Document:

<PAGE>

                                                               EXHIBIT 10.20
                                                                    REDACTED

           CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
           SEPARATELY WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN
           REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

                                POWER OF ATTORNEY

I the undersigned,

Olivier Houssin,

President Directeur General of Alcatel Business Systems, a company incorporated
under the laws of France as a societe anonyme with a share capital of FRF
734,376,000, having its registered office at 12 rue de la Baume 75008 Paris,
registered with the Commercial and Companies Registry of Paris under number B
602 033 185 (the "Company").

Acting in accordance with the powers granted to me by the Board of Directors of
the Company on April 134, 1999.

Hereby grant to Philippe Coffre, Director of Strategy

The following powers:

To execute an OEM Agreement with a maximum amount of US$ 25,000,000 (twenty five
million US Dollars) with Interwave Communication Inc., a company incorporated
under the laws of California

And to carry out in the name of the Company and on its behalf any act, matter or
thing, and to pass and sign any and all documents which the Company may do and
which relate in any way to the aforementioned transaction.

Made on October 19, 1999.

/s/ Olivier Houssin
--------------------
Olivier Houssin
President Directeru General
<PAGE>

                         DISTRIBUTION AND OEM AGREEMENT
                                     BETWEEN
                  INTERWAVE COMMUNICATIONS INTERNATIONAL, LTD.
                          AND ALCATEL BUSINESS SYSTEMS

         This Distribution and OEM Agreement (hereinafter referred to as the
"Agreement"), is made and entered into as of the 27th day of OCTOBER, 1999,
(hereinafter referred to as the "Effective Date"), by and between

INTERWAVE COMMUNICATIONS INTERNATIONAL Ltd, company incorporated in Bermuda with
its US offices at 656 Bair Island Road, Suite 108, Redwood City, CA 94063-2704
(hereinafter referred to as the "SUPPLIER"),

and

ALCATEL BUSINESS SYSTEMS, a company organized under the laws of France with its
registered office at 12, rue de la Baume, 75008 Paris, France (referred to
hereinafter as "ALCATEL");

(collectively referred to as the "Parties" or individually as a "Party").

<PAGE>
                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                         Page
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<S>      <C>                                                                                             <C>
1.       DEFINITIONS ......................................................................................1
2.       SCOPE OF AGREEMENT ...............................................................................3
3.       DEVELOPMENT ......................................................................................3
4.       SALE OF THE PRODUCTS BY ALCATEL ..................................................................9
5.       CONTENT OF PRODUCT ..............................................................................10
6.       TESTING AND ACCEPTANCE ..........................................................................10
7.       QUALITY ASSURANCE ...............................................................................11
8.       PRODUCT EVOLUTION AT THE INITIATIVE OF SUPPLIER .................................................13
9.       GENERIC PRODUCT EVOLUTION REQUESTED BY ALCATEL ..................................................13
10.      HOMOLOGATION OF SUPPLIER PRODUCTS INCLUDING DEVELOPED PRODUCTS ..................................14
11.      SUPPLY AND MAINTENANCE OBLIGATIONS OF ALCATEL ...................................................14
12.      LABELLING, SALES DOCUMENTATION AND USE OF TRADEMARKS ............................................15
13.      TERM OF AGREEMENT ...............................................................................15
14.      PRICES ..........................................................................................16
15.      PURCHASE ORDERS .................................................................................18
16.      DELIVERY OF PRODUCTS ............................................................................19
17.      PAYMENT .........................................................................................22
18.      TAXES ...........................................................................................22
19.      DOCUMENTATION ...................................................................................22
20.      TRAINING ........................................................................................23
21.      INSTALLATION ....................................................................................23
22.      MAINTENANCE AND SUPPORT SERVICES ................................................................24
23.      MANUFACTURING LICENSE ...........................................................................26
24.      PRODUCT SOFTWARE LICENSE ........................................................................29
25.      WARRANTY ........................................................................................31
26.      INDEMNITY .......................................................................................33
27.      LIMITATION OF LIABILITY .........................................................................34
28.      PROPRIETARY TECHNICAL MATERIALS .................................................................35
29.      STRATEGY AND MARKETING COORDINATION COMMITTEE ...................................................36
30.      TERMINATION AND CHANGE OF OWNERSHIP OR DIRECTION ................................................36
31.      GENERAL .........................................................................................40
32.      ESCROW AGREEMENT ................................................................................45
</TABLE>

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                                     ANNEXES

Annex A (1)       DEVELOPED PRODUCTS DESCRIPTION AND GENERAL TECHNICAL
                  SPECIFICATIONS

Annex A (2)       MILESTONES

Annex A (3)       NRE COSTS

Annex B           NEW RELEASES ROAD MAP

Annex C           ALCATEL ROLLING FORECASTS & PO TIMEFRAMES

Annex D           PRICING

Annex E           LIST OF SUBCONTRACTORS

Annex F           TECHNICAL PRODUCT SUPPORT BY THE SUPPLIER

Annex G           LIST OF ALL ALCATEL COMPETITORS

Annex H           TRAINING

Except as set forth in Section 3.3, in the case of any conflict between the
Agreement and any Annex, the Agreement shall control, unless otherwise expressly
agreed in writing by the Parties.

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         Whereas, ALCATEL and SUPPLIER desire to develop corporate mobility
business, integrating wireless cellular coverage (technology, GSM, PCS, TDMA,
CDMA, ...) with corporate networks (including the evolution toward IP);

         Whereas, ALCATEL is a world leader in telecommunications systems and
equipment and first in enterprise solutions, as well as related cables and
components activities, and operates in over 130 countries. ALCATEL provides
complete solutions and services to Customers, service providers, companies and
consumers, ranging from backbone networks to user terminals. ALCATEL is the
World leader in public switching and the European leader in PABX business
communications.

         Whereas, SUPPLIER supplies compact mobile wireless network solutions
supporting corporate mobility and wireless networks, including IP;

         Whereas, ALCATEL wishes to offer for sale a complete range of products
in the field of cellular mobility (especially for Enterprise and Campus)
communication, including certain Products and Developed Products, as those terms
are defined hereinafter, which it does not manufacture itself;

         NOW, THEREFORE, in consideration of the mutual promises contained
herein and the covenants, conditions and provisions hereinafter set forth, the
parties hereby agree as follows:

         1.       DEFINITIONS

                  The following terms used in this Agreement shall have, unless
the context otherwise requires, the meanings hereby assigned to them:

                  ASSOCIATED COMPANIES shall mean any business entity which is
under the control of, in control of or under common control with a Party.
"Control" within the meaning of this provision means to have, directly or
indirectly a controlling interest at any time during the term of this Agreement
and as long as such an interest exists, by owning a majority of the voting stock
or equivalent rights.

                  CUSTOMERS shall mean ALCATEL's and its Associated Companies'
end user customers.

                  DETAILED TECHNICAL SPECIFICATION shall mean a detailed
specification for a Developed Product provided by SUPPLIER and accepted by
ALCATEL based upon the General Technical Specifications, which includes the
specific types of detailed information about the Developed Product mutually
identified and agreed by the Parties.

                  DEVELOPED PRODUCTS shall mean any software, firmware or
hardware for which ALCATEL has provided a General Technical Specifications and
which it has requested SUPPLIER, and SUPPLIER has agreed, to design and/or
develop, and which is funded by ALCATEL.

<PAGE>

                  GENERAL TECHNICAL SPECIFICATIONS shall mean those
specifications initially prepared by ALCATEL described in Annex A (1).

                  KNOW-HOW AND TECHNOLOGY SHALL MEAN any technical information
or knowledge created by a party related to the technology underlying the Product
or Developed Products.

                  LEAD TIME shall mean the period between the date of SUPPLIER's
receipt of an Order and the date of shipment of such Products pursuant to the
terms and conditions of this Agreement.

                  MAINTENANCE UPDATE RELEASE shall mean an update to a version
that remedies existing Severe Defects or Minor Defects and contains no new
features.

                  MALFUNCTION shall mean material non-conformity of the
Developed Product with the Detailed Technical Specifications.

                  MILESTONE shall mean a mutually agreed date for completion of
a task or deliverable as defined in an Annex A (2) to this Agreement.

                  MINOR DEFECTS shall mean moderate deviations in a Developed
Product or Product which do not preclude operation but do not strictly comply
with the corresponding Detailed Technical Specification (for Developed Products)
or SUPPLIER's published specifications (for Products).

                  NEW VERSION RELEASE shall mean Release 4 (R4), Release 5 (R5),
Release 6 (R6) and Release 7 (R7), as described in Annex B.

                  ORDER shall mean an order including but not limited to a
purchase order, placed by ALCATEL or its Associated Companies in accordance with
Section 15 of this Agreement.

                  PRODUCT SOFTWARE shall mean Software provided by SUPPLIER
designed to operate a Product.

                  PRODUCTS shall mean those products, consisting of hardware,
firmware and software (together with related documentation, and New Version
Releases, etc.), set out in Annex B as amended from time to time by written
agreement of the Parties including products operating in the 900, 1800 and 1900
Mhz range.

                  RELEASE shall mean a fix package or upgrade to a version that
improves product attributes capabilities, or usability, or contains major
enhancements thereto, an may also incorporate corrections to Severe Defects or
Minor Defects thereto.

                  ROLLING FORECAST PROCEDURE shall mean the procedure set forth
in Section 15.4.

                                    -2-
<PAGE>

                  SERVICES shall mean all services rendered by SUPPLIER to
ALCATEL including, but not limited to studies, development, maintenance and
support for software, training and technical assistance.

                  SEVERE DEFECT shall mean the system or network is down and
unusable as a result of a problem with a Product or Developed Product which
causes failures, or results in server intermittent operations with no customer
acceptable work-arounds, or the customer states the problem has a critical
impact on their operation. It may also mean the situation where a system or
network is up and running, however the problem with a Product or Developed
Product exists with significant impact and which has difficult or no
work-arounds, such problem causing substantial performance degradation, or
preventing the customer from using a critical feature of the Product or the
system.

                  SOFTWARE shall mean, all or any part of the specific computer
software program or collection of programs and related design material and
documentation (whether in human or machine readable form), including system and
support software delivered to ALCATEL.

                  STANDARD LEAD TIME shall mean, in respect of any Product,
eight weeks from the date of SUPPLIER's receipt of an Order to the date of
shipment to ALCATEL.

         2.       SCOPE OF AGREEMENT

                  2.1 The purpose of this Agreement is to define:

                  - a distribution and OEM relationship for the Products between
                  the Parties,

                  and

                  - a design and development relationship between the Parties
                  for Developed Products.

                  2.2 SUPPLIER shall design and develop the Developed Products
as further specified in this Agreement.

                  2.3 ALCATEL or its Associated Companies shall purchase, or
cause to be purchased by an Associated Company, the Products, documentation,
training, maintenance, and support services as defined in Annex D from
SUPPLIER, by means of Orders placed from time to time during the term of this
Agreement and include such Products in its catalogue in order to resell them.
ALCATEL and its Associated Companies shall only issue Orders for Products to
SUPPLIER under the terms of this Agreement.

         3.       DEVELOPMENT

                  3.1 ALCATEL may at any time submit requests for a modification
of the Product and/or Developed Products to the Strategic Marketing and
Coordination Committee to be developed by SUPPLIER hereunder (hereinafter
"Modifications").

                                    -3-
<PAGE>

                  3.2 If, after SUPPLIER receives the General Technical
Specifications, the Parties mutually agree to proceed, SUPPLIER shall undertake
the feasibility study and shall subsequently provide ALCATEL with an estimate of
the price for effecting the agreed Modifications. SUPPLIER shall determine,
among other things, the appropriate Milestone or the revised Milestone for
effecting the Modifications.

                  3.3 If and when the estimate is accepted by ALCATEL, the
Parties shall sign an amendment to the Agreement (including a new or revised
Annex A), in particular with respect to financial conditions and possible
revision of the time schedule. Any amendment hereunder to add a new Developed
Product shall only serve to amend this Agreement with respect to that particular
Developed Product, and specifically shall not amend the Agreement with respect
to previous Developed Products, unless otherwise expressly agreed by the
parties.

                  3.4 ALCATEL will pay the amounts for the development on the
schedule specified in Annex A (3).

                  3.5 SUPPLIER may invoice ALCATEL for such amounts upon
completion of Milestones specified in Annex A (2).

                  3.6 ALCATEL shall pay such invoices in accordance with the
payment provisions set forth in Article 17.

                  3.7 SUPPLIER shall use members of its technical expert staff
with appropriate expertise for performance of its obligations. SUPPLIER shall
use reasonable efforts to maintain the same technical expert staff for the
duration of the development of a module of the Developed Product.

                  3.8 Cooperation Between The Parties

                           The Parties specifically acknowledge that the
development of the Developed Products shall require active and continual
cooperation between SUPPLIER and ALCATEL.

                           3.8.1    Project Managers and Technical Experts

                                    The Parties recognize that the successful
completion of the project calls for continuous supervision, and each Party
agrees to assign a Project Manager with the authority to take technical
decisions related to the activities which are the subject matter of this
Agreement. If either Party's Project Manager cannot continue to serve, the
Party concerned shall appoint a replacement Project Manager and give the
other Party written notice of the change.

                                    SUPPLIER's Project Manager shall allocate
a dedicated team of highly qualified engineers to the project for development
of the Developed Products.

                                    -4-
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                                    ALCATEL shall have the right to during the
term of this Agreement to have at least one of its or its Associated Company's
employees located at SUPPLIER's facilities at ALCATEL's cost.

                           3.8.2    Progress Reviews

                                    Progress reviews shall be made on a monthly
basis, as jointly agreed upon in writing by ALCATEL and SUPPLIER.

                                    Written minutes of each progress review
meeting shall be prepared and issued alternately by each of the Parties and
shall be approved by the other Party within eight (8) business days after the
non-preparing Party's receipt thereof. If, upon expiration of the
above-mentioned period, the preparing Party has received no recommended changes
on the minutes from the non-preparing Party, the minutes shall be deemed
approved by both Parties.

                           3.8.3    Technical Committee.

                                    A Technical Committee shall be established.
Its role shall be limited to overseeing the technical aspect and the
implementation of Developed Product program under this Agreement. The Technical
Committee shall be composed of two (2) members empowered to make day to day
decisions, each Party appointing its own representative.

                                    (a) In particular, the role of the Technical
Committee shall be:

                                            (i) To liaise between The SUPPLIER
and ALCATEL;

                                            (ii) To monitor the development and
installation of the Developed Products including the review of Progress Reviews;

                                            (iii) To check that both Parties are
complying with the time schedule; and

                                            (iv) To transmit all decisions
necessary for the implementation of the Developed Products to both Parties.

                                    (b) The Technical Committee shall also
examine all matters relating to the performance of the Developed Product program
under the Agreement, in particular:

                                            (i) The resolution of any difficulty
encountered in the performance of the Developed Product program under the
Agreement;

                                            (ii) The negotiation of any
supplement to or modification of the terms of the Developed Product program
under this Agreement, including prices or time schedule; and

                                    -5-
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                                            (iii) All important questions raised
by either Party with respect to the performance of the Developed Product program
under the Agreement and the decisions to be made in respect thereto.

                                    Decisions of the Technical Committee shall
be made by unanimous agreement and shall be given due consideration by the
Parties. In the event of disagreement between the members of the Technical
Committee, the matter shall be referred to the respective management of each
Party.

                                    Meetings of the Technical Committee shall
take place on a quarterly basis, as jointly determined by ALCATEL and the
SUPPLIER. Besides the regular progress reviews, a meeting shall be organized as
soon as any significant problem is identified by the SUPPLIER and ALCATEL.

                                    Minutes of the Technical Committee meetings
shall be alternately prepared and issued by each of the Parties' representatives
and shall be approved by the other Party's representative within eight (8) days
after receipt thereof. If upon expiration of the above-mentioned period the
preparing Party has received no recommended changes on the minutes from the
non-preparing Party, the minutes shall be deemed approved by both Parties.

                  3.9 Acceptance Procedures

                           3.9.1 Prior to SUPPLIER conducting a feasibility
study and preparing an estimate for a Developed Product under Section 3.2,
ALCATEL shall provide General Technical Specifications for each Developed
Product.

                           3.9.2 After the Parties execute an amendment to this
Agreement for a new Developed Product pursuant to Section 3.3, SUPPLIER shall
generate a set of Detailed Technical Specifications on the schedule set forth in
the Milestones.

                           3.9.3 The Parties shall jointly review the Detailed
Technical Specifications within fifteen (15) business days from receipt of
Detailed Technical Specifications and mutually agree on any changes to the
Detailed Technical Specifications.

                           3.9.4 SUPPLIER shall create a detailed test procedure
including test criteria which ensures that the Developed Product meets the
requirements of the Detailed Technical Specification.

                           3.9.5 The Parties shall jointly review the test
procedure and acceptance criteria within fifteen (15) business days from receipt
of test procedure and acceptance criteria and mutually agree on any changes to
the test procedure and/or acceptance criteria.

                           3.9.6 SUPPLIER shall test the Developed Product in
accordance with agreed upon test procedures and ensure that the Developed
Product meets the acceptance criteria.

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SUPPLIER shall notify ALCATEL of all Malfunctions and Minor and Severe Defects
noted during testing, whether corrected or not.

                           3.9.7 SUPPLIER shall provide a written test report
detailing the test results and the attainment or non-attainment of any
acceptance criteria.

                           3.9.8 ALCATEL reserves the right to test the
Developed Product in accordance with test procedures given in Article 6,
provided that such testing is detailed in the agreed upon test procedure.

                           3.9.9 If the Developed Product meets the acceptance
criteria specified in the test procedure, then the Developed Product shall be
deemed to have met Provisional Acceptance.

                           3.9.10 SUPPLIER shall create a detailed final test
procedure including test acceptance criteria which ensures that the Developed
Product meets the requirements of the Detailed Technical Specification.

                           3.9.11 The Parties shall jointly review the final
test procedure and acceptance criteria within fifteen (15) business days from
receipt of final test procedure and acceptance criteria and mutually agree on
any changes to the final test procedure and/or acceptance criteria.

                           3.9.12 SUPPLIER shall test the Developed Product
in accordance with agreed upon final test procedures and ensure that the
Developed Product meets the acceptance criteria. SUPPLIER shall notify
ALCATEL of all Malfunctions and Minor and Severe Defects noted during
testing, whether corrected or not.

                           3.9.13 SUPPLIER shall provide a written final test
report detailing the test results and the attainment of any acceptance criteria.

                           3.9.14 If the Developed Product meets the acceptance
criteria specified in the final test procedure, then the Developed Product shall
be deemed to have met Final Acceptance.

                           3.9.15 In the event that the Developed Product fails
to meet the final test acceptance criteria within thirty (30) days SUPPLIER
shall propose an action plan for meeting the final test acceptance criteria.

                  3.10     Milestones

                           SUPPLIER shall deliver to ALCATEL the deliverables
including but not limited to reports and/or Developed Products as specified in
the Milestones in Annex A (2).

                           ALCATEL shall have the right to terminate all of its
obligations with respect to a particular Developed Product program under the
present Agreement (except with respect to Milestones already delivered
hereunder) if SUPPLIER fails to achieve the final milestone for the

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particular Developed Product program within 150% of the agreed upon program
duration unless otherwise agreed in writing.

                           ALCATEL will have to pay only for Milestones
completed before the delay period begins.

                  3.11     Intellectual Property Rights in Developed Products

                           3.11.1   Ownership Of Developed Product

                                    All Developed Products including all
software (in both binary and source code form) and all copies thereof are and
shall be the exclusive property of ALCATEL and shall be delivered to ALCATEL
promptly at ALCATEL request from time to time at the termination or completion
of development or at the termination of this Agreement, which ever is earlier.

                           3.11.2   Ownership of Inventions and Intellectual
Property

                                    SUPPLIER hereby grants and agrees to grant
to ALCATEL all right, title and interest in and to the following (collectively,
"Supplier Developed Rights"): any and all things of value, including, but not
limited to, all services product, inventions (patentable or unpatentable), trade
secrets, and copyrights, together with any applications for patents which may
issue thereunder and registrations of copyrights, which are embodied in or cover
the Developed Products and are discovered, created, developed, or otherwise
acquired by SUPPLIER or any of its representatives, or subcontractors solely in
connection with the development of Developed Products. Upon request of ALCATEL,
SUPPLIER shall, at ALCATEL's expense, do or cause to be done all things
necessary to enable ALCATEL to register, file, prosecute, maintain and protect
trade secrets, copyrights, and applications for patents and patents issuing on
such applications, and to perfect the full ownership and right, title and
interest in and in all the rights and properties described hereinabove in this
Section 3.11.2. For purposes of clarification, Supplier Developed Rights shall
not include rights in items (a) developed by SUPPLIER before the Effective
Date, (b) obtained by SUPPLIER from a third party, and which SUPPLIER has no
legal right to provide such, right, title and interest or (c) independently
developed by SUPPLIER without access or reference to any information provided by
ALCATEL or its Associated Companies, whether before, during or after the
Developed Products development.

                           3.11.3   Background Intellectual Property Rights

                                    With respect to any Developed Products
provided by SUPPLIER under this Agreement, SUPPLIER agrees to grant, and hereby
grant to ALCATEL an irrevocable, paid up, non-exclusive worldwide license:

                                    (a) to make, use and sell under any and all
patent rights, owned or controlled by SUPPLIER to the extent needed for making,
using, selling or licensing equipment, materials or other goods based on or
using documents or tangible materials provided as part of the Developed Products
supplied by SUPPLIER; or

                                    -8-
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                                    (b) to display, perform, use, reproduce,
prepare derivative works based on, or distribute any documents or other tangible
materials provided as part of the Developed Products supplied by SUPPLIER; and

                                    (c) to disclose and use any and all of the
information contained in such documents or tangible materials.

                           3.11.4   Grant Back

                                    ALCATEL agrees with ALCATEL's prior written
consent to grant and hereby grants to SUPPLIER, under the Supplier Developed
Rights, a world-wide, non-exclusive, perpetual, non-terminable, sublicensable
but non-assignable, irrevocable, paid-up and royalty-free right and license
under intellectual property rights created by SUPPLIER to make, have made, use,
sell, offer for sale, import, copy, reproduce, modify, display, perform,
transmit, prepare derivative works and otherwise exploit in any way and
commercialize without restriction any products, software, equipment, materials,
or other goods, services, methods or processes.

         4.       SALE OF THE PRODUCTS BY ALCATEL

                  4.1 Scope of the sale

                           ALCATEL or its Associated Companies and their
respective Customers shall have the worldwide right to sell to Customers the
Product for resale, loan or lease by such Customers for the benefit of their
customers under ALCATEL's or its Associated Company's or Customers brand names,
provided, however that if ALCATEL or its Associated Company or Customer desire
to have SUPPLIER label the Product, SUPPLIER shall have the right to charge
ALCATEL or the Associated Company.

                           4.1.1 ALCATEL shall be free to determine the prices
and other terms pursuant to which it shall sell the Products.

                           4.1.2 If SUPPLIER is interested in subcontracting any
manufacturing, SUPPLIER shall consider ALCATEL or Associated Companies for such
manufacturing.

                  4.2 Relationship of the Parties

                           4.2.1 The relationship of ALCATEL and SUPPLIER
established by this Agreement is that of independent contracting parties, and
nothing contained in this Agreement shall be construed as (i) giving either
party the power to direct or control the day-to-day activities of the other,
(ii) constituting the parties as partners, joint ventures, co-owners,
principals, and agents or otherwise as participants in a joint or common
undertaking or (iii) creating an employment relationship.

                           4.2.2 Nothing in this Agreement shall be construed as
granting to ALCATEL distributorship or franchising rights.

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                           4.2.3 Neither Party, its agents and employees, shall
have power or authority as agent, employee or in any other capacity to
represent, act for, find or otherwise create or assume any obligation on behalf
of the other Party for any purpose whatsoever.

                           4.2.4 All sales and other agreements between ALCATEL
and its Customers shall be the sole responsibility of ALCATEL, except as
otherwise provided in this Agreement.

         5        CONTENT OF PRODUCT

                  5.1 The list of Products and minimum feature for future
releases are set forth in Annex B and may be amended from time to time upon the
mutual written consent of the Parties.

                  5.2 The evolution of the Product beyond that described in
Annex B shall be discussed in the Strategic Marketing and Coordination Committee
in accordance with Article 9 of the Present Agreement.

         6        TESTING AND ACCEPTANCE

                  6.1 Initial acceptance

                           Prior to placing any Orders for the Products listed
in Annex D and any new Products developed in the future, ALCATEL shall carry out
a platform testing and acceptance procedure for each such Product.

                           6.1.1 Such testing shall be carried out according to
the standard procedures of ALCATEL. These standard procedures will be made
available to SUPPLIER no less than sixty (60) days prior to the scheduled test.

                           6.1.2 Any non-conformity of the Products with
SUPPLIER's published specifications tested shall be duly recorded by both
Parties, and SUPPLIER will correct such non-conformities within two (2) months.

                           6.1.3 Upon successful performance testing of the
Products, ALCATEL will issue a written acceptance of the Products and their
related specifications. SUPPLIER agrees to work with ALCATEL to make sure that
SUPPLIER'S standard tests are consistent with ALCATEL's standard procedures as
tested in 6.1.1.

                  6.2 Pre-delivery inspection and certification by SUPPLIER

                           6.2.1 Prior to delivery of any Order, the Products
must be inspected by SUPPLIER in accordance with SUPPLIER's standard inspection
procedure to ensue that the Products comply with such Order and, in particular,
with the specifications for the Products to be delivered thereunder.

                           6.2.2 ALCATEL shall have the right to participate in
such inspection with regard to any Order with at least one (1) week's notice to
SUPPLIER.

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                           6.2.3 Upon delivery, SUPPLIER shall communicate to
ALCATEL in writing a certification from SUPPLIER's manager for quality control
that such Products are in conformity with the SUPPLIER's standard inspection
procedures.

                  6.3 Subsequent inspection and acceptance by ALCATEL

                           6.3.1 Within eight (8) weeks after arrival of the
Products at the destination indicated in the Order, ALCATEL may inspect such
Products, in accordance with agreed test procedures, to ensure that they comply
with the Order and specifications, as in effect at the time of delivery, and
that they are in good working order.

                           6.3.2 ALCATEL shall notify SUPPLIER in writing within
such eight (8) week period of any failure in this respect.

                                    (a) ALCATEL shall have no obligation to pay
SUPPLIER for properly rejected Products.

                                    (b) The SUPPLIER shall have 6 (six) weeks to
remedy any Severe Defects.

                                    (c) Failure to provide such notification
shall constitute acceptance.

                  6.4 Return and replacement of defective Products

                           6.4.1 SUPPLIER shall ship replacement Products to
ALCATEL FCA airport closest to SUPPLIER's manufacturing plant, in accordance
with the 2000 INCOTERMS of the International Chamber of Commerce, within
four (4) working days from date of receipt of written notification to SUPPLIER
of the rejection of the Products.

                           6.4.2 All defective Products will be repaired or
replaced at SUPPLIER s sole discretion and at its own expense.

                           6.4.3 SUPPLIER shall provide ALCATEL with a "Return
Material Authorization", and ALCATEL shall ship to SUPPLIER all defective
Products, transportation, insurance and any other related costs to be borne by
SUPPLIER with regard to replacement Products only during the Product's original
warranty period. Costs for Products returned to the SUPPLIER for repair after
the original warranty period shall be borne by ALCATEL.

         7.       QUALITY ASSURANCE

                  7.1 General Requirements

                           7.1.1 SUPPLIER is free to choose the quality
assurance system that best enables SUPPLIER to meet ALCATEL's requirements.
However, SUPPLIER recognizes and accepts that ALCATEL shall use standard ISO
9001, in whole or in part, to evaluate the suitability

                                    -11-
<PAGE>

and efficiency of the Quality Assurance set up for this purpose. The SUPPLIER
shall get ISO 9001 certification within 12 (twelve) months of this agreement's
signature.

                           7.1.2 SUPPLIER is at all times responsible for the
quality assurance of the Products and services relating thereto. In this regard,
SUPPLIER is, in particular, responsible for the quality of its purchases and the
quality of production expertise.

                           7.1.3 SUPPLIER shall appoint a representative to deal
with matters concerning ALCATEL and also delegate to such representative the
authority to act as its representative in connection with the quality assurance
of the Products supplied.

                           7.1.4 SUPPLIER must document and implement a Quality
Assurance program which demonstrates capacity to supply Products conforming to
the requirements of this Agreement.

                                    (a) Such documentation, which shall be in
English, shall consist of:

                                            (i) a quality manual defining the
quality system of SUPPLIER, including, another other subjects, the organization
and procedures followed within SUPPLIER, a copy of which shall be delivered to
ALCATEL on the effective date of this Agreement and any future updates as the
same are made.

                                            (ii) a quality plan, which must
contain a process for review and correction of errors;

                                            (iii) the specific quality testing
procedures of the Products and corresponding certification.

                                    (b) SUPPLIER shall deliver to ALCATEL copies
of the documents described in paragraphs (ii) and (iii) within sixty (60) days
of the effective date of this agreement.

