FIRST AMENDMENT TO LEASE

         This  First  Amendment  to  Lease  ("First  Amendment"),  dated  as  of
September  9,  1996,  is  entered  into by and  between  Benicia  Associates,  a
California general partnership  ("Lessor") and Signal Technology  Corporation, a
Delaware corporation ("Lessee").


                                    RECITALS

         A. Lessor and ST Microwave Corporation, a Delaware corporation, entered
into a Standard  Industrial  Lease dated  October 18, 1990 (the "Lease") for the
premises consisting of approximately 34,656 square feet ("Existing Premises") in
the building located at 975-977 Benicia Avenue, Sunnyvale, California.

         B. The term of the Lease is scheduled to expire on November 30, 1996.


         C. ST Microwave  Corporation now agrees to assign all of its rights and
obligations under the Lease to Lessee and Lessor and Lessee desire to extend the
term of the Lease, to expand the premises to include the remaining 19,624 square
feet of space in the building (the  "Additional  Premises") and to amend certain
other provisions of the Lease as provided herein.  The Existing Premises and the
Additional  Premises  are  sometimes  collectively  referred  to  herein  as the
"Premises."

                                   AGREEMENT

         In  consideration  of the mutual  covenants  set forth herein and other
valuable consideration, Lessor and Lessee agree to amend the Lease as follows:

         1.  Premises.  As of December 1, 1996 (the  "Effective  Date"),  Lessee
shall lease from Lessor the  Additional  Premises,  in addition to the  Existing
Premises,  and  paragraph 2 of the Lease shall be deleted and replaced  with the
following:

                  2. Premises.  Lessor hereby leases to Lessee and Lessee hereby
         leases  from Lessor for the term,  at the  rental,  and upon all of the
         conditions set forth herein, that certain real property situated in the
         County of Santa Clara,  State of California,  commonly known as 975-977
         Benicia Avenue,  Sunnyvale,  more fully described on Exhibit A attached
         hereto and made a part hereof,  consisting of a  single-story  building
         containing approximately 54,280 square feet ("Building"), together with
         the exclusive right to use the parking areas, driveways,  sidewalks and
         other outside areas surrounding the Building (the "Outside Area").

         2.  Term.  Paragraph  3.1 of the Lease is amended to extend the term of
the  Lease for a period of seven (7)  years,  so that the term  shall  expire on
November 30, 2003.

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         3. Rent. Paragraph 4 of the Lease is amended to provide that rent shall
be paid at  $32,923.20  per month  (34,656  square feet x $0.95 per square foot)
from  December l, 1996 until the date which is 60 days after  possession  of the
Additional  Premises is  tendered  to Lessee;  at that time rent will be paid at
$51,566.00  per  month,  i.e.,  54,280  square  feet x $0.95  per  square  foot.
Thereafter, rent shall be paid in accordance with the following schedule:

                   Months of Term                     Monthly Rent
                   --------------                     ------------

         Possession of Additional Premises
          plus 60 days - Nov 30, 1998               $51,566.00/month
           Dec l, 1998 - Nov 30, 2000               $55,908.00/month
           Dec l, 2000 - Nov 30, 2002               $60,251.00/month
           Dec l, 2002 - Nov 30, 2003               $65,136.00/month

         4.  Security  Deposit.  Paragraph  5 of the Lease is amended to provide
that, as of the date that Tenant takes  possession of the Additional  Space, the
Security  Deposit shall be increased to  $50,000.00.  Within ten (10) days after
Tenant takes possession of the Additional Space,  Lessee shall deliver to Lessor
the sum of $29,206.00 to increase the Security. Deposit to such amount.

