<PAGE>



                                      LEASE



                                 BY AND BETWEEN

                 CORPORATE TECHNOLOGY CENTRE ASSOCIATES II LLC,
                     A CALIFORNIA LIMITED LIABILITY COMPANY

                                   AS LANDLORD

                                       AND

                         DIGITAL MICROWAVE CORPORATION,
                             A DELAWARE CORPORATION

                                    AS TENANT


                               FEBRUARY 16, 2000



                              170 ROSE ORCHARD WAY


<PAGE>



                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                    PAGE
                                                                                    ----
<S>                                                                                   <C>
ARTICLE 1        REFERENCE.............................................................1

     1.1      References ..............................................................1

ARTICLE 2          LEASED PREMISES, TERM AND POSSESSION ...............................2

     2.1      Demise Of Leased Premises ...............................................2

     2.2      Right To Use Outside Areas ..............................................2

     2.3      Lease Commencement Date And Lease Term ..................................2

     2.4      Delivery Of Possession ..................................................2

     2.5      Performance Of Tenant Improvements; Acceptance Of Possession ............3

     2.6      Surrender Of Possession..................................................3

ARTICLE 3          RENT, LATE CHARGES AND SECURITY DEPOSITS ...........................3

     3.1      Base Monthly Rent .......................................................3

     3.2      Additional Rent .........................................................3

     3.3      Year-End Adjustments ....................................................4

     3.4      Late Charge, And Interest On Rent In Default ............................4

     3.5      Payment Of Rent..........................................................4

     3.6      Prepaid Rent.............................................................4

     3.7      Security Deposit .......... .............................................4

ARTICLE 4        USE OF LEASED PREMISES AND OUTSIDE AREA ..............................5

     4.1      Permitted Use ...........................................................5

     4.2      General Limitations On Use ..............................................5

     4.3      Noise And Emissions......................................................5

     4.4      Trash Disposal ..........................................................5

     4.5      Parking..................................................................5

     4.6      Signs....................................................................6

     4.7      Compliance With Laws And Private Restrictions  ..........................6

     4.8      Compliance With Insurance Requirements ..................................6

     4.9      Landlord's Right To Enter ...............................................6

     4.10     Use Of Outside Areas ....................................................6

     4.11     Environmental Protection ................................................6

     4.12     Rules And Regulations ...................................................8

     4.13     Reservations.............................................................8

ARTICLE 5        REPAIRS, MAINTENANCE, SERVICES AND UTILITIES .........................8

     5.1      Repair And Maintenance ..................................................8

              (a)   Tenant's Obligations...............................................8

              (b)   Landlord's Obligation .............................................8

     5.2      Utilities................................................................8

     5.3      Security.................................................................8

     5.4      Energy And Resource Consumption..........................................9

     5.5      Limitation Of Landlord's Liability.......................................9

ARTICLE 6        ALTERATIONS AND IMPROVEMENTS .........................................9

     6.1      By Tenant................................................................9

     6.2      Ownership Of Improvements................................................9

     6.3      Alterations Required By Law..............................................9

     6.4      Liens...................................................................10

ARTICLE 7        ASSIGNMENT AND SUBLETTING BY TENANT .................................10

     7.1      By Tenant...............................................................10

     7.2      Merger, Reorganization, or Sale of Assets...............................10


                                       i.
<PAGE>


     7.3      Landlord's Election ....................................................11

     7.4      Conditions To Landlord's Consent........................................11

     7.5      Assignment Consideration And Excess Rentals Defined ....................11

     7.6      Payments................................................................12

     7.7      Good Faith..............................................................12

     7.8      Effect Of Landlord's Consent............................................12

ARTICLE 8        LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY.....................12

     8.1      Limitation On Landlord's Liability And Release..........................12

     8.2      Tenant's Indemnification Of Landlord....................................12

ARTICLE 9        INSURANCE............................................................13

     9.1      Tenant's Insurance......................................................13

     9.2      Landlord's Insurance....................................................13

     9.3      Mutual Waiver Of Subrogation............................................14

ARTICLE 10       DAMAGE TO LEASED PREMISES............................................14

     10.1     Landlord's Duty To Restore................................... ..........14

     10.2     Insurance Proceeds......................................................14

     10.3     Landlord's Right To Terminate ..........................................14

     10.4     Tenant's Right To Terminate.............................................15

     10.5     Tenant's Waiver.........................................................15

     10.6     Abatement Of Rent.......................................................15

ARTICLE 11       CONDEMNATION ........................................................15

     11.1     Tenant's Right To Terminate.............................................15

     11.2     Landlord's Right To Terminate ..........................................15

     11.3     Restoration.............................................................15

     11.4     Temporary Taking........................................................15

     11.5     Division Of Condemnation Award..........................................15

     11.6     Abatement Of Rent.......................................................15

     11.7     Taking Defined..........................................................16

ARTICLE 12       DEFAULT AND REMEDIES ................................................16

     12.1     Events Of Tenant's Default..............................................16

     12.2     Landlord's Remedies.....................................................16

     12.3     Landlord's Default And Tenant's Remedies................................17

     12.4     Limitation Of Tenant's Recourse.........................................17

     12.5     Tenant's Waiver.........................................................18

ARTICLE 13       GENERAL PROVISIONS...................................................18

     13.1     Taxes On Tenant's Property..............................................18

     13.2     Holding Over............................................................18

     13.3     Subordination To Mortgages..............................................18

     13.4     Tenant's Attornment Upon Foreclosure....................................19

     13.5     Mortgagee Protection....................................................19

     13.6     Estoppel Certificate....................................................19

     13.7     Tenant's Financial Information..........................................19

     13.8     Transfer By Landlord....................................................19

     13.9     Force Majeure...........................................................19

     13.10    Notices.................................................................19

     13.11    Attorneys' Fees.........................................................20

     13.12    Definitions.............................................................20


                                      ii.
<PAGE>

              (a)   Real Property Taxes...............................................20

              (b)   Landlord's Insurance Costs........................................20

              (c)   Property Maintenance Costs........................................20

              (d)   Property Operating Expenses.......................................21

              (e)   Law...............................................................21

              (f)   Lender............................................................21

              (g)   Private Restrictions .............................................21

              (h)   Rent..............................................................21

     13.13    General Waivers.........................................................21

     13.14    Miscellaneous...........................................................21

ARTICLE 14       CORPORATE AUTHORITY BROKERS AND ENTIRE AGREEMENT.....................21

     14.1     Corporate Authority ....................................................21

     14.2     Brokerage Commissions ..................................................21

     14.3     Entire Agreement .......................................................22

     14.4     Landlord's Representations..............................................22

ARTICLE 15       OPTIONS TO EXTEND....................................................22

ARTICLE 16       TELEPHONE SERVICE....................................................23
</TABLE>


                                      iii.
<PAGE>

                                      LEASE

         THIS LEASE, dated February 16, 2000 for reference purposes only, is
made by and between CORPORATE TECHNOLOGY CENTRE ASSOCIATES II LLC, a California
limited liability company ("Landlord") and DIGITAL MICROWAVE CORPORATION, a
Delaware corporation ("Tenant"), to be effective and binding upon the parties as
of the date the last of the designated signatories to this Lease shall have
executed this Lease (the "Effective Date of this Lease").

                                    RECITALS

         A.       Metropolitan Life Insurance Company ("MetLife") and Tenant
entered into a lease dated May 6, 1991 (the "Original Lease"), for the leased
Premises (as defined below);

         B.       On or about August 14, 1998, Landlord acquired the fee simple
interest in certain real property, including the Leased Premises, and succeeded
to the interest of MetLife as landlord under the Original Lease;

         C.       Tenant is now occupying the Leased Premises pursuant to the
Original Lease; and

         D.       Landlord and Tenant have agreed to enter into this new Lease
instead of extending the Original Lease, and Tenant has agreed to assume the
obligations under the Original Lease as if the term of the Original Lease had
been extended.

                                    AGREEMENT

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

                                    ARTICLE 1

                                    REFERENCE

1.1 REFERENCES. All references in this Lease (subject to any further
clarifications contained in this Lease) to the following terms shall have the
following meaning or refer to the respective address, person, date, time period,
amount, percentage, calendar year or fiscal year as below set forth:

<TABLE>
<S>                                             <C>
         Tenant's Address for Notice:           Digital Microwave Corporation
                                                170 Rose Orchard Way
                                                San Jose, California 95134

         Tenant's Representative:               Sandy Johnson, Facility Manager
                                                Ed Rockwell, Director of Finance

         Landlord's Address for Notices:        c/o Menlo Equities LLC
                                                525 University Avenue
                                                Suite 100
                                                Palo Alto, California 94301

         Landlord's Representative:             Henry Bullock/Richard Holmstrom
         Phone Number:                          (650) 326-9300

         Intended Commencement Date:            January 1, 2001

         Intended Term:                         Ten (10) years

         Lease Expiration Date:                 Ten (10) years from the Actual Lease Commencement Date, unless
                                                earlier terminated by Landlord in accordance with the terms of
                                                this Lease, or extended by Tenant pursuant to Article 15.

         Options to Renew:                      2 option(s) to renew, each for a term of five (5) years etc.

         First Month's Prepaid Rent:            $99,792.00

         Tenant's Security Deposit:             $130,032.00

         Late Charge Amount:                    Five Percent (5%) of the Delinquent Amount

         Tenant's Required Liability Coverage:  $10,000,000 Combined Single Limit

         Tenant's Broker(s):                    Martin Morici of Colliers International


                                       1.
<PAGE>

         Project:                               That certain real property situated in the City of San
                                                Jose, County of Santa Clara, State of California, as
                                                presently improved with 5 building(s), which real property
                                                is shown on the Site Plan attached hereto as Exhibit "A."

         Property:                              That certain real property situated in the City of San
                                                Jose, County of Santa Clara, State of California, as
                                                presently improved with 1 building, which real property is
                                                shown on the Site Plan attached hereto as Exhibit "A."

         Building:                              That certain building on the Property in which the Leased
                                                Premises are located commonly known as or otherwise described
                                                as 170 Rose Orchard Way, California. (the "Building")
                                                located on Assessor's Parcel No. 97-03-077, which Building is
                                                shown outlined on Exhibit "A" hereto.

         Outside Areas:                         The "Outside Areas" shall mean all areas within Assessor's
                                                Parcel No. 97-03-077 which are located outside the Building,
                                                such as pedestrian walkways, parking areas, landscaped areas,
                                                open areas and enclosed trash disposal areas.

         Leased Premises:                       All the interior space within the Building, including
                                                stairwells, connecting walkways, and atriums, consisting of
                                                approximately 60,480 square feet and, for purposes of
                                                this Lease, agreed to contain said number of square feet.

         Tenant's Expense Share:                The term "Tenant's Expense Share" shall mean the percentage
                                                obtained by dividing the rentable square footage of the
                                                Leased Premises at the time of calculation by the rentable
                                                square footage of the Building. Such percentage is currently
                                                100%.

         Tenant's Project Share:                The term "Tenant's Project Share" shall mean the percentage
                                                obtained by dividing the rentable square footage of the Leased
                                                Premises at the time of calculation by the rentable square
                                                footage of all buildings located on the Property at the time
                                                of calculation. Such percentage is currently 19.42%. In the
                                                event that any portion of the Property is sold by Landlord, or
                                                the rentable square footage of the Leased Premises or the
                                                Property is otherwise changed, Tenant's Expense Share shall be
                                                recalculated to equal the percentage described in the first
                                                sentence of this paragraph, so that the aggregate Tenant's
                                                Expense Share of all tenants of the Property shall equal 100%.
                                                Tenant's Expense Share is subject to adjustment as set forth in
                                                Paragraphs 13.12(b) and 13.12 (c).

         Base Monthly Rent:                     The term "Base Monthly Rent" shall mean the following:

                                                Period                       Base Monthly Rent
                                                ------                       -----------------

                                                1/1/01-12/31/01                 $99,792.00
                                                1/1/02-12/31/02                 $102,816.00
                                                1/1/03-12/31/03                 $105,840.00
                                                1/1/04-12/31/04                 $108,864.00
                                                1/1/05-12/11/05                 $111,888.00
                                                1/1/06-12/31/06                 $115,516.80
                                                1/1/07-12/31/07                 $119,145.60
                                                1/1/08-12/31/08                 $122,774.40
                                                1/1/09-12/31/09                 $126,403.20
                                                1/1/10-12/31/10                 $130,032.00

         Permitted Use:                         Office, research and development light manufacturing and
                                                assembly.

         Exhibits:                              The term "Exhibits" shall mean the Exhibits of this Lease
                                                which are described as follows:

                                                Exhibit "A" - Site Plan showing the Property and delineating
                                                the Building in which the Leased Premises are located.

                                                Exhibit "B" - Work Letter

                                                Exhibit "C" - Form of Tenant Estoppel Certificate
</TABLE>


                                       2.
<PAGE>

                                   ARTICLE 2

                      LEASED PREMISES, TERM AND POSSESSION

2.1 DEMISE OF LEASED PREMISES. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord for Tenant's own use in the conduct of Tenant's
business and not for purposes of speculating in real estate, for the Lease Term
and upon the terms and subject to the conditions of this Lease, that certain
interior space described in Article 1 as the Leased Premises, reserving and
excepting to Landlord the right to fifty percent (50%) of all assignment
consideration and excess rentals as provided in Article 7 below. Tenant's lease
of the Leased Premises, together with the appurtenant right to use the Outside
Areas as described in Paragraph 2.2 below, shall be conditioned upon and be
subject to the continuing compliance by Tenant with (i) all the terms and
conditions of this Lease, (ii) all Laws governing the use of the Leased Premises
and the Property, (iii) all Private Restrictions, easements and other matters
now of public record respecting the use of the Leased Premises and Property, and
(iv) all reasonable rules and regulations from time to time established by
Landlord. Notwithstanding any provision of this Lease to the contrary, Landlord
hereby reserves to itself and its designees all rights of access, use and
occupancy of the Building roof, provided that Tenant may retain the antennae
existing on the Building roof as of the Effective Date of this Lease and shall
have a right to access the Building roof for maintenance of such antennae and
Tenant's other maintenance and repair obligations pursuant to this Lease.

2.2 RIGHT TO USE OUTSIDE AREAS. As an appurtenant right to Tenant's right to the
use and occupancy of the Leased Premises, Tenant shall have the right to use the
Outside Areas in conjunction with its use of the Leased Premises solely for the
purposes for which they were designated and intended and for no other purposes
whatsoever. Tenant's right to so use the Outside Areas shall be subject to the
limitations on such use as set forth in Article 1 and shall terminate
concurrently with any termination of this Lease.

2.3 LEASE COMMENCEMENT DATE AND LEASE TERM. The term of this Lease shall begin,
and the Lease Commencement Date shall be deemed to have occurred, on the Lease
Commencement Date, as set forth in Article 1 (the "Lease Commencement Date").
The term of this Lease shall in all events end on the Lease Expiration Date (as
set forth in Article 1). The Lease Term shall be that period of time commencing
on the Lease Commencement Date and ending on the Lease Expiration Date (the
"Lease Term").

2.4 DELIVERY OF POSSESSION. Landlord and Tenant acknowledge that Tenant is
currently in possession of the Leased Premises. Tenant agrees to accept the
Leased Premises "as-is" WITH ALL FAULTS on the Lease Commencement Date.
Landlord hereby represents that Landlord has not received notice from any
governmental agencies that the Leased Premises or Building do not comply with
the Americans With Disabilities Act of 1990.

2.5 PERFORMANCE OF TENANT IMPROVEMENTS. Tenant shall, pursuant to the Work
Letter attached hereto as Exhibit B, construct the Tenant Improvements, as more
particularly described therein.

2.6 SURRENDER OF POSSESSION. Immediately prior to the expiration or upon the
sooner termination of this Lease, Tenant shall remove all of Tenant's signs from
the exterior of the Building and shall remove all of Tenant's equipment, trade
fixtures, furniture, supplies, wall decorations and other personal property from
within the Leased Premises, the Building and the Outside Areas, and shall vacate
and surrender the Leased Premises, the Building, the Outside Areas and the
Property to Landlord in the same condition, broom clean, when Tenant first took
occupancy of the Leased Premises, reasonable wear and tear excepted. Tenant
shall repair all damage to the Leased Premises, the exterior of the Building and
the Outside Areas caused by Tenant's removal of Tenant's property. Tenant shall
patch and refinish, to Landlord's reasonable satisfaction, all penetrations made
by Tenant or its employees to the floor, walls or ceiling of the Leased
Premises, whether such penetrations were made with Landlord's approval or not.
Tenant shall repair or replace all stained or damaged ceiling tiles, wall
coverings and floor coverings to the reasonable satisfaction of Landlord. Tenant
shall repair all damage caused by Tenant to the exterior surface of the Building
and the paved surfaces of the Outside Areas and, where necessary, replace or
resurface same. Tenant shall remove all Specialized Improvements (as defined in
Paragraph 6 hereof) identified by Landlord pursuant to the terms of this Lease
and shall repair all damage to the Leased Premises, the Building and the
Property caused by such removal. Additionally, to the extent that Landlord shall
have notified or is deemed to have notified Tenant in writing at the time the
improvements were completed that it desired to have certain improvements made by
Tenant or at the request of Tenant removed at the expiration or sooner
termination of the Lease, Tenant shall, upon the expiration or sooner
termination of the Lease, remove any such improvements constructed or installed
by Landlord or Tenant and repair all damage caused by such removal. If the
Leased Premises, the Building, the Outside Areas and the Property are not
surrendered to Landlord in the condition required by this paragraph at the
expiration or sooner termination of this Lease, Landlord may, at Tenant's
expense, so remove Tenant's signs, property and/or improvements not so removed
and make such repairs and replacements not so made or hire, at Tenant's expense,
independent contractors to perform such work. Tenant shall be liable to Landlord
for all costs incurred by Landlord in returning the Leased Premises, the
Building and the Outside Areas to the required condition, together with interest
on all costs so incurred from the date paid by Landlord at the then maximum rate
of interest not prohibited or made usurious by law until paid. Tenant shall pay
to Landlord the amount of all costs so incurred plus such interest thereon,
within ten (10) days of Landlord's billing Tenant for same. Tenant shall
indemnify Landlord against loss or liability resulting from delay by Tenant in
surrendering the Leased Premises, including, without limitation, any claims made
by any succeeding Tenant or any losses to Landlord with respect to lost
opportunities to lease to succeeding tenants.


                                       3.
<PAGE>

                                    ARTICLE 3

                    RENT, LATE CHARGES AND SECURITY DEPOSITS

3.1 BASE MONTHLY RENT. Commencing on the Lease Commencement Date (as determined
pursuant to Paragraph 2.3 above) and continuing throughout the Lease Term,
Tenant shall pay to Landlord, without prior demand therefor, in advance on the
first day of each calendar month, the amount set forth as "Base Monthly Rent" in
Article 1 (the "Base Monthly Rent").

