into any business during the term of
     this Agreement that involves the design or manufacture of microwave radios
     for terrestrial applications of the nature and scope of the products which
     are being produced under this Agreement.

23.  PRODUCT CHANGES
     Manufacturer understands and agrees that Purchaser from time to time may
     make changes to the design and specifications on any Product involved with
     this Agreement. Changes will be documented and provided to Manufacturer via
     Engineering Change Orders (ECOs).  Each ECO will specify an effective date
     for the change.

     Upon receipt of an ECO Manufacturer shall review it and provide a written
     response to Purchaser within 5 working days stating any impact to schedule
     or price. Manufacturer shall not implement any ECO which delays any
     delivery schedule or increases price to the Purchaser without first
     obtaining written authorization.

24.  PROPRIETARY INFORMATION
     APPENDIX 'E' 'Non-Disclosure Agreement' as signed by both parties is
     attached and incorporated by reference.



                                     Page 8
<PAGE>


     This Agreement and the existence of this Agreement shall be deemed to be
     confidential and shall be controlled by the 'Non-Disclosure Agreement'.

25.  ENTIRE AGREEMENT
     This instrument including the referenced Purchase Order Agreement
     Appendices constitutes the entire Agreement relative to the establishment
     of the manufacturer relationship between Purchaser and Manufacturer.

     Purchaser may use its standard forms to issue purchase orders, specify
     quantities, authorize prices, change schedules, modify specifications and
     documentation or provide other notices as provided for in this Agreement.
     In the event of any conflict, discrepancy or inconsistency between this
     Agreement and any other Purchaser document delivered to Manufacturer, the
     terms and conditions of this Agreement shall prevail to the extent of such
     conflict, discrepancy or inconsistency.

26.  NON-ASSIGNABLE
     This Agreement may not be transferred or assigned in whole or in part by
     either party without the prior written consent of the other party.

27.  NOTICES
     All notices given pursuant to this Agreement shall be in the English
     language. Notices shall be deemed effective on the day they are dispatched
     by certified or registered mail, return receipt requested, addressed to the
     other party at the address stated on the first page of this Agreement or at
     any superseding address so notified hereunder.

28.  SEVERABILITY OF PROVISIONS
     The invalidity under applicable law, regulations, or other governmental
     restrictions or prohibitions of any provisions of this Agreement shall not
     affect the validity of any other provisions of this Agreement, and in the
     event that any provision hereof be determined to be invalid or otherwise
     illegal, this Agreement shall remain effective and shall be construed in
     accordance with its terms as if the invalid or illegal provision were not
     contained herein.

29. GOVERNING LAW
     This Agreement is deemed entered into in San Jose, California, and shall in
     all respects be governed by and construed under the laws of the state of
     California as such laws are applied to agreements between California
     residents entered  into and performed entirely within California.  Any
     litigation or other dispute resolution between the parties relating to this
     Agreement will take place in Santa Clara County, California or as the case
     may be, at any California State or Federal Courts generally serving the
     Santa Clara County area with respect to the subject matter of this
     agreement.


                                     Page 9
<PAGE>


30.  AUTHORITY
     Purchaser and Manufacturer each represent to the other that it has due and
     proper authority to make and perform all duties and obligations stipulated
     herein and contemplated by this Agreement.

31.  INTEGRATION
     This Agreement embodies the entire understanding of the parties as it
     relates to the subject matter hereof.  This Agreement supersedes any prior
     agreements or understandings between the parties as to this subject matter.
     No amendment or modification of this Agreement shall be valid or binding
     upon the parties unless in writing and signed by an officer of each party.

     IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
     seals the day and year showed below.


     DIGITAL MICROWAVE CORP.       MICROELECTRONICS TECHNOLOGY INC.

     TONY ALVA                     Allen Yen
     Director of Product           VP Sales & Special Assistants to
       / Technology Transfer       Chairman of Executive Committee


     /s/ Tony Alva                 /s/ Allen Yen
     ----------------------------  ---------------------------------
     Signature                     Authorized Signature
     1/20/98                       2/6/98
     ----------------------------  ---------------------------------
     Acceptance  Date              Acceptance Date


                                     Page 10
<PAGE>

                               LIST  OF  APPENDICES


                    APPENDIX  A              MANUFACTURER'S PRODUCTS
                    APPENDIX  B              PURCHASER SUPPLIED MATERIAL
                    APPENDIX  C              SCOPE OF WORK
                    APPENDIX  D              DMC QUALITY STANDARD
                    APPENDIX  E              NON-DISCLOSURE AGREEMENT
                    APPENDIX  F              PRODUCT TEST PROCEDURES
                    APPENDIX  G              PRICING




                                     Page 11
<PAGE>


                                   APPENDIX A
                               AUTHORIZED PRODUCTS

This Appendix lists the Products covered by this Agreement.