                  7.2 Analysis and Investigation of Failures

                           All defects or anomalies in the manufacture of the
Products noted by either or both parties shall be recorded and appropriate
corrective action shall be taken by SUPPLIER.

                  7.3 Investigations and Audits

                           7.3.1 ALCATEL may carry out quality insurance
investigations and audits during the term of this Agreement upon seven (7) days
notice.

                           7.3.2 At all times upon seven (7) days notice
ALCATEL, and/or its Customers, when such Customers so require, shall have access
to the documents and control systems accounting records at SUPPLIER'S premises,
or the premises of its major sub-contractors, for the purpose of verifying the
implementation of the quality assurance of the Products in all respects.

                                    -12-
<PAGE>

                           7.3.3 In this event SUPPLIER shall hold at the
disposal of ALCATEL's representatives all reasonable material and qualified
personnel.

                           7.3.4 ALCATEL shall be solely responsible for, and
shall indemnify and hold the SUPPLIER free and harmless from, any and all
claims, damages, costs (including reasonable attorney s fees) or lawsuit arising
out of its acts or omissions or those of its employees, servants, agents or any
of them during any such investigation or audit.

         8.       PRODUCT EVOLUTION AT THE INITIATIVE OF SUPPLIER

                  8.1 SUPPLIER shall cause the Products to evolve, as concerns
the Product Software, in the form of Maintenance Update Releases and New Version
Releases.

                  8.2 SUPPLIER shall inform ALCATEL of its Releases of feature
improvements which may be suitable for use on, or in connection with, the
Products, as well as new generic products that are similar or equivalent to the
Products, provided it can do so lawfully, in which case the Parties shall meet
to discuss the suitability and terms and conditions of the sale of such new
products to ALCATEL.

                  8.3 SUPPLIER shall not impact form, fit or function of the
Products or the specifications without giving ALCATEL sixty (60) days notice and
SUPPLIER will not ship any such impacted equipment to ALCATEL without ALCATEL's
written permission.

                  8.4 Upgrade of delivered Products

                           SUPPLIER will produce New Version Releases of Product
Software reflecting functional evolution for installation in delivered Products,
in accordance with Annex B and will consider in good faith the recommendations
of the Strategic and Marketing Coordination Committee.

                           The costs of developing any upgrade reflecting
changes in design of generic products made by SUPPLIER in the normal course of
product evolution will be for the account of SUPPLIER. SUPPLIER commits to make
future Releases of generic Product Software as described in Annex B available to
ALCATEL for sublicensing to Customers in accordance with the provisions of this
Agreement.

         9.       GENERIC PRODUCT EVOLUTION REQUESTED BY ALCATEL

                  9.1 As a result of the output of the Strategic and Marketing
Coordination Committee, ALCATEL may request new technical specifications and
request SUPPLIER to implement the corresponding modifications, subject to
SUPPLIER's acceptance. SUPPLIER shall consider such request within a reasonable
period of time and respond to ALCATEL whether it accepts such a request.

                                     -13-

<PAGE>

                  9.2 With respect to any upgrade, as well as new features or
facilities added to the current generic version, made at the request of ALCATEL
the parties will negotiate in good faith sharing of financing and property
rights in the event that ALCATEL funds the development, and a specific written
agreement is mandatory. In the event that ALCATEL does not fund the requested
development the proprietary rights will remain with the SUPPLIER.

         10.      HOMOLOGATION OF SUPPLIER PRODUCTS INCLUDING DEVELOPED PRODUCTS

                           SUPPLIER will furnish proof of compliance with
general requirements of CE homologation and with CE marking, a list of countries
where SUPPLIER is homologated and verified, accepted and approved by
Underwriter's Laboratories ("U.L") and in compliance with Class B under 47 CFR
part 15 and other applicable limits under 47 CFR part 24 of the Regulations of
the U.S. Federal Communications Commission. In any case, all the delivered
product will be stamped with CE marking label. SUPPLIER will provide a list of
certifications obtained. ALCATEL shall provide a list of countries in which it
desires to certify the Product. ALCATEL will be responsible for identifying any
additional compliance tests required in those countries. SUPPLIER shall have the
option of:

                           1) Agreeing to perform such compliance tests in a
                              time frame agreed to by both Parties at
                              SUPPLIER expense;

                           2) Requesting ALCATEL to assist in accordance with
                              Section 10.1.2 below; or

                           3) Deciding not to pursue the test nor pay the
                              expense of pursuing such compliance.

                           10.1.1 With respect to any such country, SUPPLIER
shall, at ALCATEL's request, furnish documentary proof of such compliance.

                           10.1.2 At SUPPLIER's request, ALCATEL agrees to
assist SUPPLIER in seeking homologation compliance approval in a particular
country, provided that:

                                    (a) SUPPLIER shall furnish ALCATEL, at
SUPPLIER's sole expense, all necessary documentation, including powers of
attorney to act on behalf of SUPPLIER; and

                                    (b) SUPPLIER shall reimburse ALCATEL for all
costs and expenses incurred by ALCATEL in connection therewith.

         11.      SUPPLY AND MAINTENANCE OBLIGATIONS OF ALCATEL

                                     -14-

<PAGE>

                  11.1 ALCATEL will develop, within six (6) months after the
Effective Date, and thereafter maintain, an adequate staff of trained
technicians and provide technical support and service to Customers at such
prices and on such terms as ALCATEL may establish.

                  11.2 ALCATEL will maintain a spare parts inventory in
quantities and mix reasonably sufficient to support the installed base of
Products in all locations where ALCATEL has service technicians trained to
service SUPPLIER's Products, provided that SUPPLIER shall provide ALCATEL with
the necessary information concerning the quantifies and mix, Mean Time Before
Failure (MTBF), and lead time for repairs.

         12.      LABELLING, SALES DOCUMENTATION AND USE OF TRADEMARKS

                  12.1 ALCATEL shall market and resell the Products under its
own name and trademark, or that of its Associated Companies or Customers which
right shall include:

                           12.1.1 The use of ALCATEL's name and trademark in
advertising and sales promotion activities, as well as trade shows, technical
seminars and any other activities related to the marketing and sale by ALCATEL
of the Products.

                           12.1.2 The use of ALCATEL's name and trademark by
Customers, including Customers and customers of Customers, for all such
activities, provided that ALCATEL has agreed to same.

                           12.1.3 ALCATEL shall have the right to request in
writing from SUPPLIER use of SUPPLIERS trademark in specific situations.
SUPPLIER will signify approval of the request in writing to ALCATEL.

                  12.2     SUPPLIER shall provide marking of the Products as
follows:

                           12.2.1 Products purchased under this Agreement shall
include a front panel reflecting ALCATEL's product markings.

                                    (a) With respect to the Products set forth
in Annex D as of the Effective Date, ALCATEL and SUPPLIER shall agree on the
most appropriate and efficient means of applying ALCATEL's product markings at
the earliest possible date.

                                    (b) With respect to new Products which may
be added in the future to Annex D, ALCATEL shall supply a marking specification,
together with ALCATEL's "private label" panels to SUPPLIER.

         13.      TERM OF AGREEMENT

                  Subject to any other provisions in this Agreement concerning
the right of either Party to terminate this Agreement:

                                     -15-

<PAGE>

                           13.1.1 Initial Term. This Agreement shall commence
upon the Effective Date and shall remain in full force and effect until December
31, 2001.

                           13.1.2 Renewal for Subsequent Periods. At the end of
the initial period and any subsequent period, this Agreement shall automatically
be renewed for an additional twelve (12) month period unless either party gives
written notice of non-renewal at least ninety (90) days prior to the end of the
current period.

         14.      PRICES

                  14.1     Prices and Discounts

                           Prices to ALCATEL for Products shall be as set forth
in Annex D.

                  14.2     Prices in U.S. Dollars

                           All prices under this Agreement are stated and shall
be paid in U.S. Dollars, unless otherwise agreed by the Parties.

                  14.3     Most Favoured Pricing

                           SUPPLIER will agree to sell the Products to ALCATEL
at prices equal to the lowest price charged by SUPPLIER to a third party
purchasing same or lesser quantities of the similar Product under an agreement
with comparable terms and conditions (including same or lesser volumes
commitments) to those in this Agreement. If at any time during the term of this
Agreement, SUPPLIER sells the same or lesser quantities of the Product to a
third Party at a lower price than that charged to ALCATEL, SUPPLIER shall
promptly notify ALCATEL in writing and ALCATEL shall then have the option to
purchase the Product from SUPPLIER at the prices offered to such third party for
so long as ALCATEL sells at the volume levels for which such third party was
offered such prices.

                  14.4     Purchase Commitments

                           During each Semester of this Agreement, ALCATEL shall
purchase Products, Services and/or Support (exclusive of NRE specified in Annex
A(3)) totaling at least the amount specified for such Semester (the "Semester
Commitment") as shown in the table below:
<TABLE>
<CAPTION>
------------------------------------- ------- ---------------------------------- ----------------------------------
                USSM                   1999                 2000                               2001
------------------------------------- ------- ---------------------------------- ----------------------------------
Calendar Quarter ending                Dec      Mar      Jun     Sep      Dec      Mar     Jun      Sep      Dec
------------------------------------- ------- -------- -------- ------- -------- -------- ------- -------- --------
<S>                                   <C>      <C>     <C>     <C>      <C>       <C>     <C>      <C>     <C>
Quarterly Revenue                        ***      ***      ***     ***      ***      ***     ***      ***      ***
------------------------------------- ------- -------- -------- ------- -------- -------- ------- -------- --------
Semester Revenue                                           ***              ***              ***               ***
------------------------------------- ------- -------- -------- ------- -------- -------- ------- -------- --------
Annual Revenue                           ***                                ***                                ***
------------------------------------- ------- -------- -------- ------- -------- -------- ------- -------- --------
Cumulative Revenue                       ***                                ***                                ***
------------------------------------- ------- -------- -------- ------- -------- -------- ------- -------- --------
</TABLE>

                                     -16-

* Certain information on this page has been omitted and filed separately with
  the SEC. Confidential treatment has been requested with respect to the
  omitted portions.

<PAGE>

                           For purposes of this Agreement, a "Semester" shall
mean a six (6) month period commencing on January first or July first of any
year during the term of this Agreement, provided that the first Semester shall
commence on the Effective Date and end on June 30, 2000.

                  14.5     Shortfall Payment

                           14.5.1 Provided that ALCATEL uses commercially
reasonable efforts to sell the volumes of Product or use the Support and
Services covered by this Agreement, in the event that ALCATEL fails to meet the
Semester Commitment stated above for any Semester, SUPPLIER'S sole remedy and
ALCATEL's total liability shall be calculated as follows:

                                    (a) ALCATEL may carryover up to [*****]
of the Semester Commitment for a given Semester to the next Semester, provided
that in no event may any amount carried over from the preceding Semester to
the current Semester be carried over to the next Semester. The actual
carryover amount from any semester (the "Carryover Amount") shall be equal to
the lesser of (i) [*****]  of the Semester Commitment for such Semester; and
(ii) the sum of the Semester Commitment for such Semester and the Carryover
Amount from the immediately preceding Semester less the amount actually
purchased during such Semester.

                                    (b) If, at the end of any Semester, the
amount actually purchased during such Semester is less than the sum of the
Carryover Amount from the previous Semester and [*****] of the Semester
Commitment for the current Semester, then ALCATEL shall pay SUPPLIER a
shortfall payment of [*****]  of such difference. SUPPLIER shall invoice
ALCATEL for such shortfall payment after the end of such Semester, and
ALCATEL shall pay such invoice in accordance with Article 17.

                                    (c) If, at the end of any Semester, the
amount actually purchased during such Semester exceeds the sum of the
Semester Commitment for such Semester and the Carryover Amount from the
preceding Semester, then ALCATEL shall receive a credit against purchases
equal to the lesser of: (i) the shortfall payment actually paid by ALCATEL
pursuant to Section 14.5.l(b) for a shortfall in the previous Semester, and
(ii) [*****]  of the amount by which the volume actually purchased during the
current Semester exceeds the sum of the Semester Commitment for such Semester
and the Carryover Amount from the preceding Semester.

                                    d) At the end of each Calendar Year, the
Parties will make the grand total of all ALCATEL and its Associated Companies'
purchases during this Calendar Year.

                                    If ALCATEL and its Associated Companies have
reached their Purchase commitments here above mentioned, ALCATEL shall be
completely reimbursed by SUPPLIER of all shortfall payments paid by ALCATEL
during the first Semester.

         Unless mutually agreed by the Parties, if SUPPLIER delays meeting the
general availability dates for any agreed upon Release milestones exceeds six
(6) months, then ALCATEL's volume commitments for that calendar year are hereby
terminated.

                                      -17-

* Certain information on this page has been omitted and filed separately with
  the SEC. Confidential treatment has been requested with respect to the
  omitted portions.

<PAGE>

         15.      PURCHASE ORDERS

                  15.1     Purchase Order Documents

                           ALCATEL shall purchase Products under this Agreement
by placing Orders in writing with SUPPLIER.

                           15.1.1 ALCATEL shall communicate firm purchase Orders
to SUPPLIER at SUPPLIER's office in Paris, France, or such other office as
SUPPLIER shall designate in writing.

                           15.1.2 Each Order shall:

                                    (a) Identify the Products desired by
quantity, SUPPLIER model number and description, and shall describe the hardware
and programming configurations of said Products.

                                    (b) Set forth a delivery schedule, which
shall not be less than the Standard Lead Time.

                           15.1.3 SUPPLIER shall be obligated to accept any
Order which conforms to the Rolling Forecast Procedure and this Article 15,
except that SUPPLIER shall not be obligated to accept any Order while ALCATEL is
in default of payment or for Products not covered in this Agreement.

                                    (a) SUPPLIER shall acknowledge acceptance of
Orders within five (5) working days after receipt of such Orders.

                                    (b) As promptly as practical after receipt
of ALCATEL's Order, but in no event less than Seven (7) working days of receipt
of such Order, SUPPLIER will notify ALCATEL in writing of the estimated shipment
dates for the Products ordered in conformity with Rolling Forecast Procedure.

                                    (c) If SUPPLIER has not issued a notice of
acceptance, or a duly justified rejection, within such period, then the Order
shall be deemed accepted according to its terms.

                  15.2     Cancellation of Orders

                           15.2.1 ALCATEL may cancel any Order for Products
placed in accordance with the Standard Load Time upon written notice provided to
SUPPLIER within fifteen (15) days after placement of the Order.

                  15.3     Phase out of the Product - Last Time Buy Order

                           15.3.1 Should SUPPLIER intend at any time to cease
production of Products, then, it shall so notify ALCATEL, in writing sent by
prepaid registered mail, a minimum of six

                                      -18-

<PAGE>

months prior to such cessation. ALCATEL may, in the three months following the
giving of notice, order further Products of the type to be discontinued at
reasonable prices to be agreed upon during the notice period, for delivery up to
the date of final production (provided that such orders are not disproportionate
to the existing volume commitments).

                           15.3.2 SUPPLIER shall make available for sale at the
prices stated in Annex D spare parts needed for maintenance of the Products sold
hereunder, during a minimum period of three (3) years from the date of the last
delivery. SUPPLIER will do its best efforts to provide ALCATEL with spare parts
after the period of three (3) years from the date of the last delivery.

SUPPLIER shall continue during a period of five (5) years from the date of the
last delivery to provide ALCATEL with support, maintenance, and repair.

                  15.4 Rolling Forecast Procedure

                  During each calendar month of the Agreement, ALCATEL shall
                  provide a rolling twelve month forecast as follows ("Rolling
                  Forecast Procedure"):

                  -        For each of the twelve calendar months following the
                           date of the forecast, the forecast shall state the
                           amount of the Products to be delivered in such month
                           by dollar volume and country including a breakdown by
                           Product type for each of the six calendar months
                           following the date of the forecast.

                  -        Forecast accuracy must be within fifty percent (50%)
                           by the ninth month and seventy-five percent (75%) by
                           the sixth month; i.e., actual Orders for delivery in
                           each of the first six months in the forecast shall
                           not vary by more than twenty-five percent (25%) from
                           the amount forecasted, and actual Orders for delivery
                           in each of the seventh, eighth and ninth months in
                           the forecast shall not vary by more than fifty
                           percent (50%) from the amount forecasted.

                  -        The rolling forecast shall not be construed as an
                           Order, provided that ALCATEL may only change the
                           quantities as stated above.

                  -        This process shall be reviewed to optimize the
                           requirements of both Parties on a quarterly basis.

                  -        ALCATEL shall have a right to verify SUPPLIER's
                           capacity to meet the forecasts, including site visits
                           to SUPPLIER facilities within fourteen (14) days
                           notice.

                  -        ALCATEL's initial twelve (12) month rolling forecast
                           is attached hereto as Annex C.

         16.      DELIVERY OF PRODUCTS

                                      -19-

<PAGE>

                  16.1     Delivery period

                           16.1.1 The Standard Lead Time shall apply to all
Orders placed in accordance with the Rolling Forecast Procedure in Section 15.4,
unless otherwise agreed by the Parties.

                           16.1.2 If delivery of any item of Product is delayed
beyond the agreed delivery date, for reasons other than events constituting
force majeure:

                                    (a) ALCATEL shall be entitled to receive
from SUPPLIER, as liquidated damages, to amount equal to one quarter of one
percent (.25%) of the net contract price of delayed Products for each calendar
week, starting after the first month of delay, provided that liquidated damages
in respect of any delayed Product shall not exceed five percent (5%) of the net
contract price of the Products delayed.

                                    (b) Such liquidated damages shall be paid
within sixty (60) days of the issue of an appropriate invoice by ALCATEL and
shall be in full and final satisfaction of SUPPLIER'S liability for such delay.

                           16.1.3 If delayed Products have not been delivered
within twenty (20) weeks of the agreed delivery date, ALCATEL shall have the
right to cancel without liability, in whole or in part, the Order concerned, in
so far as it related to the delayed Products, without prejudice to ALCATEL's
right to receive liquidated damages up to the date of such cancellation, subject
to the aforementioned maximum of five per cent (5%).

                           16.1.4 Any delay in the delivery beyond the agreed
upon delivery date shall delay the Rolling Forecast by the same number of days
of the delay.

                  16.2     Method of Delivery

                           16.2.1 The Products shall be delivered to ALCATEL FCA
San Francisco Airport or its other designated non-USA location at ALCATEL's
expense, in accordance with the 2000 INCOTERMS of the International Chamber of
Commerce.

                  16.3     Title

                           16.3.1 Title to Goods for all shipments shall pass to
ALCATEL at port of entry of the country addressed on the Order. Title to all
SUPPLIER Product Software shall remain with SUPPLIER.

                  16.4     Retention by SUPPLIER of security interest

                           16.4.1 Until such time as SUPPLIER shall have
received, in cash or cleared funds, full payment for the Products, SUPPLIER
shall retain a security interest in such Products, including any insurance
proceeds arising from loss or damage to same.

                                      -20-

<PAGE>

                           16.4.2 ALCATEL shall not be entitled to pledge or in
any way charge by way of security for any indebtedness any of the Products for
which full payment has not been received, and if ALCATEL does so, all Moines
owing by ALCATEL to SUPPLIER for such products shall (without prejudice to any
other right or remedy of SUPPLIER) immediately become due and payable.

                           16.4.3 If ALCATEL fails to pay any portion of the
purchase price or any related charges as required under the terms of Article 17,
SUPPLIER shall have the right, without liability, to repossess the Products and
to avail itself of any legal remedy; provided, however, that SUPPLIER shall not
repossess the Products from any Customer of ALCATEL except upon thirty (30) days
prior written notice to ALCATEL.

                           16.4.4 ALCATEL agrees to execute and deliver such
financing statements and other documentation as SUPPLIER may reasonably request
to perfect and protect SUPPLIER's security interest in the Products, provided
that any and all costs of obtaining and perfecting such security interest shall
be borne by SUPPLIER.

                  16.5     Export and Import Licensing

                           Subject to the terms of this Agreement:

                           16.5.1 SUPPLIER shall undertake to obtain such United
States export licenses and approvals as may be necessary or appropriate to
permit the export of Products hereunder, but makes no representation that such
licenses or approvals can be obtained or maintained.

                                    (a) ALCATEL shall undertake to obtain all
licenses, approvals or permits required by any other government.

                                    (b) SUPPLIER and ALCATEL each agree to
provide to the other such information and assistance as may be reasonably
required by the other in connection with obtaining such licenses, approvals and
permits and to take timely action to attempt to obtain all required import and
export documents.

                           16.5.2 SUPPLIER shall be at all times subject to the
export administration and control laws and regulations of the United States
Government, and any agency thereof. ALCATEL agrees that, with respect to resale
or any other disposition of Products and printed commercial and technical data
and information supplied by SUPPLIER, ALCATEL shall comply fully with the
export administration and control laws and regulations of the United States of
America, any amendments to such laws and regulations, and any instructions
provided by SUPPLIER relating to such compliance.

                           16.5.3 ALCATEL shall comply with all other applicable
laws of the United States and all other jurisdictions in which it carries on its
activities pursuant to this Agreement and

                                     -21-

<PAGE>

shall take commercially reasonable steps to ensure that its Customers comply
with such requirements..

         17.       PAYMENT

                  17.1     General Payment Terms

                           Payment shall be made by ALCATEL to SUPPLIER's Hong
Kong office thirty (30) days following receipt of a valid written invoice. A
valid written invoice must include the ALCATEL purchase order number and must be
for the exact amount of that ALCATEL purchase order. If the Order allows for
partial shipments, then ALCATEL will pay invoices for such partial shipments up
to the amount aggregated in the Order upon receipt of an otherwise valid written
invoices.

                           17.1.1 Products shall be invoiced as of the date of
shipment by the SUPPLIER.

         18.       TAXES

                  18.1 The prices specified in SUPPLIER's price list as set
forth in Annex D are exclusive of any sales, use or privilege tax, value added
tax, customs duty or impost, export or import license fee, excise tax based on
gross revenue or any similar tax or change which might be levied as a result of
the production, sale, license or shipment of any Products or the use of any
Products by ALCATEL.

                  18.2 ALCATEL agrees to pay and otherwise be fully responsible
for any such taxes (except for taxes based on the net income of SUPPLIER and any
withholding tax payable under the provisions of the Tax Treaty between France
and the United States, in force at the time of payment). Any personal property
taxes assessable on the Products after delivery shall be borne by ALCATEL.
SUPPLIER shall have the right, but shall not be obligated, to pay any such taxes
directly, in which event ALCATEL shall promptly reimburse SUPPLIER in the amount
thereof upon presentation by SUPPLIER of evidence of payment. If a certificate
of exemption or similar document or proceeding is to be made in order to exempt
the sale from sales or use tax liability, ALCATEL will obtain and pursue such
certificate, document or proceeding and present to SUPPLIER evidence of such
exemption satisfactory to SUPPLIER no later than sixty (60) days prior to
shipment.

         19.       DOCUMENTATION

                  19.1 Provision of Documentation by SUPPLIER

                           19.1.1 Upon acceptance of ALCATEL's first Order for
Products, SUPPLIER shall provide ALCATEL with one (1) copy of each of the
following documents of SUPPLIER in English, in both CD-ROM and diskette formats:

                                     -22-

<PAGE>

                                    (a) Installation Guides

                                    (b) Operations (User) Guides

                                    (c) All documents concerning dimensioning
and configuration rules

                                    (d) Payment for such documents shall be in
accordance with the terms noted in Article 17 and for the amount provided in
Annex D.

                           19.1.2 Upon publication by SUPPLIER, SUPPLIER will
provide one (1) copy of any new document that is similar to the above and is
made generally available to SUPPLIER's Customers and potential Customers and any
revisions to the documents listed above.

                  19.2     Use - Reproduction - Translation - Distribution

                           19.2.1 ALCATEL may use, reproduce, translate, modify
and distribute the documents described in Section 19.1.1, provided that:

                                    (a) ALCATEL may use and distribute such
documents only in connection with the exercise of its rights to resell and
sublicense Products under this Agreement, and ALCATEL may translate and modify
such documents as long as the documents continue to accurately describe such
Products and do not materially change the information in such documents.

                                    (b) ALCATEL may not make any warranty or
otherwise incur any liability on behalf of SUPPLIER with respect to the
accuracy or completeness of any such translated or modified version; and
shall indemnify SUPPLIER against any and all loss, damages, costs (including
reasonable attorneys fees) and expenses arising out of any breach by ALCATEL
of such obligation.

                                    (c) Title to and ownership of the
documentation described above shall at all times remain in SUPPLIER.

         20.      TRAINING

                  20.1 Training classes and prices are catalogued in Annex H

                  20.2 All costs for trainees appointed by ALCATEL, including
but not limited to costs for instruction charges, transportation, lodging, and
meals, shall be paid by ALCATEL.

         21.      INSTALLATION

                  21.1 The parties intend that at the earliest practical time
ALCATEL's personnel shall gain the required knowledge and expertise to perform
Products installation without participation of SUPPLIER's personnel. ALCATEL may
request and SUPPLIER may agree to provide assistance in the installation of
SUPPLIER's products at ALCATEL's expense.

                                     -23-

<PAGE>

                  21.2 If the installation of Products is performed by
SUPPLIER's personnel on request of ALCATEL the fees shall be as follows:

                  21.3 Charges for SUPPLIER-furnished installation shall be on a
time and materials basis in accordance with the hourly charges provided in Annex
F List Prices, plus travel and living expenses for SUPPLIER's personnel, in
accordance with ALCATEL'S corporate reimbursement policy.

                  21.4 Charges shall be paid by ALCATEL.

         22.      MAINTENANCE AND SUPPORT SERVICES

                  22.1     Customer support

                           22.1.1 ALCATEL will set up a technical assistance
center, in order to provide maintenance and support services to its Customers.

                           22.1.2 SUPPLIER shall provide training to ALCATEL
personnel with regard to such services in accordance with the fees in Annex H.

                           22.1.3 Service problems arising due to the Product's
non-conformity to the published specifications at the time the product was
shipped will be the SUPPLIER's responsibility to correct in accordance with the
time frames based upon the severity level tables in this Agreement and the
warranty provisions in Article 25 assuming the product has been used in the
manner for which it was designed. For problems arising outside the warranty
period the SUPPLIER will be obligated to provide support in accordance with the
support agreements in place at the time.

                  22.2     Repairs

                           22.2.1 The repair services set forth in Annex F
provided by SUPPLIER shall be made available to ALCATEL at the prices set forth
in that Annex F, which may be changed by SUPPLIER once per year upon thirty (30)
days written notice.

                           22.2.2 ALCATEL shall be responsible for shipping
charges to SUPPLIER and agrees to request and use the shipping containers
provided by SUPPLIER and to ship the Products and modules in the manner
prescribed by SUPPLIER.

                           22.2.3 SUPPLIER will ship the repaired Product, or
its replacement, within two weeks of receipt, and shall be responsible for
shipping charges to ALCATEL. Emergency repairs required in less than two weeks
will be made with all reasonable efforts.

                           22.2.4 Except for loss or damage caused by SUPPLIER's
negligence, ALCATEL relieves SUPPLIER of responsibility and shall indemnify
SUPPLIER against any liability whatsoever for all risks of loss or damage to the
Products and modules during the period

                                     -24-

<PAGE>

such Products and modules are in transit to and from SUPPLIER's Technical
Assistance Center and while in the possession of SUPPLIER at that location.

                  22.3     SUPPLIER hardware and software support service

                           22.3.1 In accordance with the provisions of Article
6, SUPPLIER shall be fully responsible for correcting errors and anomalies from
SUPPLIER's Product specifications.

                           22.3.2 SUPPLIER shall therefore establish and
maintain, a Technical Telephone Support and Software Update operation ("TSU") to
analyze and resolve such problems and to lend technical support to ALCATELs
maintenance technicians on-site.

                                    (a) The TSU shall include emergency callout
services, which shall be available to respond to calls seven (7) days a week and
twenty-four (24) hours a day. The TSU shall provide acknowledgement and status
on cases escalated by ALCATEL within 24 hours of receipt of such escalated
cases.

                                    (b) The TSU shall be staffed with trained
technicians to analyze problems and propose solutions to ALCATEL maintenance
representatives on site, including temporary bypass or workaround solutions to
blockages, major problems and minor problems.

                                    (c) The escalation process will be reviewed
and approved by the ALCATEL service factory organization.

                           22.3.3 The parties will agree to case severity
classifications using the definitions below as a guideline. If the Parties do
not agree upon the emergency classification, the decision of the Technical
Steering Committee will apply.

                                    S1 - EMERGENCY - System or network is down
and unusable as a result of a problem which causes failures, or results in
server intermittent operations with no customer acceptable work-arounds, or the
customer states the problem has a critical impact on their operation.

                                    S2 - SIGNIFICANT IMPACT - System of network
is up and running however the problem exists with significant impact and which
has difficult or no work-arounds causing substantial performance degradation, or
prevents the customer from using a critical feature of the product or the
system.

                                    S3 - LIMITED IMPACT - System or network is
up and running but minor problems exist having limited impact. Customer can use
the system or product with limitation or workarounds that are not critically
impacting the overall operations. This could also be non-problematic issue such
as documentation errors.