3.2 ADDITIONAL RENT. Commencing on the Lease Commencement Date (as determined
pursuant to Paragraph 2.3 above) and continuing throughout the Lease Term, in
addition to the Base Monthly Rent and to the extent not required by Landlord to
be contracted for and paid directly by Tenant, Tenant shall pay to Landlord as
additional rent (the "Additional Rent") the following amounts:

         (a) An amount equal to all Property Operating Expenses (as defined in
Article 13) incurred by Landlord. Payment shall be made by whichever of the
following methods (or combination of methods) is (are) from time to time
designated by Landlord:

                  (i) Landlord may forward invoices or bills for such expenses
to Tenant, and Tenant shall, no later than ten (10) days prior to the due date,
pay such invoices or bills and deliver satisfactory evidence of such payment to
Landlord, and/or

                  (ii) Landlord may bill to Tenant, on a periodic basis not more
frequently than monthly, the amount of such expenses (or group of expenses) as
paid or incurred by Landlord, and Tenant shall pay to Landlord the amount of
such expenses within thirty (30) days after receipt of a written bill therefor
from Landlord, and/or

                  (iii) Landlord may deliver to Tenant Landlord's reasonable
estimate of any given expense (such as Landlord's Insurance Costs or Real
Property Taxes), or group of expenses, which it anticipates will be paid or
incurred for the ensuing calendar or fiscal year, as Landlord may determine, and
Tenant shall pay to Landlord an amount equal to the estimated amount of such
expenses for such year in equal monthly installments during such year with the
installments of Base Monthly Rent.

Landlord reserves the right to change from time to time the methods of billing
Tenant for any given expense or group of expenses or the periodic basis on which
such expenses are billed.

         (b) Landlord's share of the consideration received by Tenant upon
certain assignments and sublettings as required by Article 7.

         (c) Any legal fees and costs that Tenant is obligated to pay or
reimburse to Landlord pursuant to Article 13; and

         (d) Any other charges or reimbursements due Landlord from Tenant
pursuant to the terms of this Lease.

Notwithstanding the foregoing, Landlord may elect by written notice to Tenant
to have Tenant pay Real Property Taxes or any Portion thereof directly to the
applicable taxing authority, in which case Tenant shall make such payments
and deliver satisfactory evidence of payment to Landlord no later than ten
(10) days before such Real Property Taxes become delinquent.

3.3 YEAR-END ADJUSTMENTS. If Landlord shall have elected to bill Tenant for
the Property Operating Expenses (or any group of such expenses) on an
estimated basis in accordance with the provisions of Paragraph 3.2(a)(iii)
above, Landlord shall furnish to Tenant within three months following the end
of the applicable calendar or fiscal year, as the case may be, a statement
setting forth (i) the amount of such expenses paid or incurred during the
just ended calendar or fiscal year, as appropriate, and (ii) the amount that
Tenant has paid to Landlord for credit against such expenses for such period.
If Tenant shall have paid more than its obligation for such expenses for the
stated period, Landlord shall, at its election, either (i) credit the amount
of such overpayment toward the next ensuing payment or payments of Additional
Rent that would otherwise be due or (ii) refund in cash to Tenant the amount
of such overpayment. If such year-end statement shall show that Tenant did
not pay its obligation for such expenses in full, then Tenant shall pay to
Landlord the amount of such underpayment within ten days from Landlord's
billing of same to Tenant. The provisions of this Paragraph shall survive the
expiration or sooner termination of this Lease.

3.4 LATE CHARGE, AND INTEREST ON RENT IN DEFAULT. Tenant acknowledges that
the late payment by Tenant of any monthly installment of Base Monthly Rent or
any Additional Rent will cause Landlord to incur certain costs and expenses
not contemplated under this Lease, the exact amounts of which are extremely
difficult or impractical to fix Such costs and expenses will include without
limitation, administration and collection costs and processing and accounting
expenses. Therefor, if any installment of Base Monthly Rent is not received
by Landlord from Tenant within five (5) calendar days after the same becomes
due, Tenant shall immediately pay to Landlord a late charge in an amount
equal to the amount set forth in Article 1 as the "Late Charge Amount," and
if any Additional Rent is not received by Landlord when the same becomes due,
Tenant shall immediately pay to Landlord a late charge in an amount equal to
5% of the Additional Rent not so paid. Landlord and Tenant agree that this
late charge represents a reasonable estimate of such costs and expenses and
is fair compensation to Landlord for the anticipated loss Landlord would
suffer by reason of Tenant's failure to make timely payment. In no event
shall this provision for a late charge be deemed to grant to Tenant a grace
period or extension of time within which to pay any rental installment or
prevent Landlord from exercising any right or remedy available to Landlord
upon Tenant's failure to

                                       4.
<PAGE>

pay each rental installment due under this Lease when due, including the right
to terminate this Lease. If any rent remains delinquent for a period in excess
of five (5) calendar days, then, in addition to such late charge, Tenant shall
pay to Landlord interest on any rent that is not so paid from said tenth day at
the then maximum rate of interest not prohibited or made usurious by Law until
paid.

3.5 PAYMENT OF RENT. Except as specifically provided otherwise in this Lease,
all rent shall be paid in lawful money of the United States, without any
abatement, reduction or offset for any reason whatsoever, to Landlord at such
address as Landlord may designate from time to time. Tenant's obligation to
pay Base Monthly Rent and all Additional Rent shall be appropriately prorated
at the commencement and expiration of the Lease Term. The failure by Tenant
to pay any Additional Rent as required pursuant to this Lease when due shall
be treated the same as a failure by Tenant to pay Base Monthly Rent when due,
and Landlord shall have the same rights and remedies against Tenant as
Landlord would have had Tenant failed to pay the Base Monthly Rent when due.

3.6 PREPAID RENT. Tenant shall, upon execution of this Lease, pay to Landlord
the amount set forth in Article 1 as "First Month's Prepaid Rent" as
prepayment of rent for credit against the first payment of Base Monthly Rent
due hereunder.

3.7 SECURITY DEPOSIT. Tenant has deposited or shall deposit concurrently with
Tenant's execution of this Lease, with Landlord the amount set forth in
Article I as the "Security Deposit" (LESS any unapplied security deposit held
by Landlord under the Original Lease, which shall be applied to the amount of
the Security Deposit) as security for the performance by Tenant of the terms
of this Lease to be performed by Tenant, and not as prepayment of rent.
Tenant hereby grants to Landlord a security interest in the Security Deposit,
including but not limited to replenishments thereof. Landlord may apply such
portion or portions of the Security Deposit as are reasonably necessary for
the following purposes: (i) to remedy any default by Tenant in the payment of
Base Monthly Rent or Additional Rent or a late charge or interest on
defaulted rent, or any other monetary payment obligation of Tenant under this
Lease; (ii) to repair damage to the Leased Premises, the Building or the
Outside Areas caused or permitted to occur by Tenant; (iii) to clean and
restore and repair the Leased Premises, the Building or the Outside Areas
following their surrender to Landlord if not surrendered in the condition
required pursuant to the provisions of Article 2, and (iv) to remedy any
other default of Tenant to the extent permitted by Law including, without
limitation, paying in full on Tenant's behalf any sums claimed by materialmen
or contractors of Tenant to be owing to them by Tenant for work done or
improvements made at Tenant's request to the Leased Premises. In this regard,
Tenant hereby waives any restriction on the uses to which the Security
Deposit may be applied as contained in Section 1950.7(c) of the California
Civil Code and/or any successor statute. In the event the Security Deposit or
any portion thereof is so used, Tenant shall pay to Landlord, promptly upon
demand, an amount in cash sufficient to restore the Security Deposit to the
full original sum. If Tenant fails to promptly restore the Security Deposit
and if Tenant shall have paid to Landlord any sums as "Last Month's Prepaid
Rent," Landlord may, in addition to any other remedy Landlord may have under
this Lease, reduce the amount of Tenant's Last Month's Prepaid Rent by
transferring all or portions of such Last Month's Prepaid Rent to Tenant's
Security Deposit until such Security Deposit is restored to the amount set
forth in Article 1. Landlord shall not be deemed a trustee of the Security
Deposit. Landlord may use the Security Deposit in Landlord's ordinary
business and shall not be required to segregate it from Landlord's general
accounts. Tenant shall not b e entitled to any interest on the Security
Deposit. If Landlord transfers the Building or the Property during the Lease
Term, Landlord may pay the Security Deposit to any subsequent owner in
conformity with the provisions of Section 1950.7 of the California Civil Code
and/or any successor statute, in which event the transferring landlord shall
be released from all liability for the return of the Security Deposit. Tenant
specifically grants to Landlord (and Tenant hereby waives the provisions of
California Civil Code Section 1950.7 to the contrary) a period of ninety days
following a surrender of the Leased Premises by Tenant to Landlord within
which to inspect the Leased Premises, make required restorations and repairs,
receive and verify workmen's billings therefor, and prepare a final
accounting with respect to the Security Deposit. In no event shall the
Security Deposit or any portion thereof, be considered prepaid rent.

                                     ARTICLE

                     USE OF LEASED PREMISES AND OUTSIDE AREA

4.1 PERMITTED USE. Tenant shall be entitled to use the Leased Promises solely
for the "Permitted Use" as set forth in Article 1 and for no other purpose
whatsoever. Tenant shall continuously and without interruption use the Leased
Premises for such purpose for the entire Lease Term. Any discontinuance of
such use for a period of sixty consecutive calendar days shall be, at
Landlord's election, a default by Tenant under the terms of this Lease.
Tenant shall have the right to use the Outside Areas in conjunction with its
Permitted Use of the Leased Premises solely for the purposes for which they
were designed and intended and for no other purposes whatsoever.

4.2 GENERAL LIMITATIONS ON USE. Tenant shall not do or permit anything to be
done in or about the Leased Premises, the Building, the Outside Areas or the
Property which does or could (i) jeopardize the structural integrity of the
Building or (ii) cause damage to any part of the Leased Premises, the
Building, the Outside Areas or the Property. Tenant shall not operate any
equipment within the Leased Premises which does or could (i) injure, vibrate
or shake the Leased Premises or the Building, (ii) damage, overload or impair
the efficient operation of any electrical, plumbing, heating, ventilating or
air conditioning systems within or servicing the Leased Premises or the
Building, or (iii) damage or impair the efficient operation of the sprinkler
system (if any) within or servicing the Leased Premises or the Building.
Except as set forth in Paragraph 2.1 hereof, Tenant shall not install any
equipment or antennas on or make any penetrations of the exterior walls or
roof of the Building. Tenant shall not affix any equipment to or make any
penetrations or cuts in the floor, ceiling, walls or roof of the Leased
Premises. Tenant shall not place any loads upon the floors, walls, ceiling or
roof systems which could endanger the structural integrity of the Building or
damage its floors, foundations or supporting structural components. Tenant
shall not place any explosive, flammable or harmful fluids or other waste
materials in the drainage systems of the Leased Premises, the


                                       5.
<PAGE>

Building, the Outside Areas or the Property. Tenant shall not drain or
discharge any fluids in the landscaped areas or across the paved areas of the
Property. Tenant shall not use any of the Outside Areas for the storage of
its materials, supplies, inventory or equipment and all such materials,
supplies, inventory or equipment shall at all times be stored within the
Leased Premises. Tenant shall not commit nor permit to be committed any waste
in or about the Leased Premises, the Building, the Outside Areas or the
Property.

4.3 NOISE AND EMISSIONS. All noise generated by Tenant in its use of the
Leased Premises shall be confined or muffled so that it does not interfere
with the businesses of or annoy the occupants and/or users of adjacent
properties. All dust, fumes, odors and other emissions generated by Tenant's
use of the Leased Premises shall be sufficiently dissipated in accordance
with sound environmental practice and exhausted from the Leased Premises in
such a manner so as not to interfere with the businesses of or annoy the
occupants and/or users of adjacent properties, or cause any damage to the
Leased Premises, the Building, the Outside Areas or the Property or any
component part thereof or the property of adjacent property owners.

4.4 TRASH DISPOSAL. Tenant shall provide trash bins or other adequate garbage
disposal facilities within the trash enclosure areas provided or permitted by
Landlord outside the Leased Premises sufficient for the interim disposal of
all of its trash, garbage and waste. All such trash, garbage and waste
temporarily stored in such areas shall be stored in such a manner so that it
is not visible from outside of such areas, and Tenant shall cause such trash,
garbage and waste to be regularly removed from the Property. Tenant shall
keep the Leased Premises and the Outside Areas in a clean, safe and neat
condition free and clear of all of Tenant's trash, garbage, waste and/or
boxes, pallets and containers containing same at all times.

4.5 PARKING. Tenant shall have the non-exclusive use of approximately 157
parking spaces on the Property, as shown on the Site Plan attached as Exhibit
A. Tenant shall not, at any time, park or permit to be parked any
recreational vehicles, inoperative vehicles or equipment in the Outside Areas
or on any portion of the Property. Tenant agrees to assume responsibility for
compliance by its employees and invitees with the parking provisions within
contained herein. If Tenant or its employees park any vehicle within the
Property in violation of these provisions, then Landlord may, upon prior
written notice to Tenant giving Tenant one (1) day (or any applicable
statutory notice period, if longer than one (1) day) to remove such
vehicle(s), in addition to any other remedies Landlord may have under this
Lease, charge Tenant, as Additional Rent, and Tenant agrees to pay, as
Additional Rent, One Hundred Dollars ($100) per day for each day or partial
day that each such vehicle is so parked within the Property. Landlord
reserves the right to grant easements and access rights to others for use of
the parking areas on the Property, provided that such grants do not
materially interfere with Tenant's use of the parking areas.

4.6 SIGNS. Tenant shall not place or install on or within any portion of the
Leased Premises, the exterior of the Building, the Outside Areas or the
Property any sign, advertisement, banner, placard, or picture which is
visible from the exterior of the Leased Premises. Tenant shall not place or
install on or within any portion of the Leased Premises, the exterior of the
Building, the Outside Areas or the Property any business identification sign
which is visible from the exterior of the Leased Promises until Landlord
shall have approved in writing and in its sole discretion the location, size,
content, design, method of attachment and material to be used in the making
of such sign. Any signs installed by Tenant shall not adversely impact the
signage rights of other tenants of the Project. Landlord may remove any signs
(which have not been approved in writing by Landlord), advertisements,
banners, placards or pictures so placed by Tenant on or within the Leased
Premises, the exterior of the Building, the Outside Areas or the Property and
charge to Tenant the cost of such removal, together with any costs incurred
by Landlord to repair any damage caused thereby, including any cost incurred
to restore the surface (upon which such sign was so affixed) to its original
condition. Tenant shall remove all of Tenant's signs, repair any damage
caused thereby, and restore the surface upon which the sign was affixed to
its original condition, all to Landlord's reasonable satisfaction, upon the
termination of this Lease.

4.7 COMPLIANCE WITH LAWS AND PRIVATE RESTRICTIONS. Tenant shall abide by and
shall promptly observe and comply with, at its sole cost and expense, all
Laws and Private Restrictions respecting the use and occupancy of the Leased
Premises, the Building, the Outside Areas or the Property including, without
limitation, all Laws governing the use and/or disposal of hazardous
materials, and shall defend with competent counsel, indemnify and hold
Landlord harmless from any claims, damages or liability resulting from
Tenant's failure to so abide, observe, or comply. Tenant's obligations
hereunder shall survive the expiration or sooner termination of this Lease.

4.8 COMPLIANCE WITH INSURANCE REQUIREMENTS. With respect to any insurance
policies required or permitted to be carried by Landlord in accordance with
the provisions of this Lease, Tenant shall not conduct nor permit any other
person to conduct any activities nor keep, store or use (or allow any other
person to keep, store or use) any item or thing within the Leased Premises,
the Building, the Outside Areas or the Property which (i) is prohibited under
the terms of any such policies, (ii) could result in the termination of the
coverage afforded under any of such policies, (iii) could give to the
insurance carrier the right to cancel any of such policies, or (iv) could
cause an increase in the rates (over standard rates) charged for the coverage
afforded under any of such policies. Tenant shall comply with all
requirements of any insurance company, insurance underwriter, or Board of
Fire Underwriters which are necessary to maintain, at standard rates, the
insurance coverages carried by either Landlord or Tenant pursuant to this
Lease.

4.9 LANDLORD'S RIGHT TO ENTER. Landlord and its agents shall have the right
to enter the Leased Premises during normal business hours after giving Tenant
reasonable notice and subject to Tenant's reasonable security measures for
the purpose of (i) inspecting the same; (ii) showing the Leased Premises to
prospective purchasers, mortgagees or tenants; (iii) making necessary
alterations, additions or repairs; and (iv) performing any of Tenant's
obligations when Tenant has failed to do so. Landlord shall have the right to
enter the Leased Premises during normal business hours (or as otherwise
agreed), subject to Tenant's reasonable security measures, for purposes of
supplying any maintenance or services agreed to be supplied by Landlord.
Landlord shall have the right to enter the Outside Areas

                                       6.
<PAGE>

during normal business hours for purposes of (i) inspecting the exterior of
the Building and the Outside Areas; (ii) posting notices of nonresponsibility
(and for such purposes Tenant shall provide Landlord at least thirty days'
prior written notice of any work to be performed on the Leased Premises); and
(iii) supplying any services to be provided by Landlord. Any entry into the
Leased Premises or the Outside Areas obtained by Landlord in accordance with
this paragraph shall not under any circumstances be construed or deemed to be
a forcible or unlawful entry into, or a detainer of, the Leased Premises, or
an eviction, actual or constructive of Tenant from the Leased Premises or any
portion thereof.

4.10 USE OF OUTSIDE AREAS. Tenant, in its use of the Outside Areas, shall at
all times keep the Outside Areas in a safe condition free and clear of all
materials, equipment, debris, trash (except within existing enclosed trash
areas), inoperable vehicles, and other items which are not specifically
permitted by Landlord to be stored or located thereon by Tenant. If, in the
opinion of Landlord, unauthorized persons are using any of the Outside Areas
by reason of, or under claim of, the express or implied authority or consent
of Tenant, then Tenant, upon demand of Landlord, shall restrain, to the
fullest extent then allowed by Law, such unauthorized use, and shall initiate
such appropriate proceedings as may be required to so restrain such use.
Landlord reserves the right to grant easements and access rights to others
for use of the Outside Areas and shall not be liable to Tenant for any
diminution in Tenant's right to use the Outside Areas as a result.

4.11 ENVIRONMENTAL PROTECTION. Tenant's obligations under this Paragraph 4.11
shall survive the expiration or termination of this Lease.

         (a) As used herein, the term "Hazardous Materials" shall mean any
toxic or hazardous substance, material or waste or any pollutant or
infectious or radioactive material, including but not limited to those
substances, materials or wastes regulated now or in the future under any of
the following statutes or regulations and any and all of those substances
included within the definitions of "hazardous substances," "hazardous
materials," "hazardous waste," "hazardous chemical substance or mixture,"
"imminently hazardous chemical substance or mixture," "toxic substances,"
"hazardous air pollutant," "toxic pollutant," or "solid waste" in the (a)
Comprehensive Environmental Response, Compensation and Liability Act of 1990
("CERCLA" or "Superfund"), as amended by the Superfund Amendments and
Reauthorization Act of 1986 ("SARA"), 42 U.S.C. Section 9601 ET SEQ., (b)
Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Section
6901 ET SEQ., (c) Federal Water Pollution Control Act ("FSPCA"), 33 U.S.C.
Section 1251 ET SEQ., (d) Clean Air Act ("CAA"), 42 U.S.C. Section 7401 ET
SEQ., (e) Toxic Substances Control Act ("TSCA"), 14 U.S.C. Section 2601 ET
SEQ., (f) Hazardous Materials Transporation Act, 49 U.S.C. Section 1801, ET
SEQ., (g) Carpenter-Presley-Tanner Hazardous Substance Account Act
("California Superfund"), Cal. Health & Safety Code Section 25300 ET SEQ.,
(h) California Hazardous Waste Control Act, Cal. Health & Safety code Section
25100 ET SEQ., (i) Porter Cologne Water Quality Control Act ("Porter-Cologne
Act"), Cal. Water Code Section 13000 ET SEQ., (j) Hazardous Waste Disposal
Land Use Law, Cal. Health & Safety codes Section 25220 ET SEQ., (k) Safe
Drinking Water and Toxic Enforcement Act of 1986 ("Proposition 65"), Cal.
Health & Safety code Section 25249.5 ET SEQ., (l) Hazardous Substances
Underground Storage Tank Law, Cal. Health & Safety code Section 25280 ET
SEQ., (m) Air Resources Law, Cal. Health & Safety Code Section 39000 ET SEQ.,
and (n) regulations promulgated pursuant to said laws or any replacement
thereof, or as similar terms are defined in the federal, state and local
laws, statutes, regulations, orders or rules. Hazardous Materials shall also
mean any and all other biohazardous wastes and substances, materials and
wastes which are, or in the future become, regulated under applicable Laws
for the protection of health or the environment, or which are classified as
hazardous or toxic substances, materials or wastes, pollutants or
contaminants, as defined, listed or regulated by any federal, state or local
law, regulation or order or by common law decision, including, without
limitation, (i) trichloroethylene, tetrachloroethylene, perchloroethylene and
other chlorinated solvents, (ii) any petroleum products or fractions thereof,
(iii) asbestos, (iv) polychlorinted biphenyls, (v) flammable explosives, (vi)
urea formaldehyde, (vii) radioactive materials and waste, and (viii)
materials and wastes that are harmful to or may threaten human health,
ecology or the environment.