     MAGNUM
     [*]                               Assembly Drawing [*]
                                                        [*]
                                                        [*]
                                                        [*]
                                                        [*]
                                                        [*]
                                                        [*]
                                                        [*]
     [*]                                                [*]
                                                        [*]
     [*]                                                [*]
                                                        [*]

     CLASSICII
     [*]                                                [*]
     [*]                                                [*]
     [*]                                                [*]

     SPECTRUMII
     [*]                                                [*]
                                                        [*]
                                                        [*]
                                                        [*]
                                                        [*]
                                                        [*]


     Applicable Drawings


     Applicable Documents



                                     Page 12

---------------
[*]   OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. THE MATERIAL HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>


                                   APPENDIX  B
                         MATERIALS PROVIDED BY PURCHASER

     This Appendix lists the Materials provided by Purchaser for each Product
     Manufacturer is to produce.

B.1  Top Level Assembly Drawing Number:                 (Appendix A)

     Material Provided (quantity provided as required to meet Purchaser's
     schedule):

     DESCRIPTION                   PART NUMBER               ASSET NUMBER
     -----------                   -----------               ------------

     SpectrumII [*]ghz ODU

     Test Fixtures

     Test Equipment


     Miscellaneous:

     Shipping Box, Shipping Inserts, Config. Label, Manual



                                     Page 13

---------------
[*]   OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. THE MATERIAL HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>


                                   APPENDIX  C
                                  SCOPE OF WORK

This Appendix lists the Scope of Work to be performed by the Manufacturer.

1.   RECEIVING OF MATERIAL - [*]
2.   INSPECTION OF MATERIAL - [*]
3.   STORAGE OF COMPONENTS - [*]
4.   KIT AND STAGE - [*]
5.   BOARD LEVEL FUNCTIONAL TEST - [*]
6.   PRODUCT ASSEMBLY - [*]
7.   BURN-IN - [*]
8.   UNIT LEVEL TEST - [*]
9.   CERTIFICATE OF CONFORMANCE - [*]
10   PACKING - [*]
11.  STORAGE - [*]
12.  SHIPPING - [*]


                                     Page 14

---------------
[*]   OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. THE MATERIAL HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>


[*]
                                   APPENDIX D

                              DMC QUALITY STANDARD


                           DMC QUALITY PLAN (PENDING)



                                     Page 15

---------------
[*]   OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. THE MATERIAL HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

<PAGE>


                                   APPENDIX E

                            NON-DISCLOSURE AGREEMENT

WHEREAS, Digital Microwave Corporation (DMC) ("Disclosing Party") has developed
unique and proprietary technology, business strategies and financial
information;

WHEREAS, Microelectronics Technology Inc. (MTI) ("Receiving Party") has
approached Disclosing Party concerning a relationship between the Disclosing
Party and the Receiving Party: and

WHEREAS, the Disclosing Party is interested in discussing the possibility of
such a relationship with the Receiving Party;

NOW, THEREFORE:

The Receiving Party understands that the Disclosing Party has disclosed or may
disclose information (including, without limitation, certain proprietary
technology, business strategies, code, algorithms, names and expertise of
employees and consultants, know-how, formulas, processes, ideas inventions
(whether patentable or not), schematics and other technical, business, financial
and product development plans, forecasts, strategies and information), which to
the extent previously, presently, or subsequently disclosed to the Receiving
Party is hereinafter referred to as "Proprietary Information" of the Disclosing
Party.

In consideration of the parties' discussions and any access the Receiving Party
may have to Proprietary Information of the Disclosing Party, the Receiving Party
hereby agrees as follows:

     1.   The Receiving Party agrees (i) to hold the Disclosing Party's
          Proprietary Information in confidence as a fiduciary and to take all
          necessary precautions to protect such Proprietary Information
          (including, without limitation, all precautions the Receiving Party
          employs with respect to its confidential materials, (ii) not to
          divulge any such Proprietary Information or any information derived
          therefrom to any third person, (iii) not to make any use whatsoever at
          any time of such Proprietary Information except to evaluate internally
          whether to enter into the currently contemplated business relationship
          with the Disclosing Party, (iv) not to copy or reverse engineer,
          reverse, compile or attempt to derive the composition or underlying
          information of any such Proprietary Information. Any employee
          affiliated with the Receiving Party given access to any such
          Proprietary Information shall be



                                     Page 16

<PAGE>


          similarly bound in writing. Without granting any right or license, the
          Disclosing Party agrees that the foregoing shall not apply with
          respect to information the Receiving Party can document (i) is in the
          public domain (and is readily available without substantial effort) at
          the time of disclosure or which thereafter enters the pubic domain
          (and is readily available without substantial effort), through no
          improper action or inaction by the Receiving Party or any affiliate,
          agent or fellow employee, or (ii) is in its possession or known by it
          other than by receipt from the Disclosing Party, or (iii) is
          rightfully disclosed to it by another person without restriction, or
          (iv) is independently developed without reference to the disclosed
          information.