                                    S4 - RMA - Logging a request for a Return
Material Authorization.

                                    S5 - ENHANCEMENT - Required for a new
product or feature.

                                     -25-

<PAGE>

                                    S6 - INFORMATIONAL - Used for Customer
information requests.

                                    Target time for resolution of such faults
within receipt of initial fault report are as follows based upon severity:

<TABLE>
<CAPTION>
------------------------------ --------------------------- --------------------------- ----------------------------
          Severity                   NSS Workaround              BSS Workaround                 Full Fix
------------------------------ --------------------------- --------------------------- ----------------------------
------------------------------ --------------------------- --------------------------- ----------------------------
<S><C>
S1                             Within 24 hours             Within 48 hours             2 weeks
------------------------------ --------------------------- --------------------------- ----------------------------
------------------------------ --------------------------- --------------------------- ----------------------------
S2                             1 Week                      2 Weeks                     90 calendar Days or with
                                                                                       next Maintenance Update
                                                                                       Release whichever is
                                                                                       earlier
------------------------------ --------------------------- --------------------------- ----------------------------
------------------------------ --------------------------- --------------------------- ----------------------------
S3                             Not Required                Not Required                A commitment will be made
                                                                                       within three months to a
                                                                                       future Release for which
                                                                                       the fix is planned.
------------------------------ --------------------------- --------------------------- ----------------------------
</TABLE>

                           22.3.4 All costs and expenses associated with such
corrective action shall be for SUPPLIERS account if the problem:

                                    (a) arises during the warranty period of the
Products in question; or

                                    (b) arises after expiration of the warranty
period but is due to non-conformity of the Product with SUPPLIERS
specifications at the time the product was shipped.

                           22.3.5 The Technical Committee will meet within
thirty (30) days of the Effective Date of this Agreement and determine the best
possible support procedure.

                  22.4 With regard to the hardware portion of the Products,
SUPPLIER shall maintain service capabilities to repair hardware problems for a
period of five (5) years from the date of shipment of a Product, provided that
such repairs shall be for ALCATEL's expense after expiration of the warranty
period on same. At the end of the five (5) year period, if SUPPLIER will no
longer repair such Products, SUPPLIER agrees to propose an alternative solution
which could include an end of life buy pursuant to Section 15.3, appointment by
SUPPLIER of a third party to repair such Products, or transfer of repair
technology.

         23       MANUFACTURING LICENSE

                  23.1 In The event that, during the term of this Agreement,
ALCATEL and its Associated Companies pay invoices from SUPPLIER in an aggregate
and cumulative amount of at least $25 million in product revenue for New Version
Release Products (not including any Support, Services or development revenue)
then ALCATEL may in its sole discretion upon written notice to SUPPLIER exercise
one of the following options:

                                     -26-

<PAGE>

                           23.1.1 OPTION 1. License to Manufacture

         ALCATEL may elect to receive a non-exclusive, non-transferable, royalty
bearing, worldwide license to manufacture New Version Release Products at any of
ALCATEL's worldwide manufacturing facilities for resale under its brand name or
that of its Customer's brand names (such products being referred to as "ALCATEL
Manufactured Products"), provided however that in no event shall such license be
granted with respect to a specific New Version Release prior to the end of the
second complete calendar quarter following SUPPLIER's designation of that
Release being generally available. The date that SUPPLIER grants such license to
ALCATEL for a specific New Version Release shall be called "Manufacturing
License Commencement" (MLC) for such Product Release.

         SUPPLIER shall provide, and this Manufacturing License for a specific
New Version Release shall permit ALCATEL or its Associated Companies to use the
following with respect to such New Version Release:

         -        Hardware manufacturing information including but not limited
                  to assembly drawings, blueprints, bill of materials and other
                  manufacturing information

         -        Product(s) Technical Functional Specifications

         -        Packaging and Transport Specifications

         -        Lists of components and their certified suppliers

         -        Manufacturing Processes

         -        Test Procedures

         -        Rights to procure test tools from SUPPLIER at a reasonable
                  price

         -

         -        ALCATEL shall have the right to procure ASICs at the same
                  terms and conditions as SUPPLIER gets ASICs from its own
                  suppliers (procurement will be made either from SUPPLIER, or
                  from SUPPLIER's suppliers directly with written authorization
                  given by SUPPLIER to its own suppliers).

         -        Binary code for all Software (including middleware) and
                  related corrections

         -        Firmware in binary form

         -        Notification of component changes and/or obsolescence of
                  components

                                     -27-
<PAGE>

(all of the foregoing information, not including the rights to procure,
hereinafter referred to as the "Manufacturing Information").

         SUPPLIER shall provide, during the first quarter after ALCATEL has
exercised its option, at SUPPLIER's then current labor and other related support
costs and at ALCATEL's expense, a reasonable amount of technical support in the
form of access to qualified technical persons.

         SUPPLIER shall review and approve of ALCATEL's manufacturing process.

         This Manufacturing License shall also include the right to have ALCATEL
Manufactured Products made by a third party contractor solely for ALCATEL and/or
its Associated Companies, such contractor approved in writing and in advance by
SUPPLIER and such approval shall not be unreasonably withheld.

         ALCATEL and/or its Associated Companies agree to pay SUPPLIER a royalty
amount based upon the prices listed in Annex D effective immediately before
Manufacturing License Commencement (the "Transfer Price") which royalty shall be
calculated for each New Version Release in accordance with the table shown
below. If SUPPLIER reduces the price for a Product after Manufacturing License
Commencement, the Transfer Price shall be reduced by a factor equivalent to the
same factor by which the price for the SUPPLIER Product is reduced.

         If Manufacturing License Commencement for a specific New Version
Release occurs during the term of this Agreement, then the manufacturing license
for such New Version Release granted in this provision shall survive any
termination or expiration of this Agreement for three (3) years, except when the
Agreement is terminated by supplier under Section 30.1 or 30.3.

                           23.1.2 OPTION 2. Discounts

         In lieu of OPTION 1 above, ALCATEL may elect to continue purchasing
Products from SUPPLIER, in which case ALCATEL and/or its Associated Companies
shall receive the additional discounts on New Version Release Products described
in the fourth column of the table below, such discounts computed separately for
each New Version Release based upon the Minimum Volume and timing for such New
Version Release.

                      MANUFACTURING LICENSE AND DISCOUNT OPTION TABLE

<TABLE>
<CAPTION>
------------------------------ --------------------------- --------------------------- ----------------------------
Manufacturing Step for a       Royalty for each Release    Minimum Volume of           Additional Discount from
Release (12 month                                          specific Release to         Transfer Price if
------------------------------ --------------------------- --------------------------- ----------------------------

                                         -28-

<PAGE>

------------------------------ --------------------------- --------------------------- ----------------------------
periods commencing on MLC      (as a percentage of         advance to next lower       SUPPLIER manufactures for
for such Release)              Transfer Price)             Royalty level (measured     ALCATEL under OPTION 2
                                                           by the Transfer Price of
                                                           such Products)*
------------------------------ --------------------------- --------------------------- ----------------------------
<S>                            <C>                         <C>                         <C>
Manufacturing Step 1                      30%                     $15 million                      5%
------------------------------ --------------------------- --------------------------- ----------------------------
Manufacturing Step 2*                     25%                     $7.5 million                     10%
------------------------------ --------------------------- --------------------------- ----------------------------
Manufacturing Step 3*                     15%                      $5 million                      20%
------------------------------ --------------------------- --------------------------- ----------------------------
Manufacturing Step 4*                     10%                No minimum volume for                 25%
                                                                 five (5) years
------------------------------ --------------------------- --------------------------- ----------------------------
Thereafter                                 0%
------------------------------ --------------------------- --------------------------- ----------------------------
</TABLE>

ALCATEL and/or its Associated Companies will only advance to a lower royalty
percentage for a specific New Version Release at the end of a Manufacturing
Step:

   - if ALCATEL and/or its Associated Companies have manufactured such Release,

   - during twelve (12) month period commencing on MLC for such Release,

   - and if ALCATEL and/or its Associated Companies have reached a Minimum
     Volume corresponding to such Manufacturing Step.

         24.      PRODUCT SOFTWARE LICENSE

                  24.1 Subject to the terms and conditions set forth herein,
SUPPLIER hereby appoints ALCATEL and it Associated Companies as non-exclusive
worldwide reseller of the Product Software to Customers, and in connection
therewith hereby grants ALCATEL a non-exclusive and non-transferable worldwide
right and license to promote and distribute, either directly or indirectly
through its Associated Companies, the Product Software to Customers as an
integrated part of ALCATEL's or Associated Company's products.

                  24.2 SUPPLIER shall be free to appoint other distributors, use
other distribution channels, enter into OEM relationships or sell the Product
Software directly to any customer,

                                     -29-

<PAGE>

without incurring any liability to ALCATEL or its Associated Companies for so
doing. ALCATEL shall have no right to indirectly sell, sublicense or otherwise
distribute copies of the Product Software and shall not appoint any
sub-distributor, reseller, agent or other third party in connection with the
Product Software, except that ALCATEL or its Associated Companies shall be
entitled to provide the Product Software as part of the ALCATEL or Associated
Company's products to its Associated Companies for resale and sublicensing to
their Customers.

                  24.3 ALCATEL and its Associated Companies shall be entitled to
grant Customers sublicenses for use of the Product Software in connection with
ALCATEL or it Associated Company's products and to deliver to Customers copies
of the Product Software paid for by ALCATEL and provided by SUPPLIER and only in
connection with ALCATEL's or it Associated Company's products.

                  24.4 ALCATEL agrees not to sublicense or otherwise distribute
the Product Software except under a license in a written agreement (either a
sublicense agreement or an overall contract containing sublicense clauses) that
shall contain at least the following contractual restrictions and requirements:

                           24.4.1 Use of the Product Software restricted to
object code only; and

                           24.4.2 Prohibition of any transfer or assignment of
the Product Software, except for temporary installation in the event of a
computer malfunction; and

                           24.4.3 Prohibition of any reverse engineering,
disassembly or decompilation of the Product Software, save as permitted by law,
and prohibition of copying the Product Software except for a single backup or
archival copy; and

                           24.4.4 Requirement for Customer to discontinue use
and destroy or return to ALCATEL all copies of the Product Software and
documentation upon term or termination of the sublicense; and

                           24.4.5 Prohibition on removing or masking any
copyright notice, trademark (or trademark notice) or restrictive legend affixed
to the Product Software or appearing in the documentation.

                           24.4.6 Warranty disclaimers to disclaim all implied
warranties and limitations on liability to exclude all consequential damages.

                  24.5 If the Product in which the Product Software is
incorporated or embedded is licensed or sold by ALCATEL through an Associated
Company, ALCATEL shall require such Associated Company to enter with the
Customer into a written agreement containing the above-listed restrictions and
requirements.

                  24.6 ALCATEL agrees that in marketing and sublicensing the
Product Software as part of the ALCATEL or it Associated Company's products,
ALCATEL shall neither engage in any

                                    -30-

<PAGE>

deceptive, misleading, illegal or unethical practices that could be detrimental
to SUPPLIER, nor make to potential Customers any representations, warranties or
guarantees that are inconsistent with or in addition to those contained in this
Agreement or made otherwise by SUPPLIER, and that in promoting and distributing
the Product Software as part of the ALCATEL or it Associated Company's products
ALCATEL shall comply with all applicable laws and regulations.

                  24.7 ALCATEL or its Associated Companies shall use
commercially reasonable efforts to promote and market the Product Software
incorporated in The ALCATEL or it Associated Company's products in those
countries where the ALCATEL conducts business..

                  24.8 ALCATEL will maintain a sufficient number of capable
technical and sales personnel that will have completed the applicable training
in accordance with Article 20.

         25.      WARRANTY

                  25.1     Warranty Period

                           25.1.1   Hardware Warranty

                                    SUPPLIER, warrants to ALCATEL that for a
period of sixteen (16) months from the date of shipment (referred to as the
Hardware Warranty Period), each Product, other than the Product Software, will
conform in all material respects to SUPPLIER's written specifications for the
Product and will be free from defects in materials and workmanship, provided
that, in the event of any repairs made to Products and returned to ALCATEL or
its Customer during the last six months of the above warranty period, the
repaired Products shall continue to benefit from the warranty for a period of
six months. SUPPLIER's sole obligation under this warranty is limited to
repairing or replacing at SUPPLIER's option, at a SUPPLIER designated location,
any non-Product Software Products or parts thereof that SUPPLIER determines do
not conform to this warranty.

                                    The above Hardware Warranty is contingent
upon proper use in accordance with the specifications for the Product. The
warranty will not apply if adjustment, repair or parts replacement is required
because of misuse, neglect, improper installation, repair, alteration or
accident including humidity, temperature, power supply requirements, etc.

                                    THE WARRANTIES SET FORTH IN THIS SECTION
25.1.1 CONSTITUTE THE ONLY WARRANTIES WITH RESPECT TO ANY HARDWARE PRODUCT. THEY
ARE IN LIEU OF ALL OTHER WARRANTIES, CONDITIONS OR OTHER TERMS, WRITTEN OR
ORAL, STATUTORY, EXPRESS OR IMPLIED INCLUDING WITHOUT LIMITATION THE WARRANTY OF
MERCHANTABILITY AND THE WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, ALL OF
WHICH ARE EXPRESSLY EXCLUDED. THESE EXCLUSIONS DO NOT APPLY TO DEATH OR PERSONAL
INJURY CAUSED BY NEGLIGENCE.

                                     -31-

<PAGE>

                                    25.1.2  Software Warranty

                                    SUPPLIER warrants that Software provided
under this Agreement will perform in all material respects with the current
published specification for a period of twelve (12) months from the date of
shipment (Referred to as the Software Warranty Period). During the Software
Warranty Period, SUPPLIER shall take all reasonable steps without charge to
correct errors or defects in any such Software and any corrections, or defects
may at SUPPLIER election be provided to ALCATEL directly and/or incorporated in
subsequent updates from SUPPLIER. The actions described in this Section 25.1.2.
shall constitute SUPPLIER's sole obligation and ALCATEL's sole remedy for breach
of the Warranty in this Section 25.1.2.

                                    Any modifications or alteration of
Software without the approval of the SUPPLIER shall void SUPPLIER's
obligation under this Section unless and until the Software is returned to
its unaltered state.

                                    SUPPLIER does not warrant the Software will
operate in accordance with the published documentation in the combinations which
may be selected for use by ALCATEL, or will meet ALCATEL's requirements.
SUPPLIER does not warrant that the operation of the Software will be
uninterrupted or error free, or that all Software errors will be corrected.
Notwithstanding the prior disclaimer, SUPPLIER warrants that all Software
provided by SUPPLIER shall be free from any viruses coded or introduced into
Products.

                                    THE WARRANTIES SET FORTH IN THIS SECTION
25.1.2 CONSTITUTE THE ONLY WARRANTIES WITH RESPECT TO ANY SOFTWARE PRODUCT.
THEY ARE IN LIEU OF ALL OTHER WARRANTIES, CONDITIONS OR OTHER TERMS, WRITTEN
OR ORAL, STATUTORY, EXPRESS OR IMPLIED INCLUDING WITHOUT LIMITATION THE
WARRANTY OF MERCHANTABILITY AND THE WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE, ALL OF WHICH ARE EXPRESSLY EXCLUDED. THESE EXCLUSIONS DO NOT APPLY
TO DEATH OR PERSONAL INJURY CAUSED BY NEGLIGENCE.

                  25.2     Obligation to Notify

                           25.2.1  ALCATEL shall promptly notify SUPPLIER in
writing of any alleged non-conformities or defects in the Products and
specifically describe the problem.

                           25.2.2 SUPPLIER shall have no obligations under this
warranty with respect to any non-conformity or defect unless SUPPLIER receives
notice and a description of such non-conformity or defect no later than five (5)
business days after the expiration of the warranty period.

                           25.2.3  Upon receipt of such notice, SUPPLIER shall
(i) instruct ALCATEL as to the element or elements of the Products that ALCATEL
shall return to SUPPLIER and (ii) designate SUPPLIER's location to which such
element(s) shall be shipped.

                  25.3  Shipment under Warranty

                                     -32-

<PAGE>

                           25.3.1 Warranty service and repair and parts
replacement will be performed at SUPPLIER location designated by SUPPLIER.

                                    (a) In performing warranty service, SUPPLIER
will furnish parts on an exchange basis and the replaced parts will become the
property of SUPPLIER.

                                    (b) Charges for shipping Products or Product
elements to SUPPLIER are the responsibility of ALCATEL and shall be prepaid by
ALCATEL.

                           25.3.2  If Product or Product elements are determined
by SUPPLIER to be non-conforming or defective, SUPPLIER shall be responsible
for the cost of shipping both the nonconforming or defective Product or Product
element to SUPPLIER and shipping the repaired or replaced Product or Product
element to ALCATEL. If such Products or Product elements are determined by
SUPPLIER not to be non-conforming or defective, ALCATEL shall bear all costs of
such return.

                  25.4     Packaging

                           25.4.1 ALCATEL agrees to request and use the shipping
containers designated and provided by SUPPLIER and to ship the Products and
Products elements in the manner prescribed by SUPPLIER.

                           25.4.2 Except for loss or damage caused by SUPPLIER's
negligence, ALCATEL relieves SUPPLIER of responsibility for and shall indemnify
SUPPLIER against liability howsoever arising from all risks of loss or damage to
the Products and Product elements during the period such Products and Product
elements are in transit to and from a SUPPLIER location or are in the possession
of SUPPLIER at such location.

                  25.5     Warranty Exclusion

                           25.5.1 The warranties provided by SUPPLIER under
this Agreement do not include:

                                    (a) Performance of preventive maintenance;
or

                                    (b) Repair of damages or delays in service
caused by: failure to provide a suitable installation environment, use of the
Products for other than the purposes for which they were designed, accident,
neglect, disaster, damage incurred in transit, alterations to the Products or
other work on the Products not permitted or not performed as specified by
SUPPLIER or other damage not arising under normal operating conditions.

         26.      INDEMNITY

                  26.1  Indemnification

                                     -33-

<PAGE>

                           26.1.1 Notwithstanding any provisions of this
Agreement to the contrary, SUPPLIER shall protect, defend, indemnify and hold
harmless ALCATEL and its Associated Companies, co-owners, Customers and joint
ventures (if any), and their respective officers, directors, agents,
contractors and employees against loss or damage arising out of any claim or
suit for misappropriation of trade secret or for patent, copyright, trademark
or other proprietary right infringement by the possession, sale, licensing,
reproduction, modification, distribution, disclosure, manufacture or use, as
authorized under this Agreement, of the Products, Developed Products,
Software or Services provided by SUPPLIER hereunder. ALCATEL shall promptly
notify SUPPLIER of any such claim or suit and afford SUPPLIER an opportunity
at SUPPLIER's expense to undertake the defense of any such suit, provided
that, at ALCATEL's election, ALCATEL may join (but not control or direct) in
such defense at its expense. If SUPPLIER refuses or fails to defend such
suit, SUPPLIER shall reimburse ALCATEL in full for ALCATEL's reasonable costs
and expenses in the defense of such suit including attorneys' fees. SUPPLIER
shall pay promptly any final judgments or decrees which may be entered
against ALCATEL in such suit, and in event of the grant of injunctive relief,
SUPPLIER shall: (i) procure for ALCATEL the right to use such Products.
Developed Products, Software or other Services; (ii) provide non-violating
information, goods, equipment, and/or material substantially equal in value
and efficiency; or (iii) if it is commercially infeasible for SUPPLIER to do
(i) or (ii), grant ALCATEL a credit based on the remaining beneficial use of
the products. The foregoing obligations shall not apply to infringement
claims directly and necessarily arising from (i) the combination of a
SUPPLIER product with other products not provided, specified, recommended, or
suggested by SUPPLIER for use with such SUPPLIER products, if such
infringement would have been avoided by the use of such SUPPLIER product
alone, (ii) modification of a SUPPLIER product not made or authorized by
SUPPLIER, if such infringement would have been avoided by the use of the
unmodified SUPPLIER product; (iii) following ALCATEL's specifications,
designs, methods or directions, unless a commercially reasonable
non-infringing implementation of such specifications, designs, methods or
direction exists; or (iv) any trademark infringement involving branding not
applied by SUPPLIER or applied at ALCATEL's direction. THE FOREGOING STATES
THE ENTIRE LIABILITY AND OBLIGATIONS OF SUPPLIER AND THE EXCLUSIVE REMEDY OF
ALCATEL WITH RESPECT TO ANY ALLEGED OR ACTUAL INTELLECTUAL PROPERTY
INFRINGEMENT.

         27.      LIMITATION OF LIABILITY

                  27.1 IN NO EVENT WILL EITHER PARTY BE LIABLE FOR (i) SPECIAL,
INDIRECT OR CONSEQUENTIAL DAMAGES OR (ii) ANY DAMAGES WHATSOEVER RESULTING FROM
LOSS OF USE, DATA OR PROFITS, ARISING OUT OF OR IN CONNECTION WITH THIS
CONTRACT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN
CONTRACT TORT; INCLUDING NEGLIGENCE, OR OTHERWISE. [IN NO EVENT SHALL EITHER
PARTY'S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED
THE AMOUNTS PAID OR EXPRESSLY PAYABLE BY SUCH PARTY UNDER THE AGREEMENT DURING
THE LAST TWELVE (12) MONTHS.

                                     -34-

<PAGE>

         SUCH LIMITATION OF LIABILITY SHALL NOT APPLY WITH RESPECT TO ANY
ALLEGED OR ACTUAL INTELLECTUAL PROPERTY INFRINGEMENT.

                  27.2     Nothing in this Agreement or otherwise shall limit
either Party's liability for death or personal injury resulting from its
negligence.

         28.      PROPRIETARY TECHNICAL MATERIALS

                  28.1     Reverse Engineering

                           ALCATEL agrees not to disassemble, decompile, reverse
engineer, duplicate or modify any Software (except Developed Products software)
in any form or manner, nor directly or indirectly permit or allow its Customers
or any other person to do so except in the case of the existence of a license
granted under this agreement.

                  28.2     Documentation License

                           Subject to the terms and provisions of this
Agreement, and in particular Article 12 [Labeling, Sales Documentation and Use
of Trademarks] and Article 19 [Documentation]:

                           28.2.1 Confidential documentation, maintenance
manuals and drawings related to the Products or the Software (except Developed
Products), specifically excluding the items described in Section 19.1.1
(collectively, "Proprietary Technical Materials") which SUPPLIER may furnish
shall be in ALCATEL's possession pursuant only to a restrictive,
non-transferable (except for purposes of sublicensing), nonexclusive license
under which ALCATEL may use such Proprietary Technical Materials internally
solely for the purpose of selling, operating, servicing and repairing the
Products and the Software and for no other purpose.

                           28.2.2 Without limiting the generality of the
foregoing, ALCATEL may not reproduce or copy any Proprietary Technical Materials
or transfer, assign, sublicense, loan or disclose or otherwise make available
all or any portion of such Proprietary Technical Materials to any other person
or entity, without the prior express written consent of SUPPLIER. Such
Proprietary Technical Materials shall also be considered Confidential
Information for purposes of Section 31.4.

                  28.3     Ownership of Documentation

                           28.3.1 Title to and ownership of the Proprietary
Technical Materials shall at all times remain in SUPPLIER.

                           28.3.2 In addition to any other remedy SUPPLIER may
have, SUPPLIER reserves the right to terminate this license or to terminate this
Agreement pursuant to Article 30 hereof if ALCATEL fails to comply with any
significant or material term or condition hereof.

                                     -35-

<PAGE>

                           28.3.3 This license shall also terminate at such time
as ALCATEL shall permanently cease to use the Products for the purposes for
which they were manufactured by SUPPLIER and as permitted by this Agreement.

                           28.3.4 ALCATEL agrees, upon notice from SUPPLIER of
any termination of this license and in accordance with any more specific
directions from SUPPLIER, to deliver immediately to SUPPLIER all Proprietary
Technical Materials and all copies thereof.

         29.      STRATEGY AND MARKETING COORDINATION COMMITTEE

                  29.1 A Strategy and Marketing Coordination Committee composed
of representatives of the Parties is hereby created. Each Party shall appoint
immediately after the signature of this agreement a representative who has
authority to act in the name and on behalf of the relevant Party, subject only
where necessary to Board approval.

                  29.2 An alternate shall be also nominated by each Party, who
in case of absence of the Party's representative shall have full power to act in
the name and on behalf of the relevant Party, subject as aforesaid, to Board
approval. Each party may replace its representative and the alternate.

                  29.3 The Co-ordination Committee shall be chaired
alternatively by the representative of each of the Parties Meetings of the
Co-ordination Committee shall be held, in principle, at least two (2) times a
year, but should circumstances so require, a meeting may be convened at any time
at the request of any of the Parties. Decisions of the Coordination Committee
shall be made by unanimous agreement and shall be given due consideration by the
Parties.

                  29.4 The Chairman shall prepare minutes of each meeting of the
Strategic Coordination Committee and shall distribute copies of the same to the
other Party.

                  29.5 Finalized minutes once agreed shall be a true and
complete record of the decision taken by the Parties.

                  29.6 The Strategy and Marketing Coordination Committee shall
examine all important matters relating to the performance of the Agreement
including evolution of the Product and vision and strategic direction of
corporation with respect to the corporate mobility market.

         30.      TERMINATION AND CHANGE OF OWNERSHIP OR DIRECTION

                  30.1     Termination by SUPPLIER

                           30.1.1 Without prejudice to SUPPLIER's rights under
any other provision of this Agreement, SUPPLIER may, without incurring any
liability, terminate this Agreement at any time by giving written notice to such
effect to ALCATEL, upon the occurrence of any one of the following events:

                                     -36-
<PAGE>

                                    (a) All or a substantial portion of the
assets of ALCATEL are transferred to an assignee for benefit of creditors;

                                    (b) A receiver, trustee in bankruptcy or
person with similar powers has been appointed with respect to ALCATEL, or any
voluntary or involuntary action is commenced by or against ALCATEL under any
bankruptcy or similar law, and such action or appointment is not dismissed or
terminated within sixty (60) days thereafter;

                                    (c) ALCATEL is generally not paying its
debts as they become due;

                                    (d) Any legally constituted court or
governmental agency rules that a material provision of this Agreement is illegal
or unenforceable or requires a modification which would materially alter the
basic intent of the Parties in entering into this Agreement;

                                    (e) Any currency or other controls are
imposed by any governmental entity which prevents ALCATEL from making payments
as required by this Agreement.

                           30.1.2 In the event of termination by SUPPLIER under
this Article 30.1, ALCATEL's sole liability to SUPPLIER shall be for amounts due
and payable under this Agreement on the date of termination.

                  30.2     Termination by ALCATEL

                           30.2.1 Without prejudice to ALCATEL's rights under
any other provision of this Agreement, ALCATEL may, without incurring any
liability, including but not limited to shortfall payments and volume
commitments, terminate this Agreement at any time by giving written notice
to such effect to SUPPLIER, upon the occurrence of any one of the following
events:

                                    (a) All or a substantial portion of the
assets of SUPPLIER are transferred to an assignee for benefit of creditors;

                                    (b) A receiver, trustee in bankruptcy or
person with similar powers has been appointed with respect to SUPPLIER, or any
voluntary or involuntary action is commenced by or against SUPPLIER under any
bankruptcy or similar law, and such action or appointment is not dismissed or
terminated within sixty (60) days thereafter;

         In the event of termination under this provision:

         - ALCATEL's purchase commitments under Section 14.4 are hereby
           terminated

         - then SUPPLIER agrees to grant and hereby grants to ALCATEL a
           worldwide, perpetual, non exclusive, sublicensable, assignable right
           to use any information provided by SUPPLIER or use the Escrow
           Information to allow ALCATEL and/or its Associated Companies anywhere
           in the world to make, sell, license, distribute lease, copy, operate
           or otherwise use such information for any purpose (subject only to
           any non disclosure

                                     -37-
<PAGE>

           obligations stated herein) which it may determine. In addition,
           ALCATEL its Associated Companies may brand any Products of
           resale under the ALCATEL or its Associated Company's name.

                                    (c) SUPPLIER is generally not paying its
debts as they become due;

                                    (d) Any legally constituted court or
governmental agency rules that a material provision of this Agreement is
illegal or unenforceable or requires a modification which would materially
alter the basic intent of the Parties in entering into this Agreement;

                                    (e) Any currency or other controls are
imposed by any governmental entity which prevents SUPPLIER from performing its
obligations under this Agreement; or

                  30.3     Termination by either Party

                           Subject to the terms of this Agreement, either
Party shall have the right, at its option, by written notice to such effect
to the other Party, and in addition and without prejudice to any other rights
or remedies, to terminate this Agreement with immediate effect upon failure
of the other party to pay any Monies when due hereunder, or upon material
failure of the other Party to observe, keep or perform any of the covenants,
terms or conditions of this Agreement, if in either case such default
continues for ninety (90) days (or such lesser period as may be provided in
this Agreement) or more after written notice to such other Party.