         (b) Notwithstanding anything to the contrary in this Lease, Tenant,
at its sole cost, shall comply with all Laws relating to the storage, use and
disposal of Hazardous Materials; PROVIDED, HOWEVER, that Tenant shall not be
responsible for contamination of the Leased Premises by Hazardous Materials
existing as of the date the Leased Premises were originally occupied by
Tenant (whether before or after the Lease Commencement Date) unless caused by
Tenant. Tenant shall not store, use or dispose of any Hazardous Materials
except for those Hazardous Materials listed in a Hazardous Materials
management plan ("HMMP")which Tenant shall deliver to Landlord upon execution
of this Lease and update at least annually with Landlord ("Permitted
Materials") which may be used, stored and disposed of provided (i) such
Permitted Materials are used, stored, transported, and disposed of in strict
compliance with applicable laws, (ii) such Permitted Materials shall be
limited to the materials listed on and may be used only in the quantities
specified in the HMMP, and (iii) Tenant shall provide Landlord with copies of
all material safety data sheets and other documentation required under
applicable Laws in connection with Tenant's use of Permitted Materials as and
when such documentation is provided to any regulatory authority having
jurisdiction, in no event shall Tenant cause or permit to be discharged into
the plumbing or sewage system of the Building or onto the land underlying or
adjacent to the Building any Hazardous Materials. Tenant shall be solely
responsible for and shall defend, indemnify, and hold Landlord and its agents
harmless from and against all claims, costs and liabilities, including
attorneys' fees and costs, arising out of or in connection with Tenant's
storage, use and/or disposal of Hazardous Materials. If the presence of
Hazardous Materials on the Leased Premises caused or Permitted by Tenant
results in contamination or deterioration of water or soil, then Tenant shall
promptly take any and all action necessary to clean up such contamination,
but the foregoing shall in no event be deemed to constitute permission by
Landlord to allow the presence of such Hazardous Materials. At any time prior
to the expiration of the Lease Term if Tenant has a reasonable basis to
suspect that there has been any release or the presence of Hazardous
Materials in the ground or ground water on the Leased Premises which did not
exist upon commencement of the Lease Term, Tenant shall have the right to
conduct appropriate tests of water and soil and to deliver to Landlord the
results of such tests to demonstrate that no contamination in excess of
permitted levels has occurred as a result of Tenant's use of the Leased
Premises. Tenant shall further be solely responsible for, and shall


                                       7.
<PAGE>

defend, indemnify, and hold Landlord and its agents harmless from and against
all claims, costs and liabilities, including attorneys' fees and costs, arising
out of or in connection with any removal, cleanup and restoration work and
materials required hereunder to return the Leased Premises and any other
property of whatever nature to their condition existing prior to the appearance
of the Hazardous Materials.

       (c) Upon termination or expiration of the lease, Tenant at its sole
expense shall cause all Hazardous Materials placed in or about the Leased
Premises, the Building and/or the Property by Tenant, its agents, contractors,
or invitees, and all installations (whether interior or exterior) made by or on
behalf of Tenant relating to the storage, use, disposal or transportation of
Hazardous Materials to be removed from the property and transported for use,
storage or disposal in accordance and compliance with all Laws and other
requirements respecting Hazardous Materials used or permitted to be used by
Tenant. Tenant shall apply for and shall obtain from all appropriate regulatory
authorities (including any applicable fire department or regional water quality
control board) all permits, approvals and clearances necessary for the closure
of the Property and shall take all other actions as may be required to complete
the closure of the Building and the Property. In addition, prior to vacating the
Leased Premises, Tenant shall undertake and submit to Landlord an environmental
site assessment from an environmental consulting company reasonably acceptable
to Landlord which site assessment shall evidence Tenant's compliance with this
Paragraph 4.11.

       (d) At any time prior to expiration of the Lease term, subject to
reasonable prior notice (not less than forty-eight (48) hours) and Tenant's
reasonable security requirements and provided such activities do not
unreasonably interfere with the conduct of Tenant's business at the Leased
Premises, Landlord shall have the right to enter in and upon the Property,
Building and Leased Premises in order to conduct appropriate tests of water
and soil to determine whether levels of any Hazardous Materials in excess of
legally permissible levels has occurred as a result of Tenant's use thereof.
Landlord shall furnish copies of all such test results and reports to Tenant
and, at Tenant's option and cost, shall permit split sampling for testing and
analysis by Tenant. Such testing shall be at Tenant's expense if Landlord has
a reasonable basis for suspecting and confirms the presence of Hazardous
Materials in the soil or surface or ground water in, on, under, or about the
Property, the Building or the Leased Premises, which has been caused by or
resulted from the activities of Tenant, its agents, contractors, or invitees.

       (e) Landlord may voluntarily cooperate in a reasonable manner with the
efforts of all governmental agencies in reducing actual or potential
environmental damage. Tenant shall not be entitled to terminate this Lease or to
any reduction in or abatement of rent by reason of such compliance or
cooperation. Tenant agrees at all times to cooperate fully with the requirements
and recommendations of governmental agencies regulating, or otherwise involved
in, the protection of the environment.

4.12 RULES AND REGULATIONS. In the event Digital Microwave Corporation is no
longer the sole tenant of the Leased Premises, Landlord shall have the right
from time to time to establish reasonable rules and regulations and/or
amendments or additions thereto respecting the use of the Leased Premises and
the Outside Areas for the care and orderly management of the Property. Upon
delivery to Tenant of a copy of such rules and regulations or any amendments
or additions thereto, Tenant shall comply with such rules and regulations. A
violation by Tenant of any of such rules and regulations shall constitute a
default by Tenant under this Lease. If there is a conflict between the rules
and regulations and any of the provisions of this Lease, the provisions of
this Lease shall prevail. Landlord shall not be responsible or liable to
Tenant for the violation of such rules and regulations by any other tenant of
the Property.

4.13 RESERVATIONS. Landlord reserves the right from time to time to grant,
without the consent or joinder of Tenant, such easements, rights of way and
dedications that Landlord deems necessary, and to cause the recordation of
parcel maps and restrictions, so long as such easements, rights of way and
dedications do not unreasonably interfere with the use of the Leased Premises
by Tenant. Tenant agrees to execute any documents reasonably requested by
Landlord to effectuate any such easement rights, dedications, maps or
restrictions.

                                   ARTICLE 5

                  REPAIRS, MAINTENANCE, SERVICES AND UTILITIES

5.1 REPAIR AND MAINTENANCE. Except in the case of damage to or destruction of
the Leased Premises, the Building, the Outside Areas or the Property caused by
an act of God or other peril, in which case the provisions of Article 10 shall
control, the parties shall have the following obligations and responsibilities
with respect to the repair and maintenance of the Leased Premises, the Building,
the Outside Areas, and the Property.

         (a) TENANT'S OBLIGATIONS. Tenant shall, at all times during the
Lease Term and at its sole cost and expense, regularly clean and continuously
keep and maintain in good order, condition and repair the Leased Premises and
every part thereof including, without limiting the generality of the
foregoing, (i) all interior walls, floors and ceilings, (ii) all windows,
doors and skylights, (iii) all electrical wiring, conduits, connectors and
fixtures, (iv) all plumbing, pipes, sinks, toilets, faucets and drains, (v)
all lighting fixtures, bulbs and lamps and all heating ventilating and air
conditioning equipment, and (vi) all entranceways to the Leased Premises.
Tenant, if requested to do so by Landlord, shall hire, at Tenant's sole cost
and expense, a licensed heating, ventilating and air conditioning contractor
to regularly and periodically (not less frequently than every three months)
inspect and perform required maintenance on the heating, ventilating and air
conditioning equipment and systems serving the Leased Premises, or
alternatively, Landlord may, at its election, contract in its own name for
such regular periodic inspections of and maintenance on such heating,
ventilating and air conditioning equipment and systems and charge to Tenant,
as Additional Rent, the cost thereof. Tenant shall, at all times during the
Lease Term, keep in a clean and safe condition the Outside Areas. Tenant
shall regularly and periodically sweep and clean the driveways and parking
areas. Tenant shall, at its sole cost and expense, repair all damage to the
Leased Premises, the Building,

                                       8.
<PAGE>

the Outside Areas or the Property caused by the activities of Tenant, its
employees, invitees or contractors promptly following written notice from
Landlord to so repair such damages. If Tenant shall fail to perform the
required maintenance or fail to make repairs required of it pursuant to this
paragraph within a reasonable period of time following notice from Landlord
to do so, then Landlord may, at its election and without waiving any other
remedy it may otherwise have under this Lease or at law, perform such
maintenance or make such repairs and charge to Tenant, as Additional Rent,
the costs so incurred by Landlord for same. All glass within or a part of the
Leased Premises, both interior and exterior, is at the sole risk of Tenant
and any broken glass shall promptly be replaced by Tenant at Tenant's expense
with glass of the same kind, size and quality.

         (b) LANDLORD'S OBLIGATION. Landlord shall, at Landlord's sole cost
and expense, maintain in good condition and repair the foundation, roof
structure, load-bearing and exterior walls of the Building (other than
exterior painting) (except to the extent any of the foregoing are caused by
the actions or inactions of Tenant, or result from the failure of Tenant to
comply with the terms of the Lease, in which case such maintenance and
repairs shall be made at Tenant's sole cost and expense). Subject
reimbursement pursuant to Article 3 hereof, Landlord shall maintain the
Outside Areas and the following base building systems and elements: roof
membrane, standard HVAC, non-distributed plumbing, non-distributed electrical
and sprinkler/ fire suppression systems unless such systems or elements were
installed by Tenant or are specific to Tenant's activities or the Improvement
Works. Except as set forth in the first sentence of this Paragraph 5.1(b),
Landlord shall charge to Tenant, as Additional Rent pursuant to Article 3,
all costs incurred by Landlord for all repairs, replacements and maintenance
(including exterior painting) for the Building, the Property and the Outside
Areas.

5.2 UTILITIES. Tenant shall arrange at its sole cost and expense and in its
own name, for the supply of gas and electricity to the Leased Premises. In
the event that such services are not separately metered, Tenant shall, at its
sole expense, cause such meters to be installed. Landlord shall maintain the
water meter(s) in its own name; provided, however, that if at any time during
the Lease Term Landlord shall require Tenant to put the water service in
Tenant's name, Tenant shall do so at Tenant's sole cost. Tenant shall be
responsible for determining if the local supplier of water, gas and
electricity can supply the needs of Tenant and whether or not the existing
water, gas and electrical distribution systems within the Building and the
Leased Premises are adequate for Tenant's needs. Tenant shall be responsible
for determining if the existing sanitary and storm sewer systems now
servicing the Leased Premises and the Property are adequate for Tenant's
needs. Tenant shall pay all charges for water, gas, electricity and storm and
sanitary sewer services as so supplied to the Leased Premises, irrespective
of whether or not the services are maintained in Landlord's or Tenant's name.

5.3 SECURITY. Tenant acknowledges that Landlord has not undertaken any duty
whatsoever to provide security for the Leased Premises, the Building, the
Outside Areas or the Property and, accordingly, Landlord is not responsible
for the security of same or the protection of Tenant's property or Tenant's
employees, invitees or contractors. To the extent Tenant determines that such
security or protection services are advisable or necessary, Tenant shall
arrange for and pay the costs of providing same.

5.4 ENERGY AND RESOURCE CONSUMPTION. Landlord may voluntarily cooperate in a
reasonable manner with the efforts of governmental agencies and/or utility
suppliers in reducing energy or other resource consumption within the Property.
Tenant shall not be entitled to terminate this Lease or to any reduction in or
abatement of rent by reason of such compliance or cooperation. Tenant agrees at
all times to cooperate fully with Landlord and to abide by all reasonable rules
established by Landlord (i) in order to maximize the efficient operation of the
electrical, heating, ventilating and air conditioning systems and all other
energy or other resource consumption systems with the Property and/or (ii) in
order to comply with the requirements and recommendations of utility suppliers
and governmental agencies regulating the consumption of energy and/or other
resources.

5.5 LIMITATION OF LANDLORD'S LIABILITY. Landlord shall not be liable to Tenant
for injury to Tenant, its employees, agents, invitees or contractors, damage to
Tenant's property or loss of Tenant's business or profits, nor shall Tenant be
entitled to terminate this Lease or to any reduction in or abatement of rent by
reason of (i) Landlord's failure to provide security services or systems within
the Property for the protection of the Leased Premises, the Building or the
Outside Areas, or the protection of Tenant's property or Tenant's employees,
invitees, agents or contractors, or (ii) Landlord's failure to perform any
maintenance or repairs to the Leased Premises, the Building, the Outside Areas
or the Property until Tenant shall have first notified Landlord, in writing, of
the need for such maintenance or repairs, and then only after Landlord shall
have had a reasonable period of time following its receipt of such notice within
which to perform such maintenance or repairs, or (iii) any failure,
interruption, rationing or other curtailment in the supply of water, electric
current, gas or other utility service to the Leased Premises, the Building, the
Outside Areas or the Property from whatever cause (other than Landlord's sole
active negligence or willful misconduct), or (iv) the unauthorized intrusion or
entry into the Leased Premises by third parties (other than Landlord).

                                    ARTICLE 6

                          ALTERATIONS AND IMPROVEMENTS

6.1 BY TENANT. Tenant shall not make any alterations to or modifications of the
Leased Premises or construct any improvements within the Leased Premises until
Landlord shall have first approved, in writing, the plans and specifications
therefor, which approval may be withheld in Landlord's sole discretion.
Landlord's approval shall be deemed given if not denied by Landlord in a written
notice to Tenant delivered within fifteen (15) days following receipt of
Tenant's written request. Tenant's written request shall also contain a request
for Landlord to elect whether or not it will require Tenant to remove the
subject alterations, modifications or improvements at the expiration or earlier
termination of this Lease. If such additional request is not included, Landlord
may make such election at the expiration or earlier termination of this Lease
(and for purposes of Tenant's removal obligations set forth in Paragraph 2.6
above, Landlord shall be deemed to have made the election at the time the
alterations,


                                       9.
<PAGE>

modifications or improvements were completed). Landlord shall have the right to
require Tenant to remove all nonstandard Tenant Improvements and other
alterations, modifications and improvements to the Leased Premises, including
without limitation, raised floors, additional interior offices, cabling (all
such non-standard modifications, alterations and improvements are referred to
herein as "Specialized Improvements"). All such modifications, alterations or
improvements, once so approved, shall be made, constructed or installed by
Tenant at Tenant's expense (including all permit fees and governmental charges
related thereto), using a licensed contractor first approved by Landlord, in
substantial compliance with the Landlord-approved plans and specifications
therefor. All work undertaken by Tenant shall be done in accordance with all
Laws and in a good and workmanlike manner using new materials of good quality.
Tenant shall not commence the making of any such modifications or alterations or
the construction of any such improvements until (i) all required governmental
approvals and permits shall have been obtained, (ii) all requirements regarding
insurance imposed by this Lease have been satisfied, (iii) Tenant shall have
given Landlord at least five (5) business days prior written notice of its
intention to commence such work so that Landlord may post and file notices of
non-responsibility, and (iv) if requested by Landlord, Tenant shall have
obtained contingent liability and broad form builder's risk insurance in an
amount satisfactory to Landlord in its reasonable discretion to cover any perils
relating to the proposed work not covered by insurance carried by Tenant
pursuant to Article 9. In no event shall Tenant make any modification,
alterations or improvements whatsoever to the Outside Areas or the exterior or
structural components of the Building including, without limitation, any cuts or
penetrations in the floor, roof or exterior walls of the Leased Premises. As
used in this Article, the term "modifications, alterations and/or improvements"
shall include, without limitation, the installation of additional electrical
outlets, overhead lighting fixtures, drains, sinks, partitions, doorways, or the
like. Notwithstanding the foregoing, Tenant, without Landlord's prior written
consent, shall be permitted to make non-structural alterations to the Building,
provided that: (a) such alterations do not exceed $25,000 individually, (b)
Tenant shall timely provide Landlord the notice required pursuant to Paragraph
4.9 above, (c) Tenant shall notify Landlord in writing within thirty (30) days
of completion of the alteration and deliver to Landlord a set of the plans and
specifications therefor, either "as built" or marked to show construction
changes made, (d) Tenant shall, upon Landlord's request, remove the alteration
at the termination of the Lease and restore the Leased Premises to their
condition prior to such alteration, and (e) Tenant shall otherwise comply with
the terms of this Article 6 regarding alterations and improvements.

6.2 OWNERSHIP OF IMPROVEMENTS. All modifications, alterations and improvements
made or added to the Leased Premises by Tenant (other than Tenant's inventory,
equipment, movable furniture, wall decorations and trade fixtures) shall be
deemed real property and a part of the Leased Premises, but shall remain the
property of Tenant during the Lease, and Tenant hereby covenants and agrees not
to grant a security interest in any such items to any party other than
Landlord. Any such modifications, alterations or improvements, once completed,
shall not be altered or removed from the Leased Premises during the Lease Term
without Landlord's written approval first obtained in accordance with the
provisions of Paragraph 6.1 above. At the expiration or sooner termination of
this Lease, all such modifications, alterations and improvements other than
Tenant's inventory, equipment, movable furniture, wall decorations and trade
fixtures, shall automatically become the property of Landlord and shall be
surrendered to Landlord as part of the Leased Premises as required pursuant to
Article 2, unless Landlord shall require Tenant to remove any of such
modifications, alterations or improvements in accordance with the provisions of
Article 2, in which case Tenant shall so remove same. Landlord shall have no
obligations to reimburse Tenant for all or any portion of the cost or value of
any such modifications, alterations or improvements so surrendered to Landlord.
All modifications, alterations or improvements which are installed or
constructed on or attached to the Leased Premises by Landlord and/or at
Landlord's expense shall be deemed real property and a part of the Leased
Premises and shall be property of Landlord. All lighting, plumbing,
electrical, heating, ventilating and air conditioning fixtures, partitioning,
window coverings, wall coverings and floor coverings installed by Tenant shall
be deemed improvements to the Leased Premises and not trade fixtures of Tenant.