         5.  Maintenance,  Repairs and  Alterations.  As of the Effective  Date,
paragraph 7.1 of the Lease shall be deleted and replaced with the following:

                  Subject to the obligations of Lessor as hereinafter set forth,
                  Lessee shall at all times and at its own expense  maintain and
                  repair all parts of the Premises in good, order, condition and
                  repair,  including all plumbing,  heating,  air  conditioning,
                  ventilating, electrical, and lighting facilities and equipment
                  within or serving  the  Premises;  fixtures,  interior  walls,
                  interior  surfaces  of  exterior  walls,   ceilings,   floors,
                  windows, doors, entrances,  plateglass and skylights;  and all
                  landscaping, driveways, parking lots, sidewalks, fences, signs
                  and exterior  lighting  located on the Premises.  Lessee shall
                  obtain preventive  maintenance  contracts for the heating, air
                  conditioning  and  ventilating  ("HVAC")  system with  monthly
                  service in accordance with manufacturer recommendations, which
                  shall provide for and include  replacement of filters,  oiling
                  and lubricating of machinery, parts replacement, adjustment of
                  drive  belts,  oil changes and other  preventive  maintenance,
                  including  annual  maintenance  of duct  work,  interior  unit
                  drains and caulking at sheet metal,  and  recaulking  of jacks
                  and vents on an annual basis. Lessee shall have the benefit of
                  all warranties  available to Lessor regarding the equipment in
                  the HVAC system.  Lessor may, at Lessor's  election,  have the
                  HVAC system  inspected by a licensed  HVAC  contractor  at the
                  expiration  of  the  term  to  confirm   whether   Lessee  has
                  maintained the HVAC system as required

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<PAGE>

                  herein.  The cost of such  inspection  shall be paid by Lessee
                  within  thirty  (30)  days  after  Lessor's   written  request
                  therefor.  Additionally, if any repairs and/or replacements to
                  the HVAC  system are  recommended  by the  contractor,  Lessee
                  shall  perform  such  repairs  and/or  replacements  and shall
                  provide   Lessor  with  evidence  that  such  repairs   and/or
                  replacements  have  been  completed  in  accordance  with  the
                  contractor's recommendations.

The first  sentence  of  paragraph  7.2 shall be deleted and  replaced  with the
following:

                  On  the  last  day  of  the  term  hereof,  or on  any  sooner
                  termination,  Lessee shall surrender the Premises to Lessor in
                  good  condition and repair,  ordinary wear and tear and damage
                  by fire or other  casualty  excepted.  Lessee  shall  have the
                  right  to  remove   Lessee's  trade   fixtures,   furnishings,
                  equipment and other personal property from the Premises at any
                  time prior to the  expiration  or sooner  termination  of this
                  Lease.

The following language is added to paragraph 7.3:

                  If Lessor  fails to perform any of its repair and  maintenance
                  obligations under this paragraph 7, and such failure continues
                  for more than  thirty  (30) days  after  written  notice  from
                  Lessee,  Lessee shall have the right,  but not the obligation,
                  to perform such repairs and/or maintenance. If any repairs are
                  required to the roof of the  Building,  Lessee  shall have the
                  right to perform  such repairs if Lessor fails to do so within
                  ten (10) days after  written  notice  from  Lessee.  In either
                  case,  Lessor shall reimburse  Lessee for the reasonable costs
                  incurred by Lessee to complete such repairs and/or maintenance
                  within  thirty  (30) days after  receipt of  Lessee's  written
                  demand  therefor,   together  with  copies  of  paid  invoices
                  evidencing  the costs  incurred by Lessee.  If Lessor fails to
                  reimburse  Lessee for such costs  within  such thirty (30) day
                  period,  such amount shall accrue interest at the maximum rate
                  permitted by law  from the date of expenditure by Lessee until
                  reimbursed by Lessor. Any repairs and/or maintenance permitted
                  herein shall be performed in a good and workmanlike  manner by
                  licensed  and insured  contractors.  If Lessor  objects to the
                  repairs and/or maintenance performed by Lessee or the expenses
                  incurred  by Lessee in  performing  such  work,  Lessor  shall
                  deliver written notice of Lessor's  objection to Lessee within
                  thirty (30) days after  Lessor's  receipt of Lessee's  invoice
                  evidencing the expenses  incurred by Lessee.  Lessor's  notice
                  shall set forth in reasonable detail Lessor's

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<PAGE>

                  reasons  for its claim that such  repairs  and/or  maintenance
                  were not  required or were not Lessor's  obligation  under the
                  terms of this Lease,  and/or the reasons for Lessor's  dispute
                  of the expenses incurred by Lessee in performing such work. If
                  Lessor and  Lessee  fail to resolve  any such  dispute  within
                  thirty (30) days after Lessor has notified  Lessee of Lessor's
                  objections,   the  matter   shall  be   resolved   by  binding
                  arbitration  in accordance  with the  provisions of California
                  Code of Civil Procedure Sections 1280 et seq.