                  30.4     SUPPLIER Obligations Upon Expiration or Termination
of this Agreement

                           30.4.1 Except in the case of termination by SUPPLIER
for the reasons set forth in Article 30.1 or 30.3, SUPPLIER shall continue,
during a period of three (3) years, to provide support, maintenance and repair
services for all Products which have previously been sold to ALCATEL at the
prices and under relevant terms and conditions stated in this Agreement and any
technical assistance needed by ALCATEL to exercise its post termination rights
at SUPPLIER's hourly rates set forth herein.

                  30.5     ALCATEL Obligations Upon Expiration or Termination of
this Agreement

                           Except as SUPPLIER may otherwise authorize in
writing, ALCATEL shall cease to use the trade names, symbols, logos and
trademarks of SUPPLIER and shall take all necessary action to ensure that any
contractor, agent or other party utilizing SUPPLIER's trade name, logos, symbols
or trademarks, pursuant to the rights granted to ALCATEL under this Agreement,
ceases to do so.

                  30.6 Orders after termination

                                     -38-
<PAGE>

                           The acceptance of any order from, or the sale of any
Products to, ALCATEL after the expiration or termination of this Agreement shall
not be construed as a renewal or extension hereof nor as a waiver of
termination, but in the absence of a written agreement signed by SUPPLIER and
ALCATEL, all such transactions shall be governed by provisions identical to the
applicable provisions of this Agreement, except the provisions regarding term.

                  30.7     Surviving Rights and Obligations

                           30.7.1 Notwithstanding anything to the contrary in
this Agreement, no termination by either party, or expiration at the end of its
term, of the OEM relationship created by this Agreement shall affect any rights
or obligations of either party:

                                    (a) which are accrued pursuant to this
Agreement as of the effective date of such termination or expiration; or

                                    (b) which are intended by their terms to
survive such termination or expiration, including, without limitation, Article
26 (Indemnity) and Article 31.4 (Confidentiality).

                  30.8     CHANGE OF OWNERSHIP OR DIRECTION

                           30.8.1 If any entity listed in Annex G (an "ALCATEL
Competitor") who, as of the Effective Date, had no ownership of the stock of
SUPPLIER entitled to vote in an election of its board of directors ("SUPPLIER's
Stock"), purchases more than fifteen percent (15%) of SUPPLIER's Stock during
the term of this Agreement, then:

         -

         -        ALCATEL's purchase volume commitments under Section 14.4 are
                  hereby terminated.

         -        The term of the contract, at ALCATEL's request, shall be
                  extended for a period of three years from the date such entity
                  obtains that interest.

         -        ALCATEL may for convenience reasons, terminate this Agreement
                  with a six (6) months prior written notice without any
                  penalties and or liquidated damages to be paid.

                           30.8.2 If any ALCATEL Competitor takes effective
control of the SUPPLIER by acquiring more than fifty percent (50%) of SUPPLIER's
Stock, or if SUPPLIER otherwise changes its strategic direction (change of
strategic direction means that SUPPLIER abandons future releases in the
corporate mobility market and/or refuses or consistently fails to materially
comply with its support, service, supply or development obligations under this
Agreement, and/or fails to meet the deadlines for general availability for New
Version Releases with minimum features stated in Annex B by at least six (6)
months).

                                     -39-
<PAGE>

         In such case, SUPPLIER shall inform ALCATEL as of the occurrence of
such an event.

         -        ALCATEL's purchase volume commitments under Section 14.4 are
                  hereby terminated

         -        The term of the contract, at ALCATEL's request, shall be
                  extended for a period of three years from the date such entity
                  obtains that interest or the date of change in strategic
                  direction;

         -        ALCATEL may for convenience reasons, terminate this Agreement
                  with a six (6) months prior written notice without any
                  penalties and or liquidated damages to be paid.

The right to the Manufacturing License shall, upon request of ALCATEL vest
without the need for ALCATEL to meet its $25 million purchase requirements, but
with an initial payment equal to 40% x [$25 million less the cumulative
purchases by ALCATEL prior to the exercise of ALCATEL's right to the
manufacturing license] and payment of periodic royalties in accordance with
the table (MANUFACTURING LICENSE AND DISCOUNT OPTION TABLE) in Section 23.1.2
of this Agreement; and

         -        SUPPLIER agrees to negotiate in good faith with ALCATEL, for a
                  reasonable lump-sum payment plus a royalty percentage applied
                  to the price stated in this Agreement, for SUPPLIER to grant
                  to ALCATEL a worldwide, perpetual, non exclusive,
                  sublicensable, assignable right to use any information
                  provided by SUPPLIER or use the Escrow Information to allow
                  ALCATEL and/or its Associated Companies anywhere in the world
                  to make, sell, license, distribute lease, copy, operate or
                  otherwise use such information for any purpose (subject only
                  to any non disclosure obligations stated herein) which it may
                  determine. In addition, ALCATEL its Associated Companies may
                  brand any Products of resale under the ALCATEL or its
                  Associated Company's name.

         31.      GENERAL

                  Each Party has all requisite legal and corporate power and
authority, including receipt of any required approval or authorization of its
Board of Directors and/or shareholders (individually or collectively), to enter
into and perform this Agreement.  Each Party acknowledges and represents that
there are no understandings, agreements, or prohibitions existing which would
interfere with, prohibit or limit such Party's ability to enter into this
Agreement and to fulfill its obligations hereunder.

                  31.1     Force Majeure.

                           31.1.1 Neither party shall be liable for failure to
perform or delay in performing any obligation under this Agreement (except an
obligation to pay money) if that performance is prevented, restricted or delayed
by any cause whatsoever, including, but not limited to, war, civil disturbance,
labor difficulties or direction of a governmental authority, whether or not

                                     -40-

*Certain information on this page has been omitted and filed separately with
the SEC.  Confidential treatment has been requested with respect to the
omitted portions.

<PAGE>

that cause is direct or indirect and whether or not that cause was in the
contemplation of the parties at the time of execution of this Agreement,
provided such cause is beyond the reasonable control of the party whose
performance is impaired and the party so affected takes all reasonable steps to
avoid or remove the cause.

                           31.1.2 The party whose performance is prevented,
restricted or delayed by any such cause shall notify the other party of the
nature and estimated duration of that cause and shall thereafter report to the
other party all circumstances relating to such matter at thirty (30) day
intervals.

                           31.1.3 If such cause ceases to exist, the party whose
performance was impaired shall perform or resume performance of its obligations
under this Agreement.

                           31.1.4 If any such cause affecting the performance of
ALCATEL continues for more than sixty (60) days SUPPLIER may terminate this
Agreement by notice to ALCATEL.

                  31.2     Severability

                           If any provision or part of a provision of this
Agreement shall be, or found by any authority or court of competent jurisdiction
to be, invalid or unenforceable, such invalidity or uneforceability shall not
affect the other provisions or parts of such provision of this Agreement, all of
which shall remain in full force and effect.

                  31.3     Effect on Commerce

                           Notwithstanding the content or generality of any
provision of this Agreement, nothing in this Agreement shall be construed to
require either party to commit or to refrain from committing any act or acts if
such requirement could not be lawfully imposed under applicable law of the
jurisdiction whose commerce would be affected, including, without limitation,
any law with respect to restraint of trade, unfair competition or patents.

                  31.4     Confidentiality

                           31.4.1 Any and all information of either party
which is received by the other party, including without limitation any and
all information relating to the Products, Developed Products, Software, or
Services including but not limited to parts or sub-assemblies thereof
including hardware and software, successor products or other SUPPLIER or
ALCATEL products or marketing or maintenance information, materials or
documentation (including without limitation technical specifications therefor
and Proprietary Information), shall be used by receiving party solely for the
purposes of fulfilling its obligations and exercising its other existing
rights under this Agreement and shall not be disclosed to any third party
except as expressly permitted herein.

                           31.4.2 The receiving party shall use the same degree
of care that the receiving party employs to protect its own similar confidential
information but in no case less than a reasonable degree of care.

                                     -41-
<PAGE>

                           31.4.3 The receiving party ALCATEL shall not directly
or indirectly disclose confidential information to any third party.
Notwithstanding the preceding sentence, the receiving party may disclose
confidential information to a third party performing work for the receiving
party in connection with this Agreement, provided however that the third party
agrees in writing to treat such confidential information confidential as
confidential, to use it only for the purposes of its work in connection with
this Agreement, to protect it to at least the same degree as required herein,
and to return or destroy all tangible or electronic copies of such information
upon completion of such work.

                           31.4.4 Upon termination of this Agreement, each Party
shall immediately return or destroy, at the other Party's election, all tangible
or electronic copies of the other Party's confidential information, and shall
certify in writing that such Party no longer possesses any tangible or
electronic copies of any other Party's confidential information.

                           31.4.5 Notwithstanding the foregoing, the
confidentiality obligations under this Section 31.4 do not extend to information
which the receiving party can demonstrate: (i) is or becomes generally available
in the public domain without fault of the receiving party; (ii) is rightfully
obtained by the receiving party from a third party without restriction as to use
and disclosure; (iii) is shown by written record to have been known or available
to the receiving party without restriction prior to the receipt hereunder; or
(iv) is independently developed by the receiving party without use of the other
party's confidential information.

                  31.5     Continuing Obligations

                           No termination or expiration of this Agreement shall
relieve ALCATEL of its obligations hereunder to the extent provided in Section
30.7 or its obligation to make payment of all Monies due under this Agreement or
under ALCATEL's order documents issued hereunder according to the terms hereof.

                  31.6     Assignment

                           31.6.1 Any assignment or attempted assignment by
either party, in whole or in part, of its rights or obligations hereunder or of
any other interest in this Agreement without the other party's prior written
consent shall be void, except that SUPPLIER may

                                    (a) assign the right to receive payments
hereunder; or

                                    (b) assign this Agreement or any of its
rights or obligations hereunder to a Foreign Sales Corporation or other
affiliate of SUPPLIER now or hereafter in existence, provided that SUPPLIER
shall remain liable as guarantor for the performance of such assignee; or

                                    (c) assign this Agreement in connection with
the acquisition of SUPPLIER, by merger or otherwise, subject, however, to the
right of ALCATEL to terminate this Agreement under the provisions of Article 30,
if applicable.

                                     -42-
<PAGE>

                  31.7     Governing Law and Resolution of Disputes

                           31.7.l This Agreement shall be subject to, governed
by and construed according to the substantive law of England.

                           31.7.2 Any dispute between the parties hereto arising
out of or in connection with this Agreement, which cannot be settled amicably,
shall be finally settled under the Rules of Conciliation and Arbitration of the
International Chamber of Commerce by three arbitrators (unless the parties agree
on the name of a single arbitrator), appointed in accordance with the said
Rules. The arbitration shall take place in London, England.

                  31.8     Language

                           This Agreement is in the English language only, which
language shall be controlling in all respects, and all versions hereof in any
other language shall be for accommodation only and shall not be binding upon the
parties hereto.

                  31.9     Entire Agreement

                           This Agreement, along with the Annexes attached
hereto, which are incorporated herein by reference, sets forth the entire
agreement and understanding between the parties with respect to the subject
matter hereof, and supersedes any and all prior proposals, agreements, and
representations between them, whether written or oral. The terms and conditions
of this Agreement shall prevail notwithstanding any variance with any term or
condition of any order submitted by ALCATEL or any other document, without
regard to any provision to the contrary in any such order or subordinate
document, notwithstanding any acknowledgment thereof by SUPPLIER.

                  31.10    Article Headings

                           Article headings and paragraph numbers are inserted
for convenience only and shall not be used in any way to construe the terms of
this Agreement.

                  31.11    Amendment

                           No modification or amendment of this Agreement shall
be valid and binding unless in writing and signed on behalf of each party by a
duly authorized officer.

                  31.12    Notices

                           All Notices required or permitted hereunder shall be
given in writing in the English language and shall be deemed to have been given
upon delivery in person the next working day if by facsimile or five (5) days
after mailing by certified mail or local equivalent, return receipt requested to
the addresses of the parties hereto (until written notice of a change thereof
shall have been given):

                                     -43-
<PAGE>

                           SUPPLIER:

                                    interWAVE COMMUNICATIONS INTERNATIONAL, LTD.
                                    c/o interWAVE Communications
                                    656 Bair Island Road
                                    Redwood City, CA 94065, USA,
                                    Attention: Chief Financial Officer

                           ALCATEL:

                                    32, Avenue Kleber
                                    92707 Colombes France
                                    Attention: ESD Financial Controller

                  31.13    U.S. Government Requirements on Encrypted Technology

                           31.13.1 This Agreement is subject to all United
States Laws and regulations related to exports and pursuant to such laws and
regulations to all administrative acts of the United States Government.

                           31.13.2 The parties to this Agreement agree that
the obligations contained in this Agreement shall not affect the performance of
any obligations created by prior contracts or subcontracts which the parties may
have individually or collectively with the U.S. Government.

                           31.13.3 No liability will be incurred by or
attributed to the U.S. Government in connection with any possible infringement
of privately owned patent or proprietary rights, either domestic or foreign by
reason of the U.S. Government's approval of this Agreement.

                           31.13.4 No export, sale, transfer, or other
disposition of the defense articles covered by this Agreement is authorized to
any country without the prior written approval of the Bureau of Export
Administration of the U.S. Department of Commerce.

                           31.13.5 The parties to this Agreement agree that an
annual report of sales or other transfers pursuant to this Agreement of the
licensed articles by quantity, type, U.S. dollar value, and recipient shall be
provided by the ALCATEL to the SUPPLIER and may be provided by the SUPPLIER to
the Department of Commerce.

                           31.13.6 All provisions in this Agreement which refer
to the United States Government and the Department of Commerce will remain
binding on the parties after the termination of this Agreement.

                           31.13.7 By signing this Agreement, ALCATEL
understands and agrees that all of the Products shipped to ALCATEL are
authorized for export by the U.S. Government only to the countries named in the
Orders or otherwise communicated to SUPPLIER. They may not be

                                    -44-
<PAGE>

resold, diverted, transferred, transshipped, or otherwise be disposed of in any
other country, either in their original form or after being incorporated through
an intermediate process into other end-items, without the prior written approval
of the U.S. Department of Commerce.

                  31.14    Confidentiality of Terms, Publicity

                           The existence of this Agreement, as well as its terms
and conditions, shall be held in confidence by both parties and only disclosed
as may be agreed to by both parties or as may be required to meet security
disclosure of export permit requirements. Neither Party shall make public
statements including conferences or issue publicity or media releases or take
the SUPPLIERS products to trade shows without the prior written approval of the
other Party. In addition, neither Party shall make public statements or issue
publicity or media releases with regard to this agreement or the relationship
between the Parties without the prior written approval of the other Party.

                  31.15    Counterparts

                           This Agreement may be executed in multiple
counterparts, each of which shall be considered an original, but all of which
together shall constitute one instrument, and the Parties hereby authorize and
agree to be bound by counterpart signature pages delivered by each Party to the
other Party via facsimile transmission, provided that an executed original of
the Agreement is delivered to such other Party within seven (7) days thereafter.

         32.      ESCROW AGREEMENT

                  32.1 SUPPLIER shall, within thirty (30) days of execution of
this Agreement ALCATEL, enter into an escrow agreement with Data Securities
International or another mutually agreed upon agent for the deposit of Product
Software source code, and all related information necessary to use such source
code, and Manufacturing Information hardware design information including but
not limited to drawings, bill of materials and other manufacturing information
Product Technical Functional Specifications Packaging and Transport
Specifications, Lists of components, Lists of certified suppliers, Manufacturing
Processes, Test Procedures, Binary code, Firmware, Software and related upgrades
or changes relating to Products, all information necessary to use such source
code, the Manufacturing Information, and any other information necessary to
permit ALCATEL to manufacture, develop and sell, support, and exercise its other
rights under this Agreement (hereinafter collectively referred to as "Escrow
Information"). The terms of the escrow agreement are to be agreed between the
Parties, but shall at a minimum provide:

-        If Supplier commits any act of bankruptcy, or compounds with its
         creditors, or a petition or receiving order in bankruptcy is presented
         or made against the Supplier, or a petition for an administration order
         is presented in relation to the Supplier, or a resolution or petition
         to wind up the Supplier, or a receiver or administrative receiver is
         appointed, other than for reconstruction, reorganization or
         amalgamation, and such act or petition is not cured, dismissed, or
         withdrawn within 90 days thereafter, or Supplier ceases to carry on
         business, then the Escrow Information shall be released to ALCATEL,
         provided that ALCATEL shall only be entitled to use the Escrow
         Information to enable the continued supply of Products and the
         provision of maintenance and

                                    -45-
<PAGE>

         support services to Customers and the development, manufacture and sale
         of any Products and Developed Products.

Upon execution of the escrow agreement, SUPPLIER agrees that all modifications,
updates and changes to the Escrow Information shall be deposited within thirty
(30) days of them becoming commercially available. All costs associated with the
deposit and update of Escrow Information shall be for ALCATEL's account.

                                    -46-
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

INTERWEAVE COMMUNICATIONS                            ALCATEL BUSINESS SYSTEMS
INTERNATIONAL Ltd.

By:  /s/ [ILLEGIBLE]                             By:
    --------------------------------                ----------------------------
Name:    PRISCILLA M. LU                         Name:
     -------------------------------                  --------------------------
Title:   CEO & CHAIRMAN                          Title:
       -----------------------------                   -------------------------
Oct. 27, 1999

<PAGE>

                                   ANNEX A (1)

       DEVELOPED PRODUCTS DESCRIPTION AND GENERAL TECHNICAL SPECIFICATION

I.       DEFINITIONS:

-     GCS IP LINK shall mean the link between the BSC and the Corporate GSM
      server (CGS) supporting GSM protocols BSSAP over IP.

-     CGS IP LINK SOFTWARE shall mean the software developed within the BSC, in
      order to provide interworking (using GSM signaling) between BSC and CGS
      over IP and or BSC and public MSC over SS7 link.

-     CGS IP LINK SPECIFICATION shall means the document prepared by ABS
      expressing ABS's requests and approved By SUPPLIER.

-     IP LINK DEVELOPMENT shall mean engineering effort to make available the
      BSC IP software including specification, production, validation,
      integration, configuration, installation and maintenance. As described
      within BSC IP link specification.

-     PRODUCT shall mean the BSC equipment supporting the "standard" BSC
      software and including the functions required within CGS IP link detailed
      specifications.

II. PROJECT SCOPE

On request of ALCATEL, Supplier agrees to perform the development of the CGS
IP link
         The object of this agreement is to define all rights and obligations of
         the parties for the development of the product: developed product, in
         compliance with the CGS IP link detailed specification.
         Supplier will provide all services to be performed under the OEM
         agreement.

III.     GENERAL TECHNICAL SPECIFICATIONS

General Technical CGS IP link Specifications.

1. INTRODUCTION
         The document describes the interworking between the CMS* / CGS
         (corporate GSM server) and BSS in 2 cases
         1) using SS7 signalling over PCM

<PAGE>

         2)  using GSM signalling over IP

         CGS includes functional blocks providing signalling adaptation, The GW
         PBX provides the Call handling services
         Several steps are identified and a road map allowing a cost
         optimisation  including IP connection is also considered.
         Note: CMS corporate mobility server
         General description of CMS is given in appendix 1

2. CGS INTERFACES TO BSS

2.1 STEP 1: SS7 INTERFACE

         With the Step 1, the CGS is connected to the interface. No modification
         is needed on the BSS (BSC + BTS).

-    Signalling aspects
         The BSC is linked to the CGS via A link ( PCM )
         "A" signalling is carried in 64K Channels (eg NDEG.16).
         In the normal BSS / MSC configuration origin & destination point CODE
         (OPC/ DPC) need to be defined eg: BSC PC XXX, MSC PC YYY.
         The CGS will interface BSC and MSC without any addressing modification
         as described below

                                       [GRAPHIC]

                   [graphic shows, in general terms, the BSC
                   interfacing with the MSC through the CGS]

-        Functional interworking

                 The protocols architecture is defined as below:

                                       [GRAPHIC]

                  [graphic shows, in specific terms, the BSC
                  interfacing with the MSC through the CGS]

<PAGE>

-    TCH aspects

         In the normal BSS / MSC configuration all PCM link are linked between
BSC and MSC.
         When the CGS is introduced, a PCM link (TCH only) from the BSC is
connected to the GW PBX

                                       [GRAPHIC]

                   [graphic shows the BSC interfacing with the
                MSC through the CGS and the PCM link to the TCM]

         The PCM, which links the BSC to the CGS, will be managed by the CGS
(selection of channels ...)

         The BSC is configured with 2 PCM (which seems to be linked directly to
the MSC).

         It is assumed that TCH are provided on a PCM G703 / G704 (voice
channels at 64 k bits).

-    Link between CGS and GWPBX

         The link between the CGS and the GWPBX is Alcatel proprietary.

-    Synchronization

         It is assumed that the MSC provides clock reference via PCM links
         connected to the BSC.
         When the clock signal is carried over the A interface connected
         to the CGS.
         The MSC will be the master, the CGS the slave. (Its internal
         clock will use the MSC clock).
         The CGS will transmit the clock signal to the BSC.
         The BSC will be the slave and use the CGS /MSC clock for its
         internal use.

         It is assumed that the GWPBX will be synchronised from the public
         network.

-    SUMMARY of the CGS / BSS interface

         The interface between CGS and BSC is based on two PCM links

<PAGE>

                                     [GRAPHIC]

                   [graphic shows the BCS interfacing with the
                          MSC based on two PCM links]

-    Configuration

         - TRAFFIC
         The CGS is designed to allow 80 - 100 erlangs with the PBX. ( 1000
         GSM terminals with 0.1 E )

         - PBX LINK
         The CGS is able to control 4PCM to the PBX. This capacity can be
         extended up 8 PCM

         - BSC/MSC links: A interface with signalling.
         All A interfaces which carry the A signalling must be linked to the
         CGS.
         The capacity of the CGS is under definition,
         the objective is support at least 4 A interfaces.

2.2 STEP 2 : IP INTERFACE BETWEEN CGS AND BSS

         The IP interface between CGS and BSC may be carried on IP link,
         2-sub-steps is identified.

         Step 2a) A signalling over IP and TCH over PCM (64K)

         step 2b)
         -    A signalling over IP & TCH over IP and or
         -    H323 signalling and TCH over IP
                  (specific 'adaptation' of H323 may be needed to carry all GSM
                  information, as far as possible all generic mechanisms to
                  carry additional information will be preferred)

<PAGE>

-    Step 2 a) < < A > >  over IP.

         THE OBJECTIVE IS TO AVOID SS7 BOARDS HANDLING SS7 LOW LAYERS. (MTP 1 -2
         -3)

         Basic principle:
         The deviation of signalling which was possible using S87 boards should
         be mapped to a < < BSC > > deviation of signalling using IP to the CGS

         It is proposed that the BSC deviate the signalling GSM to the CGS over
         an IP link which will return to the BSC the signalling after
         processing.
         The BSC will then forward the signaling to the MSC over the PCM SS7
         channels.

         In a similar way, in the opposite direction the SS7 signalling over PCM
         coming from the MSC is first deviated to the CGS. The CGS will return
         the signalling on IP to the BSC for processing.

                                     [GRAPHIC]

                     [graphic that shows the BSC connected
                      to the MSC through the IP deviator]

-    Protocol architecture

         It is proposed to interface the CGS directly at the SSCP level or
equivalent.

         For the BSC the connection to the CGS must not impact any signalling
procedures.

<PAGE>

The protocol architecture could be the following:

                                    [GRAPHIC]

            [graphic that shows the possible protocol architecture
                of the CGS and MSC, including the BSSAP and CGSA]

         The link between the CGS and the BSC corresponds to the internal link
between SCCP layer and MTP layer.

         The information (messages transfert part primitives) will be carried on
IP link TCP (or UDP)
         See REC Q701 para 8, MTP primitives:
         - MTP transfer
         - MTP pause
         - MTP resume
         - MTP status.

-    PCM TRUNKS
         The BSC will have the normal SS7 interface (A or Ater interface) with
         the MSC
         The BSC will have 2 type PCM trunks
               'Public' PCM trunks for GSM calls routed to the MSC
               "corporate" PCM trunks for GSM calls routed to GW PBX.

         All alarms related to "Corporate" PCM trunks must not be transmitted to
the MSC.

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

-    RELIABILITY
         In case of CGS failure or IP link failure between CGS / BSC publics
         calls must always be possible.

-    Other requirements

         General rules

<PAGE>

         - Any signalling which relates to calls using corporate trunks must not
be transmitted to the public MSC

         - Handshake process (CGS/BSC) should allow reconfiguration which
guarantees minimum quality of service..

         - Alarms: in case of IP link failure an alarm is sent to the supplier
OMC.

       DOCUMENTATION

Supplier shall furnish to Alcatel, free of charge, all relevant documentation
relating to the CGS IP link software, such that Alcatel may produce its own
finished literature. Alcatel shall have the right to use solely for use on or in
conjunction with the Products, reproduce and apply its trademark or copyright on
such documentation and supply the same to its Customers.
     Documentation shall be Supplier standard documentation and furnished in
paper form and electronic form (worldwide standard).

3. GENERAL DESCRIPTION OF CORPORATE MOBILITY SERVER
(CMS)

3.1 SYSTEM ARCHITECTURE

         The general concept is based on a server called CMS server which
interfaces the BSS (BSC+BTS) and the PBX.

                                   [GRAPHIC]

                     [graphic that shows the offsite MSC
                  connected to the onsite GSM air interface]

<PAGE>

         The PLMN sees the corporate BSS as standard BSS. With our CMS, this BSS
allows local routing of local calls for corporate GSM users. For these local
calls, the public MSC is not involved. There is no charging ticket in the PLMN.
By local routing of local calls we mean:

- Calls from mobile to mobile
- Calls from mobile to PBX fixed phone
- Calls from PBX fixed phone to mobile
- Calls from mobile to PSTN fixed phone
- Calls from PSTN fixed phone to mobile

         The system can welcome visitors. Visitors, if allowed, are then seen as
public GSM users. They systematically will use A interface for calls. All
visitors' calls will be handled by the public MSC. For that calls public
charging is used
         The GSM PBX is a mono company equipment. It also means that the BSS is
dedicated to one company.

         The PBX interface we use depends on Client PBX capabilities. Between
mobiles the level of features depends on CMS call handling capabilities. Between
fixed PBX lines and mobile lines, the level of features depends on PBX
signalling (QSIG, DPNSS)

         The mobility Management (e.g. localization) is handled by the PLMN
(HLR, VLR) with the standard GSM protocol procedures.

3.2 CMS / PBX INTEROPERABILITY

                                   [GRAPHIC]

                [graphic that shows the transmission of voice
                  and other signals between the BSC and MSC]
<PAGE>

The CMS relies on two main blocks:

-   A CGS: Corporate GSM Server
-   A PBX GW: PBX gateway

The BSS brings indoor coverage with the required level of capacity.

         The CGS is ensuring local routing of local calls. Today the
signaling between CGS and BSC is SS7 signalling. Signalling on IP will be
available later on.
The CGS is analysing the signalling and decides whether or not he has to
locally route the call.

USERS

2 types of GSM users are identified:

-   Corporate GSM users:

         The corporate GSM users are registered in the CGs thanks to
their IMSI and in the gateway PBX by their directory number. They are also
attached to the PLMN network for authentication, ciphering and localisation
procedures.

-   Visitors GSM users:

         The visitors GSM users are unknown by the CGS, nevertheless they can
use the corporate radio coverage and keep the GSM services provided by their
operator.

Call scenario for visitors GSM users:

         The visitors GSM establish or receive their calls directly through the
PLMN. The CMS is transparent.

Call scenario for corporate GSM users:

         The corporate GSM users can make calls using the PLMN numbering plan or
the corporate numbering plan. In order to differentiate the two numbering plans
a prefix is necessary to access the corporate numbering plan.
         The corporate GSM users are called by their directory number part of
the DDI range of the PBX. When off site the UBIQUITY services can redirect the
call to the PLMN network.

<PAGE>

                                   ANNEX A (2)

                                   MILESTONES

Software is delivered in the form of object code and source code with all
relevant comments for the Developed Products.

The CGS IP link software delivery time is given in table below.

High level project plan

<TABLE>
<CAPTION>

Date                            Description                                                Parties
Location
<S>                             <C>                                                        <C>
15th November 99                First draft of IP link detailed specs                      IW
15th December 99                CGs IP link detailed specification approval                IW/ABS
         Paris

1st March 00                    delivery of test plan Prov acceptance                      IW
15th March 00                   test plan approval                                         IW/ABS

15th March 00                   Delivery of CGs IP software.                               IW
                                Start of integration test                                  ABS      Paris
                                Documentation                                              IW
15th  April 00                  Test report
                                alpha test                                                 Alcatel
1st May 00                      provisional acceptance                                     ABS
                                operator validation                                                 Paris
15th May 00                     beta test                                                     ABS, customer
15th July 00                    final acceptance
                                general availability

</TABLE>

The Supplier's program manager shall be (Pi Hui)
The Alcatel program manager shall be Jean Rene Rousseau

<PAGE>

                                   ANNEX A (3)

                                    NRE COSTS

ABS will pay 450 000 US$ as development fees (non refundable expenses) for the
development of the CGS IP link. The maturity date of the installment will be as
follows:

/ / 50% at signing of the OEM agreement
/ / 30% at delivery of CGS IP Software
/ / 20% at final acceptance

The detailed contents of this development shall be provided by Supplier by 5th
of December 1999.