6.3 ALTERATIONS REQUIRED BY LAW. Tenant shall make all modifications,
alterations and improvements to the Leased Premises, at its sole cost, that are
required by any Law because of (i) Tenant's use or occupancy of the Leased
Premises, the Building, the Outside Areas or the Property, (ii) Tenant's
application for any permit or governmental approval, or (iii) Tenant's making of
any modifications, alterations or improvements to or within the Leased Premises.
If Landlord shall, at any time during the Lease Term, be required by any
governmental authority to make any modifications, alterations or improvements to
the Building or the Property, the cost incurred by Landlord in making such
modifications, alterations or improvements, including interest at a rate equal
to the greater of (a) 12%, or (b) the sum of that rate quoted by Wells Fargo
Bank, N.T. & S.A. from time to time as its prime rate, plus two percent (2%)
("Wells Prime Plus Two") (but in no event more than the maximum rate of interest
not prohibited or made usurious), shall be amortized by Landlord over the
useful life of such modifications, alterations or improvements, as determined in
accordance with generally accepted accounting principles, and the monthly
amortized cost of such modifications, alterations and improvements as so
amortized shall be considered a Property Maintenance Cost.

6.4 LIENS. Tenant shall keep the Property and every part thereof free from any
lien, and shall pay when due all bills arising out of any work performed,
materials furnished, or obligations incurred by Tenant, its agents, employees or
contractors relating to the Property. If any such claim of lien is recorded
against Tenant's interest in this Lease, the Property or any part thereof,
Tenant shall bond against, discharge or otherwise cause such lien to be entirely
released within ten days after the same has been recorded. Tenant's failure to
do so shall be conclusively deemed a material default under the terms of this
Lease.


                                      10.
<PAGE>

                                   ARTICLE 7

                      ASSIGNMENT AND SUBLETTING BY TENANT

7.1 BY TENANT. Tenant shall not sublet the Leased Premises or any portion
thereof or assign its interest in this Lease, whether voluntarily or by
operation of Law, without Landlord's prior written consent which shall not be
unreasonably withheld. Any attempted subletting or assignment without Landlord's
prior written consent, at Landlord's election, shall constitute a default by
Tenant under the terms of this Lease. The acceptance of rent by Landlord from
any person or entity other than Tenant, or the acceptance of rent by Landlord
from Tenant with knowledge of a violation of the provisions of this paragraph,
shall not be deemed to be a waiver by Landlord of any provision of this Article
or this Lease or to be a consent to any subletting by Tenant or any assignment
of Tenant's interest in this Lease. Without limiting the circumstances in which
it may be reasonable for Landlord to withhold its consent to an assignment or
subletting, Landlord and Tenant acknowledge that it shall be reasonable for
Landlord to withhold its consent in the following instances:

         (a) the proposed assignee or sublessee is a governmental agency;

         (b) in Landlord's reasonable judgment, the use of the Leased Premises
by the proposed assignee or sublessee would involve occupancy by other than for
a Permitted Use, would entail any alterations which would lessen the value of
the leasehold improvements in the Leased Premises, or would require increased
services by Landlord;

         (c) in Landlord's reasonable judgment, the financial worth of the
proposed assignee does not meet the credit standards applied by Landlord;

         (d) the proposed assignee or sublessee (or any of its affiliates) has
been in material default under a lease, has been in litigation with a
previous landlord, or in the ten years prior to the assignment or sublease
has filed for bankruptcy protection, has been the subject of an involuntary
bankruptcy, or has been adjudged insolvent;

         (e) Landlord has experienced a previous default by or is in litigation
with the proposed assignee or sublessee;

         (f) in Landlord's reasonable judgment, the Leased Premises, or the
relevant part thereof, will be used in a manner that will violate any negative
covenant as to use contained in this Lease;

         (g) the use of the Leased Premises by the proposed assignee or
sublessee will violate any applicable law, ordinance or regulation;

         (h) the proposed assignee or sublessee is, as of the date of this
Lease, a tenant in the Building;

         (i) the proposed assignment or sublease fails to include all of the
terms and provisions required to be included therein pursuant to this Article 7;

         (j) Tenant is in default of any obligation of Tenant under this Lease,
or Tenant has defaulted under this Lease on three or more occasions during the
12 months preceding the date that Tenant shall request consent; or

         (k) in the case of a subletting of less than the entire Leased
Premises, if the subletting would result in the division of the Leased Premises
into more than three subparcels or would require improvements to be made outside
of the Leased Premises.

7.2 MERGER, REORGANIZATION, OR SALE OF ASSETS. Any dissolution, merger,
consolidation or other reorganization of Tenant, or the sale or other transfer
in the aggregate over the Lease Term of a controlling percentage of the capital
stock of Tenant, or the sale or transfer of all or a substantial portion of the
assets of Tenant, shall be deemed a voluntary assignment of Tenant's interest in
this Lease. The phrase "controlling percentage" means the ownership of and the
right to vote stock possessing more than fifty percent of the total combined
voting power of all classes of Tenant's capital stock issued, outstanding and
entitled to vote for the election of directors. If Tenant is a partnership, a
withdrawal or change, voluntary, involuntary or by operation of Law, of any
general partner, or the dissolution of the partnership, shall be deemed a
voluntary assignment of Tenant's interest in this Lease. Upon Landlord's request
from time to time, Tenant shall promptly provide Landlord with a statement
certified by the Tenant's chief operating officer, which shall provide the
following information: (a) the names of all of Tenant's shareholders and their
ownership interests at the time thereof, provided Tenant's shares are not
publicly traded; (b) the state in which Tenant is incorporated; (c) the location
of Tenant's principal place of business; (d) information regarding a material
change in the corporate structure of Tenant, including, without limitation, a
merger or consolidation; and (e) any other information regarding Tenant's
ownership that Landlord reasonably requests. Notwithstanding the foregoing,
Tenant may, without Landlord's prior written consent, sublet the Leased
Premises or assign this Lease to a subsidiary, affiliate, division, corporation
or joint venture controlling, controlled by or under common control with Tenant,
provided that Tenant shall remain primarily liable under the Lease

7.3 LANDLORD'S ELECTION. If Tenant shall desire to assign its interest under the
Lease or to sublet the Leased Premises, Tenant must first notify Landlord, in
writing, of its intent to so assign or sublet, at least thirty (30) days in
advance of the date it intends to so assign its interest in this Lease or sublet
the Leased Premises but not sooner than one hundred eighty days in advance of
such date, specifying in detail the terms of such proposed assignment or
subletting, including the name of the proposed assignee or sublessee, the
property assignee's or sublessee's intended


                                      11.
<PAGE>

use of the Leased Premises, current financial statements (including a balance
sheet, income statement and statement of cash flow, all prepared in accordance
with generally accepted accounting principles) of such proposed assignee or
sublessee, the form of documents to be used in effectuating such assignment or
subletting and such other information as Landlord may reasonably request.
Landlord shall have a period of ten (10) business days following receipt of such
notice and the required information within which to do one of the following: (i)
consent to such requested assignment or subletting subject to Tenant's
compliance with the conditions set forth in Paragraph 7.4 below, or (ii) refuse
to so consent to such requested assignment or subletting, provided that such
consent shall not be unreasonably refused, or (iii) terminate this Lease as to
the portion of the Leased Premises that is the subject of the proposed
assignment or subletting. During such ten (10) business day period, Tenant
covenants and agrees to supply to Landlord, upon request, all necessary or
relevant information which Landlord may reasonably request respecting such
proposed assignment or subletting and/or the proposed assignee or sublessee.

7.4 CONDITIONS TO LANDLORD'S CONSENT. If Landlord elects to consent, or shall
have been ordered to so consent by a court of competent jurisdiction, to such
requested assignment or subletting, such consent shall be expressly conditioned
upon the occurrence of each of the conditions below set forth, and any purported
assignment or subletting made or ordered prior to the full and complete
satisfaction of each of the following conditions shall be void and, at the
election of Landlord, which election may be exercised at any time following such
a purported assignment or subletting but prior to the satisfaction of each of
the stated conditions, shall constitute a material default by Tenant under this
Lease until cured by satisfying in full each such condition by the assignee or
sublessee. The conditions are as follows:

         (a) Landlord having approved in form and substance the assignment or
sublease agreement and any ancillary documents, which approval shall not be
unreasonably withheld by Landlord if the requirements of this Article 7 are
otherwise complied with.

         (b) Each such sublessee or assignee having agreed, in writing
satisfactory to Landlord and its counsel and for the benefit of Landlord, to
assume, to be bound by, and to perform the obligations of this Lease to be
performed by Tenant which relate to space being subleased.

         (c) Tenant having fully and completely performed all of its obligations
under the terms of this Lease through and including the date of such assignment
or subletting.

         (d) Tenant having reimbursed to Landlord all reasonable costs and
reasonable attorneys' fees incurred by Landlord in conjunction with the
processing and documentation of any such requested subletting or assignment.

         (e) Tenant having delivered to Landlord a complete and fully-executed
duplicate original of such sublease agreement or assignment agreement (as
applicable) and all related agreements.

         (f) Tenant having paid, or having agreed in writing to pay as to future
payments, to Landlord fifty percent (50%) of all assignment consideration or
excess rentals to be paid to Tenant or to any other on Tenant's behalf or for
Tenant's benefit for such assignment or subletting as follows:

                  (i) If Tenant assigns its interest under this Lease and if all
or a portion of the consideration for such assignment is to be paid by the
assignee at the time of the assignment, that Tenant shall have paid to Landlord
and Landlord shall have received an amount equal to fifty percent (50%) of the
assignment consideration so paid or to be paid (whichever is the greater) at the
time of the assignment by the assignee; or

                  (ii) If Tenant assigns its interest under this Lease and if
Tenant is to receive all or a portion of the consideration for such assignment
in future installments, that Tenant and Tenant's assignee shall have entered
into a written agreement with and for the benefit of Landlord satisfactory to
Landlord and its counsel whereby Tenant and Tenant's assignee jointly agree to
pay to Landlord an amount equal to fifty percent (50%) of all such future
assignment consideration installments to be paid by such assignee as and when
such assignment consideration is so paid.

                  (iii) If Tenant subleases the Leased Premises, that Tenant and
Tenant's sublessee shall have entered into a written agreement with and for the
benefit of Landlord satisfactory to Landlord and its counsel whereby Tenant and
Tenant's sublessee jointly agree to pay to Landlord fifty percent (50%) of all
excess rentals to be paid by such sublessee as and when such excess rentals are
so paid.

7.5 ASSIGNMENT CONSIDERATION AND EXCESS RENTALS DEFINED. For purposes of this
Article, including any amendment to this Article by way of addendum or other
writing, the term "assignment consideration" shall mean all consideration to be
paid by the assignee to Tenant or to any other party on Tenant's behalf or for
Tenant's benefit as consideration for such assignment, after deduction for
reasonable leasing commissions actually paid by Tenant but without deduction for
any other costs or expenses (including, without limitation, tenant improvements,
capital improvements, building upgrades, permit fees, attorneys' fees, and
other consultants' fees) incurred by Tenant in connection with such assignment,
and the term "excess rentals" shall mean all consideration to be paid by the
sublessee to Tenant or to any other party on Tenant's behalf or for Tenant's
benefit for the sublease of all or any portion of the Leased Premises in excess
of the rent due to Landlord under the terms of this Lease for the portion so
subleased for the same period, after deduction for reasonable leasing
commissions actually paid by Tenant but without deduction for any other costs or
expenses (including, without limitation, tenant improvements, capital
improvements, building upgrades, permit fees, attorneys' fees, and other
consultants' fees) incurred by Tenant in connection with such sublease. Tenant
agrees that the portion of any assignment consideration and/or excess rentals


                                      12.
<PAGE>

arising from any assignment or subletting by Tenant which is to be paid to
Landlord pursuant to this Article now is and shall then be the property of
Landlord and not the property of Tenant.

7.6 PAYMENTS. All payments required by this Article to be made to Landlord shall
be made in cash in full as and when they become due. At the time Tenant,
Tenant's assignee or sublessee makes each such payment to Landlord, Tenant or
Tenant's assignee or sublessee, as the case may be, shall deliver to Landlord an
itemized statement in reasonable detail showing the method by which the amount
due Landlord was calculated and certified by the party making such payment as
true and correct.

7.7 GOOD FAITH. The rights granted to Tenant by this Article are granted in
consideration of Tenant's express covenant that all pertinent allocations which
are made by Tenant between the rental value of the Leased Premises and the value
of any of Tenant's personal property which may be conveyed or leased generally
concurrently with and which may reasonably be considered a part of the same
transaction as the permitted assignment or subletting shall be made fairly,
honestly and in good faith. If Tenant shall breach this covenant, Landlord may
immediately declare Tenant to be in default under the terms of this Lease and
terminate this Lease and/or exercise any other rights and remedies Landlord
would have under the terms of this Lease in the case of a material default by
Tenant under this Lease.

7.8 EFFECT OF LANDLORD'S CONSENT. No subletting or assignment, even with the
consent of Landlord, shall relieve Tenant of its personal and primary obligation
to pay rent and to perform all of the other obligations to be performed by
Tenant hereunder. Consent by Landlord to one or more assignments of Tenant's
interest in this Lease or to one or more sublettings of the Leased Premises
shall not be deemed to be a consent to any subsequent assignment or subletting.
If Landlord shall have been ordered by a court of competent jurisdiction to
consent to a requested assignment or subletting, or such an assignment or
subletting shall have been ordered by a court of competent jurisdiction over the
objection of Landlord, such assignment or subletting shall not be binding
between the assignee (or sublessee) and Landlord until such time as all
conditions set forth in Paragraph 7.4 above have been fully satisfied (to the
extent not then satisfied) by the assignee or sublessee, including, without
limitation, the payment to Landlord of all agreed assignment considerations
and/or excess rentals then due Landlord.

                                    ARTICLE 8

                 LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY

8.1 LIMITATION ON LANDLORD'S LIABILITY AND RELEASE. Landlord shall not be liable
to Tenant for, and Tenant hereby releases Landlord and its partners, principals,
members, officers, agents, employees, lenders, attorneys, and consultants from,
any and all liability, whether in contract, tort or on any other basis, for any
injury to or any damage sustained by Tenant, Tenant's agents, employees,
contractors or invitees, any damage to Tenant's property, or any loss to
Tenant's business, loss of Tenant's profits or other financial loss of Tenant
resulting from or attributable to the condition of, the management of, the
repair or maintenance of, the protection of, the supply of services or utilities
to, the damage in or destruction of the Leased Premises, the Building, the
Property or the Outside Areas, including without limitation (i) the failure,
interruption, rationing or other curtailment or cessation in the supply of
electricity, water, gas or other utility service to the Property, the Building
or the Leased Premises; (ii) the vandalism or forcible entry into the Building
or the Leased Premises; (iii) the penetration of water into or onto any portion
of the Leased Premises; (iv) the failure to provide security and/or adequate
lighting in or about the Property, the Building or the Leased Premises, (v) the
existence of any design or construction defects within the Property, the
Building or the Leased Premises; (vi) the failure of any mechanical systems to
function properly (such as the HVAC systems); (vii) the blockage of access to
any portion of the Property, the Building or the Leased Premises, except that
Tenant does not so release Landlord from such liability to the extent such
damage was proximately caused by Landlord's active negligence, willful
misconduct, or Landlord's failure to perform an obligation expressly undertaken
pursuant to this Lease after a reasonable period of time shall have lapsed
following receipt of written notice from Tenant to so perform such obligation.
In this regard, Tenant acknowledges that it is fully apprised of the provisions
of Law relating to releases, and particularly to those provisions contained in
Section 1542 of the California Civil Code which reads as follows:

         "A general release does not extend to claims which the creditor does
         not know or suspect to exist in his favor at the time of executing the
         release, which if known by him must have materially affected his
         settlement with the debtor."

Notwithstanding such statutory provision, and for the purpose of implementing a
full and complete release and discharge, Tenant hereby (i) waives the benefit of
such statutory provision and (ii) acknowledges that, subject to the exceptions
specifically set forth herein, the release and discharge set forth in this
paragraph is a full and complete settlement and release and discharge of all
claims and is intended to include in its effect, without limitation, all claims
which Tenant, as of the date hereof, does not know of or suspect to exist in its
favor.

8.2 TENANT'S INDEMNIFICATION OF LANDLORD. Tenant shall defend with competent
counsel satisfactory to Landlord any claims made or legal actions filed or
threatened against Landlord with respect to the violation of any Law, or the
death, bodily injury, personal injury, property damage, or interference with
contractual or property rights suffered by any third party occurring within the
Leased Premises or resulting from Tenant's use or occupancy of the Leased
Premises, the Building or the Outside Areas, or resulting from Tenant's
activities in or about the Leased Premises, the Building, the Outside Areas or
the Property, and Tenant shall indemnify and hold Landlord, Landlord's partners,
principals, members, employees, agents and contractors harmless from any loss
liability, penalties, or expense whatsoever (including any loss attributable to
vacant space which otherwise would have been leased, but for such activities)
resulting therefrom, except to the extent proximately caused by the active
negligence or willful misconduct of Landlord. This indemnity agreement shall
survive the expiration or sooner termination of this Lease.


                                       13.
<PAGE>

                                   ARTICLE 9

                                   INSURANCE

9.1 TENANT'S INSURANCE. Tenant shall maintain insurance complying with all of
the following:

         (a) Tenant shall procure, pay for and keep in full force and effect, at
all times during the Lease Term, the following:

                  (i) Commercial general liability insurance insuring Tenant
against liability for personal injury, bodily injury, death and damage to
property occurring within the Leased Premises, or resulting from Tenant's use or
occupancy of the Leased Premises, the Building, the Outside Areas or the
Property, or resulting from Tenant's activities in or about the Leased Premises
or the Property, with coverage in an amount equal to Tenant's Required Liability
Coverage (as set forth in Article 1), which insurance shall contain "blanket
contractual liability" and "broad form property damage" endorsements insuring
Tenant's performance of Tenant's obligations to indemnify Landlord as contained
in this Lease.

                  (ii) Fire and property damage insurance in "special form"
coverage insuring Tenant against loss from physical damage to Tenant's personal
property, inventory, trade fixtures and improvements within the Leased Premises
with coverage for the full actual replacement cost thereof;

                  (iii) Business income/extra expense insurance sufficient to
pay Base Monthly Rent and Additional Rent for a period of not less than twelve
(12) months;

                  (iv) Plate glass insurance, at actual replacement cost;

                  (v) Boiler and machinery insurance, to limits sufficient to
restore the Building;

                  (vi) Product liability insurance (including, without
limitation, if food and/or beverages are distributed, sold and/or consumed
within the Leased Premises, to the extent obtainable, coverage for liability
arising out of the distribution, sale, use or consumption of food and/or
beverages (including alcoholic beverages, if applicable) at the Leased Premises
for not less than Tenant's Required Liability Coverage (as set forth in Article
1);

                  (vii) Workers' compensation insurance (statutory coverage)
with employer's liability in amounts not less than $1,000,000 insurance
sufficient to comply with all laws; and

                  (viii) With respect to making of any alterations or
modifications or the construction of improvements or the like undertaken by
Tenant, course of construction, commercial general liability, automobile
liability and workers' compensation (to be carried by Tenant's contractor), in
an amount and with coverage reasonably satisfactory to Landlord.