As of the Effective  Date,  paragraph 7.4 shall be deleted and replaced with the
following:

                  Lessor  shall at all  times  maintain  the  roof,  foundation,
                  exterior walls of the Building (excluding interior surfaces of
                  exterior  walls),  and the  structural  condition  of interior
                  loadbearing walls, in good order, condition and repair. Lessor
                  shall  have no  obligation  to  maintain  or repair  any other
                  portion of the Building or the Outside Area.

                  Lessor shall  service all HVAC units in the Building  prior to
                  delivering  possession of the Additional Premises to Lessee so
                  that the HVAC  system  serving the  Building  shall be in good
                  working  order and repair when Lessee  assumes  responsibility
                  for the  maintenance  and repair of HVAC system as provided in
                  paragraph  7.1.  Lessee  shall  have  thirty  (30)  days after
                  possession of the  Additional  Premises is delivered to Lessee
                  to inspect the HVAC system  serving the Building.  If the HVAC
                  system  is not  in  good  operating  condition,  Lessor  shall
                  promptly  perform  such  maintenance  and/or  repairs  as  are
                  necessary  to the  place  the HVAC  system  in good  operating
                  condition. In addition,  prior to delivering possession of the
                  Additional Premises to Lessee, Lessor and Lessee shall inspect
                  the electrical system in the Additional  Premises to determine
                  whether any repairs to such electrical system are necessary to
                  eliminate any electrical  hazards and to determine whether the
                  existing  electrical  system in the  Additional  Premises  was
                  installed in accordance  with  applicable  code  requirements.
                  Based upon the results of such  inspection,  Lessor and Lessee
                  shall agree upon the repairs and/or improvements to be made to
                  the electrical  system in the  Additional  Premises and Lessor
                  shall  perform  such  work  at  Lessor's  expense  as  soon as
                  reasonably possible.

                  Subject to Lessor's  completion  of the  foregoing,  by taking
                  possession of the Additional  Premises  Lessee shall be deemed
                  to have accepted the Additional Premises and all

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<PAGE>

                  improvements  therein  in their  present  condition,  "as is,"
                  subject to all applicable zoning, municipal,  county and state
                  laws,  ordinances and regulations governing and regulating the
                  use of the  Additional  Premises.  Lessee  acknowledges  that,
                  except as expressly stated herein, neither Lessor nor Lessor's
                  agents  have made any  representation  or  warranty  as to the
                  condition of the Additional Premises nor any representation or
                  warranty  as to  the  present  or  future  suitability  of the
                  Additional  Premises  for the  conduct of  Lessee's  business.
                  Lessee  expressly  waives the  benefit of any  statute  now or
                  hereafter in effect which would  otherwise  afford  Lessee the
                  right to make repairs at Lessor's expense or to terminate this
                  Lease because of Lessor's failure to keep the Premises in good
                  order, condition and repair.

The first two  sentences  of  paragraph  7.5(a)  of the  Lease are  deleted  and
replaced with the following:

                  Lessee shall not,  without  Lessor's  prior  written  consent,
                  which consent shall not be unreasonably  withheld,  delayed or
                  conditioned, make any alterations, improvements, additions, or
                  Utility  Installations,  in, on or about the Premises,  except
                  for  (i)  nonstructural   alterations  not  exceeding  in  the
                  aggregate  $50,000.00  during the term of this Lease, and (ii)
                  alterations,  improvements  or  additions in or to the Outside
                  Area not exceeding in the aggregate $10,000.00 during the term
                  of this Lease. In any event,  whether or not in excess of such
                  amounts, Lessee shall not make any change or alteration to the
                  exterior of the Building nor remove any  landscaping  from the
                  Outside Area without  Lessor's prior written  consent.  Lessor
                  hereby  consents to Lessee's  installation of storage cages in
                  the  Building  and/or the Outside  Area  provided  that Lessee
                  obtains  all   necessary   permits  and   approvals  for  such
                  installation  and installs  such storage  cages in  compliance
                  with all applicable laws.