                        POTENTIAL NEXT DEVELOPED PRODUCTS

                 Within the strategy and marketing coordination committee,
                 specific sessions between Supplier and Alcatel will provide
                 inputs to the more detailed specification on the following
                 items.
                 If Parties agree to develop, Alcatel shall pay to Supplier
                 for the following Products to be developped.
                 The Supplier shall provide Alcatel with a quotation for the
                 hereabove mentioned non refundable expenses.

1. O&M

The following features could be considered for R6.
A general technical specification could be targeted for 1Q 00

OMC Web based (preliminary definition)
         Server in operator premises
         Partitioning: on site corporation remote client
                  Secured access
                  Restricted access (e.g: no access to freq management)
                  Fault management of dedicated equipment
Interface to operator OSS for frequency planning
Alarms are sent to public OMC

2. BSS RADIO EVOLUTION

In order to not restrict the market to GSM countries, other radio technology
such as CDMA or TDMA could be considered.

<PAGE>

                                     ANNEX B

                              NEW RELEASES ROAD MAP

         RELEASE 5

         TIME FRAME
         / /      Alpha test                         : January 15th 2000
         / /      Beta test                          : February 15th 2000
         / /      General availability               : April 15th 2000

         RELEASE CONTENT

         / /      E1/T1 module ( with Hot swap capabilities)
         / /      EFR
         / /      PCS 1900 frequency, GSM 900, 1800 Mhz
         / /      Up link/down link control
         / /      ANSI SS7 protocol stack
         / /      Mu Law & A law companding
         / /      16 Kbps Switching in the BSC
         / /      BS+ capacity: 3 TRX (no external BTS)
         / /      BS+ with external BTS ( 2TRX in BS+)
         / /      DSP (trau) Module management
         / /      Turbo Wave Module Management
         / /      Post Mortem analysis (Event, traces ..)

RELEASE 5+

         TIME FRAME

         / /      Alpha test                 :        April 15th 2000
         / /      Beta test                  :        May 15th 2000
         / /      General availability       :        June 30th 2000

         RELEASE CONTENT

/ /      CGS IP link
/ /      Soft BSC shut down (power down gracefully via OMC)

<PAGE>

     RELEASE 6

     TIME FRAME
         / /      Alpha test                 :       July 31th 2000
         / /      Beta test                  :       September 30th 2000
         / /      General availability       :       December 30th 2000

     RELEASE CONTENT

       / /        New radio module 250 mW
       / /        Radio module 2 W
       / /        BS+ ( up to 6 TRX with new processor) *
       / /        SF Hopping
       / /        GPRS: radio () Hardware Ready
       / /        RJ 45 10BaseT connector
       / /        E1 Board configurable on a port by port basis (with or
                  without TRAU)
       / /        A ter (with remote transcodeurs, and TFO capabilities)
       / /        SOLSA (within six (6) month of G. A.)
       / /        E911 location service

*MAXIMUM CAPACITY PROPOSED BY SUPPLIER

<PAGE>

RELEASE 7 IP BSS (PRELIMINARY)

TIME FRAME
     / /      Alpha test                 :       March 30th 2001
     / /      Beta test                  :       April 30th 2001
     / /      General availability       :       June 30th 2001

RELEASE CONTENT

     / /   Rel 7 of BSS will have IP based architecture, it will support data
           communications (mobile terminal to server) up to 100 K bps using
           GPRS

     / /   IP BSS will have Public Gb interface according to adequate ETSI
           specifications.

     / /   IP BSS should utilize the corporate IP infrastructure and
           interoperate with H 323 based corporate Equipments (e.g.,
           gatekeeper, IP PBX, DNS, ...).

     / /   The bill of material for 2 TRX is targeted to be US$1500, but in
           any event must not exceed US$2,000

<PAGE>

                               OSS PRODUCT ROADMAP

RELEASE 4.5

         TIME FRAME
              / /      Alpha test
              / /      Beta
              / /      General availability               : November 1999

         RELEASE CONTENT

              / /      Support of new 4.5 NSS features
              / /      OMC Health management
                       / /      Detection of OMC application failures
                       / /      OMC administration monitoring
                       / /      Simplify OMC S/W I&C
              / /      Dual EISS/NSS actions
              / /      Navigation shortcuts
              / /      NE administrative synchronization
              / /      Backward compatibility with BSS releases

RELEASE 5

         TIME FRAME
              / /      Alpha test                 :  January 15th 2000
              / /      Beta test           :  February 15th 2000
              / /      General availability       :  April 15th 2000

         RELEASE CONTENT

              / /      Support of BSS NSS features
              / /      Off site alarming (paging support) and interface to
                       external alarms
              / /      On line help

<PAGE>

RELEASE 6 (PRELIMINARY)

         TIME FRAME
              / /      Alpha test               :      August 30th 2000
              / /      Beta test            :       October 30th 2000
              / /      General availability     :        December 30th 2000

         RELEASE CONTENT

              / /      Support of Release 6 features
              / /      Subscriber Management
              / /      Enhanced GUI
              / /      Web based Management
              / /      Network partitioning

<PAGE>

                                     ANNEX C

                    ALCATEL ROILING FORECASTS & PO TIMEFRAMES

<TABLE>
<CAPTION>
                          4Q99       1Q00      2Q00       3Q00       4Q00       1Q01       2Q01      3Q01       4Q01
<S>                       <C>        <C>       <C>        <C>        <C>        <C>        <C>       <C>        <C>
Purchase order            [***]      [***]     [***]      [***]      [***]      [***]      [***]     [***]      [***]
Shipments                 [***]      [***]     [***]      [***]      [***]      [***]      [***]     [***]      [***]

*US$ million

nb of systems             [***]      [***]     [***]      [***]      [***]      [***]      [***]     [***]      [***]
( non binding forecast
subject to Customer
Orders )

                of witch
                     BS+  [***]      [***]     [***]      [***]      [***]      [***]      [***]     [***]      [***]
               BS+ & BTS  [***]      [***]     [***]      [***]      [***]      [***]      [***]     [***]      [***]

           nb of BT+2TRX  [***]      [***]     [***]      [***]      [***]      [***]      [***]     [***]      [***]
           nb of BTS2TRX  [***]      [***]     [***]      [***]      [***]      [***]      [***]     [***]      [***]

The estimated average system price is US$[***]   (to be retablished )
</TABLE>

*  Certain information on this page has been omitted and filed separately with
   the SEC. Confidential treatment has been requested with respect to the
   omitted portions.

<PAGE>

                                     ANNEX D

PRICING FOR R4 GIVEN IN US $

<TABLE>
<CAPTION>
                <S>                                                        <C>
                                                                           R4
                ------------------------------------------------- -------------------
                Combo 2TRX                                                      [***]
                ------------------------------------------------- -------------------

                ---------------------------------------------------------------------
                BSC 1E1                                                         [***]
                ---------------------------------------------------------------------
                BSC 2E1                                                         [***]
                ---------------------------------------------------------------------

                ---------------------------------------------------------------------
                BSC 2TRX                                                    [***] (1)
                ---------------------------------------------------------------------
                BTS 3TRX                                                    [***] (1)
                ---------------------------------------------------------------------

                ---------------------------------------------------------------------
                Ext 1TRX                                                        [***]
                ---------------------------------------------------------------------

                ---------------------------------------------------------------------
                OMC                                                             [***] can manage up to 30
                --------------------------------------------------------------------- systems
                Craft PC                                                        [***]
                ---------------------------------------------------------------------
</TABLE>

             The RTU is included in the basic 2TRX Combo configuration

            (1) RTU of [***]/TRX for each BT5 connected to a BSC
            (1) RTU of [***]/TRX for each BTS connected to a Combo

Certain information on this page has been omitted and filed separately with
the SEC. Confidential treatment has been requested with respect to the
omitted portions.

<PAGE>

PRICING FOR R5/R5+ GIVEN IN US $
<TABLE>
<CAPTION>
                                                                  R5/R5+
                ------------------------------------------------- -------------------
               <S>                                                           <C>
                Combo 2TRX                                                     [***]
                ------------------------------------------------- -------------------

                ---------------------------------------------------------------------
                BS + 2TRX                                                      [***]
                ---------------------------------------------------------------------
                BS + 3TRX                                                      [***]
                ---------------------------------------------------------------------

                ---------------------------------------------------------------------
                BSC                                                            [***]
                ---------------------------------------------------------------------
                BSC 2E1                                                        [***]
                ---------------------------------------------------------------------

                ---------------------------------------------------------------------
                BTS 2TRX                                                   [***] (1)
                ---------------------------------------------------------------------
                BTS 3TRX                                                   [***] (1)
                ---------------------------------------------------------------------

                ---------------------------------------------------------------------
                Ext 1TRX                                                        [***]
                ---------------------------------------------------------------------

                ---------------------------------------------------------------------
                OMC                                                             [***] can manage up to 200
                                                                                      systems
                ---------------------------------------------------------------------
                Craft PC                                                        [***]
                ---------------------------------------------------------------------
</TABLE>
                  Pricing includes a RTU license for TRX's contained in the BS+
                  base configurations

                  The RTU is included in the basic 2TRX Combo configuration

                  (1) RTU of [***]TRX for each BTS connected to a BSC or BS+

                  (1) RTU of [***]TRX for each BTS connected to a Combo

* Certain information on this page has been omitted and filed separately with
  the SEC. Confidential treatment has been requested with respect to the
  omitted portions.

<PAGE>

PRICING FOR R6 GIVEN IN US $
<TABLE>
<CAPTION>
                                                                  R6
                ------------------------------------------------- -------------------
               <S>                                                           <C>
                Combo 2TRX                                                     [***]
                ------------------------------------------------- -------------------

                ---------------------------------------------------------------------
                BS + 2TRX                                                      [***]
                ---------------------------------------------------------------------
                BS + 3TRX                                                      [***]
                ---------------------------------------------------------------------

                ---------------------------------------------------------------------
                BSC                                                            [***]
                ---------------------------------------------------------------------
                BSC 2E1                                                        [***]
                ---------------------------------------------------------------------

                ---------------------------------------------------------------------
                BSC 2TRX                                                    [***](1)
                ---------------------------------------------------------------------
                BTS 3TRX                                                    [***](1)
                ---------------------------------------------------------------------

                ---------------------------------------------------------------------
                Ext 1TRX                                                        [***]
                ---------------------------------------------------------------------

                ---------------------------------------------------------------------
                OMC                                                             [***] can manage up to 200
                                                                                      systems
                ---------------------------------------------------------------------
                Craft PC                                                        [***]
                ---------------------------------------------------------------------
</TABLE>
                Pricing includes a RTU license for TRX's contained in the BS+
                base configurations

                The RTU is included in the basic 2TRX Combo configuration

                (1) RTU of [***] TRX for each BTS connected to a BSC or BS+

                (1) RTU of [***]/TRX for each BTS connected to a Combo

* Certain information on this page has been omitted and filed separately with
  the SEC. Confidential treatment has been requested with respect to the
  omitted portions.

<PAGE>

TRANSFERT PRICE FOR R7

         For R7, the transfer at least equal to R6 tranfer
         price -15%
         This is for equivalent level of features. It does not take into account
         new features such as GPRS, wich will increase the price.  Actual
         pricing will be a function of periodic reviews of market based pricing

         Pricing will include RTU license for additional TRX's for BSC's/BS+
         configurations as well as a RTU for additional TRX's added to the basic
         Combo configuration

SPARES
<TABLE>
<CAPTION>

           --------------------------------------------------------------------------------
          <S>                                               <C>         <C>         <C>
           Clock 13 MHz                                      [***]       [***]       [***]
           --------------------------------------------------------------------------------
           E1, trunk, 120 Ohms, without trau 2ports          [***]       [***]       [***]
           BTS
           --------------------------------------------------------------------------------
           E1, trunk, 120 Ohms, without trau 2ports          [***]       [***]       [***]
           BSC
           --------------------------------------------------------------------------------
           E1, trunk, 75 Ohms, without trau 2ports           [***]       [***]       [***]
           BTS
           --------------------------------------------------------------------------------
           E1, trunk, 75 Ohms, without trau 2ports           [***]       [***]       [***]
           BSC
           --------------------------------------------------------------------------------
           E1, with 2 traus, 120 Ohms 32 trau                [***]       [***]       [***]
           channels
           --------------------------------------------------------------------------------
           E1, with 2 traus, 75 Ohms 32 trau                 [***]       [***]       [***]
           channels
           --------------------------------------------------------------------------------
           E1, with 4 traus, 120 Ohms 64 trau                [***]       [***]       [***]
           channels
           --------------------------------------------------------------------------------
           E1, with 4 traus, 75 Ohms 64 trau                 [***]       [***]       [***]
           channels
           --------------------------------------------------------------------------------
           E1, with 1 DSP 120 Ohms Switch                    [***]       [***]       [***]
           --------------------------------------------------------------------------------
           E1, with 1 DSP 75 Ohms Switch                     [***]       [***]       [***]
           --------------------------------------------------------------------------------
           IWP 16 MB, MMU                                    [***]       [***]       [***]
           --------------------------------------------------------------------------------
           IWP 64MB, With Hard disk 810                      [***]       [***]       [***]
           --------------------------------------------------------------------------------
           Power supply 350W 115V AC                         [***]       [***]       [***]
           --------------------------------------------------------------------------------
</TABLE>

* Certain information on this page has been omitted and filed separately with
  the SEC. Confidential treatment has been requested with respect to the
  omitted portions.

<PAGE>

<TABLE>
<CAPTION>

        --------------------------------------------------------------------------------------
       <S>                                                      <C>         <C>         <C>
        Power supply 350W 230V AC                                [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        Power supply 350W -48V DC                                 [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        Power supply 50A -48V DC                                 [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        Power supply 50A 115V AC                                 [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        Power supply 50A 230V AC                                 [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        RFD 900 MHz                                              [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        RFD 1800 MHz                                             [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        RFD 1900 MHz                                             [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        TuboWAVE 4W 900 et 1800MHz                               [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        TuboWAVE 8W 900 et 1800MHz                               [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        TRX 900 MHz                                              [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        TRX 1800 MHz                                             [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        TRX 1900 MHz                                             [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        Module Fan 12V cards                                     [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        Fan 12V Power Supply                                     [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        Cable kit full set                                        [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        BTS chassis indoor                                       [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        BSC chassis indoor                                       [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        Wall mount kit                                           [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        Rack mount kit                                           [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        Table mount kit                                          [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        Mount rack and filter BTS                                [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        Outdoor mount kit (environmental cabinet)                [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        UPS kit 230V outdoor                                     [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        Heat Xchanger 230V outdoor                               [***]       [***]       [***]
        --------------------------------------------------------------------------------------
        Enclosure kit combiner outdoor                           [***]       [***]       [***]
        --------------------------------------------------------------------------------------
</TABLE>

        Pricing includes any rigths to use

* Certain information on this page has been omitted and filed separately with
  the SEC. Confidential treatment has been requested with respect to the
  omitted portions.

<PAGE>

                                     ANNEX E

                             LIST OF SUBCONTRACTORS

SUPPLIER agrees to provide a list of all of its subcontractors and will inform
ALCATEL and obtain ALCATEL'S prior written approval of any changes to this list.

PEMSTAR                                              SAN JOSE

GSS ARRAY                                            SAN JOSE

<PAGE>

                                                    ANNEX F

TECHNICAL PRODUCT SUPPORT BY THE SUPPLIER

Scope of services

         -   Update of documentation and training;
         -   Software patch and maintenance Release;
         -   Advanced replacement of components and or spare parts to fix
             hardware's bugs
         -   Emergency call services (ref. 22-3.2 TSU)

A.       Commencement Period
         Prices for technical support shall be applicable after the expiry of
         the period of warranty

B.       Prices for such services are calculated on the basis of one percent
         (1%) of the Supplier's sales prices. This payment is made on the
         Semester basis and invoiced separately to ALCATEL.

         Such services will continue for a three (3) years period following the
         expiry of the warranty period.

EMERGENCY CALL OUT SERVICES

[To be completed, if requested by ALCATEL]

A.       Base Rates (Assume Call Out is From RWC)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
                               Standard            Weeknights         Nights/Weekends    Sundays/Holidays
Job Level                      8am-5pm             5pm-11pm            11pm-8am
-----------------------------------------------------------------------------------------------------------
<S>                            <C>                 <C>                <C>                <C>
Junior Engineer                $90                 $110               $125                  $150
Engineer                       $110                $130               $150                  $185
Sr. Engineer/Spec.             $150                $180               $185                  $250
Project Manager                $190                $225               $250                  $315
-----------------------------------------------------------------------------------------------------------
</TABLE>

1. All of these hourly rates will be discounted by 20%.

2. These rates are subject to a six month adjustment based upon an agreed to
price escalation table.

<PAGE>

*Rates do Not include transportation and a Per Diem for food and Lodging and
out-of-pocket expenses for personnel rendering such services. Expenses must
include proper justification.

                                     ANNEX G

                               ALCATEL COMPETITORS

                            EFFECTIVE OCTOBER 22,1999

                                    ERICSSON
                                     NORTEL
                               LUCENT TECHNOLOGIES
                                     SIEMENS
                                      CISCO
                                      NOKIA

<PAGE>

                                     ANNEX H

         TRAINING

[To be completed if requested by ALCATEL]

A.       Overview

         The SUPPLIER is proposing a strategy whereby it would train the
         ALCATEL's trainers upon ALCATEL's request

         It is expected that this training would take place at SUPPLIER'S
         facilities in the USA.

         SUPPLIER shall provide the following training for 2-3 attendees at each
         of 3 categories of training sessions i.e., sales, pre-sales and
         technical support for the purpose of permitting ALCATEL to train it
         employees and customers:

B.       SUPPLlER Obligations

1.       The SUPPLIER shall make available the necessary documentation and
         training courseware to enable the ALCATEL's instructors to train its
         customers on the product features for the operations and maintenance of
         the products. The courses available to ALCATEL are provided in the
         SUPPLIER training catalogue which may be changed over time.

2.       The SUPPLIER will work with ALCATEL training organization on a program
         to train their trainers to enable :hem to deliver the courses In the
         catalogue required by ALCATEL.

         Obligations of Both Parties

The SUPPLIER shall propose a plan to train the ALCATEL trainers.
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
COURSE #            DESCRIPTION*                                  ESTIMATED
                                                                  COURSE DAYS
---------------------------------------------------------------------------------
<S>                 <C>                                           <C>
T100                GSM Overview                                  1
---------------------------------------------------------------------------------
T200                Product Overview                              1/2
---------------------------------------------------------------------------------
T300                OMC-R System Administration                   2
---------------------------------------------------------------------------------
T400                OMC-R Network Operations                      3
---------------------------------------------------------------------------------
T500                BSS Operations & Maintenance                  3
---------------------------------------------------------------------------------
T600                BSS Installation & Commissioning              2
---------------------------------------------------------------------------------
T700                OMC-S System Administration                   2
---------------------------------------------------------------------------------
T800                OMC Network Operations                        3
---------------------------------------------------------------------------------
T900                WAVEXchange Operations & Maintenance          3
---------------------------------------------------------------------------------
</TABLE>

<PAGE>

The Supplier will invoice Alcatel for such training sessions at a fixed rate of
US[***] for each category ( maximum of 3 attendees ).

*  Certain information on this page has been omitted and filed separately with
   with the SEC. Confidential treatment has been requested with respect to the
   omitted portions.
<PAGE>

                              TRAINING CATALOGUE

[LOGO]

INTERWAVE COMMUNICATIONS, Inc.

                                                                            1998
                                                                TRAINING CATALOG

                                                                         REV 4.0
                                                                     MAY 1, 1998

INTERWAVE COMMUNICATIONS
A U.S. SUBSIDIARY OF INTERWAVE COMMUNICATIONS INTERNATIONAL LTD.
656 Bair Island Road, Suite 108 Redwood City, CA 94063
(415) 482-6200 (415) 482-6220 FAX

<PAGE>

                          TABLE OF CONTENTS

<TABLE>

<S>                                                           <C>
TRAINING SERVICES ............................................14

TRAINING CENTERS .............................................15

ON-SITE CUSTOMER TRAINING ....................................15

TRAINING ADMINISTRATOR .......................................15

PLANNING YOUR CLASSES ........................................15

REGISTRATION .................................................16

CATALOG AND LITERATURE REQUEST ...............................16

TUITION ......................................................16

CANCELLATION POLICY ..........................................16

PRODUCT TRAINING PROGRAM .....................................16

COURSE SERIES ................................................17

COURSE DESCRIPTIONS ..........................................18

         GSM Overview ........................................18

         InterWAVE's Product Overview ........................20

         WAVEView OMC-R System Administration ................21

         WAVEView OMC-R Network Operations ...................23

         WAVEView OMC Combined System Administration .........24

         WAVEView OMC Combined Network Operations ............26

         BSS Operations ......................................28

         BSS Installation & Commissioning ....................30

         WAVEXchange Operations & Maintenance ................31

         BSS Database Engineering ............................33

         BSS Advanced Maintenance & Troubleshooting ..........35

</TABLE>

<PAGE>

TRAINING SERVICES

     INTERWAVE COMMUNICATIONS is developing an extensive series of training
     courses designed to teach you how to use our products. The courses are
     developed by a combination of subject matter experts and training
     specialists in order to create highly technical materials in a modern
     training format. Each of our course offerings are designed around specific
     learning objectives that keep our classes on track to learning specific job
     skills related to INTERWAVE'S products.

     Each course incorporates a number of different elements. The bulk of the
     material is presented in lecture by an experienced, full-time trainer who
     is familiar with both wireless telecommunications and training theory. The
     student manuals serve as an excellent reference tool, incorporating all of
     the presented concepts with graphics, review questions, and appendices
     containing useful information. Hands-on lab activities are extensively used
     in our courses, which allow the students to experiment with the concepts
     learned in the course, and interact in a "real-world" environment.

     This catalog contains a listing of the INTERWAVE training services
     available along with descriptions of each course. Our training materials
     are divided into specific sub system training series, depending upon the
     topic and job requirements.

     Our courses are monitored for content and technique by our training
     professionals and by attendees, so you can be assured of the highest level
     of satisfaction.

                                                        INTERWAVE COMMUNICATIONS

                                                                   Eric J. Kmiec
                                                      Worldwide Training Manager

<PAGE>

TRAINING CENTERS

     To provide the highest level of training available, we have an established
     Regional Training Center in Hong Kong and planned facilities in Redwood
     City, California. All facilities are fully equipped with up to date systems
     and all associated test equipment. The combination of equipment allows a
     two-to-one ratio of students to systems, giving participants an edge in our
     hands-on learning environment.

               HONG KONG                             NORTH AMERICA
     RM 1801 18/F National Mutual                 656 Bair Island Road
                Centre                                 Suite 108
            151 Gloucester Road                  Redwood City, CA., 94062
           Wanchai, Hong Kong                     415.482.2100 (tel.)
        011.852.2519.9633 (tel.)                  415.261.6220 (fax)
        011.852.2519.9033 (fax)

ON-SITE CUSTOMER TRAINING

     Customer site courses may be provided based upon equipment, and instructor
     availability. INTERWAVE will supply all the necessary training
     documentation, training personnel and software required to conduct the
     class. Please contact your regional training administrator for more
     details.

TRAINING ADMINISTRATOR

     Regional Training Administrators are ready to help with any of your
     questions or concerns, whether it be course availability, confirmation,
     registration or general training issues.

PLANNING YOUR CLASSES

     Training is offered on a space available bases; therefore, advanced
     registration is recommended. Regional Training Center classes can support
     up to (10) students.

<PAGE>

REGISTRATION

     First, determine which courses and location you would like to enroll in.
     call your regional training administrator at one of the above locations
     listed above for course availability and registration forms, Monday through
     Friday, 8:00 a.m. to 5:00 p.m. (LOCAL TIMES).

CATALOG AND LITERATURE REQUEST

     To order a Technical Training Catalog, a class schedule, to be placed on
     our mailing list, or to make address changes or corrections, please call
     your local training administrator at one of the above locations listed or
     visit us on our web pager, www.iwv.com for additional information.

TUITION

         Tuition fees are indicated in the course description section and are
         for scheduled classes held in our Training Centers. We accept checks or
         purchase orders. Payment in full is required prior to the start of all
         classes or your registration is subject to cancellation. Tuition
         includes (1) set of manuals per student.

CANCELLATION POLICY

         Cancellations received less than ten business days prior to class are
         subject to a 100% cancellation fee. InterWAVE reserves the right to
         reschedule or cancel a class two weeks prior to the first day of class.

PRODUCT TRAINING PROGRAM

         Each course consists of a series of lessons. Each lesson is developed
         to support its objectives. At the beginning of a lesson the objectives
         are reviewed with the students. The students are told to insure that we
         as instructors meet these objectives. At the end of each lesson the
         students are asked to complete a short review (test). The test
         questions reinforce the objectives.

<PAGE>

COURSE SERIES

InterWAVE Microcellular Network Solutions Training courses offer technical
training designed to fit the training requirements of the operators.

                   [FLOW CHART OF CLASSES OFFERED, including
                   OMC combined, OMC-R, BSS, NSS and System]

                         NSS COURSES AVAILABLE: 8/1/98

<PAGE>

COURSE DESCRIPTIONS

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
                                              GSM OVERVIEW
-----------------------------------------------------------------------------------------------

                                            COURSE SERIES 100
<S>                                     <C>

        Course Description:             This course is intended to provide students with a
                                        general overview of GSM. In this course we will introduce
                                        the student to the principles of GSM, including the
                                        History, Architecture, Interfaces, Protocols, Radio
                                        Propagation problems with solutions as well, the students
                                        will also understand how mobile station access the
                                        network through traffic cases.

        Lessons:                        -        Introduction to GSM
                                        -        GSM Architecture
                                        -        GSM Air Interface
                                        -        GSM Interfaces
                                        -        Radio Transmission
                                        -        Traffic Cases

        Objectives:                     AT THE END OF THIS COURSE SERIES THE STUDENT WILL BE ABLE TO:
                                        -        Describe how GSM is organized
                                        -        List three current GSM type systems
                                        -        List the four main components of a GSM network
                                        -        List all of the nodes in a GSM network, and list
                                                 their function
                                        -        Describe physical and logical channels
                                        -        Describe how the various interfaces in GSM are
                                                 used
                                        -        Explain the role of SS7 signaling
                                        -        Define roaming and location updating
                                        -        Describe the different handovers
                                        -        Describe the different types of radio
                                                 interference
                                        -        Describe the solutions to the
                                                 interference problems
                                        -        Describe basic traffic cases

        Who should attend?              This overview course is recommended
                                        for all personnel; technical or non technical
                                        management, administration personnel or anyone
                                        who needs a refresher on the basics of GSM.
                                        This course is designed to provide
                                        general knowledge of the GSM/DCS system.

        Prerequisites:                  Basic knowledge of telecommunications
                                        and some knowledge of GSM is required

<PAGE>

        Delivery:                       Instructor led lecture with student manuals.

        Duration:                       1 day
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
                                      INTERWAVE'S PRODUCT OVERVIEW
-----------------------------------------------------------------------------------------------

                                               COURSE SERIES 200
<S>                                     <C>

        Course Description:             InterWAVE's Microcellular products are very versatile
                                        telecommunications products that can be used in a wide variety
                                        of microcell applications in a GSM network. In this course we
                                        will describe the different applications and solutions, as well
                                        as the components within the WAVEXpress and MicroEXpress
                                        architecture that allow it to be so versatile. We will also
                                        introduce the student to the WAVEView OMC and CraftPC products.

        Lessons:                        -        Introduction to InterWAVE Microcellular Network
                                                 Products
                                        -        WAVEX PLATFORM
                                        -        Introduction to WAVEView & CraftPC

        Objectives:                     AT THE END OF THIS COURSE SERIES THE STUDENT WILL BE ABLE TO:
                                        -        List the components and basic functions of
                                                 INTERWAVE'S Microcellular network solutions
                                        -        Describe the basic functionality of the different
                                                 modules found in the WAVEXpress architecture
                                        -        Describe how InterWAVE Microcellular Network
                                                 Solutions can coexist with GSM networks
                                        -        Describe the Features and Functionality of
                                                 the WAVEView OMC and CraftPC interface tools.

        Who should attend?              Primary audience: BSS system specialists and OMC-R personnel
                                        Secondary audience: technical and non-technical management
                                        personnel interested in the WAVEXpress product.

        Prerequisites:                  Basic knowledge of GSM

        Delivery:                       Instructor led lecture with student manuals.

        Duration:                       1/2 day
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
                                  WAVEVIEW OMC-R SYSTEM ADMINISTRATION
-----------------------------------------------------------------------------------------------

                                                COURSE SERIES 300
<S>                                     <C>
        Course Description:             This course is intended for UNIX System Administrators. It
                                        provides the necessary knowledge to install, commission, and
                                        backup the WAVEView OMC-R system.