         (b) Each policy of liability insurance required to be carried by Tenant
pursuant to this paragraph or actually carried by Tenant with respect to the
Leased Premises or the Property: (i) shall, except with respect to insurance
required by subparagraph (a)(vii) above, name Landlord, and such others as are
designated by Landlord, as additional insureds; (ii) shall be primary insurance
providing that the insurer shall be liable for the full amount of the loss, up
to and including the total amount of liability set forth in the declaration of
coverage, without the right of contribution from or prior payment by any other
insurance coverage of Landlord (iii) shall be in a form satisfactory to
Landlord; (iv) shall be carried with companies reasonably acceptable to Landlord
with Best's ratings of at least A and XI; (v) shall provide that such policy
shall not be subject to cancellation, lapse or change except after at least
thirty (30) days prior written notice to Landlord, and (vi) shall contain a
so-called "severability" or "cross liability" endorsement. Each policy of
property insurance maintained by Tenant with respect to the Leased Premises or
the Property or any property therein (i) shall provide that such policy shall
not be subject to cancellation, lapse or change except after at least thirty
(30) days prior written notice to Landlord and (ii) shall contain a waiver
and/or a permission to waive by the insurer of any right of subrogation against
Landlord, its partners, principals, members, officers, employees, agents and
contractors, which might arise by reason of any payment under such policy or by
reason of any act or omission of Landlord, its partners, principals, members,
officers, employees, agents and contractors.

         (c) Prior to the time Tenant or any of its contractors enters the
Leased Premises, Tenant shall deliver to Landlord, with respect to each
policy of insurance required to be carried by Tenant pursuant to this
Article, a copy of such policy (appropriately authenticated by the insurer as
having been issued, premium paid) or a certificate of the insurer certifying
in form satisfactory to Landlord that a policy has been issued, premium paid,
providing the coverage required by this Paragraph and containing the
provisions specified herein. With respect to each renewal or replacement of
any such insurance, the requirements of this Paragraph must be complied with
not less than thirty days prior to the expiration or cancellation of the
policies being renewed or replaced. Landlord may, at any time and from time
to time, inspect and/or copy any and all insurance certificates required to
be carried by Tenant pursuant to this Article. If Landlord's Lender,
insurance broker, advisor or counsel reasonably determines at any time that
the amount of coverage set forth in Paragraph 9.1(a) for any policy of
insurance Tenant is required to carry pursuant to this Article is not
adequate, then Tenant shall increase the amount of coverage for such
insurance to such greater amount as Landlord's Lender, insurance broker,
advisor or counsel reasonably deems adequate.

9.2 LANDLORD'S INSURANCE. With respect to insurance maintained by Landlord:


                                      14.
<PAGE>

         (a) Landlord shall maintain, as the minimum coverage required of it by
this Lease, fire and property damage insurance in so-called special form
coverage insuring Landlord (and such others as Landlord may designate) against
loss from physical damage to the Building with coverage of not less than one
hundred percent (100%) of the full actual replacement cost thereof and against
loss of rents for a period of not less than six months. Such fire and property
damage insurance, at Landlord's election but without any requirements on
Landlord's behalf to do so, (i) may be written in so-called "all risk" form,
excluding only those perils commonly excluded from such coverage by Landlord's
then property damage insurer; (ii) may provide coverage for physical damage to
the improvements so insured for up to the entire full actual replacement cost
thereof; (iii) may be endorsed to cover loss or damage caused by any additional
perils against which Landlord may elect to insure, including earthquake and/or
flood; and/or (iv) may provide coverage for loss of rents for a period of up to
twelve months. Landlord shall not be required to cause such insurance to cover
any of Tenant's personal property, inventory, and trade fixtures, or any
modifications, alterations or improvements made or constructed by Tenant to or
within the Leased Premises. Landlord shall use commercially reasonable efforts
to obtain such insurance at competitive rates.

         (b) Landlord shall maintain commercial general liability insurance
insuring Landlord (and such others as are designated by Landlord) against
liability for personal injury, bodily injury, death, and damage to property
occurring in, on or about, or resulting from the use or occupancy of the
Property, or any portion thereof, with combined single limit coverage of at
least Ten Million Dollars ($10,000,000). Landlord may carry such greater
coverage as Landlord or Landlord's Lender, insurance broker, advisor or counsel
may from time to time determine is reasonably necessary for the adequate
protection of Landlord and the Property.

         (c) Landlord may maintain any other insurance which in the opinion of
its insurance broker, advisor or legal counsel is prudent in carry under the
given circumstances, provided such insurance is commonly carried by owners of
property similarly situated and operating under similar circumstances.

9.3 MUTUAL WAIVER OF SUBROGATION. Landlord hereby releases Tenant, and Tenant
hereby releases Landlord and its respective partners, principals, members,
officers, agents, employees and servants, from any and all liability for
loss, damage or injury to the property of the other in or about the Leased
Premises or the Property which is caused by or results from a peril or event
or happening which is covered by insurance actually carried and in force at
the time of the loss by the party sustaining such loss; PROVIDED, HOWEVER,
that such waiver shall be effective only to the extent permitted by the
insurance covering such loss and to the extent such insurance is not
prejudiced thereby.

                                   ARTICLE 10

                            DAMAGE TO LEASED PREMISES

10.1 LANDLORD'S DUTY TO RESTORE. If the Leased Premises, the Building or the
Outside Area are damaged by any peril after the Effective Date of this Lease,
Landlord shall restore the same, as and when required by this paragraph, unless
this Lease is terminated by Landlord pursuant to Paragraph 10.3 or by Tenant
pursuant to Paragraph 10.4. If this Lease is not so terminated, then upon the
issuance of all necessary governmental permits, Landlord shall commence and
diligently prosecute to completion the restoration of the Leased Premises, the
Building or the Outside Area, as the case may be, to the extent then allowed by
law, to substantially the same condition in which it existed as of the date the
Leased Premises were originally occupied by Tenant. Landlord's obligation to
restore shall be limited to the improvements constructed by Landlord. Landlord
shall have no obligation to restore any alterations, modifications or
improvements made by Tenant to the Leased Premises or any of Tenant's personal
property, inventory or trade fixtures. Upon completion of the restoration by
Landlord, Tenant shall forthwith replace or fully repair all of Tenant's
personal property, inventory, trade fixtures and other improvements constructed
by Tenant to like or similar conditions as existed at the time immediately prior
to such damage or destruction.

10.2 INSURANCE PROCEEDS. All insurance proceeds available from the fire and
property damage insurance carried by Landlord shall be paid to and become the
property of Landlord. If this Lease is terminated pursuant to either
Paragraph 10.3 or 10.4, all insurance proceeds available from insurance
carried by Tenant which cover loss of property that is Landlord's property or
would become Landlord's property on termination of this Lease shall be paid
to and become the property of Landlord, and the remainder of such proceeds
shall be paid to and become the property of Tenant. If this Lease is not
terminated pursuant to either Paragraph 10.3 or 10.4, all insurance proceeds
available from insurance carried by Tenant which cover loss to property that
is Landlord's property shall be paid to and become the property of Landlord,
and all proceeds available from such insurance which cover loss to property
which would only become the property of Landlord upon the termination of this
Lease shall be paid to and remain the property of Tenant. The determination
of Landlord's property and Tenant's property shall be made pursuant to
Paragraph 6.2.

10.3 LANDLORD'S RIGHT TO TERMINATE. Landlord shall have the option to terminate
this Lease in the event any of the following occurs, which option may be
exercised only by delivery to Tenant of a written notice of election to
terminate within thirty days after the date of such damage or destruction:

         (a) The Building is damaged by any peril covered by valid and
collectible insurance actually carried by Landlord and in force at the time of
such damage or destruction (an "insured peril") to such an extent that the
estimated cost to restore the Building exceeds the lesser of (i) the insurance
proceeds available from insurance actually carried by Landlord, or (ii) fifty
percent of the then actual replacement cost thereof;

         (b) The Building is damaged by an uninsured peril, which peril Landlord
was not required to insure against pursuant to the provisions of Article 9 of
this Lease.


                                      15.
<PAGE>

         (c) The Building is damaged by any peril and, because of the laws then
in force, the Building (i) cannot be restored at reasonable cost or (ii) if
restored, cannot be used for the same use being made thereof before such damage.

10.4 TENANT'S RIGHT TO TERMINATE. If the Leased Premises, the Building or the
Outside Area are damaged by any peril and Landlord does not elect to terminate
this Lease or is not entitled to terminate this Lease pursuant to this Article,
then as soon as reasonably practicable, Landlord shall furnish Tenant with the
written opinion of Landlord's architect or construction consultant as to when
the restoration, work required of Landlord may be complete. Tenant shall have
the option to terminate this Lease in the event any of the following occurs,
which option may be exercised only by delivery to Landlord of a written notice
of election to terminate within seven days after Tenant receives from Landlord
the estimate of the time needed to complete such restoration:

         (a) If the time estimated to substantially complete the restoration
exceeds nine (9) months from and after the date the architect's or construction
consultant's written opinion is delivered; or

         (b) If the damage occurred within twelve months of the last day of the
Lease Term and the time estimated to substantially complete the restoration
exceeds one hundred eighty days from and after the date such restoration is
commenced.

10.5 TENANT'S WAIVER. Landlord and Tenant agree that the provisions of Paragraph
10.4 above, captioned "Tenant's Right To Terminate", are intended to supersede
and replace the provisions contained in California Civil Code, Section 1932,
Subdivision 2, and California Civil Code, Section 1934, and accordingly, Tenant
hereby waives the provisions of such Civil Code Sections and the provisions of
any successor Civil Code Sections or similar laws hereinafter enacted.

10.6 ABATEMENT OF RENT. In the event of damage to the Leased Premises which does
not result in the termination of this Lease, the Base Monthly Rent (and any
Additional Rent) shall be temporarily abated during the period of restoration in
proportion in the degree to which Tenant's use of the Leased Premises is
impaired by such damage.

                                   ARTICLE 11

                                  CONDEMNATION

11.1 TENANT'S RIGHT TO TERMINATE. Except as otherwise provided in Paragraph 11.4
below regarding temporary takings, Tenant shall have the option to terminate
this Lease if as a result of any taking, (i) all of the Leased Premises is
taken, or (ii) twenty-five percent (25%) or more of the Leased Premises is taken
and the part of the Leased Premises that remains cannot, within a reasonable
period of time, be made reasonably suitable for the continued operation of
Tenant's business. Tenant must exercise such option within a reasonable period
of time, to be effective on the later to occur of (i) the date that possession
of that portion of the Leased Premises that is condemned is taken by the
condemnor or (ii) the date Tenant vacated the Leased Premises.

11.2 LANDLORD'S RIGHT TO TERMINATE. Except as otherwise provided in Paragraph
11.4 below regarding temporary takings, Landlord shall have the option to
terminate this Lease if, as a result of any taking, (i) all of the Leased
Premises is taken, (ii) twenty-five percent (25%) or more of the Leased
Premises is taken and the part of the Leased Premises that remains cannot,
within a reasonable period of time be made reasonably suitable for the
continued operation of Tenant's business, or (iii) because of the laws then
in force, the Leased Premises may not be used for the same use being made
before such taking, whether or not restored as required by Paragraph 11.3
below. Any such option to terminate by Landlord must be exercised within a
reasonable period of time, to be effective as of the date possession is taken
by the condemnor.

11.3 RESTORATION. If any part of the Leased Premises or the Building is taken
and this Lease is not terminated, then Landlord shall, to the extent not
prohibited by laws then in force, repair any damage occasioned thereby to the
remainder thereof to a condition reasonably suitable for Tenant's continued
operations and otherwise, to the extent practicable, in the manner and to the
extent provided in Paragraph 10.1.

11.4 TEMPORARY TAKING. If a portion of the Leased Premises is temporarily taken
for a period of one year or less and such period does not extend beyond the
Lease Expiration Date, this Lease shall remain in effect. If any portion of the
Leased Premises is temporarily taken for a period which exceeds one year or
which extends beyond the Lease Expiration Date, then the rights of Landlord and
Tenant shall be determined in accordance with Paragraphs 11.1 and 11.2 above.

11.5 DIVISION OF CONDEMNATION AWARD. Any award made for any taking of the
Property, the Building, or the Leased Premises, or any portion thereof, shall
belong to and be paid to Landlord, and Tenant hereby assigns to Landlord all of
its right, title and interest in any such award; PROVIDED, HOWEVER, that Tenant
shall be entitled to receive any portion of the award that is made specifically
(i) for the taking of personal property, inventory or trade fixtures belonging
to Tenant, (ii) for the interruption of Tenant's business or its moving costs,
or (iii) for the value of any leasehold improvements installed and paid for by
Tenant. The rights of Landlord and Tenant regarding any condemnation shall be
determined as provided in this Article, and each party hereby waives the
provisions of Section 1265.130 of the California Code of Civil Procedure, and
the provisions of any similar law hereinafter enacted, allowing either party to
petition the Supreme Court to terminate this Lease and/or otherwise allocate
condemnation awards between Landlord and Tenant in the event of a taking of the
Leased Premises.


                                      16.
<PAGE>

11.6 ABATEMENT OF RENT. In the event of a taking of the Leased Premises which
does not result in a termination of this Lease (other than a temporary taking),
then, as of the date possession is taken by the condemning authority, the
Base Monthly Rent shall be reduced in the same proportion that the area of
that part of the Leased Premises so taken (less any addition to the area of
the Leased Premises by reason of any reconstruction) bears to the area of the
Leased Premises immediately prior to such taking.

11.7 TAKING DEFINED. The term "taking" or "taken" as used in this Article 11
shall mean any transfer or conveyance of all or any portion of the Property to a
public or quasi-public agency or other entity having the power of eminent domain
pursuant to or as a result of the exercise of such power by such an agency,
including any inverse condemnation and/or any sale or transfer by Landlord of
all or any portion of the Property to such an agency under threat of
condemnation or the exercise of such power.

                                   ARTICLE 12

                              DEFAULT AND REMEDIES

12.1 EVENTS OF TENANT'S DEFAULT. Tenant shall be in default of its obligations
under this Lease if any of the following events occur:

         (a) Tenant shall have failed to pay Base Monthly Rent or any Additional
Rent when due; or

         (b) Tenant shall have done or permitted to be done any act, use or
thing in its use, occupancy or possession of the Leased Premises or the Building
or the Outside Areas which is prohibited by the terms of this Lease; or

         (c) Tenant shall have failed to perform any term, covenant or condition
of this Lease (except those requiring the payment of Base Monthly Rent or
Additional Rent, which failures shall be governed by subparagraph (a) above)
within thirty (30) days after written notice from Landlord to Tenant specifying
the nature of such failure and requesting Tenant to perform same; or

         (d) Tenant shall have sublet the Leased Premises or assigned or
encumbered its interest in this Lease in violation of the provisions contained
in Article 7, whether voluntarily or by operation of law; or

         (e) Tenant shall have abandoned the Leased Premises; or

         (f) Tenant or any Guarantor of this Lease shall have permitted or
suffered the sequestration or attachment of, or execution on, or the appointment
of a custodian or receiver with respect to, all or any substantial part of the
property or assets of Tenant (or such Guarantor) or any property or asset
essential to the conduct of Tenant's (or such Guarantor's) business, and Tenant
(or such Guarantor) shall have failed to obtain a return or release of the same
within thirty days thereafter, or prior to sale pursuant to such sequestration,
attachment or levy, whichever is earlier; or

         (g) Tenant or any Guarantor of this Lease shall have made a general
assignment of all or a substantial part of its assets for the benefit of its
creditors; or

         (h) Tenant or any Guarantor of this Lease shall have allowed (or
sought) to have entered against it a decree or order which: (i) grants or
constitutes an order for relief, appointment of a trustee, or condemnation or
a reorganization plan under the bankruptcy laws of the United States; (ii)
approves as properly filed a petition seeking liquidation or reorganization
under said bankruptcy laws or any other debtor's relief law or similar
statute of the United States or any state thereof, or (iii) otherwise directs
the winding up or liquidation of Tenant; provided, however, if any decree or
order was entered without Tenant's consent or over Tenant's objection,
Landlord may not terminate this Lease pursuant to this Subparagraph if such
decree or order is rescinded or reversed within thirty days after its
original entry; or

         (i) Tenant or any Guarantor of this Lease shall have availed itself of
the protection of any debtor's relief law, moratorium law or other similar law
which does not require the prior entry of a decree or order.

         (j) Tenant shall be in default of its obligations under any other Lease
between Landlord and Tenant.

12.2 LANDLORD'S REMEDIES. In the event of any default by Tenant, and without
limiting Landlord's right to indemnification as provided in Article 8.2,
Landlord shall have the following remedies, in addition to all other rights and
remedies provided by law or otherwise provided in this Lease to which Landlord
may resort cumulatively, or in the alternative:

         (a) Landlord may, at Landlord's election, keep this Lease in effect
and enforce, by an action at law or in equity, all of its rights and remedies
under this Lease including, without limitation, (i) the right to recover the
rent and other sums as they become due by appropriate legal action, (ii) the
right to make payments required by Tenant, or perform Tenant's obligations
and be reimbursed by Tenant for the cost thereof with interest at the then
maximum rate of interest not prohibited by law from the date the sum is paid
by Landlord until Landlord is reimbursed by Tenant, and (iii) the remedies of
injunctive relief and specific performance to prevent Tenant from violating
the terms of this Lease and/or to compel Tenant to perform its obligations
under this Lease, as the case may be.

         (b) Landlord may, at Landlord's election, terminate this Lease by
giving Tenant written notice of termination, in which event this Lease shall
terminate on the date set forth for termination in such notice, in which


                                      17.
<PAGE>

event Tenant shall immediately surrender the Leased Premises to Landlord, and
if Tenant fails to do so, Landlord may, without prejudice to any other remedy
which it may have for possession or arrearages in rent, enter upon and take
possession of the Leased Premises and expel or remove Tenant and any other
person who may be occupying the Leased Premises or any part thereof, without
being liable for prosecution or any claim or damages therefor. Any
termination under this subparagraph shall not relieve Tenant from its
obligation to pay to Landlord all Base Monthly Rent and Additional Rent then
or thereafter due, or any other sums due or thereafter accruing to Landlord,
or from any claim against Tenant for damages previously accrued or then or
thereafter accruing. In no event shall any one or more of the following
actions by Landlord, in the absence of a written election by Landlord to
terminate this Lease constitute a termination of this Lease:

                  (i) Appointment of a receiver or keeper in order to protect
Landlord's interest hereunder;

                  (ii) Consent to any subletting of the Leased Premises or
assignment of this Lease by Tenant, whether pursuant to the provisions hereof or
otherwise; or

                  (iii) Any action taken by Landlord or its partners,
principals, members, officers, agents, employees, or servants, which is intended
to mitigate the adverse effects of any breach of this Lease by Tenant,
including, without limitation, any action taken to maintain and preserve the
Leased Premises on any action taken to relet the Leased Premises or any portion
thereof for the account at Tenant and in the name of Tenant.

         (c) In the event Tenant breaches this Lease and abandons the Leased
Premises, Landlord may terminate this Lease, but this Lease shall not terminate
unless Landlord gives Tenant written notice of termination. If Landlord does not
terminate this Lease by giving written notice of termination, Landlord may
enforce all its rights and remedies under this Lease, including the right and
remedies provided by California Civil Code Section 1951.4 ("lessor may continue
lease in effect after lessee's breach and abandonment and recover rent as it
becomes due, if lessee has right to sublet or assign, subject only to reasonable
limitations"), as in effect on the Effective Date of this Lease.