     2.   Immediately upon a request by the Disclosing Party at any time (which
          will be effective if actually received or if mailed First class
          postage prepaid to the Receiving Party's address herein), the
          Receiving Party will turn over to the Disclosing Party all Proprietary
          Information of the Disclosing Party and all documents or media
          containing any such Proprietary Information and any and all copies or
          extracts thereof.  The Receiving Party understands that nothing herein
          requires the Disclosing Party to proceed with any proposed transaction
          or relationship in connection with which Proprietary Information may
          be disclosed.

     3.   Except to the extent required by law, neither party shall disclose the
          existence or subject matter of the negotiations or business
          relationship contemplated by this Agreement.

     4.   The Receiving Party acknowledges and agrees that due to the unique
          nature of the Disclosing Party's Proprietary Information, there can be
          no adequate remedy at law for any breach of its obligations hereunder,
          that any such breach may allow the Receiving Party or third parties to
          unfairly compete with the Disclosing Party resulting in irreparable
          harm to the Disclosing Party and therefore, that upon any such breach
          or any threat thereof, the Disclosing Party shall be entitled to
          appropriate equitable relief in addition to whatever remedies it might
          have at law and to be indemnified by the Receiving Party from any loss
          or harm, including, without limitation, attorney's fees, in connection
          with any breach or enforcement of the Receiving Party's obligations
          hereunder or the unauthorized use or release of any such Proprietary
          Information. The Receiving Party will notify the Disclosing Party in
          writing immediately upon the occurrence of any such unauthorized
          release or other breach. In the event that any of the provisions of
          this statement shall be held by a court order or other tribunal of
          competent jurisdiction to be unenforceable, the remaining portions
          hereof shall remain in full force and effect. This Agreement
          supersedes all prior discussions and writings and constitutes the
          entire agreement between the parties with respect to the



                                     Page 17

<PAGE>


          subject matter hereof. No waiver or modification of this Agreement
          will be binding upon either party unless made in writing and signed by
          a duly authorized representative of such party or the Receiving Party
          and no failure or delay in enforcing any right will be deemed a
          waiver.


     5.   This Agreement shall be governed by the laws of the State of
          California, without regard to conflicts of laws provisions thereof and
          each party submits to the jurisdiction and venue of any California
          State or federal Courts generally serving the Santa Clara County area
          with respect to the subject matter of the Agreement.



Digital Microwave Corporation,               Microelectronics Technology Inc.
The Disclosing Party                         The Receiving Party


Tony Alva                                    Allen Yen
Director of Product / Technology             VP Sales & Special Assistants to
Transfer                                        Chairman of Executive Committee

/s/ Tony Alva                                /s/ Allen Yen
-------------------------------------        ----------------------------------
Signature                                    Authorized Signature

1/20/98                                      2/6/98
-------------------------------------        ----------------------------------
Acceptance Date                              Acceptance Date


                                     Page 18
<PAGE>


                                   APPENDIX F

                             PRODUCT TEST PROCEDURES













                                     Page 19
<PAGE>


                                   APPENDIX G

                                     PRICING

---------------------------------         ----------------------------------
PRODUCT             PER UNIT              PRODUCT COST        PER UNIT
                    COST                                      COST
---------------------------------         ----------------------------------
M2 RF:                                    PROT QPSK
------                                    ---------
                                          M3:
                                          ---
N/P,SP,                     [*]           2X/4X                      [*]
RF
N/P,HP,                     [*]           8X/16X                     [*]
RF                                        X
PROT,SP,RF                  [*]
PROT,HP,RF                  [*]           TERMINAL PRICE:
                                          ---------------
                                          N/P,SP,RF,4                [*]
                                          E1
MDM QPSK M3:                              N/P,HP,RF,4                [*]
------------                              E1
2X                          [*]           PROT,SP,RF,                [*]
                                          4E1
4X                          [*]           PROT,HP,RF                 [*]
                                          ,4E1
8X                          [*]
16X                         [*]           N/P,SP,RF,16               [*]
                                          E1
                                          N/P,HP,RF,1                [*]
                                          6E1
---------------------------------
                                          PROT,SP,RF,16E1            [*]
                                          PROT,HP,RF,16E1            [*]
---------------------------------         ----------------------------------


                                     Page 20


---------------
[*]   OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. THE MATERIAL HAS
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.