        Lessons:                        -        Introduction to WAVEView
                                        -        WAVEView Hardware Components
                                        -        Software Processes Overview
                                        -        WAVEView Directory Structure
                                        -        Start Up & Shutdown Process
                                        -        System Access & Security
                                        -        WAVEView Archive & Restore Procedures with hands on
                                                 Exercise

        Objectives:                     AT THE END OF THIS COURSE THE STUDENT WILL BE ABLE TO:
                                        -        Define all the hardware components within the WAVEView
                                        -        Define the hardware and software requirements for the
                                                 WAVEView
                                        -        Describe the software processes with the OMC-R
                                        -        Understand the directory structure and disk
                                                 partitioning of the OMC-R
                                        -        Use the Solaris install utility to configure the
                                                 client/server default parameters and disk partitions
                                        -        Install Solaris patches
                                        -        Setup UNIX user accounts
                                        -        Setup Oracle user accounts
                                        -        Client/Server Oracle RDBMS database
                                                 product installation
                                        -        Server Oracle RDBMS database setup
                                        -        Install Motif and X11 software on the client/server
                                        -        Install the client/server OMC-R application software
                                        -        E1 UNIX software installation
                                        -        Carry out daily, weekly, and monthly archives
                                        -        Restore data after a disk crash

        Who should attend?              Primary Audience: System Administrators
                                        Secondary Audience: Network Administrators

        Prerequisites:                  Course 100 & 200 Must be an experienced UNIX user.

        Delivery:                       Instructor led lecture with theoretical and hands-on activities.

<PAGE>

        Duration:                       2 days
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
                                   WAVEVIEW OMC-R NETWORK OPERATIONS
-----------------------------------------------------------------------------------------------

                                                COURSE SERIES 400
<S>                                     <C>
        Course Description:             This course is intended to give operators
                                        the skills to monitor and operate the
                                        WAVEView OMC-R From this course the student
                                        will learn to configure, troubleshoot, and
                                        maintain the BSS network controlled by the OMC-R.

        Lessons:                        -        Introduction to WAVEView OMC
                                        -        WAVEView Features
                                        -        WAVEView User Interfaces
                                        -        WAVEView Alarm & Event Handling
                                        -        WAVEView Performance Management
                                        -        OML Management
                                        -        Network Element Configuration
                                        -        Software Management
                                        -        WAVEView Routine Procedures

        Objectives:                     AT THE END OF THIS COURSE THE STUDENT WILL BE ABLE TO:
                                        -        Describe the OMC-R in the GSM network
                                        -        Define all the hardware and software components
                                                 within the WAVEView product
                                        -        Navigate through the WAVEView GUI
                                        -        Handle the event and alarm screens
                                        -        Open event logs and use the event filters
                                        -        Troubleshoot the network from the WAVEView GUI
                                        -        Monitor the performance of the network using the OMC-R
                                                 Performance management features
                                        -        Perform hourly, daily, and weekly tasks
                                        -        Add, delete, or modify BTS, and BSC sites
                                        -        Add, delete, or modify individual network element
                                                 component modules
                                        -        Add, delete, or modify network element module parameters

        Who should attend?              Primary Audience: OMC-R Operators and Network Administrators
                                        Secondary Audience: Specialists

        Prerequisites:                  Course 100 & 200, or familiarity with GSM and InterWAVE products

        Delivery:                       Instructor led lecture with theoretical and hands-on activities.

        Duration:                       3 days
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
                               WAVEVIEW OMC COMBINED SYSTEM ADMINISTRATION
-----------------------------------------------------------------------------------------------

                                                COURSE SERIES 700
<S>                                     <C>
        Course Description:             This course is intended for
                                        UNIX System Administrators responsible
                                        for maintaining InterWAVE's InterWAVE
                                        Microcellular network offering. This
                                        course provides the necessary knowledge
                                        to install, commission, and backup the
                                        combined WAVEView OMC system.

        Lessons:                        -        Introduction to WAVEView
                                        -        WAVEView Hardware Components
                                        -        Software Processes Overview
                                        -        WAVEView Directory Structure
                                        -        Start Up & Shutdown Process
                                        -        System Access & Security
                                        -        WAVEView Archive & Restore Procedures with hands on
                                                 Exercises

        Objectives:                     AT THE END OF THIS COURSE THE STUDENT WILL BE ABLE TO:
                                        -        Define all the hardware components within the WAVEView
                                        -        Define the hardware and software requirements for the
                                                 WAVEView
                                        -        Describe the software processes with the OMC-R
                                        -        Understand the directory structure and disk
                                                 partitioning of the OMC-R
                                        -        Use the Solaris install utility to configure the
                                                 client/server default parameters and disk partitions
                                        -        Install Solaris patches
                                        -        Setup UNIX user accounts
                                        -        Setup Oracle user accounts
                                        -        Client/Server Oracle RDBMS database
                                                 product installation
                                        -        Sewer Oracle RDBMS database setup
                                        -        Install Motif and X11 software on the client/server
                                        -        Install the client/server OMC-R application software
                                        -        E1 UNIX software installation
                                        -        Carry out daily, weekly, and monthly archives
                                        -        Restore data after a disk crash

        Who should attend?              Primary Audience: System Administrators
                                        Secondary Audience: Network Administrators

        Prerequisites:                  Course 100 & 200. Must be an experienced UNIX user.

        Delivery:                       Instructor led lecture with theoretical and hands-on activities.

<PAGE>

        Duration:                       2 days
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
                              WAVEVIEW OMC COMBINED NETWORK ADMINISTRATION
-----------------------------------------------------------------------------------------------

                                                COURSE SERIES 800
<S>                                     <C>
        Course Description:             This course is intended to
                                        give operators the skills to monitor and
                                        operate both WAVEView OMC-R and OMC-S.
                                        From this course the student will learn
                                        to configure, troubleshoot, and maintain
                                        the network controlled by the WAVEView
                                        OMC.

        Lessons:                        -        Introduction to WAVEView OMC
                                        -        WAVEView Features
                                        -        WAVEView User Interfaces
                                        -        WAVEView Alarm & Event Handling
                                        -        WAVEView Performance Management
                                        -        OML Management
                                        -        Network Element Configuration
                                        -        Software Management
                                        -        WAVEView Routine Procedures

        Objectives:                     AT THE END OF THIS COURSE THE STUDENT WILL BE ABLE TO:
                                        -        Describe the OMC-S in the GSM network
                                        -        Define all the hardware and software components within
                                                 the WAVEView products
                                        -        Navigate through the WAVEView GUI
                                        -        Handle the event and alarm screens
                                        -        Open event logs and use the event filters
                                        -        Troubleshoot the network from the WAVEView GUI
                                        -        Monitor the performance of the network using the OMC-S
                                                 Performance management features
                                        -        Perform hourly, dally, and weekly tasks
                                        -        Add, delete, or modify Subscribers, IMSIs, and MSISDNs
                                        -        Add, delete, or modify WAVEXchange MSC and HLR
                                                 parameters
                                        -        Add, delete, or modify Routes and Dialing parameters
                                        -        CDR administration

        Who should attend?              Primary Audience: OMC-S Operators and Network Administrators.
                                        Secondary Audience: BSS Specialists

        Prerequisites:                  Course 100 & 200, or familiarity with GSM and INTERWAVE products.

        Delivery:                       Instructor led lecture with theoretical and hands-on activities.

<PAGE>

        Duration:                       2 days
</TABLE>

                                      CUSTOMER AVAILABILITY: 4/1/98

<PAGE>
-------------------------------------------------------------------------------
                               BSS OPERATIONS
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                COURSE SERIES 500
<S>                                     <C>

        Course Description:             This course is intended to provide BSS
                                        personnel with an in-depth understanding
                                        of the WAVEXpress theory of operation
                                        as well as hands-on exercises to
                                        maintain the BSS Network with the
                                        CraftPC user interface tool.

        Lessons:                        -        BSS Features and Functionality
                                        -        BSS Hardware Descriptions
                                        -        BSS Configurations
                                        -        BSS Software Architecture
                                        -        BSS Operations & Maintenance
                                        -        CraftPC Overview
                                        -        CraftPC NMI Exercises
                                        -        BSS Software Management

        Objectives:                     -        AT THE END OF THIS COURSE THE STUDENT WILL BE ABLE TO:
                                        -        Identify and explain the main Features and
                                                 Functionality of the WAVEXpress & MicroEXpress
                                        -        Identify the physical components within the WAVEXpress
                                                 & MicroEXpress
                                        -        Know the system and module configurations, capacity and
                                                 dimensioning rules
                                        -        Identify the major sections of the WAVEXpress/BSC
                                                 software architecture
                                        -        Identify the manageable objects within software the
                                                 Object structure
                                        -        Understand the sequence of events and processes
                                                 of fault detection and recovery
                                        -        Understand WAVEXpress diagnostic capabilities
                                        -        Describe the Boot and POST process of the
                                                 WAVEXpress
                                        -        Understand and Implement the CraftPC with the
                                                 equipping/verifying of devices under a BSC/BTS
                                        -        Know Event & Performance management through
                                                 the BSS

        Who should attend?              Primary audience: BSS specialist,  Field Optimization,  or System
                                        and Database Engineers.
                                        Secondary audience: OMC-R Network Operators.

        Prerequisites:                  Course 100 & 200, or  extensive  knowledge  of GSM and  INTERWAVE
                                        products.

        Delivery:                       Instructor led lecture with theoretical and hands-on activities.

<PAGE>

        Duration:                       3 days

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

<PAGE>

                      BSS INSTALLATION & COMMISSIONING
-----------------------------------------------------------------------------------------------

                                                COURSE SERIES 600

        Course Description:             This course is intended to provide BSS
                                        personnel with the knowledge and skills
                                        to install and commission a WAVEXpress BSC,
                                        BTS or MicroEXpress/BTS. In this course
                                        we will cover each step of the installation
                                        process from customizing the installation
                                        environment to RF commissioning.

        Lessons:                        -        Overview of BSS Installation & Commissioning Processes
                                        -        WAVEXpress/BTS Installation & Commissioning Exercises
                                        -        WAVEXpress/BSC Installation & Commissioning Exercises
                                        -        MicroEXpress/BTS Installation & Commissioning Exercises
                                        -        Field Replaceable Units (FRU) exercises

        Objectives:                     AT THE END OF THIS COURSE THE STUDENT WILL BE ABLE TO:
                                        -        Define and understand the physical site requirements
                                                 and environmental constraints for a WAVEXpress BSC, BTS &
                                                 MicroEXpress/BTS
                                        -        Understand the POST and Diagnostic test available
                                                 through the CraftPC
                                        -        Know the test equipment associated with Installation &
                                                 Commissioning
                                        -        Perform hands-on BSC & BTS commissioning using the
                                                 CraftPC and maintenance manuals.
                                        -        Perform practical exercises of field replacements of
                                                 modules
                                        -        Perform practical hands on POST tests

        Who should attend?              Primary   audience:    BSS   Installation,    Commissioning   and
                                        Maintenance Engineers,
                                        Secondary audience: BSS Specialist.

        Prerequisites:                  Course 100 & 200, or  extensive  knowledge  of GSM and  INTERWAVE
                                        products.

        Delivery:                       Instructor led lecture with theoretical and hands-on activities.

        Duration:                       1.5 days

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

<PAGE>

                          WAVEXCHANGE OPERATIONS & MAINTENANCE
-----------------------------------------------------------------------------------------------

                                                   COURSE SERIES 900

        Course Description:    This course is intended to provide
                               MSC personnel with theory of operation as well as
                               hands-on exercises to Install, Commission,
                               Integrate, Configure the WAVEXchange platform as
                               an integrated network offering. Topics include
                               Subscriber management,(via HLR), NSS
                               Configurations, PSTN Interfaces (with
                               Configuration of all links), BSS configurations,
                               Along with lower level of technical product
                               description such as H/W, S/W architecture,
                               protocols, NSS Dimensioning rules, Maintenance
                               and recovery.

        Lessons:               -        Network Overview
                               -        NSS Hardware & Configuration
                               -        NSS Software Architecture
                               -        Using the Craft PC
                               -        WXC Operation & Maintenance
                               -        Signaling
                               -        Implementation
                               -        Configuration Management
                               -        Software Management
                               -        Routing
        Objectives:            AT THE END OF THIS COURSE THE STUDENT WILL BE ABLE TO:
                               -        Understand and describe the system architecture/market applications
                               -        Understand and describe the PALIM concept
                               -        Understand and describe the Network interfaces
                               -        Understand and describe the hardware components of WAVEXchange, OMC &
                                        HLR
                               -        Understand and describe the capacity of each hardware component.
                               -        Understand and describe the Craft PC and its connections to IWP
                               -        Understand and describe the WAVEXchange software structure and how to
                                        navigate NMI objects
                               -        Understand and describe the NMI object hierarchy.
                               -        Understand and describe the vxWorks commands
                               -        Understand the POST tests
                               -        Understand the recovery process
                               -        Know how to config and set the signaling connections.
                               -        Understand the Installation and Commissioning Process.
                               -        Know how to set up the NSS network
                               -        Know how to define BSS data on the WAVEXchange level.
                               -        Know how the WAVEXchange stores information
                               -        Understand software management
                               -        Understand Routing Concept
                               -        Create routing definition
        Who should attend?     Primary audience:  MSC specialist,  Field  Optimization,  or System and Database
                               Engineers. Secondary audience: OMC-5 Network Operators
        Prerequisites:         Course 100 & 200, or extensive knowledge of GSM and INTERWAVE products.

        Delivery:              Instructor led lecture with theoretical and hands-on activities.
        Duration:              5 days
                                         CUSTOMER AVAILABILITY: 8/1/98
-----------------------------------------------------------------------------------------------

<PAGE>

                              BSS DATABASE ENGINEERING
-----------------------------------------------------------------------------------------------

                                                  COURSE SERIES 1000

        Course Description:           An Instructor Led course familiarizing
                                      students in practical BSS database
                                      building. To provide trainees with
                                      the skills and knowledge to fine tune
                                      the BSS network using the OMC-R, as well
                                      as to give recommendations for parameter
                                      settings.

        Lessons:                      -        Introduction
                                      -        BSS Interface Configuration
                                      -        BSC Configuration
                                      -        BTS Configuration
                                      -        Handover Configuration
                                      -        Power Control Configuration
                                      -        Adjacent Cell Configuration
                                      -        Site Configuration Exercises
        Objectives:                   AT THE END OF THIS COURSE THE STUDENT WILL BE ABLE TO:
                                      -        Equip and understand all the database parameters used within a
                                               Base Station Controller
                                      -        Equip and understand all the database parameters used within a
                                               Base Transceiver Station
                                      -        Equip and understand all the database parameters used for
                                               Handover Control & Power Budget assessment
                                      -        Equip and understand all the database parameters used for Power
                                               Control
                                      -        Equip and understand all the database parameters used within
                                               the BSS Interfaces (Air, A & Abis)
                                      -        Equip and understand all the database
                                               parameters used for Adjacent Cell
                                               sites (both managed & non managed cells)
                                      -        Build a BSC database
                                      -        Build a BTS database
                                      -        Perform C1 & C2 exercises for a given scenario
                                      -        Perform practical exercises for cell configuration using the
                                               WAVEView OMC-R

        Who should attend?            Primary Audience:  BSS Specialist, Optimization Engineers, or OMC Specialist

        Prerequisites:                Courses 200, 400, & 500 and at least 6 months field experience on the BSS

        Delivery:                     Instructor led lecture with theoretical and hands-on activities.

<PAGE>

        Duration:                     2/3 days (UNDETERMINED AT THIS TIME)

                                      NOT AVAILABLE AT THIS TIME

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

<PAGE>

                       BSS ADVANCED MAINTENANCE & TROUBLESHOOTING
-----------------------------------------------------------------------------------------------

        Course Description:             This course is designed to
                                        create a better understanding of the
                                        operation of the GSM/DCS system as a
                                        whole and the interaction between the
                                        BSS elements. Troubleshooting in a
                                        complete GSM/DCS network is also taught.
                                        To provide trainees with the skills
                                        needed to retrieve, display and
                                        administer performance measurement data
                                        from the OMC-R.

        Lessons:                        -        GSM Messaging & Call Processing Functions
                                        -        Call Tracing Exercises
                                        -        Troubleshooting LALCATEL
                                        -        Performance Measurements

        Objectives:                     AT THE END OF THIS COURSE THE STUDENT WILL BE ABLE TO:
                                        -        Understand GSM layer 1-3, messages for call processing
                                        -        Perform analyses of M-M, M-L, and location updates call
                                                 scenarios
                                        -        Effectively troubleshoot the BSS at a system level utilizing
                                                 system diagnostics and available test equipment
                                        -        Locate Hardware faults with the aid of maintenance manuals
                                                 procedures and correcting them by replacing modules
                                        -        know the counters for performance measurements
                                        -        know the objects which are monitored by the measurements
                                        -        know the benefits and purpose of the measurements

        Who should attend?              Primary Audience: BSS specialist, and OMC-R specialist

        Prerequisites:                  Courses 200,  400, & 500 and at lease 6 months field  experience on the
                                        BSS

        Delivery:                       Instructor led lecture with theoretical and hands-on activities.

        Duration:                       2/3 days (UNDETERMINED AT THIS TIME)

</TABLE>
                                          NOT AVAILABLE AT THIS TIME

<PAGE>

                             TRAINING REQUEST FORM

                                              Date of Request:
                                                               ----------------

Customer Name:                              Operator   / /    Distributor   / /
              ---------------------------------
Customer Contact:                                    Telephone:
                 ------------------------------                ----------------

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
                                            TYPE OF TRAINING REQUESTED:
<S>                                        <C>                                       <C>
   / /          Course Series 200          / /           Course Series 500           / /       Course Series 800
                 Product Overview                  BSS Operations & Maintenance             OMC-S Network Operations
                (1 2 DAY) $500USD                        (3 DAYS) $1500USD                     (5 days) $2500USD

   / /          Course Series 300          / /           Course Series 600
           OMC-R System Administration                  BSS Installation &
                (2 DAYS) $1000USD                          Commissioning
                                                         (2 DAYS) $1000USD

   / /          Course Series 400          / /           Course Series 700
             OMC-R Network Operations              NSS Operations & Maintenance
                (3 DAYS) $1500USD                        (3 DAYS) $1500USD

                                                  PRICES ARE PER STUDENT
---------- ----------------------------- -------- -------------------------------- -------- -------------------------
</TABLE>
---------------------------------------------------------------------

<TABLE>
<CAPTION>

REQUESTED TIMEFRAME OF TRAINING:            How many students:
<S>                                         <C>                           <C>
    Course Series 200                                                     ----------------------------------
                      ------------------      -------------                              BILLING

    Course Series 300
                      ------------------      -------------               / / P.O. number
                                                                                          -------------------
    Course Series 400                                                         / / Bill To:
                      ------------------      -------------                                ------------------
                                                                          -----------------------------------
    Course Series 500
                      ------------------      -------------

    Course Series 600
                      ------------------      -------------               ----------------------------------
                                                                    PREFERRED TRAINING  LOCATION
    Course Series 700
                      ------------------      -------------
                                                                    / / U.K.
    Course Series 800                                               / / Hong Kong
                      ------------------      -------------         / / Customer Location

                                                                                        ------------------
    Course Series 900                                        -----------------------------------
                      ------------------      -------------
---------------------------------------------------------------------
</TABLE><PAGE>

                                                               EXHIBIT 10.21

<PAGE>

                             300 CONSTITUTION DRIVE
                                  OFFICE LEASE

                          TYCO ELECTRONICS CORPORATION

                                    Landlord

                                       and

                         INTERWAVE COMMUNICATIONS, INC.,

                                     Tenant

<PAGE>

                             300 CONSTITUTION DRIVE
                                  OFFICE LEASE
                             BASIC LEASE INFORMATION

<TABLE>

<S>                                                    <C>
Date:                                                  November 24, 1999

Landlord:                                              Tyco Electronics Corporation,
                                                       a Pennsylvania corporation

Tenant:                                                interWave Communications, Inc.,
                                                       a Delaware corporation

Building:                                              Building I
                                                       300 Constitution Drive
                                                       Menlo Park, California 94025

Premises:                                              Portion of first floor and entire second floor
                                                       as shown on Exhibit A

Area of Premises:                                      55,969 square feet

Scheduled Commencement Date:                           December 15, 1999

Lease Term:                                            Five (5) years, one and one-half (1 1/2)
                                                       months

Option to Extend:                                      Option to extend for five (5) years
                                                       (subject to Landlord's rights under
                                                       Section 18.2)

Initial Monthly Base Rent:                             $ 169,026.38

Advance Rental Payment:                                $ 169,026.38 as Base Rent for March 2000

Tenant's Share                                         See Sections 4.2 and 4.5

Base Tax Amount:                                       $ 0.11 per square foot, per month
                                                       $ 6,175.19 total, per month

Base Insurance Amount:                                 $ 0.01 per square foot, per month
                                                       $ 500.27 total, per month

                                       1
<PAGE>

Utility Allowance:                                     $ 0.17 per square foot, per month
                                                       $ 9,473.80 total, per month

Use:                                                   General office, engineering, engineering
                                                       labs, software and hardware development
                                                       and all other legally-permitted related
                                                       uses

Security, Deposit:                                     $676,100 Letter of Credit

Guarantor:                                             None

Tenant's Address prior to Occupancy                    656 Bair Island Road
of Premises                                            Redwood City, CA 94063

Tenant's Address for Notices                           interWave Communications, Inc.
                                                       300 Constitution Drive, Building I
                                                       Menlo Park, California 94025

Landlord's Address for Notices                         Attention: Property Manager
                                                       300 Constitution Drive, Building I
                                                       Menlo Park, California 94025

Landlord's Broker                                      Cornish & Carey Commercial

Tenant's Broker                                        Cornish & Carey Commercial

</TABLE>

The foregoing Basic Lease Information is hereby incorporated into and made a
part of this Lease. Each reference in this Lease to any of the terms set
forth above shall be deemed to include the respective information set forth
above opposite such term and shall also be construed to incorporate all of
the terms provided under the particular provision of this Lease pertaining to
such term and information. In the event of any conflict between any
provisions of the Basic Lease Information and provisions of this Lease, the
Lease shall prevail and control.

                                       2
<PAGE>

                             300 CONSTITUTION DRIVE
                                  OFFICE LEASE

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS

                                                                                                                PAGE
<S>                                                                                                             <C>
ARTICLE 1 - PREMISES...............................................................................................1

         SECTION 1.1.           PREMISES...........................................................................1

         SECTION 1.2.           AREA OF PREMISES...................................................................1

         SECTION 1.3.           COMMON AREA........................................................................1

         SECTION 1.4.           CONDITION OF PREMISES..............................................................2

ARTICLE 2 - TERM AND POSSESSION ...................................................................................3

         SECTION 2.1.           TERM...............................................................................3

         SECTION 2.2.           IMPROVEMENTS.......................................................................4

ARTICLE 3 - RENT ..................................................................................................4

         SECTION 3.1.           BASE RENT..........................................................................4

         SECTION 3.2.           PAYMENT............................................................................4

         SECTION 3.3.           PARTIAL MONTHS.....................................................................4

ARTICLE 4 - TAX, INSURANCE ADJUSTMENT .............................................................................5

         SECTION 4.1.           EXCESS TAXES.......................................................................5

         SECTION 4.2.           TAXES..............................................................................5

         SECTION 4.3.           ADDITIONAL TAXES...................................................................6

         SECTION 4.4.           EXCESS INSURANCE COSTS.............................................................7

         SECTION 4.5.           INSURANCE COSTS....................................................................7

ARTICLE 5 - INTENTIONALLY OMITTED .................................................................................8

ARTICLE 6 - USE ...................................................................................................8

         SECTION 6.1.           GENERAL............................................................................8

                                       i
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)
<CAPTION>
                                                                                                                PAGE
<S>                                                                                                             <C>
         SECTION 6.2.          NUISANCE OR WASTE...................................................................8

         SECTION 6.3.          COMPLIANCE WITH LAW.................................................................8

         SECTION 6.4.          HAZARDOUS MATERIALS.................................................................9

         SECTION 6.5.          EXISTING CONDITION.................................................................10

         SECTION 6.6.          RULES AND REGULATIONS..............................................................10

         SECTION 6.7.          COMMON AREA PROVISIONS.............................................................11

ARTICLE 7 - SERVICES AND UTILITIES................................................................................11

         SECTION 7.1.          GENERAL............................................................................11

         SECTION 7.2.          UTILITY SERVICES...................................................................13

         SECTION 7.3.          SUPPLEMENTARY SERVICES.............................................................13

         SECTION 7.4.          INTERRUPTION OF ACCESS, USE OR SERVICES............................................13

ARTICLE 8 - ALTERATIONS...........................................................................................14

         SECTION 8.1.          GENERAL............................................................................14

         SECTION 8.2.          NOTICES............................................................................16

         SECTION 8.3.          LABOR, OTHER RELATIONS.............................................................16

         SECTION 8.4.          CONSTRUCTION INDEMNITY.............................................................16

         SECTION 8.5.          LANDLORD ALTERATIONS...............................................................16

ARTICLE 9 - REPAIRS...............................................................................................17

         SECTION 9.1.          TENANT'S OBLIGATIONS...............................................................17

         SECTION 9.2.          LANDLORD'S OBLIGATIONS.............................................................17

         SECTION 9.3.          TENANT'S NEGLIGENCE................................................................17

ARTICLE 10 - ASSIGNMENT AND SUBLEASE .............................................................................17

                                       ii
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)
<CAPTION>
                                                                                                                PAGE
<S>                                                                                                             <C>
         SECTION 10.1.         GENERAL............................................................................17

         SECTION 10.2.         NOTICE AND PROCEDURE...............................................................18

         SECTION 10.3.         LANDLORD'S CONSENT.................................................................19

         SECTION 10.4.         CONDITIONS.........................................................................20

         SECTION 10.5.         LIMITATION ON REMEDIES.............................................................21

         SECTION 10.6.         CONTINUING LIABILITY OF TENANT.....................................................21

         SECTION 10.7.         BANKRUPTCY.........................................................................21

ARTICLE II - DESTRUCTION OR DAMAGE ...............................................................................22

         SECTION 11.1.         GENERAL............................................................................22

         SECTION 11.2.         INSURED CASUALTY...................................................................23

         SECTION 11.3.         UNINSURED CASUALTY.................................................................23

         SECTION 11.4.         TENANT'S ELECTION..................................................................23

         SECTION 11.5.         END OF TERM........................................................................24

         SECTION 11.6.         ABATEMENT OF RENTALS...............................................................24

         SECTION 11.7.         LIABILITY FOR PERSONAL PROPERTY....................................................24

         SECTION 11.8.         WAIVER OF CERTAIN REMEDIES.........................................................25

ARTICLE 12 - EMINENT DOMAIN.......................................................................................25

         SECTION 12.1.         TAKING OF PREMISES.................................................................25

         SECTION 12.2.         TEMPORARY TAKING...................................................................25

         SECTION 12.3.         ABATEMENT OF RENT..................................................................25

         SECTION 12.4.         CONDEMNATION AWARD.................................................................25

ARTICLE 13 - INSURANCE............................................................................................26

                                       iii
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)
<CAPTION>
                                                                                                                PAGE
<S>                                                                                                             <C>
         SECTION 13.1.         LIABILITY INSURANCE................................................................26

         SECTION 13.2.         TENANT'S PROPERTY INSURANCE........................................................26

         SECTION 13.3.         TENANT'S ADDITIONAL INSURANCE......................................................27

         SECTION 13.4.         INSURANCE CRITERIA.................................................................27

         SECTION 13.5.         EVIDENCE OF COVERAGE...............................................................27

         SECTION 13.6.         WAIVER OF SUBROGATION..............................................................27

ARTICLE 14 - WAIVER INDEMNITY.....................................................................................27

         SECTION 14.1.         WAIVER OF LIABILITY................................................................27

         SECTION 14.2.         TENANT'S INDEMNITY.................................................................28

ARTICLE 15 - DEFAULT..............................................................................................28

         SECTION 15.1.         EVENTS OF DEFAULT..................................................................28

         SECTION 15.2.         LANDLORD'S REMEDIES................................................................29

         SECTION 15.3.         LATE CHARGES; INTEREST.............................................................30

         SECTION 15 4.         LEASE CONTINUES UNTIL TERMINATION..................................................31

         SECTION 15.5.         RELETTING PREMISES.................................................................31

         SECTION 15.6.         CURE BY LANDLORD...................................................................31

         SECTION 15.7.         LANDLORD'S DEFAULT.................................................................31

         SECTION 15.8.         REMEDIES CUMULATIVE................................................................32

         SECTION 15.9.         SECURITY DEPOSIT...................................................................32

ARTICLE 16 - SUBORDINATION........................................................................................33

         SECTION 16.1.         SUBORDINATION OF LEASE.............................................................33

         SECTION 16.2.         SUBORDINATION OF DEED OF TRUST.....................................................34

                                       iv
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)
<CAPTION>
                                                                                                                PAGE
<S>                                                                                                             <C>
         SECTION 16.3.         APPROVAL BY MORTGAGEES..............................................................34

ARTICLE 17 - ENTRY BY LANDLORD ....................................................................................34

ARTICLE 18 - OPTION TO EXTEND TERM ................................................................................35

         SECTION 18.1.         OPTION..............................................................................35

         SECTION 18.2.         LANDLORD'S USE.....................................................................35

         SECTION 18.3.         FAIR MARKET RENTAL.................................................................36

ARTICLE 19 - MISCELLANEOUS........................................................................................37

         SECTION 19.1.         HOLDING OVER.......................................................................37

         SECTION 19.2.         LANDLORD'S INTEREST................................................................38

         SECTION 19.3.         QUIET ENJOYMENT....................................................................38

         SECTION 19.4.         LANDLORD'S LIABILITY...............................................................38

         SECTION 19.5.         NO MERGER..........................................................................38

         SECTION 19.6.         SURRENDER OF PREMISES..............................................................38

         SECTION 19.7.         ESTOPPEL CERTIFICATE...............................................................39

         SECTION 19.8.         NO LIGHT, AIR OR VIEW EASEMENT.....................................................39

         SECTION 19.9.         NOTICES............................................................................39

         SECTION 19.10.        SUCCESSORS.........................................................................40

         SECTION 19.11.        ATTORNEYS' FEES....................................................................40

         SECTION 19.12.        WAIVER.............................................................................40

         SECTION 19.13.        CAPTIONS...........................................................................40

         SECTION 19.14.        TIME OF ESSENCE....................................................................40

         SECTION 19.15.        INTEREST RATE......................................................................40

                                       v
<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)
<CAPTION>
                                                                                                                PAGE
<S>                                                                                                             <C>
         SECTION 19.16.        GOVERNING LAW......................................................................40

         SECTION 19.17.        ENTIRE AGREEMENT...................................................................40

         SECTION 19.18.        INVALIDITY.........................................................................41

         SECTION 19.19.        AUTHORITY..........................................................................41

         SECTION 19.20.        NO OFFER...........................................................................41

         SECTION 19.21.        NO REPRESENTATIONS OR WARRANTIES...................................................41

         SECTION 19.22.        BROKERS............................................................................41

         SECTION 19.23.        AMENDMENTS.........................................................................42

         SECTION 19.24.        NAME...............................................................................42

         SECTION 19.25.        SIGNS, DIRECTORY...................................................................42

         SECTION 19.26.        PARKING............................................................................42

         SECTION 19.27.        BUILDING ACCESS....................................................................42

         SECTION 19.28.        LANDLORD...........................................................................42

         SECTION 19.29.        CONFERENCE ROOMS...................................................................43

         SECTION 19.30.        SECURITY, CUSTOMER SERVICE AREA....................................................43

         SECTION 19.31.        ANTENNA............................................................................44

         SECTION 19.32.        EXHIBITS...........................................................................45
</TABLE>

                                       vi
<PAGE>

                             300 CONSTITUTION DRIVE
                                  OFFICE LEASE

                  THIS OFFICE LEASE is made and entered into as of November 24,
1999, by and between TYCO ELECTRONICS CORPORATION, a Pennsylvania corporation
("Landlord"), and INTERWAVE COMMUNICATIONS, INC., a Delaware corporation
("Tenant").