         (d) In the event Landlord terminates this Lease, Landlord shall be
entitled, at Landlord's election, to the rights and remedies provided in
California Civil Code Section 1051.2, as in effect on the Effective Date of
this Lease. For purposes of computing damages pursuant to Section 1951.2, an
interest rate equal to the maximum rate of interest then not prohibited by
law shall be used where permitted. Such damages shall include, without
limitation:

                  (i) The worth at the time of the award of the unpaid rent
which had been earned at the time of termination;

                  (ii) The worth at the time of award of the amount by which
the unpaid rent for the balance of the term after the time of award exceeds
the amount of such rental loss that Tenant proves could be reasonably
avoided, computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco, at the time of award plus one percent;
and

                  (iii) Any other amount necessary to compensate Landlord for
all detriment proximately caused by Tenant's failure to perform Tenant's
obligations under this Lease, or which in the ordinary course of things would
be likely to result therefrom, including without limitation, the following:
(i) expenses for cleaning, repairing or restoring the Leased Premises, (ii)
expenses for altering, remodeling or otherwise improving the Leased Premises
for the purpose of reletting, including removal of existing leasehold
improvements and/or installation of additional leasehold improvements
(regardless of how the same is funded, including reduction of rent, a direct
payment or allowance to a new tenant, or otherwise), (iii) broker's fees
allocable to the remainder of the term of this Lease, advertising costs and
other expenses of reletting the Leased Premises; (iv) costs of carrying and
maintaining the Leased Premises, such as taxes, insurance premiums, utility
charges and security precautions, (v) expenses incurred in removing,
disposing of and/or storing any of Tenant's personal property, inventory or
trade fixtures remaining therein; (vi) reasonable attorney's fees, expert
witness fees, court costs and other reasonable expenses incurred by Landlord
(but not limited to taxable costs) in retaking possession of the Leased
Premises, establishing damages hereunder, and releasing the Leased Premises;
and (vii) any other expenses, costs or damages otherwise incurred or suffered
as a result of Tenant's default.

12.3 LANDLORD'S DEFAULT AND TENANT'S REMEDIES. In the event Landlord fails to
perform its obligations under this Lease, Landlord shall nevertheless not be
in default under the terms of this Lease until such time as Tenant shall have
first given Landlord written notice specifying the nature of such failure to
perform its obligations, and then only after Landlord shall have had thirty
(30) days following its receipt of such notice within which to perform such
obligations; provided that, if longer than thirty (30) days following its
receipt of such notice within which to perform such obligations; PROVIDED
THAT, if longer than thirty (30) days is reasonably required in order to
perform such obligations, Landlord shall have such longer period. In the
event of Landlord's default as above set forth, then, and only then, Tenant
may then proceed in equity or at law to compel Landlord to perform its
obligations and/or to recover damages proximately caused by such failure to
perform (except as and to the extent Tenant has waived its right to damages
as provided in this Lease).

12.4 LIMITATION OF TENANT'S RECOURSE. Tenant's sole recourse against Landlord
shall be to Landlord's interest in the Building and the Outside Areas. If
Landlord is a corporation, trust, partnership, joint venture, limited liability
company, unincorporated association, or other form of business entity, Tenant
agrees that (i) the obligations of Landlord under this Lease shall not
constitute personal obligations of the officers, directors, trustees, partners,
joint venturers, members, owners, stockholders, or other principals of such
business entity, and (ii) Tenant shall have recourse only to the interest of
such corporation, trust, partnership, joint venture, limited liability company,
unincorporated association, or other form of business entity in the Building and
the Outside Areas for the


                                       18.
<PAGE>

satisfaction of such obligations and not against the assets of such officers,
directors, trustees, partners, joint venturers, members, owners, stockholders or
principals. Additionally, if Landlord is a partnership or limited liability
company, then Tenant covenants and agrees:

         (a) No partner or member of Landlord shall be sued or named as a party
in any suit or action brought by Tenant with respect to any alleged breach of
this Lease (except to the extent necessary to secure jurisdiction over the
partnership and then only for that sole purpose);

         (b) No service of process shall be made against any partner or member
of Landlord except for the sole purpose of securing jurisdiction over the
partnership; and

         (c) No writ of execution will ever be levied against the assets of any
partner or member of Landlord other than to the extent of his or her interest in
the assets of the partnership or limited liability company constituting
Landlord.

Tenant further agrees that each of the foregoing covenants and agreements shall
be enforceable by Landlord and by any partner or member of Landlord and shall be
applicable to any actual or alleged misrepresentation or nondisclosure made
regarding this Lease or the Leased Premises or any actual or alleged failure,
default or breach of any covenant or agreement either expressly or implicitly
contained in this Lease or imposed by statute or at common law.

12.5 TENANT'S WAIVER. Landlord and Tenant agree that the provisions of
Paragraph 12.3 above are intended to supersede and replace the provisions of
California Civil Code Sections 1932(1), 1941 and 1942, and accordingly, Tenant
hereby waives the provisions of California Civil Code Sections 1932(1), 1941 and
1942 and/or any similar or successor law regarding Tenant's right to terminate
this Lease or to make repairs and deduct the expenses of such repairs from the
rent due under this Lease.

                                   ARTICLE 13

                               GENERAL PROVISIONS

13.1 TAXES ON TENANT'S PROPERTY. Tenant shall pay before delinquency any and
all taxes, assessments, license fees, use fees, permit fees and public
charges of whatever nature or description levied, assessed or imposed against
Tenant or Landlord by a governmental agency arising out of, caused by reason
of or based upon Tenant's estate in this Lease, Tenant's ownership of
property, improvements made by Tenant to the Leased Premises or the Outside
Areas, improvements made by Landlord for Tenant's use within the Leased
Premises or the Outside Areas, Tenant's use (or estimated use) of public
facilities or services or Tenant's consumption (or estimated consumption) of
public utilities, energy, water or other resources (collectively, "Tenant's
Interest"). Upon demand by Landlord, Tenant shall furnish Landlord with
satisfactory evidence of these payments. If any such taxes, assessments, fees
or public charges are levied against Landlord, Landlord's property, the
Building or the Property, or if the assessed value of the Building or the
Property is increased by the inclusion therein of a value placed upon
Tenant's Interest, regardless of the validity thereof, Landlord shall have
the right to require Tenant to pay such taxes, and if not paid and
satisfactory evidence of payment delivered to Landlord at least ten days
prior to delinquency, then Landlord shall have the right to pay such taxes on
Tenant's behalf and to invoice Tenant for the same. Tenant shall, within the
earlier to occur of (a) thirty (30) days of the date it receives an invoice
from Landlord setting forth the amount of such taxes, assessments, fees, or
public charge so levied, or (b) the due date of such invoice, pay to
Landlord, as Additional Rent, the amount set forth in such invoice. Failure
by Tenant to pay the amount so invoiced within such time period shall be
conclusively deemed a default by Tenant under this Lease. Tenant shall have
the right to bring suit in any court of competent jurisdiction to recover
from the taxing authority the amount of any such taxes, assessments, fees or
public charges so paid.

13.2 HOLDING OVER. This Lease shall terminate without further notice on the
Lease Expiration Date (as set forth in Article 1). Any holding over by Tenant
after expiration of the Lease Term shall neither constitute a renewal nor
extension of this Lease nor give Tenant any rights in or to the Leased
Premises except as expressly provided in this Paragraph. Any such holding
over to which Landlord has consented shall be construed to be a tenancy from
month to month, on the same terms and conditions herein specified insofar as
applicable, except that the Base Monthly Rent shall be increased to an amount
equal to one hundred fifty percent (150%) of the Base Monthly Rent payable
during the last full month immediately preceding such holding over. Tenant
acknowledges that if Tenant holds over without Landlord's consent, such
holding over may compromise or otherwise affect Landlord's ability to enter
into new leases with prospective tenants regarding the Leased Promises.
Therefore, if Tenant fails to surrender the Leased Premises upon the
expiration or termination of this Lease, in addition to any other liabilities
to Landlord accruing therefrom, Tenant shall protect, defend, indemnify and
hold Landlord harmless from and against all claims resulting from such
failure, including, without limiting the foregoing, any claims made by any
succeeding tenant founded upon such failure to surrender, and any losses
suffered by Landlord, including lost profits, resulting from such failure to
surrender.

13.3 SUBORDINATION TO MORTGAGES. This Lease is subject to and subordinate to all
ground leases, mortgages and deeds of trust which affect the Building or the
Property and which are of public record as of the Effective Date of this Lease,
and to all renewals, modifications, consolidations, replacements and extensions
thereof. However, if the lessor under any such ground lease or any lender
holding any such mortgage or deed of trust shall advise Landlord that it desires
or requires this Lease to be made prior and superior thereto, then, upon written
request of Landlord to Tenant, Tenant shall promptly execute, acknowledge and
deliver any and all customary or reasonable documents or instruments which
Landlord and such lessor or lender deems necessary or desirable to make this
Lease prior thereto. Tenant hereby consents to Landlord's ground leasing the
land underlying the Building or the Property and/or


                                      19.
<PAGE>

encumbering the Building or the Property as security for future loans on such
terms as Landlord shall desire, all of which future ground leases, mortgages
or deeds of trust shall be subject to and subordinate to this Lease. However,
if any lessor under any such future ground lease or any lender holding such
future mortgage or deed of trust shall desire or require that this Lease be
made subject to and subordinate to such future ground lease, mortgage or deed
of trust, then Tenant agrees, within ten days after Landlord's written
request therefor, to execute, acknowledge and deliver to Landlord any and all
documents or instruments requested by Landlord or by such lessor or lender as
may be necessary or proper to assure the subordination of this Lease to such
future ground lease, mortgage or deed of trust, but only if such lessor or
lender agrees to recognize Tenant's rights under this Lease and agrees not to
disturb Tenant's quiet possession of the Leased Premises so long as Tenant is
not in default under this Lease. If Landlord assigns the Lease as security
for a loan, Tenant agrees to execute such documents as are reasonably
requested by the lender and to provide reasonable provisions in the Lease
protecting such lender's security interest which are customarily required by
institutional lenders making loans secured by a deed of trust. Landlord
agrees to use commercially reasonable efforts to obtain a subordination,
nondisturbance and attornment agreement from the current holder of a
mortgage, deed of trust, and/or ground lease within thirty (30) days of
mutual execution of this Lease.

13.4 TENANT'S ATTORNMENT UPON FORECLOSURE. Tenant shall, upon request, attorn
(i) to any purchaser of the Building or the Property at any foreclosure sale or
private sale conducted pursuant to any security instruments encumbering the
Building or the Property, (ii) to any grantee or transferee designated in any
deed given in lieu of foreclosure of any security interest encumbering the
Building or the Property, or (iii) to the lessor under an underlying ground
lease of the land underlying the Building or the Property, should such ground
lease be terminated; provided that such purchaser, grantee or lessor recognizes
Tenant's rights under this Lease.

13.5 MORTGAGEE PROTECTION. In the event of any default on the part of Landlord,
Tenant will give notice by registered mail to any Lender or lessor under any
underlying ground lease who shall have requested, in writing, to Tenant that it
be provided with such notice, and Tenant shall offer such Lender or lessor a
reasonable opportunity to cure the default, including time to obtain possession
of the Leased Premises by power of sale or judicial foreclosure or other
appropriate legal proceedings if reasonably necessary to effect a cure.

13.6 ESTOPPEL CERTIFICATE. Tenant will, following any request by Landlord,
promptly execute and deliver to Landlord an estoppel certificate
substantially in form attached as Exhibit B, (i) certifying that this Lease
is unmodified and in full force and effect, or, if modified, stating the
nature of such modification and certifying that this Lease, as so modified,
is in full force and effect, (ii) stating the date to which the rent and
other charges are paid in advance, if any, (iii) acknowledging that there are
not, to Tenant's knowledge, any uncured defaults on the part of Landlord
hereunder, or specifying such defaults if any are claimed, and (iv)
certifying such other information about this Lease as may be reasonably
requested by Landlord, its Lender or prospective lenders, investors or
purchasers of the Building or the Property. Tenant's failure to execute and
deliver such estoppel certificate within ten days after Landlord's request
therefor shall be a material default by Tenant under this Lease, and Landlord
shall have all of the rights and remedies available to Landlord as Landlord
would otherwise have in the case of any other material default by Tenant,
including the right to terminate this Lease and sue for damages proximately
caused thereby, it being agreed and understood by Tenant that Tenant's
failure to so deliver such estoppel certificate in a timely manner could
result in Landlord being unable to perform committed obligations to other
third parties which were made by Landlord in reliance upon this covenant of
Tenant. Landlord and Tenant intend that any statement delivered pursuant to
this paragraph may be relied upon by any Lender or purchaser or prospective
Lender or purchaser of the Building, the Property, or any interest in them.

13.7 TENANT'S FINANCIAL INFORMATION. Tenant shall, within ten business days
after Landlord's request therefor, deliver to Landlord a copy of Tenant's
(and any guarantor's) current financial statements (including a balance
sheet, income statement and statement of cash flow, all prepared in
accordance with generally accepted accounting principles) and any such other
information reasonably requested by Landlord regarding Tenant's financial
condition. Landlord shall be entitled to disclose such financial statements
or other information to its Lender, to any present or prospective principal
of or investor in Landlord, or to any prospective Lender or purchaser of the
Building, the Property, or any portion thereof or Interest therein. Any such
financial statement or other information which is marked "confidential" or
"company secrets" (or is otherwise similarly marked by Tenant) shall be
confidential and shall not be disclosed by Landlord to any third party except
as specifically provided in this paragraph, unless the same becomes a part of
the public domain without the fault of Landlord.

13.8 TRANSFER BY LANDLORD. Landlord and its successors in interest shall have
the right to transfer their interest in the Building, the Property, or any
portion thereof at any time and to any person or entity. In the event of any
such transfer, the Landlord originally named herein (and in the case of any
subsequent transfer, the transferor), from the date of such transfer, (i) shall
be automatically relieved, without any further act by any person or entity, of
all liability for the performance of the obligations of the Landlord hereunder
which may accrue after the date of such transfer and (ii) shall be relieved of
all liability for the performance of the obligations of the Landlord hereunder
which have accrued before the date of transfer if its transferee agrees to
assume and perform all such prior obligations of the Landlord hereunder. Tenant
shall attorn to any such transferee. After the date of any such transfer, the
term "Landlord" as used herein shall mean the transferee of such interest in the
Building or the Property.

13.9 FORCE MAJEURE. The obligations of each of the parties under this Lease
(other than the obligations to pay money) shall be temporarily excused if such
party is prevented or delayed in performing such obligations by reason of any
strikes, lockouts or labor disputes; government restrictions, regulations,
controls, action or inaction; civil commotion; Or extraordinary weather, fire or
other acts of God.


                                      20.
<PAGE>

13.10 NOTICES. Any notice required or permitted to be given under this Lease
shall be in writing and (i) personally delivered, (ii) sent by United States
mail, registered or certified mail, postage prepaid, return receipt requested,
(iii) sent by Federal Express or similar nationally recognized overnight courier
service, or (iv) transmitted by facsimile with a hard copy sent within one (1)
business day by any of the foregoing means, and in all cases addressed as
follows, and such notice shall be deemed to have been given upon the date of
actual receipt or delivery (or refusal to accept delivery) at the address
specified below (or such other addresses as may be specified by notice in the
foregoing manner) as indicated on the return receipt or air bill:

            IF TO LANDLORD:       Corporate Technology Centre Associates II LLC
                                  c/o Menlo Equities LLC
                                  525 University Avenue
                                  Suite 100
                                  Palo Alto, California 94301
                                  Attention: Henry Bullock/Richard Holmstrom
                                  Facsimile: (650) 326-9333

            with a copy to:       Cooley Godward LLP
                                  One Maritime Plaza
                                  20th Floor
                                  San Francisco, California 94111
                                  Attention: Paul Churchill/ Elizabeth Willes
                                  Facsimile: (415) 951-3699

            IF TO TENANT:         Digital Microwave Corporation
                                  170 Rose Orchard Way
                                  San Jose, California 95134
                                  Attention: Chief Financial Officer

            with a copy to:       Digital Microwave Corporation
                                  170 Rose Orchard Way
                                  San Jose, California 95134
                                  Attention: Legal Department

Any notice given in accordance with the foregoing shall be deemed received upon
actual receipt or refusal to accept delivery.

13.11 ATTORNEYS' FEES. In the event any party shall bring any action,
arbitration proceeding or legal proceeding alleging a breach of any provision of
this Lease, to recover rent, to terminate this Lease, or to enforce, protect,
determine or establish any term or covenant of this Lease or rights or duties
hereunder of either party, the prevailing party shall be entitled to recover
from the non-prevailing party as a part of such action or proceeding, or in a
separate action for that purpose brought within one year from the determination
of such proceeding, reasonable attorneys' fees, expert witness fees, court costs
and other reasonable expenses incurred by the prevailing party.

13.12 DEFINITIONS. Any term that is given a special meaning by any provision in
this Lease shall, unless otherwise specifically stated, have such meaning
wherever used in this Lease or in any Addenda or amendment hereto. In addition
to the terms defined in Article 1, the following terms shall have the following
meanings:

         (a) REAL PROPERTY TAXES. The term "Real Property Tax" or "Real Property
Taxes" shall each mean Tenant's Expense Share of (i) all taxes, assessments,
levies and other charges of any kind or nature whatsoever, general and special,
foreseen and unforeseen (including all instruments of principal and interest
required to pay any general or special assessments for public improvements and
any increases resulting from reassessments caused by any change in ownership or
new construction), now or hereafter imposed by any governmental or quasi-
governmental authority or special district having the direct or indirect power
to tax or levy assessments, which are levied or assessed for whatever reason
against the Property or any portion thereof, or Landlord's interest herein, or
the fixtures, equipment and other property of Landlord that is an integral part
of the Property and located thereon, or Landlord's business of owning, leasing
or managing the Property or the gross receipts, income or rentals from the
Property, (ii) all charges, levies or fees imposed by any governmental
authority against Landlord by reason of or based upon the use of or number of
parking spaces within the Property, the amount of public services or public
utilities used or consumed (e.g. water, gas, electricity, sewage or waste water
disposal) at the Property, the number of person employed by tenants of the
Property, the size (whether measured in area, volume, number of tenants or
whatever) or the value of the Property, or the type of use or uses conducted
within the Property, and all costs and fees (including attorneys' fees)
reasonably incurred by Landlord in contesting any Real Property Tax and in
negotiating with public authorities as to any Real Property Tax. If, at any time
during the Lease Term, the taxation or assessment of the Property prevailing as
of the Effective Date of this Lease shall be altered so that in lieu of or in
addition to any the Real Property Tax described above there shall be levied,
awarded or imposed (whether by reason of a change in the method of taxation or
assessment, creation of a new tax or charge, or any other cause) an alternate,
substitute, or additional use or charge (i) on the value, size, use or occupancy
of the Property or Landlord's interest therein or (ii) on or measured by the
gross receipts, income or rentals from the Property, or on Landlord's business
of owning, leasing or managing the Property or (iii) computed in any manner with
respect to the operation of the Property, then any such tax or charge, however
designated, shall be included within the meaning of the terms "Real Property
Tax" or "Real Property Taxes" for purposes of this Lease. If any Real Property
Tax is partly based upon property or rents unrelated to the Property, then only
that part of such Real Property Tax that is fairly allocable to the Property
shall be included within the meaning of the terms "Real Property Tax" or "Real
Property Taxes."


                                      21.
<PAGE>

Notwithstanding the foregoing, the terms "Real Property Tax" or "Real Property
Taxes" shall not include estate, inheritance, transfer, gift or franchise taxes
of Landlord or the federal or state income tax imposed on Landlord's income from
all sources.