         6. Property  Insurance.  As of the Effective Date, the third and fourth
sentences of paragraph 8.1 shall be deleted and replaced with the following:

                  Whether the insuring party is the Lessor or the Lessee, Lessee
                  shall,  as additional  rent for the Premises,  pay the cost of
                  all insurance required  hereunder,  except for that portion of
                  the cost attributable to Lessor's liability coverage in excess
                  of $1,000,000 per occurrence. If Lessor is the insuring party,
                  Lessee shall, within ten (10) days following demand by

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<PAGE>

                  Lessor,  reimburse  Lessor  for the cost of the  insurance  so
                  obtained.

As of the  Effective  Date,  Paragraph  8.3(a) of the Addendum to Lease shall be
deleted.

         7. Real Property Taxes. As of the Effective Date, Paragraph 10.1 of the
Lease  and the  Addendum  to  Lease  shall  be  deleted  and  replaced  with the
following:

                  Lessee  shall  pay  the  real  property  tax,  as  defined  in
                  paragraph 10.2,  applicable to the Premises during the term of
                  this Lease.  All such payments shall be made at least ten (10)
                  days prior to the  delinquency  date of such  payment.  Lessee
                  shall promptly furnish Lessor with satisfactory  evidence that
                  such taxes  have been  paid.  If any such taxes paid by Lessee
                  shall  cover  any  period  of  time  prior  to  or  after  the
                  expiration  of the term hereof,  Lessee's  share of such taxes
                  shall be  equitably  prorated to cover only the period of time
                  within the tax fiscal year during which this Lease shall be in
                  effect,  and  Lessor  shall  reimburse  Lessee  to the  extent
                  required.  If Lessee shall fail to pay any such taxes,  Lessor
                  shall  have the right to pay the same,  in which  case  Lessee
                  shall  repay such  amount to Lessor  with  Lessee's  next rent
                  installment  together  with  interest at the maximum rate then
                  allowable by law.

         8. Utilities. As of the Effective Date, paragraph 11 of the Addendum to
Lease shall be deleted.

         9. Late Charges.  The second  sentence of paragraph 13.4 is deleted and
replaced with the following:

                  Accordingly,  if any payment of rent or any other sum due from
                  Lessee  shall not be received  by Lessor or Lessor's  designee
                  within  seven (7) days after such amount  shall be due,  then,
                  without any requirement for notice to Lessee, Lessee shall pay
                  to Lessor a late charge equal to 6% of such overdue amount.

         10.  Subordination.  Paragraph  30(a) of the Lease is amended by adding
the following as the last sentence of that paragraph:

                  The  nondisturbance  and  recognition   agreement  shall  also
                  provide that, in the event of a foreclosure of the mortgage or
                  deed of  trust,  Lessee  shall  have the  right  to apply  the
                  security   deposit  paid  to  Lessor  by  Lessee  pursuant  to
                  paragraph  5 of the  Lease  against  the rent due for the last
                  month of the term, notwithstanding the fact that the mortgagee
                  or beneficiary or

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<PAGE>

                  its  successors  or assigns may not have received the security
                  deposit from Lessor.

         11.  Consents.  Paragraph 36 of the Lease is deleted and replaced  with
the following:

                  Except for  paragraph  33 hereof,  wherever  in this Lease the
                  consent of one party is required to an act of the other party,
                  such consent shall not be  unreasonably  withheld,  delayed or
                  conditioned.

         12.  Parking.  Paragraph  48 of the Lease shall be deleted and replaced
with the following:

                  As  of  the  date  that  Lessor  delivers  possession  of  the
                  Additional Premises to Lessee, Lessee shall have the exclusive
                  right to use all parking spaces within the Outside Area of the
                  Premises.