                              ARTICLE 1 - PREMISES

                  Section 1.1       PREMISES. Landlord hereby leases to Tenant,
and Tenant hereby leases from Landlord, for the term and subject to the terms
and provisions contained in the Basic Lease Information and hereinafter set
forth, those certain premises shown on the floor plan attached hereto as EXHIBIT
A ("Premises"), which Premises are located on the first and second floors of the
office building referred to in the Basic Lease Information (such office building
is hereinafter referred to as the "Building"). The Building is located on that
certain real property commonly known as 300 Constitution Drive, Menlo Park,
California, and such real property, together with the Building, the other office
buildings owned by Landlord and located on such real property and all Common
Area (as defined below) and other improvements located thereon, are sometimes
hereinafter referred to as the "Project."

                  Section 1.2       AREA OF PREMISES. Landlord and Tenant agree
that the area of the Premises is the square footage specified therefor in the
Basic Lease Information, and, without limiting the foregoing, Tenant
acknowledges that the rentable area of the Premises includes an allocation of
the Common Area. Such square footage of the Premises shall be conclusive for all
purposes under this Lease. Landlord and Tenant further agree that, for all
purposes under this Agreement, Tenant's Share is the percentage therefor
specified in the Basic Lease Information.

                  Section 1.3       COMMON AREA.

                  (a)      The "Common Area" shall mean all streets, driveways,
entrances, exits, sidewalks, ramps, corridors, halls, stairs, elevators,
elevator equipment, landscaped areas, parking areas, loading and unloading
areas, delivery areas, Building and Project office facilities, fire vestibules,
foyers, lobbies, electric, telephone and telecommunications closets and risers,
common restrooms, mechanical rooms, service rooms, janitor's closets, light
wells, pipes, ducts, flues, chutes, conduits, wires, columns and all other
areas, facilities or improvements located in the Building or Project and
provided by Landlord for the benefit and non-exclusive use of Landlord. Tenant,
the other tenants and occupants of the Building and Project and their respective
employees, agents and invitees. Notwithstanding the foregoing, the Common Area
shall not include any of the foregoing areas, facilities or improvements which
are provided for by Landlord for the exclusive use or benefit of Landlord's
employees, agents or invitees, or which are

                                      1
<PAGE>

provided by Landlord the exclusive use or benefit of any other tenant or other
occupant of the Building or any other portion of the project.

                  (b)      Tenant's use and occupancy of the Premises under this
Lease shall include the non-exclusive right to use the Common Area in common
with Landlord; Landlord's employees, agents or invitees; other tenants and
occupants of the Building and Project; and other parties entitled to use the
Common Area, subject to the provisions of this Lease and to the Project rules
and regulations hereinafter described. Tenant shall not use the Common Area for
the conduct of its business or for the storage, either permanent or temporary,
of any materials, supplies, equipment or refuse, and shall keep the Common Area
free and clear of any obstructions created or permitted by Tenant or resulting
from the conduct of Tenant's business on the Premises.

                  Section 1.4       CONDITION OF PREMISES.

                  (a)      Tenant acknowledges and agrees that, as of the date
of this Lease, Tenant has conducted its own investigation of the Premises, the
physical condition thereof, including accessibility and location of utilities,
improvements and the presence or absence of Hazardous Materials (as defined
below), and any other matters relating to the Premises, the Building or the
Project which in Tenant's judgment might affect or influence Tenant's use of the
Premises or Tenant's willingness to enter into this Lease. Tenant recognizes
that Landlord would not lease the Premises except on an "as is" basis and
acknowledges that, except as otherwise expressly set forth in this Lease,
Landlord has made no representations or warranties of any kind in connection
with the improvements to, or physical conditions on, or bearing on the use of,
the Premises, the Building or the Project. Tenant shall rely solely on Tenant's
own inspection and examination of such items and not on any representations or
warranties of Landlord or its agents, employees or contractors, express or
implied. Landlord shall have the right to remove from the Premises the computer
and communications systems embodied by the software and hardware at the Premises
which link the Premises to other facilities of Landlord. Such removal shall
occur prior to December 15, 1999, in the portion of the Premises other than the
Landlord Retained Area (as defined below), and prior to February 1, 2000, in the
Landlord Retained Area.

                  (b)      Tenant acknowledges and agrees that Tenant has
examined and inspected all matters with respect to real property taxes, personal
property taxes, operating expenses, costs of insurance, permitted uses, zoning,
private covenants, conditions and restrictions, and all other matters which, in
Tenant's judgment, might bear upon the value and suitability of the Premises for
Tenant's purposes or Tenant's willingness to enter into this Lease. Tenant has
and will rely solely on Tenant's own inspection and examination of such items.

                  (c)      Notwithstanding  the  provisions  of this  Section
1.4. Landlord hereby expressly discloses to Tenant that full telephone service
(that is, installation of a main

                                        2
<PAGE>

point of entry within Building I, with lines from such point of entry connected
directly to Pacific Bell) shall be available on or before January 1, 2000. If
full telephone service is not available until subsequent to January 1, 2000,
Tenant will continue to pay the reduced Monthly Base Rent set forth in Section
3.1 below, until the later of (i) fifteen (15) days after the date on which full
telephone service is available, or (ii) January 31, 2000.

                         ARTICLE 2 - TERM AND POSSESSION

                  Section 2.1       TERM.

                  (a)      This Lease shall become effective upon execution by
Landlord and Tenant. The term of this Lease ("Term") shall commence on the date
calculated as provided in subparagraph (b) below ("Commencement Date"), and
shall continue for a period of five (5) years, one month thereafter, unless
earlier terminated in accordance with this Lease or unless extended as
hereinafter provided. If Landlord shall not deliver possession of the Premises
to Tenant in the manner provided under subparagraph (b) below on or before the
"Scheduled Commencement Date" specified in the Basic Lease Information for any
reason whatsoever. Landlord shall not be liable to Tenant by reason thereof and,
except as provided below, this Lease and the parties' obligations hereunder
shall not be rendered void or voidable thereby or otherwise affected in any
manner, except that Tenant's obligation to pay Monthly Base Rent (as defined
below) and other amounts payable by Tenant under this Lease shall not commence
until the Commencement Date. In addition, no delay by Landlord in the delivery
of possession of the Premises to Tenant shall extend the Term or any obligation
of Landlord hereunder. In the event that the Commencement Date has not occurred
prior to March 1, 2000, Tenant shall have the right to terminate this Lease by
delivering written notice to Landlord of such election to terminate on or before
ten (10) days thereafter, in which event any sums paid by Tenant to Landlord
shall be immediately returned to Tenant.

                  (b)      The Commencement Date shall be the date upon which
Landlord delivers possession of the Premises, other than the Landlord Retained
Area, to Tenant. At such time as the Commencement Date has been established, at
Landlord's request, Landlord and Tenant shall execute a written acknowledgment
of the Commencement Date. For the purposes of this Lease, the term "Landlord
Retained Area" shall mean the portion of the first floor of the Premises
occupied by Landlord's payroll group and containing approximately 1,340 square
feet of rentable area, as shown on EXHIBIT A. Landlord shall deliver possession
of the Landlord Retained Area to Tenant on or before February 1, 2000. If
Landlord shall fail to deliver possession of the Landlord Retained Area to
Tenant on or before February 1, 2000, Tenant's obligation to pay to Landlord
Monthly Base Rent with respect to the Landlord Retained Area shall be abated
until such time as Landlord shall deliver possession of the Landlord Retained
Area to Tenant. If Landlord does not deliver possession of the Landlord Retained
Area to Tenant on or before March 1, 2000. Tenant's obligation to pay to
Landlord Monthly Base Rent with

                                     3
<PAGE>

respect to the Landlord Retained Area shall be abated for each day of such delay
in delivery beyond March 1, 2000.

                  (c)      On the date of Landlord's delivery of possession of
the Premises to Tenant pursuant to this Section, the portion of the Premises so
delivered shall be clean and the Building systems located therein shall be in
good operating condition. Tenant's occupancy of the Premises (whether before or
after the Scheduled Commencement Date) shall constitute Tenant's acceptance of
the Premises and acknowledgment that the Premises are in such condition and
otherwise in good order and satisfactory to Tenant.

                  Section 2.2       IMPROVEMENTS Without limiting any other
provisions of this Agreement, Tenant expressly acknowledges and agrees that
Landlord shall have no obligation whatsoever to construct any tenant
improvements or other alterations, additions or improvements in or to the
Premises or Building, or, apart from Landlord's obligations under Section 2.l(c)
above, otherwise to prepare the Premises or Building for Tenant's occupancy.

                                ARTICLE 3 - RENT

                  Section 3.1       BASE RENT. Tenant shall pay to Landlord
throughout the term of this Lease, in lawful money of the United States, Monthly
Base Rent in the following amounts:

<TABLE>

                   PERIOD OF TERM                     MONTHLY BASE RENT
                   --------------                     -----------------
                <S>                                   <C>
                12/15/1999 - 1/31/2000                     $36,601.43
                  2/1/2000 - 2/29/2000                    $165,877.38
                  3/1/2000 - 1/31/200l                    $169,026.00
                  2/1/2001 - 1/31/2002                    $175,787.00
                  2/1/2002 - l/31/2003                    $182,819.00
                  2/1/2003 - 1/31/2004                    $190,132.00
                  2/1/2004 - 1/31/2005                    $197,737.18

</TABLE>

                  Tenant shall pay to Landlord the Monthly Base Rent without
notice or demand in advance, beginning on the Commencement Date and on the first
day of each calendar month thereafter during the Term. Concurrently with the
execution of this Lease by Tenant, and as a condition to its effectiveness,
Tenant shall pay to Landlord the advance rental specified in the Basic Lease
Information.

                  Section 3.2        PAYMENT. All payments required to be made
by Tenant under this Lease shall be made without any setoff, deduction or
counterclaim whatsoever and shall be made payable to and delivered to Landlord
at the office of Landlord in the Building or such other place as Landlord may
designate.

                                   4
<PAGE>

                  Section 3.3       PARTIAL MONTHS. If the Commencement Date is
a day other than the first day of a calendar month or if the Term expires or the
Lease is terminated on a day other than the last day of a calendar month, then
the Monthly Base Rent for the first and last fractional months of the Term shall
be prorated on the basis of a thirty (30) day month.

                      ARTICLE 4 - TAX, INSURANCE ADJUSTMENT

                  Section 4.1       EXCESS TAXES. Tenant shall pay to Landlord,
in addition to the Monthly Base Rent and for each calendar year of the Term, an
amount equal to the excess, if any, of Tenant's Share of Taxes (as defined
below) paid or incurred by Landlord during such calendar year, over the Base Tax
Amount (such excess is hereinafter referred to as the "Excess Taxes"). At or
after the Commencement Date, as to the then-current calendar year, and at or
after the commencement of any subsequent calendar year. Landlord shall have the
right to notify Tenant of the amount which Landlord reasonably estimates to be
the monthly or quarterly installments of the Excess Taxes for such calendar
year, and the amount thereof shall be payable by Tenant to Landlord together
with payments of Monthly Base Rent on a monthly or quarterly basis, as
applicable. Within one hundred twenty (120) days after the end of each calendar
year, or as soon thereafter as is practicable, Landlord shall give to Tenant a
written statement of the Excess Taxes for such calendar year ("Tax Statement").
If the Excess Taxes as shown on the Tax Statement are greater or less than the
total amounts actually paid by Tenant on a monthly or quarterly basis, as
applicable, during the year covered by such Tax Statement, then Tenant shall pay
in cash any sums owed Landlord within ten (10) business days thereafter, or, if
applicable. Tenant shall receive a credit against any the Excess Taxes next
accruing for any sums owed Tenant. If the Term of this Lease commences on a date
other than the first day of the calendar year or expires or is terminated on a
day other than the last day of a calendar year, the amount of Taxes with respect
to which Tenant shall be obligated to pay its share during the year in which the
Lease commences or expires or is terminated shall be prorated on the basis which
the number of days in the calendar year within the Term bears to three hundred
sixty (360). Following expiration of the calendar year in which the Term expires
or is terminated, Landlord shall give a final Tax Statement to Tenant for such
calendar year. If the Excess Taxes as shown on such final Tax Statement are
greater or less than the total amounts actually paid by Tenant as Excess Taxes
during the year covered by the final Tax Statement, then within ten (10)
business days thereafter the appropriate party shall pay to the other party any
sums owed.

                  Section 4.2        TAXES. For the purpose of this Lease, the
term "Taxes" shall mean and include all taxes, assessments and charges
(including costs and expenses of contesting the amount or validity thereof by
appropriate administrative or legal proceedings) levied upon or with respect to
the Building, the Project or any personal property of Landlord therein used in
connection with the management, operation,

                                   5
<PAGE>

maintenance or repair of the Building or the Project (and not in connection
with Landlord's core business operations conducted within the Project), or
Landlord's interest in the Building, the Project or such personal property,
including all real property taxes and general and special assessments;
charges, fees, levies or assessments for transit, housing, police, fire or
other governmental services or purported benefits to the Building or the
Project; service payments in lieu of taxes; environmental surcharges; excise
taxes; gross receipts taxes; gross income taxes; rent taxes; sales and/or use
taxes; employee taxes; water and sewer taxes; any tax, fee or excise on the
act of entering into this Lease, on the use or occupancy of the Building, the
Project or any part thereof, or upon or measured by the rent payable under
any lease or in connection with the business of renting space in the Building
or the Project; and all other governmental impositions of any kind and nature
whatsoever, regardless of whether now customary or within the contemplation
of the parties hereto and regardless of whether resulting from increased rate
and/or valuation, or whether extraordinary or ordinary, general or special,
unforeseen or foreseen, or similar or dissimilar to any of the foregoing,
which may now or hereafter be levied or assessed against Landlord by the
United States of America, the State of California, the County of San Mateo,
the City of Menlo Park or any political subdivision, public corporation,
district or other political or public entity, and any other tax, fee or other
excise, however described, that may be levied or assessed as a substitute
for, or as an addition to (in whole or in part) any other such taxes. For the
purposes of this Lease, the term "Tenant's Share of Taxes" shall mean the
product of Tenant's Tax Share (as hereinafter defined), multiplied by the
amount of Taxes for the year in question. For the purposes of this Lease.
"Tenant's Tax Share" shall mean the percentage obtained by dividing the
rentable area of the Premises by the sum of the rentable area of the Building
and the rentable area of all other building improvements located on the
assessor's tax parcel in which the Building is located.

         Section 4.3       ADDITIONAL TAXES. In addition to the Monthly Base
Rent and other amounts payable by Tenant hereunder, to the extent that Tenant
shall not have paid any such amounts directly to the appropriate parts therefor,
Tenant shall reimburse Landlord upon demand for any and all taxes, surcharges,
levies, assessments, fees and charges paid by Landlord, whether or not now
customary or within the contemplation of the parties hereto: (a) upon, measured
by or reasonably attributable to the cost or value of Tenant's equipment,
furniture, fixtures and other personal property located in the Premises, or the
cost or value of any leasehold improvements, regardless of whether title to such
improvements shall be in Tenant or Landlord; (b) upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises or any portion thereof; or (c) upon this
Lease transaction or any document to which Tenant is a party creating or
transferring an interest or an estate in the Premises. In the event that it
shall not be lawful for Tenant to reimburse Landlord for the additional taxes
payable hereunder, but it shall be lawful to increase the monthly rental payable
under this Lease in order to take into account Landlord's payment of such
additional taxes, the monthly rental payable to Landlord

                                   6
<PAGE>

shall be revised to net to Landlord the same net rental without reimbursement of
such additional taxes as would have been received by Landlord with reimbursement
of such additional taxes. Tenant shall have no obligation to reimburse Landlord
for any Taxes upon the net income of Landlord.

                  Section 4.4        EXCESS INSURANCE COSTS. Tenant shall pay to
Landlord, in addition to the Monthly Base Rent and for each calendar year of the
Term, an amount equal to the excess, if any, of Tenant's Share of Insurance
Costs (as defined below) paid or incurred by Landlord during such calendar year,
over the Base Insurance Amount (such excess is hereinafter referred to as the
"Excess Insurance Costs"). At or after the Commencement Date as to the
then-current calendar year, and at or after the commencement of any subsequent
calendar year, Landlord shall have the right to notify Tenant of the amount
which Landlord reasonably estimates to be the monthly or quarterly installments
of Excess Insurance Costs for such calendar year, and the amount thereof shall
be payable by Tenant to Landlord together with payments of Monthly Base Rent on
a monthly or quarterly basis, as applicable. Within one hundred twenty (120)
days after the end of each calendar year, or as soon thereafter as is
practicable. Landlord shall give to Tenant a written statement of the Excess
Insurance Costs for such calendar year ("Insurance Statement"). If the Excess
Insurance Costs as shown on the Insurance Statement are greater or less than the
total amounts actually paid by Tenant as Excess Insurance Costs on a monthly or
quarterly basis, as applicable, during the year covered by such Insurance
Statement, then Tenant shall pay in cash any sums owed Landlord within ten (10)
business days thereafter, or, if applicable, Tenant shall receive a credit
against any the Excess Insurance Costs next accruing for any sums owed Tenant.
If the Term of this Lease commences on a date other than the first day of the
calendar year or expires or is terminated on a date other than the last day of
the calendar year, the amount of Insurance Costs with respect to which Tenant
shall be obligated to pay its share during the year in which the Lease commences
or expires or is terminated shall be prorated on the basis for which the number
of days in the calendar year within the Term bears to three hundred sixty (360).
Following the expiration of the calendar year in which the Term expires or is
terminated. Landlord shall give a final Insurance Statement to Tenant for such
calendar year. If the Excess Insurance Costs as shown on such final Insurance
Statement are greater or less than the total amounts actually paid by Tenant as
Excess Insurance Costs during the year covered by the final Insurance Statement,
then within ten (10) business days thereafter the appropriate party shall pay to
the other party any sums owed.

                  Section 4.5        INSURANCE COSTS. For the purposes of this
Lease, the term "Insurance Costs" shall mean and include all costs and expenses,
including premium charges, paid or incurred by Landlord for insurance maintained
by Landlord with respect to the Premises, the Building and/or the Project,
including, without limitation, all risk, commercial general liability,
automobile liability, property damage, worker's compensation, employer's
liability, earthquake, flood and such other insurance in such

                                   7
<PAGE>

forms of coverage and on such amounts as Landlord, in its sole discretion, shall
elect to maintain with respect to the Building or Project. In the case of
blanket insurance policies covering the Project and other property of Landlord,
Insurance Costs shall include the costs and expenses thereof allocated by
Landlord to the Project. For purposes of this Lease, the term "Tenant's Share of
Insurance Costs" shall mean the product of Tenant's Insurance Share (as
hereinafter defined) multiplied by the amount of the Insurance Costs for the
year in question. For the purposes of this Lease "Tenant's Insurance Share"
shall mean the percentage obtained by dividing the rentable area of the Premises
by the sum of the rentable area of the Building and the rentable area of all
other building improvements (including those occupied by Landlord and its
affiliates) within the Project.

                        ARTICLE 5 -INTENTIONALLY OMITTED

                                 ARTICLE 6 - USE

                  Section 6.1        GENERAL. Tenant shall use the Premises only
for the purposes specified in the Basic Lease Information and for no other
purposes. Tenant, at its own cost and expense, shall obtain any and all
licenses, permits, authorizations and approvals of governmental authorities
required in order to enable Tenant lawfully to conduct in the Premises any such
use. Nothing contained in this Lease shall grant to Tenant the exclusive right
to conduct within the Building, the Project or the Premises the business to be
conducted by Tenant in the Premises, or otherwise limit the right of Landlord to
lease space within the Building or the Project to such tenants and for such
purposes as Landlord, in its sole discretion, shall deem appropriate.

                  Section 6.2       NUISANCE OR WASTE. Tenant shall not do or
permit to be done in or about the Premises anything which will in any way
obstruct or interfere with the rights of other tenants or occupants of the
Building or the Project or injure or annoy them or use or allow the Premises to
be used for any improper purpose, and Tenant shall not cause, maintain or permit
any nuisance in, on or about the Premises. Tenant shall not commit or suffer the
commission of any waste in, on or about the Premises. Tenant shall not use or
operate any equipment, machinery or apparatus within the Premises which will (a)
injure, vibrate or shake the Premises, the Building or the Project, (b) overload
existing electrical systems or other utilities or equipment servicing the
Premises, the Building or the Project, or (c) impair the efficient operation of
the sprinkler system (if any) or the HVAC equipment (if any) within or servicing
the Premises, the Building or the Project. All noises or odors generated by
Tenant's use of the Premises shall be muffled or contained in such manner such
that they do not interfere with the use or occupancy of other tenants or
occupants of the Building or the Project.

                  Section 6.3        COMPLIANCE WITH LAW. Tenant shall not use
the Premises or permit anything to be done in, on or about the Premises which
will in any way conflict (a) with any statute, ordinance, rule or regulation of
governmental authorities now in force or which may hereafter be enacted or
promulgated, or (b) any provisions of any

                                   8
<PAGE>

private covenants, conditions, restrictions, equitable servitudes or rules or
regulations which may now or hereafter affect the Premises, the Building, the
Project or any portion thereof (collectively, "CC&Rs") if any.  Tenant shall not
do or permit anything to be done in or about the Premises, or bring or keep
anything therein, which will in any way increase the rate of fire insurance upon
the Project, the Building, the Premises or any of their contents. Tenant, at its
sole cost and expense, shall promptly comply with (i) all statutes, ordinances,
rules and regulations of governmental authorities applicable to the Premises or
Tenant's use or occupancy thereof and now in force or which may hereafter be in
force regardless of the nature or extent thereof, (ii) all CC&Rs, if any, and
(iii) the requirements of any board of fire underwriters or other similar body
now or hereafter constituted relating to or affecting the condition, use, or
occupancy of the Premises. Notwithstanding the foregoing, in order to comply
with any such statutes, ordinances, roles and regulations of governmental
authorities applicable to the Premises or Tenant's use or occupancy thereof,
Tenant shall not be obligated to make any alteration, addition, improvement or
repair to the Premises, unless the obligation to make such alteration, addition,
improvement or repair arises by reason of Tenant's particular use of the
Premises, or results from any other alteration, addition, improvement or repair
made by Tenant to the Premises. The judgment of any court of competent
jurisdiction or the admission of Tenant in an action against Tenant, whether
Landlord be a party thereto or not, that Tenant has violated any such statute,
ordinance, rule or regulation shall be conclusive of such violation as between
Landlord and Tenant.

         Section 6.4       HAZARDOUS MATERIALS.

                  (a)      Without limiting the generality of the provisions of
Section 6.3, Tenant, at its sole cost and expense, shall comply with all
statutes, ordinances, rules and regulations of governmental authorities relating
to the storage, use, transportation, release and/or disposal on or about the
Premises or the Project by Tenant, its employees, agents, contractors and
invitees, of radioactive materials, hazardous waste, toxic or contaminated
substances or similar materials, including, without limitation, any substances
which are "hazardous substances" "hazardous waste" "hazardous materials" or
"toxic substances" under applicable federal, state and local statutes,
ordinances, rules or regulations (collectively, "Hazardous Materials"). Tenant
shall not store, use, transport, release or dispose of any Hazardous Materials
in, on, from or about the Premises without the prior written consent of
Landlord. Notwithstanding the foregoing, Landlord's prior written consent shall
not be required for Tenant's use on the Premises of substances and materials
typically used in office environments, such as office and cleaning supplies in
customary and reasonable amounts and used in strict compliance with all
statutes, ordinance, rules and regulations of governmental authorities relating
to Hazardous Materials. Tenant shall be solely responsible for, and shall
indemnify, defend and hold Landlord and its officers, directors, shareholders,
partners, members, agents, employees, contractors, invitees, representatives,
successors and assigns harmless from and against, any and all losses, costs,
claims, damages, liabilities and causes of action (including

                                   9
<PAGE>

attorneys' fees and consultants' fees and costs, and the costs of any
investigation, monitoring and remediation) arising out of or in connection with
the storage, use, transportation, release or disposal of Hazardous Materials by
Tenant, its employees, agents, contractors and invitees, including any claims
for the clean-up or remediation of any such Hazardous Materials. Tenant shall
provide to Landlord written notice of any communication received by Tenant from
any governmental authority or other party alleging the existence of Hazardous
Materials in, on, under or about the Premises, the Building or the Project, or
any alleged violation of environmental laws with respect to the Premises, the
Building or the Project. Without limiting any other provision of this Lease,
Tenant shall provide Landlord with access to the Premises during all reasonable
times in order to enable Landlord to conduct any inspection, monitoring,
remediation, removal or repair related to the presence or alleged presence of
Hazardous Materials in, on, under or about the Premises, the Building or the
Project. Any such inspection, monitoring, remediation, removal or repair on
Premises shall be conducted by Landlord in a manner calculated to minimize
interference with Tenant's operations to the extent reasonably possible.

                  (b)      Landlord shall indemnify, defend and hold Tenant
harmless from and against any and all losses, costs, claims, damages,
liabilities and causes of action (including attorneys' fees and costs) arising
out of or in connection with any Hazardous Materials which first came to be
located in, on or under the Project prior to the date of this Lease. Landlord
hereby discloses to Tenant that certain asbestos-containing materials are
located in the Building as described in that certain memorandum from Kristin
Stiles dated July 15, 1999, a copy of which has previously been delivered to
Tenant.

                  (c)      The rights of Landlord under this Section 6.4 or
otherwise contained in this Lease shall be in addition to any other rights and
remedies of Landlord against Tenant under any other document or instrument now
or hereafter executed by Tenant, or at law or in equity (including any right of
reimbursement or contribution pursuant to the Comprehensive Environmental
Response. Compensation and Liability Act of 1980, 42 U.S.C. section 9601 ET
SEQ., as heretofore or hereafter amended from time to time).

                  Section 6.5       EXISTING CONDITION. Tenant shall accept the
Premises subject to all applicable statutes, ordinances, rules and regulations
of governmental authorities governing and regulating the use or occupancy of the
Premises, including, without limitation, all applicable zoning, planning,
environmental and land use statutes, ordinances, rules and regulations. Tenant
acknowledges that neither Landlord nor Landlord's employees, agents or
contractors have made any representation or warranty as to the suitability of
the Premises for the conduct of Tenant's business or the consistency of Tenant's
proposed use of the Premises with any applicable zoning, planning, environmental
or land use statutes, ordinances, rules or regulations.