         (b) LANDLORD'S INSURANCE COSTS. The term "Landlord's Insurance Costs"
shall mean Tenant's Project Share of the costs to Landlord to carry and maintain
the policies of fire and property damage insurance for the Building and the
Property and general liability and any other insurance required or permitted to
be carried by Landlord pursuant to Article 9, together with any deductible
amounts paid by Landlord upon the occurrence of any insured casualty or loss.

         (c) PROPERTY MAINTENANCE COSTS. The term "Property Maintenance
Costs" shall mean Tenant's Project Share of all costs and expenses (except
Landlord's Insurance Costs and Real Property Taxes) paid or incurred by
Landlord in protecting, operating, maintaining, repairing and preserving the
Property and all parts thereof, including without limitation, (i) market rate
professional management fees, (ii) the amortizing portion of any costs
incurred by Landlord in the making of any modifications, alterations or
improvements required by any governmental authority as set forth in Paragraph
6.3, which are so amortized during the Lease Term, and (iii) such other costs
as may be paid or incurred with respect to operating, maintaining, and
preserving the Property, such as repairing and resurfacing the exterior
surfaces of the Building (including roofs), repairing and resurfacing paved
areas, and repairing and replacing, when necessary, electrical, plumbing,
heating, ventilating and air conditioning systems serving the Building. With
respect to any capital improvement made to electrical, plumbing, heating,
ventilating and air conditioning systems serving the Building by Landlord
after the date of this Lease which under generally accepted accounting
principles ("GAAP") should be capitalized and amortized rather than expensed,
Landlord shall capitalize any such improvement and amortize it over its
useful life (which shall in no event exceed the useful life for such
improvement set forth in any schedule or listing of useful lives, if any,
specified by GAAP or the Financial Accounting Standards Board). In such
event, such amortizing portion of the capital improvement shall, during the
Lease Term, constitute a Property Maintenance Cost.

         (d) PROPERTY OPERATING EXPENSES. The term "Property Operating Expenses"
shall mean and include all Real Property Taxes, plus all Landlord's Insurance
Costs, plus all Property Maintenance Costs.

         (e) LAW. The term "Law" shall mean any judicial decisions and any
statute, constitution, ordinance, resolution, regulation, rule,
administrative order, or other requirements of any municipal, county, state,
federal, or other governmental agency or authority having jurisdiction over
the parties to this Lease, the Leased Premises, the Building or the Property,
or any of them, in effect either at the Effective Date of this Lease or at
any time during the Lease Term, including, without limitation, any
regulation, order, or policy of any quasi-official entity or body (e.g. a
board of fire examiners or a public utility or special district).

         (f) LENDER. The term "Lender" shall mean the holder of any promissory
note or other evidence of indebtedness secured by the Property or any portion
thereof.

         (g) PRIVATE RESTRICTIONS. The term "Private Restrictions" shall mean
(as they may exist from time to time) any and all covenants, conditions and
restrictions, private agreements, easements, and any other recorded documents
or instruments affecting the use of the Property, the Building, the Leased
Premises, or the Outside Areas.

         (h) RENT. The term "Rent" shall mean collectively Base Monthly Rent
and all Additional Rent.

13.13 GENERAL WAIVERS. One party's consent to or approval of any act by the
other party requiring the first party's consent or approval shall not be deemed
to waive or render unnecessary the first party's consent to or approval of any
subsequent similar act by the other party. No waiver of any provision hereof,
or any waiver of any breach of any provision hereof, shall be effective unless
in writing and signed by the waiving party. The receipt by Landlord of any rent
or payment with or without knowledge of the breach of any other provision hereof
shall not be deemed a waiver of any such breach. No waiver of any provision of
this Lease shall be deemed a continuing waiver unless such waiver specifically
states so in writing and is signed by both Landlord and Tenant. No delay or
omission in the exercise of any right or remedy accruing to either party upon
any breach by the other party under this Lease shall impair such right or remedy
or be construed as a waiver of any such breach theretofore or thereafter
occurring. The waiver by either party of any breach of any provision of this
Lease shall not be deemed to be a waiver of any subsequent breach of the same or
any other provisions herein contained.

13.14 MISCELLANEOUS. Should any provisions of this Lease prove to be invalid
or illegal, such invalidity or illegality shall in no way affect, impair or
invalidate any other provisions hereof, and such remaining provisions shall
remain in full force and effect. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is
a factor. Any copy of this Lease which is executed by the parties shall be
deemed an original for all purposes. This Lease shall, subject to the
provisions regarding assignment, apply to and bind the respective heirs,
successors, executors, administrators and assigns of Landlord and Tenant. The
term "party" shall mean Landlord or Tenant as the context implies. If Tenant
consists of more than one person or entity, then all members of Tenant shall
be jointly and severally liable hereunder. Submission of this Lease for
review, examination or signature by Tenant does not constitute an offer to
lease, a reservation of or an option for lease, and notwithstanding any
inconsistent language contained in any other document, this Lease is not
effective as a lease or otherwise until execution and delivery by both
Landlord and Tenant. This Lease shall be construed and enforced in accordance
with the Laws of the State in which the Leased Premises are located. The
captions in this Lease are for convenience only and shall not be construed in
the construction or interpretation of any provision hereof. When the context
of this Term requires, the neuter gender includes the masculine, the
feminine, a partnership, corporation, limited liability company, joint
venture, or other form of business entity, and the singular includes the
plural. The terms "must," "shall," and "agree" are mandatory. The term "may"
is permissive. When a party is required


                                      22.
<PAGE>

to do something by this Lease, it shall do so at its sole cost and expense
without right of reimbursement from the other party unless specific provision is
made therefor. Where Landlord's consent is required hereunder, the consent of
any Lender shall also be required. Landlord and Tenant shall both be deemed to
have drafted this Lease, and the rule of construction that a document is to be
construed against the drafting party shall not be employed in the construction
or interpretation of this Lease. Where Tenant is obligated not to perform any
act or is not permitted to perform any act, Tenant is also obligated to restrain
any others reasonably within its control, including agents, invitees,
contractors, subcontractors and employees, from performing such act. Landlord
shall not become or be deemed a partner or a joint venturer with Tenant by
reason of any of the provisions of this Lease.

                                   ARTICLE 14

                               CORPORATE AUTHORITY
                          BROKERS AND ENTIRE AGREEMENT

14.1 CORPORATE AUTHORITY. If Tenant is a corporation, each individual executing
this Lease on behalf of such corporation represents and warrants that Tenant is
validly formed and duly authorized and existing, that Tenant is qualified to do
business in the State in which the Leased Premises are located, that Tenant has
the full right and legal authority to enter into this Lease, and that he or she
is duly authorized to execute and deliver this Lease on behalf of Tenant in
accordance with its terms. Tenant shall, within thirty days after execution of
this Lease, deliver to Landlord a certified copy of the resolution of its board
of directors authorizing or ratifying the execution of this Lease and if Tenant
fails to do so, Landlord at its sole election may elect to terminate this Lease.

14.2 BROKERAGE COMMISSIONS. Tenant represents, warrants and agrees that it has
not had any dealings with any real estate broker(s), leasing agent(s), finder(s)
or salesmen, other than the Brokers (as named in Article 1) with respect to
the lease by it of the Leased Promises pursuant to this that it will indemnify,
defend with competent counsel, and hold Landlord harmless from any liability for
the payment of any real estate brokerage commissions, leasing commissions or
finder's fees claimed by any other real estate broker(s), leasing agent(s),
finder(s), or salesmen to be earned or due and payable by reason of Tenant's
agreement or promise (implied or otherwise) to pay (or to have Landlord pay)
such a commission or finder's fee by reason of its leasing the Leased Premises
pursuant to this Lease.

14.3 ENTIRE AGREEMENT. This Lease and the Exhibits (as described in Article 1),
which Exhibits are by this reference incorporated herein, constitute the entire
agreement between the parties, and there are no other agreements,
understandings or representations between the parties relating to the lease by
Landlord of the Leased Premises to Tenant, except as expressed herein. No
subsequent changes, modifications or additions to this Lease shall be binding
upon the parties unless in writing and signed by both Landlord and Tenant,

14.4 LANDLORD'S REPRESENTATIONS. Tenant acknowledges that neither Landlord nor
any of its agents made any representations or warranties respecting the
Property, the Building or the Leased Premises, upon which Tenant relied in
entering into the Lease, which are not expressly set forth in this Lease. Tenant
further acknowledges that neither Landlord nor any of its agents made any
representations as to (i) whether the Leased Premises may be used for Tenant's
intended use under existing Law, or (ii) the suitability of the Leased Premises
for the conduct of Tenant's business, or (iii) the exact square footage of the
Leased Premises, and that Tenant relies solely upon its own investigations with
respect to such matters. Tenant expressly waives any and all claims for damage
by reason of any statement, representation, warranty, promise or other agreement
of Landlord or Landlord's agent(s), if any, not contained in this Lease or in
any Exhibit attached hereto.

                                   ARTICLE 15

                               OPTIONS TO EXTEND

15.1 So long as Digital Microwave Corporation is the Tenant hereunder and
occupies the entirety of the Leased Premises, and subject to the condition set
forth in clause (b) below, Tenant shall have two options to extend the term of
this Lease with respect to the entirety of the Leased Premises; the flat for a
period of five (5) years from the expiration of the tenth year of the Lease Term
(the "First Extension Period"), and the second (the "Second Extension Period")
for a period of five (5) years from the expiration of the first Extension
Period, subject to the following conditions:

         (a) Each option to extend shall be exercised, if at all, by notice of
exercise given to Landlord by Tenant not more than twelve months nor less than
nine months prior to the expiration of the tenth year of the Lease Term or the
expiration of the First Extension Period, as applicable;

         (b) Anything herein to the contrary notwithstanding, if Tenant is in
default under any of the terms, covenants or conditions of this Lease, either at
the time Tenant exercises either extension option or on the commencement date of
the First Extension Period or the Second Extension Period, as applicable,
Landlord shall have, in addition to all of Landlord's other rights and remedies
provided in this Lease, the right to terminate such option(s) to extend upon
notice to Tenant.

15.2 In the event the applicable option is exercised in a timely, fashion, the
Lease shall be extended for the term of the applicable extension period upon all
of the terms and conditions of this Lease, provided that the Base Monthly Rent
for each extension period shall be the "Fair Market Rent" for the Leased
Premises, increased as set forth below. For purposes hereof, "Fair Market Rent"
shall mean the Base Monthly Rent determined pursuant to the process described
below. In no event, however, shall any adjustment of Base Monthly Rent pursuant
to this paragraph result in a decrease of the Base Monthly Rent for the Leased
Premises below the amount due from Tenant for the


                                      23.
<PAGE>

preceding portion of the initial Lease Term (or the First Extension Period, if
applicable) for which Base Monthly Rent had been fixed. At the end of the first
12 MONTH period of the extension Period, Base Monthly Rent shall be increased to
by 3% per annum compounded annually for such 12 month period. Base Monthly Rent
shall be so adjusted at the end of each subsequent 12-month period during the
applicable Extension Period.

15.3 Within thirty (30) days after receipt of Tenant's notice of exercise,
Landlord shall notify Tenant in writing of Landlord's estimate of the Base
Monthly Rent for the applicable extension period, based on the provisions of
Paragraph 15.2 above. Within thirty (30) days after receipt of such notice from
Landlord, Tenant shall have the right either to (i) accept Landlord's statement
of Base Monthly Rent as the Base Monthly Rent for the applicable extension
period; or (ii) elect to arbitrate Landlord's estimate of Fair Market Rent, such
arbitration to be conducted pursuant to the provisions hereof. Failure on the
part of Tenant to require arbitration of Fair Market Rent within such 30-day
period shall constitute acceptance of the Base Monthly Rent for the applicable
extension period as calculated by Landlord. If Tenant elects arbitration, the
arbitration shall be concluded within 90 days after the date of Tenant's
election, subject to extension for an additional 30-day period if a third
arbitrator is required and does not act in a timely manner. To the extent that
arbitration has not been completed prior to the expiration of any preceding
period for which Base Monthly Rent has been determined, Tenant shall pay Base
Monthly Rent at the rate calculated by Landlord, with the potential for an
adjustment to be made once Fair Market Rent is ultimately determined by
arbitration.

15.4 In the event of arbitration, the judgment or the award rendered in any such
arbitration may be entered in any court having jurisdiction and shall be final
and binding between the parties. The arbitration shall be conducted and
determined in the City and County of Santa Clara in accordance with the then
prevailing rules of the American Arbitration Association or its successor for
arbitration of coilimercial disputes except to the extent that the procedures
mandated by such rules shall be modified as follows:

         (a) Tenant shall make demand for arbitration in writing within thirty
(30) days after service of Landlord's determination of Fair Market Rent given
under Paragraph 15.3 above, specifying therein the name and address of the
person to act as the arbitrator on its behalf. The arbitrator shall be qualified
as a real estate appraiser familiar with the Fair Market Rent of similar
industrial, research and development, or office space in the Silicon Valley area
who would qualify as an expert witness over objection to give opinion testimony
addressed to the issue in a court of competent jurisdiction. Failure on the part
of Tenant to make a proper demand in a timely manner for such arbitration shall
constitute a waiver of the right thereto. Within fifteen (15) days after the
service of the demand for arbitration, Landlord shall give notice to Tenant,
specifying the name and address of the person designated by Landlord to act as
arbitrator on its behalf who shall be similarly qualified. If Landlord fails to
notify Tenant of the appointment of its arbitrator, within or by the time above
specified, then the arbitrator appointed by Tenant shall be the arbitrator to
determine the issue.

         (b) In the event that two arbitrators are chosen pursuant to Paragraph
15.4(a) above, the arbitrators so chosen shall, within fifteen (15) days after
the second arbitrator is appointed determine the Fair Market Rent. If the two
arbitrators shall be unable to agree upon a determination of Fair Market Rent
within such 15-day period, they, themselves, shall appoint a third arbitrator,
who shall be a competent and impartial person with qualifications similar to
those required of the first two arbitrators pursuant to Paragraph 15.4(a) In the
event they are unable to agree upon such appointment within seven days after
expiration of such 15-day period, the third arbitrator shall be selected by the
panics themselves, if they can agree thereon, within a further period of
fifteen (15) days. If the parties do not so agree, then either party, on behalf
of both, may request appointment of such a qualified person by the then Chief
Judge of the United States District Court having jurisdiction over the County of
Santa Clara, acting in his private and not in his official capacity, and the
other party shall not raise any question as to such Judge's full power and
jurisdiction to entertain the application for and make the appointment. The
three arbitrators shall decide the dispute if it has not previously been
resolved by following the procedure set forth below.

         (c) Where an issue cannot be resolved by agreement between the two
arbitrators selected by Landlord and Tenant or settlement between the parties
during the course of arbitration, the issue shall be resolved by the three
arbitrators within 15 days of the appointment of the third arbitrator In
accordance with the following procedure. The arbitrator selected by each of the
parties shall state in writing his determination of the Fair Market Rent
supported by the reasons therefor with counterpart copies to each party. The
arbitrators shall arrange for a simultaneous exchange of such proposed
resolutions. The role of the third arbitrator shall be to select which of the
two proposed resolutions most closely approximates his determination of Fair
Market Rent. The third arbitrator shall have no right to propose a middle ground
or any modification of either of the two proposed resolutions. The resolution
he chooses as most closely approximating his determination shall constitute the
decision of the arbitrators and be final and binding upon the panics.

         (d) In the event of a failure, refusal or inability of any arbitrator
to act, his successor shall be appointed by him, but in the case of the third
arbitrator, his successor shall be appointed in the same manner as provided for
appointment of the third arbitrator. The arbitrators shall decide the issue
within fifteen (15) days after the appointment of the third arbitrator. Any
decision in which the arbitrator appointed by Landlord and the arbitrator
appointed by Tenant concur shall be binding and conclusive upon the parties.
Each party shall pay the fee and expenses of its respective arbitrator and both
shall share the fee and expenses of the third arbitrator, if any, and the
attorneys' fees and expenses of counsel for the respective panics and of
witnesses shall be paid by the respective party engaging such counsel or calling
such witnesses,

         (e) The arbitrators shall have the right to consult experts and
competent authorities to obtain factual information or evidence pertaining to a
determination of Fair Market Rent, but any such consultation shall be made in
the presence of both parties with full right on their part to cross-examine. The
arbitrators shall render their


                                      24.
<PAGE>

decision and award in writing with counterpart copies to each party. The
arbitrators shall have no power to modify the provisions of this Lease.

                                   ARTICLE 16

                                TELEPHONE SERVICE

         Notwithstanding any other provision of this Lease to the contrary:

         (a) So long as the entirety of the Leased Premises is leased to Tenant:

                  (i) Landlord shall have no responsibility for providing to
Tenant any telephone equipment, including wiring, within the Leased Premises or
for providing telephone service or connections from the utility to the Leased
Premises; and

                  (ii) Landlord makes no warranty as to the quality, continuity
or availability of the telecommunications services in the Building, and Tenant
hereby waives any claim against Landlord for any actual or consequential damages
(including damages for loss of business) in the event Tenant's
telecommunications services in any way are interrupted, damaged or rendered less
effective, except to the extent caused by the grossly negligent or willful act
or omission by Landlord, its agents or employees, Tenant accepts the telephone
equipment (including, without limitation, the INC, as defined below) in its
"AS-IS" condition, and Tenant shall be solely responsible for contracting with a
reliable third party vendor to assume responsibility for the maintenance and
repair thereof (which contract shall contain provisions requiring such vendor to
inspect the INC periodically (the frequency of such inspections to be determined
by such vendor based on its experience and professional judgment), and requiring
such vendor to meet local and federal requirements for telecommunications
material and workmanship). Landlord shall not be liable to Tenant and Tenant
waives all claims against Landlord whatsoever, whether for personal injury,
property damage, loss of use of the Leased Premises, or otherwise, due to the
interruption or failure of telephone services to the Leased Premises. Tenant
hereby holds Landlord harmless and agrees to indemnify, protect and defend
Landlord from and against any liability for any damage, loss or expense due to
any failure or interruption of telephone service to the Leased Premises for any
reason. Tenant agrees to obtain loss of rental insurance adequate to cover any
damage, loss or expense occasioned by the interruption of telephone service.

         (b) At such time as the entirety of the Leased Premise is no longer
leased to Tenant, Landlord shall in its sole discretion have the right, by
written notice to Tenant, to elect to assume limited responsibility for INC, as
provided below, and upon such assumption of responsibility by Landlord, this
subparagraph (b) shall apply prospectively.

                  (i) Landlord shall provide Tenant access to such quantity of
pairs in the Building intrabuilding network cable ("INC") as is determined to be
available by Landlord in its reasonable discretion. Tenant's access to the INC
shall be solely by arrangements made by Tenant, as Tenant may elect, directly
with Pacific Bell or Landlord (or such vendor as Landlord may designate), and
Tenant shall pay all reasonable charges as may be imposed in connection
therewith. Pacific Bell's charges shall be deemed to be reasonable. Subject to
the foregoing, Landlord shall have no responsibility for providing to Tenant any
telephone equipment, including wiring, within the Leased Promises or for
providing telephone service or connections from the utility to the Leased
Premises, except as required by law.

                  (ii) Tenant shall not alter, modify, add to or disturb any
telephone wiring in the Leased Premises or elsewhere in the Building without the
Landlord's prior written consent. Tenant shall be liable to Landlord for any
damage to the telephone wiring in the Building due to the act, negligent or
otherwise, of Tenant or any employee, contractor or other agent of Tenant.
Tenant shall have no access to the telephone closets within the Building, except
in the manner and under procedures established by Landlord. Tenant shall
promptly notify Landlord of any actual or suspected failure of telephone service
to the Leased Premises.