         13. Right of First Refusal. Paragraph 49 of the Lease is deleted.

         14. Lessee's Remedy. The Lease shall be amended by adding the following
as paragraph 52:

                           52.  Lessee's  Remedy.  If,  as  a  consequence  of a
                  default by Lessor  under this Lease,  Lessee  recovers a money
                  judgment against Lessor, such judgment shall be satisfied only
                  out of the proceeds of sale received  upon  execution  of such
                  judgment  and levied  thereon  against  the  right,  title and
                  interest  of Lessor in the  Premises  and out of rent or other
                  income  from  such  property  received  by  Lessor  or  out of
                  consideration  received  by  Lessor  from  the  sale or  other
                  disposition  of all or any part of  Lessor's  right,  title or
                  interest in the Premises,  and neither Lessor nor its partners
                  shall be liable for any deficiency.

         15.  Option  to  Extend.  The Lease  shall be  amended  by  adding  the
following as paragraph 53:

                  53. Option to Extend.

                           53.1 Option  Period.  Provided  that Lessee is not in
                  default  hereunder,  either at the time of  exercise or at the
                  time the extended term commences, Lessee shall have the option
                  to  extend  the  initial  term  of  this  Lease  for  two  (2)
                  additional  periods of five (5) years  each  (each  an "Option
                  Period") on the same terms,  covenants and conditions provided
                  herein,

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<PAGE>
                  except that upon such renewal the monthly  rent due  hereunder
                  shall be determined  pursuant to Paragraph 53.2.  Lessee shall
                  exercise its option by giving Lessor written  notice  ("Option
                  Notice") at least one hundred  eighty  (180) days but not more
                  than two hundred seventy (270) days prior to the expiration of
                  the initial term of this Lease or the prior Option Period,  as
                  applicable.

                           53.2 Option Period Monthly Rent. The monthly rent for
                  each Option Period shall be determined as follows:

                                    (a) The parties shall have fifteen (15) days
                  after Lessor  receives the Option Notice within which to agree
                  on the monthly  rent for the Option  Period in question  based
                  upon the then fair  market  rental  value of the  Premises  as
                  defined in  Paragraph  53.2(b).  If the  parties  agree on the
                  monthly rent for the Option Period  within  fifteen (15) days,
                  they  shall  immediately  execute an  amendment  to this Lease
                  stating the monthly rent for the Option Period. If the parties
                  are unable to agree on the monthly rent for the Option  Period
                  within  fifteen  (15) days,  then,  the  monthly  rent for the
                  Option  Period shall be the then  current  fair market  rental
                  value  of  the  Premises  as  determined  in  accordance  with
                  Paragraph 53.2(c).

                                    (b) The "then fair  market  rental  value of
                  the Premises"  shall be defined to mean the fair market rental
                  value of the  Premises  as of the  commencement  of the Option
                  Period,  taking into  consideration  the uses permitted  under
                  this Lease,  the  quality,  size,  design and  location of the
                  Premises,  and the rent for  comparable  buildings  located in
                  Sunnyvale.  In no event shall the fair market  monthly  rental
                  value of the Premises  for the Option  Period be less than the
                  monthly rent last payable under the Lease.

                                    (c)   Within   seven  (7)  days   after  the
                  expiration  of the  fifteen  (15)  day  period  set  forth  in
                  Paragraph  53.2(a),  each  party,  at its cost  and by  giving
                  notice  to the  other  party,  shall  appoint  a  real  estate
                  appraiser with at least five (5) years'  full-time  commercial
                  appraisal  experience  in the area in which the  Premises  are
                  located to appraise and set the monthly  rent. If a party does
                  not appoint an appraiser  within ten (10) days after the other
                  party  has  given  notice  of the name of its  appraiser,  the
                  single  appraiser  appointed  shall be the sole  appraiser and
                  shall set the  monthly  rent.  If the two (2)  appraisers  are
                  appointed  by the  parties as stated in this  paragraph,  they
                  shall meet  promptly and attempt to set the monthly  rent.  If
                  they are unable to agree within thirty (30)

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<PAGE>

                  days after the second appraiser has been appointed, they shall
                  attempt to elect a third appraiser meeting the  qualifications
                  stated in this paragraph  within  ten (10) days after the last
                  day the two (2)  appraisers are given to set the monthly rent.
                  If they are unable to agree on the third appraiser,  either of
                  the parties to this Lease, by giving ten (10)  days' notice to
                  the other party,  can apply to the then Presiding Judge of the
                  Santa Clara County Superior Court for the selection of a third
                  appraiser  who  meets  the   qualifications   stated  in  this
                  paragraph.  Each of the parties shall bear  one-half  (1/2) of
                  the cost of appointing  the third  appraiser and of paying the
                  third appraiser's fee. The third appraiser,  however selected,
                  shall be a person who has not previously acted in any capacity
                  for either party.