                  (iii) All costs incurred by Landlord for the installation,
maintenance, repair and replacement of telephone wiring in the Building shall be
a Property Maintenance Cost.

                  (iv) Landlord makes no warranty as to the quality, continuity
or availability of the telecommunications services in the Building, and Tenant
hereby waives any claim against Landlord for any actual or consequential damages
(including damages for loss of business) in the event Tenant's
telecommunications services in any way are interrupted, damaged or rendered less
effective, except to the extent caused by the grossly negligent or willful act
or omission by Landlord, its agents or employees. Tenant acknowledges that
Landlord meets its duty of care to Tenant with respect to the Building INC by
contracting with a reliable third party vendor to assume responsibility for the
maintenance and repair thereof (which contract shall contain provisions
requiring such vendor to inspect the INC periodically (the frequency of such
inspections to be determined by such vendor based on its experience and
professional judgment), and requiring such vendor to meet local and federal
requirements for telecommunications material and workmanship). Subject to the
foregoing, Landlord shall not be liable to Tenant and Tenant waives all claims
against Landlord whatsoever, whether for personal injury, property damage, loss
of use of the Leased Premises, or otherwise, due to the interruption or failure
of telephone services to the Leased Premises. Tenant hereby holds Landlord
harmless and agrees to indemnify, protect and defend Landlord from and against
any liability for any damage, loss or expense due to any failure or interruption
of telephone service to the Leased Premises for any reason. Tenant agrees to
obtain loss of rental insurance adequate to cover any damage, loss or expense
occasioned by the interruption of telephone service.


                                      25.
<PAGE>

          IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the respective dates below set forth with the intent to be legally bound
thereby as of the Effective Date of this Lease first above set forth.

                               LANDLORD:

                               CORPORATE TECHNOLOGY CENTRE ASSOCIATES II LLC, a
                               California limited liability company

                               By:  Corporate Technology Centre Partners II LLC,
                                    a California limited liability company, its
                                    Managing Member

                                    By:  Menlo Equities LLC, a California
                                         limited liability company, its Managing
                                         Member

                                         By:  Diamant Investments LLC, a
                                              Delaware limited liability
                                              company, Member

                                              By: /s/ Richard J. Holmstrom
                                                 -------------------------------
                                                 Richard J. Holmstrom, Manager

Dated:     2-16-00
       ----------------

                               TENANT:

                               DIGITAL MICROWAVE CORPORATION, a
                               Delaware corporation

Dated:     2-17-00                   By: /s/ Carl A. Thomson
       ----------------                 ------------------------------------
                                     Title:   SR VP & CFO
                                           ---------------------------------

Dated:     2-17-00                   By: /s/  [ILLEGIBLE]
       ----------------                 ------------------------------------
                                     Title:  CEO
                                           ---------------------------------


                                      26.
<PAGE>

                                   EXHIBIT A

                                   SITE PLAN


                                       1.
<PAGE>

                                    EXHIBIT B

                                   WORK LETTER

THIS WORK LETTER dated February 16, 2000, is entered into by and between
CORPORATE TECHNOLOGY CENTRE ASSOCIATES II LLC ("Landlord") and DIGITAL MICROWAVE
CORPORATION ("Tenant"). On or about the date hereof, Landlord and Tenant entered
into that certain Lease (the "Lease") for the Leased Premises, as defined in the
Lease. This Work Letter sets forth the agreement of Landlord and Tenant with
respect to the improvements to be constructed in the Leased Premises. In the
event of any inconsistency between the terms of this Work Letter and the terms
of the Lease, the terms of the Lease shall control. All defined terms used
herein shall have the meanings set forth in the Lease, unless otherwise defined
in this Work Letter.

         1. TENANT IMPROVEMENTS. Tenant shall replace the HVAC system serving
the Leased Premises and shall construct, furnish or install all improvements,
equipment or fixtures, that are necessary for Tenant's use and occupancy of the
Leased Premises (the "Tenant Improvements"). Tenant shall also be responsible
for the cost of any alterations to the Building required as a result of the
Tenant Improvements. The Tenant Improvements shall be in conformity with
drawings and specifications submitted to and approved by Landlord and shall be
performed in accordance with the following provisions:

                  (a) Tenant shall prepare and submit to Landlord for its
approval two sets of fully dimensioned scale drawings (suitable for submission
with a building permit application) for the Tenant Improvements (including
plans, elevations, critical sections and details) and a specification of
Tenant's utility requirements. Tenant shall cause all drawings and
specifications for the Tenant Improvements to be prepared by licensed architects
and where appropriate, mechanical, electrical and structural engineers.

                  (b) Within 10 days after receipt of Tenant's drawings Landlord
shall return one set of prints thereof with Landlord's approval and/or suggested
modifications noted thereon. If Landlord has approved Tenant's drawings subject
to modifications, such modifications shall be deemed to be acceptable to and
approved by Tenant unless Tenant shall prepare and resubmit revised drawings for
further consideration by Landlord. If Landlord has suggested modifications
without approving Tenant's drawings Tenant shall prepare and resubmit revised
drawings within seven days for consideration by Landlord. All revised drawings
shall be submitted, with changes highlighted, to Landlord within seven days
following Landlord's return to Tenant of the drawings originally submitted, and
Landlord shall approve or disapprove such revised drawings within seven days
following receipt of the same.

                  (c) Tenant shall obtain all building and other permits
necessary in connection with the Tenant Improvements prior to the commencement
of such work. The Tenant Improvements shall (i) be constructed in compliance
with all of the terms and conditions of the Lease and with all applicable laws
and regulations, (ii) not involve changes to structural components of the
Building nor involve any floor, roof, or wall penetrations unless approved by
Landlord, and (iii) not require any material modifications of the Building's
mechanical or electrical systems unless approved by Landlord.

                  (d) Prior to commencing construction, Tenant shall deliver to
Landlord the following:

                           (i) The address of Tenant's general contractor, and
the names of the primary subcontractors Tenant's contractor intends to engage
for the construction of the Leased Premises.

                           (ii) The actual commencement date of construction and
the estimated date of completion of the work, including fixturization.

                           (iii) Evidence of Insurance as called for herein-
below.

                           (iv) An executed copy of the applicable building
permit for such work.

         (e) After final approval of Tenant's drawings by Landlord, Tenant shall
proceed promptly to commence performance of the Tenant Improvements. Tenant's
contractors and subcontractors shall be acceptable to and approved in writing by
Landlord, which approval shall not be unreasonably withheld or delayed, and
shall, at Landlord's option, be subject to administrative supervision by
Landlord in their use of the Building. Tenant shall furnish to Landlord a copy
of the executed contract between Tenant and Tenant's general contractor covering
all of Tenant's obligations under this Work Letter. Tenant shall use
commercially reasonable efforts to cause such work to be performed in as
efficient a manner as is commercially reasonable. Tenant shall reimburse
Landlord on demand for the cost of repairing any damage to the Building caused
by Tenant or its contractors during performance of the Tenant Improvements.
Tenant's contractors shall conduct their work and employ labor in such manner as
to maintain harmonious labor relations. Tenant's general contractor
("Contractor") shall obtain a builder's risk policy of insurance in an amount
and form and issued by a carrier reasonably satisfactory to Landlord, and
Tenant's general contractor and subcontractors shall carry worker's compensation
insurance for their employees as required by law. The builder's risk policy of
insurance shall name Landlord as an additional insured and shall not be
cancelable without at least 30 days' prior written notice to Landlord.

         (f) Any changes in the Tenant Improvements from the final drawings
approved by Landlord shall be subject to Landlord's prior written approval,
which shall not be unreasonably withheld. Any deviation in construction from the
design specifications and criteria set forth herein or from Tenant's plans and
specifications as approved by Landlord shall constitute a default for which
Landlord may, within ten (10) days after giving written


                                       1.
<PAGE>

notice to Tenant, elect to exercise the remedies available in the event of
default under the provisions of this Lease, unless such default is cured within
such ten (10) day period, or, if the cure reasonably requires more than ten (10)
days, unless such default is cured as soon as reasonably practicable but in no
event later than thirty (30) days after Landlord's notice to Tenant. Only new
materials shall be used in the construction of the Tenant Improvements, except
with the written consent of Landlord.

                  (g) During the construction of the Tenant Improvements, Tenant
shall provide and pay for temporary connections for all utilities brought to the
Building. Trash removal will be done continually at Tenant's sole cost and
expense. No trash, or other debris, or other waste may be deposited at any time
outside the Building. If so, Landlord may remove it at Tenant's expense, which
expense shall equal the cost of removal plus twenty-five percent (25%) of such
costs as a management fee.

                  (h) Storage of Tenant's contractors' construction materials,
tools and equipment shall be confined within the Building, and in no event shall
any materials or debris be stored outside of the Building.

                  (i) Tenant acknowledges that it has engaged its architects and
shall be solely responsible for the actions and omissions of its architects and
for any loss, liability, claim, cost, damage or expense suffered by Landlord or
any other entity or person as a result of the acts or omissions of its
architects or for delays caused by its architects. Landlord's approval of any of
Tenant's architects or engineers and of any documents prepared by any of them
shall not be for the benefit of Tenant or any third party, and Landlord shall
have no duty to Tenant or to any third parties for the actions or omissions of
Tenant's architects or engineers. Tenant shall indemnify and hold harmless
Landlord against any and all losses, costs, damages, claims and liabilities
arising from the actions or omissions of Tenant's architects and engineers.

                  (j) Landlord shall have the right to post in a conspicuous
location on the Building or the Leased Premises, as well as record with the
County of Santa Clara, a Notice of Non-responsibility.

                  (k) Without limiting the generality of the foregoing, any work
to be performed outside of the Building shall be coordinated with Landlord, and
shall be subject to reasonable scheduling requirements of Landlord.

                  (l) Tenant shall, upon completion of its work, submit to
Landlord two (2) complete sets of plans (one (1) reproducible) and
specifications covering all of the Tenant Improvements, including
architectural, electrical, and plumbing, as built.

         2. PAYMENT OF COSTS OF THE TENANT IMPROVEMENTS.

                  (a) Unless specified otherwise herein, Landlord shall bear
and pay the cost of the Improvement Work (which cost shall include, without
limitation, the costs of construction, the cost of permits and permit
expediting, and all architectural and engineering services obtained by Landlord
in connection with the Tenant Improvements, the Contractor's fees, Landlord's
fee for construction administration in an amount equal to the amount charged by
Landlord's construction manager (the "Construction Manager"), and any Property
Maintenance Costs from the date of this Work Letter until the Lease Commencement
Date) up to a maximum of $423,360 (the "Improvement Allowance). The Improvement
Allowance shall be utilized only for building improvements to the Building, and
not for signage, furniture costs, any third party consulting or contracting fees
(except for Tenant's architect's fees), any telecom/cabling costs, or any other
purpose. Tenant shall bear and pay the cost of the Improvement Work (including
but not limited to all of the foregoing fees and costs) in excess of the
Improvement Allowance, if any. The cost of the Improvement Work shall exclude
the cost of furniture, fixtures and inventory.

                  (b) No less than the amount of $120,960.00 out of the
Improvement Allowance must be utilized by Tenant for replacement of the HVAC
system serving the Leased Premises and for no other purpose. The remainder of
the Improvement Allowance shall be utilized only for building improvements to
the Building or the other buildings in the Project leased to Tenant by Landlord,
and not for signage, furniture costs, any third party consulting or
contracting fees (except for Tenant's architect's fees), any telecom/cabling
costs, or any other purpose. Tenant shall bear and pay the cost of the Tenant
Improvements (including but not limited to all of the foregoing fees and costs)
in excess of the Improvement Allowance, if any.

                  (c) Not later than the 25th day of each month Tenant shall
submit applications for payment to Landlord in a form reasonably acceptable to
Landlord, certified as correct by an officer of Tenant and by Tenant's
architect, for payment of that portion of the cost of the Tenant Improvements
allocable to labor, materials and equipment incorporated in the Building during
the period from the first day of the same month projected through the last day
of the month. Each application for payment shall set forth such information and
shall be accompanied by such supporting documentation as shall be reasonably
requested by Landlord, including the following:

                           (i) Invoices and canceled checks.

                           (ii) Fully executed conditional lien releases in the
form prescribed by law from the Contractor and all subcontractors and suppliers
furnishing labor or materials during such period and fully executed
unconditional lien releases from all such entities covering the prior payment
period.

                           (iii) Contractor's worksheets showing percentages of
completion.

                           (iv) Contractor's certification as follows:


                                       2.
<PAGE>

         "There are no known mechanics' or materialmen's liens outstanding at
         the date of this application for payment, all due and payable bills
         with respect to the Building have been paid to date or shall be paid
         from the proceeds of this application for payment, and there is no
         known basis for the filing of any mechanics' or materialmen's liens
         against the Building or the Property, and, to the best of our
         knowledge, waivers from all subcontractors are valid and constitute an
         effective waiver of lien under applicable law to the extent of
         payments that have been made or shall be made concurrently herewith."

                  (d) Tenant shall submit with each application for payment all
documents necessary to effect and perfect the transfer of title to the
materials or equipment for which application or payment is made.

                  (e) On or before the 15th day of the month following
submission of the application for payment, Landlord shall pay a share of such
payment determined by multiplying the amount of such payment by a fraction, the
numerator of which is the amount of the Improvement Allowance, and the
denominator of which is the sum of (i) estimated construction cost of all
Tenant Improvements, and (ii) the estimated cost of all professional
services, fees and permits in connection therewith. Tenant shall pay the
balance of such payment, provided that at such time as Landlord has paid the
entire Improvement Allowance on account of such Tenant Improvements, all
billings shall be paid entirely by Tenant. If upon completion of the Tenant
Improvements and payment in full to the Contractor, the architect and
engineer, and payment in full of all fees and permits, the portion of the
cost of the Tenant Improvements, architects' and engineers' fees, permits and
fees theretofore paid by Landlord is less than the Improvement Allowance,
Landlord shall reimburse Tenant for costs expended by Tenant for Tenant
Improvements up to the amount by which the Improvement Allowance exceeds the
portion of such cost theretofore paid by Landlord. Landlord shall have no
obligation to advance the Improvement Allowance to the extent it exceeds the
total cost of the Tenant Improvements. In no event shall Landlord have any
responsibility for the cost of the Tenant Improvements in excess of the
Improvement Allowance. Landlord shall have no obligation to make any payments
to Contractor's material suppliers or subcontractors or to determine whether
amounts due them from Contractor in connection with the Tenant Improvements
have, in fact, been paid.

         3. EVIDENCE OF COMPLETION OF TENANT IMPROVEMENTS. Upon the completion
of the Tenant Improvements, Tenant shall:

                  (a) Submit to Landlord a detailed breakdown of Tenant's final
and total construction costs, together with receipted evidence showing payment
thereof, satisfactory to Landlord.

                  (b) Submit to Landlord all evidence reasonably available from
governmental authorities showing compliance with any and all other laws, orders
and regulations of any and all governmental authorities having jurisdiction over
the Building, including, without limitation, authorization for physical
occupancy of the Building.

                  (c) Submit to Landlord the as-built plans and specifications
referred to above.

         4. ASSIGNMENT OF RIGHTS AGAINST ARCHITECT AND CONTRACTOR. Tenant hereby
assigns to Landlord on a non-exclusive basis any and all rights Tenant may have
against Tenant's architects and contractors relating to the Tenant Improvements,
without in any way obligating Landlord to pursue or prosecute such rights.

         IN WITNESS WHEREOF, Landlord and Tenant have executed this Work Letter
as of the respective dates indicated below.

         IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the respective dates below set forth with the intent to be legally bound thereby
as of the Effective date of this Lease first above set forth.

                               LANDLORD:

                               CORPORATE TECHNOLOGY CENTRE ASSOCIATES II LLC, a
                               California limited liability company

                               By:  Corporate Technology Centre Partners II LLC,
                                    a California limited liability company, its
                                    Managing Member

                                    By:  Menlo Equities LLC, a California
                                         limited liability company, its Managing
                                         Member

                                         By:  Diamant Investments LLC, a
                                              Delaware limited liability
                                              company, Member

                                              By: /s/ Richard J. Holmstrom
                                                 -------------------------------
                                                 Richard J. Holmstrom, Manager

Dated:     2-16-00


                                       3.
<PAGE>

                               TENANT:

                               DIGITAL MICROWAVE CORPORATION, a
                               Delaware corporation

Dated:     2-17-00                   By: /s/ [ILLEGIBLE]
                                        ------------------------------------
                                     Title:   SR VP - CFO
                                           ---------------------------------

Dated:     2-17-00                   By: /s/ [ILLEGIBLE]
                                        ------------------------------------
                                     Title:  CEO
                                           ---------------------------------


                                       4.
<PAGE>

                                   EXHIBIT C

                         FORM OF ESTOPPEL CERTIFICATE


---------------------, 2000


-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------

Re     170 Rose Orchard Way
       San Jose, California

Ladies and Gentlemen:

Reference is made to that certain Lease, dated as of February __, 2000
between CORPORATE TECHNOLOGY CENTRE ASSOCIATES II LLC, a California limited
liability company ("Landlord"), and the undersigned (herein referred to as
the "Lease"). A copy of the Lease [and all amendment thereto] is[are] attached
hereto as EXHIBIT A. At the request of Landlord in connection with
[ State reasons for request for estoppel certificate], the undersigned hereby
certifies to Landlord and to [ State names of other parties requiring
certification ] and each of your respective successors and assigns as follows:

         1.  The undersigned is the tenant under the Lease.

         2.  The Lease is in full force and effect and has not been amended,
modified, supplemented or superseded except as indicated in Exhibit A.

         3.  There is no defense, offset, claim or counterclaim by or in
favor of the undersigned against Landlord under the Lease or against the
obligations of the undersigned under the Lease. The undersigned has no
renewal, extension or expansion option, no right of first offer or right of
first refusal and no other similar right to renew or extend the term of the
Lease or expand the property demised thereunder except as may be expressly
set forth in the Lease.

         4.  The undersigned is not aware of any default now existing of the
undersigned or of Landlord under the Lease, nor of any event which with
notice or the passage of time or both would constitute a default of the
undersigned or of Landlord under the Lease.

         5.  The undersigned has not received notice of a prior transfer,
assignment, hypothecation or pledge by Landlord of any of Landlord's interest
in the Lease.

         6.  The monthly rent due under the Lease is $           and has been
                                                      -----------
paid through                 , and all additional rent due and payable under
             ---------------
the Lease has been paid through -------------------.

         7.  The term of the Lease commenced on                   , and
                                                ------------------
expires on                  , unless sooner terminated pursuant to the
           -----------------
provisions of the Lease. Landlord has performed all work required by the
Lease for the undersigned's initial occupancy of the demised property.

         8.  The undersigned has deposited the sum of $            with
                                                       -----------
Landlord as security for the performance of its obligations as tenant under
the Lease, and no portion of such deposit has been applied by Landlord to any
obligation under the Lease.

         9.  There is no free rent period pending, nor is Tenant entitled to
any Landlord's contribution.

The above certifications are made to Landlord and Lender knowing that
Landlord and Lender will rely thereon in accepting an assignment of the Lease.


Very truly yours,


DIGITAL MICROWAVE CORPORATION



By:
   ------------------------------------
Name:
     ----------------------------------
Title:
      ---------------------------------



                                      1.