                           Within  thirty (30) days after the  selection  of the
                  third  appraiser,  a majority of the appraisers  shall set the
                  monthly  rent. If a majority of the  appraisers  are unable to
                  set the monthly rent within the stipulated period of time, the
                  three (3)  appraisals  shall be added together and their total
                  divided  by three (3);  the  resulting  quotient  shall be the
                  monthly rent.

                           If,  however,  the  low  appraisal  and/or  the  high
                  appraisal  are/is  more than ten percent  (10%)  lower  and/or
                  higher than the middle appraisal, the low appraisal and/or the
                  high appraisal shall be disregarded.  If only one appraisal is
                  disregarded,  the remaining two (2) appraisals  shall be added
                  together  and their total  divided by two (2);  the  resulting
                  quotient  shall be the monthly rent. If both the low appraisal
                  and the high  appraisal  are  disregarded  as  stated  in this
                  paragraph, then only the middle appraisal shall be used as the
                  result of the appraisal.  After the monthly rent has been set,
                  the appraisers  shall  immediately  notify the parties and the
                  parties shall amend this Lease to set forth such amount.

         16. Delay in Possession of Additional  Space.  The Additional  Premises
are currently occupied with a lease that expires on November 30, 1996. If Lessor
is unable to deliver possession of the Additional Premises to Lessee by December
1,  1996,  Lessor  shall  use all  commercially  reasonable  efforts,  including
litigation,  to regain possession of the Additional  Premises as soon as legally
possible.  However,  if for any reason Lessor cannot  deliver  possession of the
Additional  Premises to Lessee by December 1, 1996,  Lessor shall not be subject
to any liability  therefor,  nor shall such failure  affect the validity of this
Lease or the  obligations of Lessee  hereunder or extend the term of this Lease,
but in such event Lessee  shall not be obligated to pay rent for the  Additional
Premises until 60 days after  possession of the Additional  Premises is tendered
to Lessee, and Lessor shall reimburse Lessee for all reasonable  attorneys' fees
incurred by Lessee as a direct  result of Lessee's  holdover of the  premises at
955 Benicia Avenue due to Lessor's inability to deliver

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<PAGE>

possession of the  Additional  Premises to Lessee by December 1, 1996,  plus the
difference  between  the rent  Lessee  pays for such  premises  during  Lessee's
holdover thereof and $18,642.80 per month (19,624 square feet x $0.95 per square
foot) for the  period of such  holdover,  both  amounts to be  prorated  for any
partial months.

         17.  Assignment  and  Assumption.   ST  Microwave   Corporation  hereby
assigns and  transfers to Signal Technology  Corporation all of its right, title
and  interest in and to the Lease  arising  from and after the  Effective  Date.
Signal  Technology  Corporation  hereby  accepts the  assignment and assumes and
agrees to  perform  as a direct  obligation  to  Lessor  all  obligations  of ST
Microwave  Corporation  as Lessee  under the  Lease  arising  from and after the
Effective Date.

         Except as set forth in this First  Amendment,  the Lease is  unmodified
and in full force and effect.

LESSOR                                       LESSEE
Benicia Associates, a California             Signal Technology Corporation, a
general partnership                          Delaware corporation


By:  /s/ Larry L. Miller                     By: /s/ Dale L. Peterson
   ------------------------------               ----------------------------
   Larry L. Miller,
   General Partner                           Its  CEO
                                                ----------------------------

                                             ASSIGNOR

                                             ST Microwave Corporation, a
                                             Delaware corporation

                                             By /s/ Dale L. Peterson
                                                ----------------------------

                                             Its      Sole Director
                                                ----------------------------

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