                                   10

<PAGE>

                  Section 6.6        RULES AND REGULATIONS. Tenant shall observe
and comply with all Project rules and regulations that Landlord shall from time
to time reasonably and uniformly promulgate. Landlord reserves the right from
time to time to promulgate reasonably and uniformly additional rules and
regulations for the Project or Building, and to make additions and modifications
to such rules and regulations, and such additional rules and regulations and/or
additions and modifications to such rules and regulations shall be binding upon
Tenant upon delivery of a copy thereof to Tenant. Landlord shall not be
responsible to Tenant for the non-performance of any rules and regulations by
any other tenants or occupants of the Building or the Project.

                  Section 6.7       COMMON AREA PROVISIONS. Landlord shall have
the right, from time to time, temporarily to close portions of the Common Area
in order to prevent a dedication thereof to the public or the perfection of any
prescriptive rights therein or to perform repair or maintenance on such portion
of the Common Area; and to change the size, shape, location and extent of the
areas, facilities and improvements included in the Common Area, including
changes in the location of driveways, entrances, exits, elevators, stairs,
corridors, common restrooms and other portions of the Common Area. Landlord's
exercise of such rights shall not subject Landlord to any liability therefor nor
shall Tenant be entitled to any compensation or any diminution or abatement of
rent, provided that Landlord exercises such rights in such manner as to minimize
any interference with Tenant's use and enjoyment of the Premises to the extent
reasonably possible. In no event shall Landlord's exercise of such rights be
deemed to be a constructive or actual eviction of Tenant, or a breach of
Landlord's covenant of quiet enjoyment.

                       ARTICLE 7 - SERVICES AND UTILITIES

                  Section 7.1       GENERAL. Landlord shall:

                  (a)      Operate or cause the operation of the HVAC system
serving the Premises between the hours of 7:00 a.m. and 7:00 p.m., Monday
through Friday, and 9:00 a.m. and 1:00 p.m., Saturday, public holidays
excepted, at such temperatures and in such amounts as Landlord determines are
reasonably required for the comfortable occupancy of the Premises, or as may be
permitted or controlled by applicable statutes, ordinances, rules and
regulations of governmental authorities. Tenant agrees to cooperate fully with
Landlord at all times and to abide by all regulations and requirements which
Landlord may prescribe for the proper function and protection of the HVAC
system. Landlord shall not be responsible for the failure of the HVAC system to
perform its function due to Tenant's failure to keep all window coverings in the
Premises closed whenever the HVAC system is in operation, Tenant's arrangement
of partitioning in the Premises, any use of any heat-generating machinery or
equipment in the Premises, any occupancy of the Premises by an excessive number
of persons, or Tenant's failure to keep all HVAC vents within the Premises free
of obstruction;

                                     11
<PAGE>

                  (b)      Make customary arrangements with public utilities
and/or governmental agencies to furnish electric current to the Premises in
amounts sufficient for normal lighting by overhead fluorescent fixtures and for
normal use of typewriters and other office business machines of similar low
electrical consumption. Landlord shall have no obligation to install dedicated
circuits or other special circuitry or wiring. Tenant shall advise Landlord
prior to execution of this Lease and thereafter within five (5) days after
written request therefor from Landlord of the nature and quantity of all lights,
equipment and machines using electricity in the Premises and shall permit
Landlord and its agents to make periodic inspections of all facilities using
electricity located within the Premises. If Landlord reasonably determines that
Tenant is using excessive electricity, Landlord shall have the right to install
an electric current meter in or with respect to the Premises in order to measure
the amount of electricity consumed on the Premises. The cost of such meter, and
any conduits, wiring, panels and other equipment required in connection with
such meter, and the installation, maintenance and repair thereof, shall be paid
for by Tenant, and Tenant shall pay to Landlord promptly upon demand all such
costs, as well as the cost of any excessive electricity consumed by Tenant;

                  (c)      Provide access to warm and cold water in the
restrooms on the floor or floors on which the Premises are located for drinking
and lavatory purposes only if Tenant requires, uses or consumes water for any
purposes in addition to ordinary drinking and lavatory purposes. Landlord may
install a separate water meter for the Premises in order to measure the amount
of water consumed in the Premises. Tenant shall bear the cost and expense of
installation, repair and maintenance of such meter. Tenant shall pay for water
consumed, as shown on such meter, as and when bills are rendered, and if Tenant
shall fail to pay such charges. Landlord may pay such charges on Tenant's behalf
and recover such amounts from Tenant, together with interest thereon at the
Interest Rate (as defined below);

                  (d)      Make customary arrangements with public utilities
and/or governmental agencies to furnish to the Premises natural gas and sewer
service in amounts sufficient for the ordinary use of the Premises for the
purposes permitted under this Lease;

                  (e)      Provide janitorial service to the individual offices
on the Premises three (3) days per week, and to the bathrooms, conference areas
and other common areas on the Premises five (5) days per week, such service to
be comparable to the janitorial service provided by Landlord to its own office
premises in the Project as of the date of this Lease;

                  (f)      Operate, repair, maintain, clean and light the Common
Area. Notwithstanding the foregoing, Tenant acknowledges and agrees that
Landlord shall not be obligated to provide any security services with respect to
the Premises, the Building or the Project, and Tenant shall make all such
security arrangements as Tenant shall deem

                                      12
<PAGE>

necessary or appropriate with respect to Tenant's use or occupancy of the
Premises; all such security arrangements shall be subject to Landlord's prior
written approval. In addition, Landlord shall not be liable to Tenant for losses
due to theft or burglary, or for any other damage done, by unauthorized persons
in the Building or the Project; and

                  (g)      Provide access to the Premises on a twenty-four (24)
hour per day, seven (7) day per week basis, subject to such security procedures
for the Building and Project as are presently in effect and as Landlord shall
establish from time to time; such security procedures may include, without
limitation, requiring Tenant, its employees, agents, customers and invitees to
identify themselves to Landlord's security personnel or otherwise satisfy the
reasonable requirements of such security personnel, and/or sign a pre-approved
sign-in sheet after normal business hours for the Building or Project and on
weekends and public holidays.

                  Section 7.2       UTILITY SERVICES.

                  (a)      Tenant shall pay to Landlord, in addition to the
Monthly Base Rent, any amount by which the Utility Charges (as defined below)
exceed the Utility Allowance (such excess is hereinafter referred to as the
"Excess Utility Charges"). Landlord shall calculate the amount of Excess
Utility Charges payable by Tenant on a quarterly basis throughout the Term, and
Tenant shall pay such Excess Utility Charges to Landlord on the date for payment
of the next installment of Monthly Base Rent. For purposes of this Lease, the
term "Utility Charges" shall mean the charges to Landlord for electrical,
natural gas, water and sewer service furnished to or consumed on the Premises
during the Term.

                  (b)      Tenant shall pay, prior to delinquency, directly to
the appropriate party therefor, the costs of and charges for utilities other
than those specified in subparagraph (a) above and for other services furnished
to or consumed in or about the Premises during the Term. If any such utilities
or services are not separately metered to Tenant. Tenant shall pay a reasonable
proportion, to be determined by Landlord, of all charges jointly metered with
other premises in the Building or Project.

                  Section 7.3       SUPPLEMENTARY SERVICES. Tenant shall pay
Landlord upon demand, at the charges established by Landlord from time to time
which reflect Landlord's cost of providing such services, for all supplementary
services provided by Landlord to Tenant at Tenant's request, which services are
in addition to those which Landlord is obligated to provide under this Lease,
together with an administrative fee payable to Landlord in an amount equal to
five percent (5%) of such charges. Such supplementary services shall include,
without limitation, providing HVAC service, janitorial service and other
services during hours other than ordinary business hours and/or providing HVAC
service and utility services in amounts reasonably considered by Landlord to be
in excess of the normal and customary usage thereof for the use of the Premises
authorized by this Lease.

                                      13
<PAGE>

                  Section 7.4        INTERRUPTION OF ACCESS, USE OR SERVICES.
Landlord shall not be liable for any failure to provide access to the Premises,
to assure the beneficial use of the Premises or to furnish any services or
utilities to the Premises when such failure is caused by any act of God or the
elements; shortage or unavailability of necessary materials, supplies or labor;
shortage of or interruption in transportation facilities; riots; civil
disturbances; insurrection; war; court order; public enemy; accidents; breakage;
strikes; lockouts; other labor disputes; the making of repairs, alterations or
improvements to the Premises, the Building or the Project; the inability to
obtain an adequate supply of fuel, gas, steam, water, electricity, labor or
other supplies; Y2K problems; or by any other condition not entirely within
Landlord's reasonable control, and Tenant shall not be entitled to any damages
resulting from such failure or to any diminution or abatement in any rent or
other amounts payable by Tenant hereunder. Landlord shall take commercially
reasonable action to minimize the interruptions so caused and the adverse impact
accruing therefrom to the extent reasonably possible. In no event shall such
failure be construed as a constructive or other eviction of Tenant. If any
governmental authority promulgates or revises any statute, ordinance or
building, fire or other code, or imposes mandatory controls or guidelines on
Landlord or the Building, the Project or any part thereof, relating to the use
or conservation of energy, water, gas, steam, light or electricity or the
provision of any other utility or service provided under this Lease, or if
Landlord is required to make alterations to the Building or the Project in order
to comply with such mandatory controls or guidelines. Landlord may, in its sole
discretion, comply with such mandatory controls or guidelines, or make such
alterations to the Building and/or the Project. If, at any time, owners of a
significant number of the buildings in the Menlo Park/Palo Alto, California area
comparable to the Building have elected to comply voluntarily with any request
or guideline of any appropriate governmental authority, including, without
limitation, the making of alterations to such buildings. Landlord may also
comply with such request or guideline. Neither such compliance (as set forth
in either of the previous two (2) sentences) nor the making of such
alterations shall in any event entitle Tenant to any damages, or any
diminution, or abatement in rent or other amounts payable by Tenant under
this Lease or constitute or be construed as a constructive or other eviction
of Tenant. Tenant shall comply with all mandatory rules, regulations and
requirements promulgated by the applicable governmental authorities or
utility companies concerning the use of utility services, including any
rationing, limitation or other control on the quantity of utilities consumed.

                             ARTICLE 8 - ALTERATIONS

                  Section 8.l       GENERAL.

                  (a)      Tenant shall neither make nor cause or allow to be
made any alterations, additions or improvements (collectively, "Alterations")
in, on or to any portion of the Premises, the Building or the Project, or any
part thereof without the prior written consent of Landlord, which consent shall
not be unreasonably withheld; provided,

                                      14
<PAGE>

however, that Landlord shall have the right to withhold its consent in its sole
discretion with respect to any Alterations affecting the exterior of the
Building, the structural portions of the Building or the Building systems. In
the event that Tenant shall desire to make any Alterations. Tenant shall submit
to Landlord such information as Landlord may reasonably require prior to the
commencement of construction or installation of such Alterations, including,
without limitation, permits, licenses and bonds and evidence of sufficient
contractor's insurance coverage. Landlord shall use reasonable efforts to
notify Tenant of Landlord's approval or disapproval within ten (10) business
days following Tenant's submission of all such information to Landlord. If
Landlord consents to the making of any Alterations. Tenant shall make such
Alterations at Tenant's sole cost and expense, and any contractor selected by
Tenant to make such Alterations must be licensed by the State of California and
must first be reasonably approved in writing by Landlord. If Landlord consents
to the making of any Alterations, in order to compensate Landlord for the cost
of review and approval of the plans and specifications for the Alterations and
for additional administrative costs incurred in monitoring the construction and
installation of the Alterations. Tenant shall pay to Landlord upon demand an
administrative fee in an amount equal to fifteen percent (15%) of the cost of
such Alterations (exclusive of the cost of floor coverings and paint).
Subsequent to obtaining Landlord's consent and prior to commencement of
construction or installation of the Alterations. Tenant shall deliver to
Landlord copies of the building permit and executed construction contract
covering the Alterations. Tenant shall provide, at its sole cost and expense,
such performance and/or payment bonds as Landlord shall require with respect to
the Alterations costing in excess of $250,000. Tenant shall also require its
contractor to maintain insurance in amounts and in such form as Landlord shall
reasonably require. Any Alterations undertaken by Tenant in connection with the
Premises shall be completed in accordance with the plans and specifications
approved by Landlord, shall be carried out in a good, workmanlike and prompt
manner, shall comply with all applicable statutes, ordinances, rules and
regulations of governmental authorities having jurisdiction thereof, and shall
be subject to supervision by Landlord or its agents or contractors.

                  (b)      Tenant shall not use any portion of the Common Area
or any other portion of the Building or the Project other than the Premises in
connection with the making of any Alterations without Landlord's prior written
consent. If any Alterations that Tenant shall construct or install shall result
in Tenant or Landlord being required to make any alterations, additions or
improvements to the Premises, or in Landlord being required to make any
alterations, additions or improvements to other portions of the Building or to
the Project, in any case in order to comply with my applicable statutes,
ordinances, rules or regulations of governmental authorities, including, without
limitation, the Americans with Disabilities Act, or any regulations promulgated
thereunder, or any similar state or local statutes, ordinances, rules and
regulations, then Tenant, at its sole cost and expense, shall be obligated to
make all such alterations, additions or improvements, or, at Landlord's option.
Tenant shall reimburse Landlord upon demand for all costs and expenses incurred
by Landlord in making such alterations,

                                      15
<PAGE>

additions or improvements. Any Alterations shall become the property of Landlord
and shall remain on and be surrendered with the Premises upon the expiration or
earlier termination of this Lease; provided, however, that Tenant shall, if
required by Landlord at the time consent to such Alteration was given by
Landlord (or upon Landlord's demand if Tenant shall not have requested
Landlord's consent to such Alteration), at Tenant's sole cost and expense,
remove all or any portion of any Alterations which Landlord shall have
designated for removal at the time of expiration or earlier termination of the
Lease. Following any such removal of any of the Alterations, Tenant, at its sole
cost and expense, shall repair and restore the Premises to their original
condition.

                  Section 8.2       NOTICES. Tenant shall give Landlord at least
fifteen (15) days prior written notice of commencement of any work of
construction, alteration, addition, improvement, maintenance, repair or
replacement in the Premises in order to enable Landlord to post and/or record
such notices as Landlord deems necessary to protect the Premises, the Building,
the Project or Landlord from mechanics' liens, materialmen's liens or any other
liens. Tenant shall keep the Premises, the Common Area, the Building and the
Project free from any mechanics' liens, materialmen's liens or other liens
arising out of any labor or material furnished to Tenant or claimed to have been
furnished to Tenant or to Tenant's agents or contractors in connection with work
of any character performed or claimed to have been performed on the Premises by
or at the direction of Tenant, and promptly upon completion of any construction.
Tenant shall furnish to Landlord copies of unconditional lien waivers from all
contractors, subcontractors and suppliers involved in such construction.

                  Section 8.3       LABOR, OTHER RELATIONS. In the event that
Landlord shall determine that any work of construction, alteration, addition,
improvement, maintenance, repair or replacement in the Premises by Tenant shall
interfere with the labor relations in existence in the Building or the Project,
all such work shall be halted immediately by Tenant until such time as
construction can proceed without any such interference. Tenant shall cause any
work of construction, alteration, addition, improvement, maintenance, repair or
replacement by Tenant in the Premises to be conducted in such manner and at such
times so that any such work shall not disrupt or interfere with the use or
occupancy of other tenants or occupants of the Building or the Project.

                  Section 8.4       CONSTRUCTION INDEMNITY. Tenant shall
indemnify, defend and hold Landlord harmless from and against any and all
losses, costs, claims, damages, liabilities or causes of action (including
attorneys' fees) arising out of or in any way connected with Tenant's
performance of any work of construction, alteration, addition, improvement,
maintenance, repair or replacement in the Premises, or claims for work or labor
performed, or materials or supplies furnished, to or at the request of Tenant or
in connection with performance of any work done for the account of Tenant in the
Premises, the Common Area, the Building or the Project, whether or not Tenant
obtained

                                      16
<PAGE>

Landlord's permission to have such work done, labor performed, or materials or
supplies furnished.

                  Section 8.5        LANDLORD ALTERATIONS. Landlord shall have
the right to make changes or alterations to any portion of the Common Area, the
Building or the Project (which may include, without limitation, repair or
replacement of the Building's exterior facade, exterior window glass, elevators,
electrical systems. HVAC system, plumbing system, hallways, common restrooms or
lobbies but excluding the interior of the Premises, without Tenant's prior
written consent, which shall not be unreasonably withheld). Landlord shall not
be subject to any liability, and Tenant shall not be entitled to any
compensation or any diminution or abatement of rent, as a result of any noise,
dust, vibration or other disturbance to Tenant's use or occupancy of the
Premises arising out of the making of such changes or alterations. In no event
shall such changes or alterations be deemed to be a constructive or actual
eviction of Tenant, or a breach of Landlord's covenant of quiet enjoyment.
Landlord shall use reasonable efforts (which shall not include any obligation to
employ labor at overtime rates) to minimize disruption of Tenant's business
during the making of any such changes or alterations.

                               ARTICLE 9 - REPAIRS

                  Section 9.1       TENANT'S OBLIGATIONS. Subject to Section 9.2
below, Tenant, at Tenant's sole cost and expense, shall keep the Premises and
every part thereof in a clean and sanitary condition, and in good order,
condition and repair, ordinary wear and tear excepted. Except as expressly
provided herein, Landlord shall have no obligation whatsoever to alter, improve,
repair, maintain, remodel, decorate or paint the Premises or any part thereof.

                  Section 9.2        LANDLORD'S OBLIGATIONS. Except as otherwise
provided in Section 9.3 below, Landlord shall repair and maintain in good
condition and repair the following: (a) the structural elements of the Building
(including the foundation, floor slab, load-bearing and exterior walls, and
structural portions of the roof); (b) the Common area; and (c) all electrical,
plumbing, HVAC, sewage and other utility lines, equipment and systems installed
or furnished by Landlord, and located in or serving the Premises. Landlord shall
not be liable for any failure to make any such repairs or to perform any
maintenance unless such failure shall persist for an unreasonable time after
written notice of the necessity for such repairs or maintenance is given by
Tenant to Landlord. There shall be no diminution in or abatement of rent or
other amounts payable by Tenant under this Lease and no liability of Landlord by
reason of any injury to or interference with Tenant's business arising from
Landlord's performance of its repair and maintenance obligations under this
Lease. Tenant hereby waives any right to make repairs at Landlord's expense
under the provisions of Sections 1932, 194l and 1942 of the California Civil
Code or any other, similar statute, ordinance, rule or regulation now or
hereafter in effect.

                                      17
<PAGE>

                  Section 10.3      LANDLORD'S CONSENT. Landlord shall be
entitled to consider any reasonable factor in determining whether or not to
consent to a proposed assignment or sublease. Without limiting any other
circumstances in which it may reasonable for Landlord to withhold its consent to
a proposed assignment or sublease, Tenant acknowledges and agrees that it shall
be reasonable for Landlord to withhold its consent to any proposed assignment or
sublease if any of the following conditions shall not be satisfied:

                  (a)      The financial condition of the proposed assignee or
sublessee shall be equal to or greater than Tenant's financial condition as of
the date hereof and shall satisfy Landlord's then-current credit standards for
tenants of the Building or Project, and the proposed assignee or sublessee shall
otherwise have the financial capacity to perform all obligations under this
Lease to be performed by Tenant;

                  (b)      The proposed use of the Premises by the proposed
assignee or sublessee shall (i) comply with the provisions of Article 6 hereof,
(ii) be consistent with the general character of businesses carried on by
tenants of a first-class office building, (iii) not increase the likelihood of
damage or destruction to the Premises, the Building, or the Project, (iv) not
increase the density or occupancy of the Premises, (v) not be likely to cause an
increase in the insurance premiums for insurance policies carried by Landlord
with respect to the Building or Project, or (vi) not otherwise adversely impact
the Premises, the Building, the Project or Landlord's interest therein; or

                  (c)      Any  mortgagee or  beneficiary  under a deed of trust
whose consent to the assignment or sublease is required shall consent thereto.

                  Section 10.4      CONDITIONS. If Landlord consents to such
assignment or sublease in writing, Tenant shall be entitled to assign or
sublease the Subject Space to the proposed assignee or sublessee subject to the
following conditions:

                  (a)      As of the Transfer  Date,  Landlord  shall not have
the right to terminate this Lease because Tenant is in default under this Lease;

                  (b)      The  assignment or sublease  shall be on the same
terms and conditions set forth in the Transfer Notice given to Landlord;

                  (c)      No assignment or sublease shall be valid and no
assignee or sublessee shall take possession of the Premises or any portion
thereof until an executed counterpart of the assignment or sublease has been
delivered to Landlord;

                  (d)      No sublessee shall have a right further to sublease;

                  (e)      Any  proposed sublease would not result in more than
two subleases of portions of the Premises being in effect at any one time during
the Term;

                                      20
<PAGE>

                  (f)      Any assignee shall have assumed in writing the
obligations of Tenant under this Lease;

                  (g)      Any subtenant shall have agreed in writing to comply
with all terms and provisions of this Lease applicable to the Subject Space
except rent which shall be in the amount provided for in the sublease; and

                  (h)      Fifty percent (50%) of any sums or other economic
consideration received by Tenant as a result of such assignment or subletting
(less reasonable, BONA FIDE finders' fees or leasing commissions payable to a
third party in connection with such assignment or subletting, and less
reasonable attorneys' fees and costs paid in connection with such assignment or
sublease) whether denominated rent or otherwise, which exceed, in the aggregate,
the Monthly Base Rent and additional rent which Tenant is obligated to pay
Landlord under this Lease (prorated as to any sublease to reflect obligations
allocable to that portion of the Premises subject to such sublease) shall be
payable to Landlord as additional rent under this Lease, without affecting or
reducing any other obligation of Tenant hereunder. At Landlord's request, Tenant
shall deliver to Landlord such evidence of the sums or other economic
consideration received by Tenant as a result of assignment or sublease, and the
amounts deducted therefrom for proposes of calculating Landlord's share of such
sums or other economic consideration, as Landlord shall require from time to
time.

                  Section 10.5. LIMITATION ON REMEDIES. Tenant shall have no
right to, and Tenant hereby waives any right to assert a claim for, money
damages based upon any claim or assertion by Tenant that Landlord has
unreasonably withheld or delayed its consent to a proposed assignment or
sublease. Tenant's sole remedy shall be an action or proceeding for specific
performance, injunction or declaratory relief. Tenant acknowledges that Tenant's
rights under this Article 10 satisfy the conditions set forth in Section 1951.4
of the California Civil Code with respect to the availability to Landlord of
certain remedies for a default by Tenant under this Lease.

                  Section 10.6. CONTINUING LIABILITY OF TENANT. Regardless of
Landlord's consent, no subletting or assignment shall release Tenant from any of
its obligations hereunder or alter, impair or diminish the primary liability of
Tenant to pay the rent and to perform all other obligations to be performed by
Tenant hereunder. The acceptance of rent by Landlord from any other person shall
not be deemed to be a waiver by Landlord of any provision hereof. Consent to one
assignment or subletting shall not be deemed consent to any subsequent
assignment or subletting. If any assignee of Tenant or any successor of Tenant
defaults in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
such assignee or successor. Landlord may consent to subsequent assignments or
subleases or amendments or modifications to this Lease with assignees of Tenant,
without notifying Tenant, or any successor of Tenant, and without obtaining its
or their consent thereto, and

                                      21
<PAGE>

no such action by Landlord shall relieve Tenant from its liability under this
Lease. If Tenant assigns this Lease, or subleases all or a portion of the
Premises, or requests the consent of Landlord to any assignment or sublease,
then Tenant shall pay Landlord's reasonable attorneys' fees incurred in
connection therewith, but in no event in excess of $1,500 for each such
assignment or sublease during the initial Term of this Lease and in excess of
$2,000 for each such assignment or sublease during the Option Term (as defined
below).

                  Section 10.7. BANKRUPTCY.

                  (a)      If a petition is filed by or against Tenant for
relief under Title 11 of the United States Code, as amended ("Bankruptcy Code"),
and Tenant (including for purposes of this Section Tenant's successor in
bankruptcy, whether a trustee or Tenant as debtor-in-possession) assumes and
proposes to assign, or proposes to assume and assign, this Lease pursuant to the
provisions of the Bankruptcy Code to any person or entity who has made or
accepted a bona fide offer to accept an assignment of this Lease on terms
acceptable to Tenant, then notice of the proposed assignment setting forth (i)
the name and address of the proposed assignee, (ii) all of the terms and
conditions of the offer and proposed assignment, and (iii) the adequate
assurance to be furnished by the proposed assignee of its future performance
under the Lease, shall be given to Landlord by Tenant no later than twenty (20)
days after Tenant has made or received such offer, but in no event later than
ten (10) days prior to the date on which Tenant applies to a court of competent
jurisdiction for authority and approval to enter into the proposed assignment.
Landlord shall have the prior right and option, to be exercised by notice to
Tenant given at any time prior to the date on which the court order authorizing
such assignment becomes final and non-appealable, to receive an assignment of
this Lease upon the same terms and conditions, and for the same consideration,
if any, as the proposed assignee, less any brokerage commissions which may
otherwise be payable out of the consideration to be paid by the proposed
assignee for the assignment of this Lease.

                  (b)      If this Lease is assigned pursuant to the provisions
of the Bankruptcy Code. Landlord: (i) may require from the assignee a deposit or
other security for the performance of its obligations under the Lease in an
amount substantially the same as would have been required by Landlord upon the
initial leasing to a tenant similar to the assignee; and (ii) shall receive, as
additional rent, the sums and economic consideration described in Sections
365(b)(1) and (3) of the Bankruptcy Code. Any person or entity to which this
Lease is assigned pursuant to the provisions of the Bankruptcy Code shall be
deemed, without further act or documentation, to have assumed all of the
Tenant's obligations arising under this Lease on and after the date of such
assignment. Any such assignee shall, upon demand, execute and deliver to
Landlord an instrument confirming such assumption. No provision of this Lease
shall be deemed a waiver of Landlord's rights or remedies under the Bankruptcy
Code to oppose any assumption and/or assignment of this Lease, to require a
timely performance of Tenant's obligations under

                                      22
<PAGE>

this Lease, or to regain possession of the Premises if this Lease has neither
been assumed nor rejected within sixty (60) days after the date of the order for
relief or within such additional time as a court of competent jurisdiction may
have fixed. Notwithstanding anything in this Lease to the contrary, all amounts
payable by Tenant to or on behalf of Landlord under this Lease, whether or not
expressly denominated as rent, shall constitute rent for the purposes of Section
502(b)(6) of the Bankruptcy Code.

                       ARTICLE 11 - DESTRUCTION OR DAMAGE

                  Section 11.1. GENERAL. For the purposes of this Lease, the
term "Insured Casualty" shall mean damage to or destruction of the Premises, the
Building and/or the Project from a cause actually insured against, for which the
insurance proceeds paid or made available to Landlord are sufficient to rebuild
or restore the Premises, the Building and/or the Project, as applicable, under
then-existing applicable law to the condition existing immediately prior to the
damage or destruction, and "Uninsured Casualty" shall mean damage to or
destruction of the Premises, the Building and/or the Project from a cause not
actually insured against, or from a cause actually insured against but for which
the insurance proceeds paid or made available to Landlord are for any reason
insufficient to rebuild or restore the Premises, the Building and/or the
Project, as applicable, under then-existing applicable law to the condition
existing immediately prior to the damage or destruction.

                  Section 11.2. INSURED CASUALTY.

                  (a)      In the event of an Insured Casualty where the extent
of damage or destruction is less than twenty-five percent (25%) of the then full
replacement cost of the Premises, or is less than ten percent (10%) of the then
full replacement cost of the Building and/or the Project, as applicable.
Landlord shall rebuild or restore the Premises substantially to the condition
existing immediately prior to the damage or destruction (provided the damage or
destruction was not the result of the negligence or willful misconduct of
Tenant, its agents, employees, contractors or invitees), and provided that
then-existing applicable law would not prevent or otherwise interfere with
Landlord's ability so to rebuild or restore.

                  (b)      In the event of an Insured Casualty where the extent
of damage or destruction is equal to or greater than twenty-five percent (25%)
of the then full replacement cost of the Premises, or is equal to or greater
than ten percent (10%) of the then full replacement cost of the Building and/or
the Project, as applicable, Landlord shall have the right to rebuild or restore
the Premises substantially to the condition existing immediately prior to the
damage or destruction, or shall have the right to terminate this Lease. Landlord
shall notify Tenant in writing within sixty (60) days following the event of
damage or destruction of Landlord's election either to rebuild or restore the
Premises or to terminate this Lease.

                                      23
<PAGE>

                  Section 11.3. UNINSURED CASUALTY. In the event of an
Uninsured Casualty, Landlord shall have the right to (a) rebuild or restore the
Premises as soon as reasonably possible at Landlord's expense (unless the damage
or destruction was caused by the negligence or willful misconduct of Tenant, its
employees, agents, contractors or invitees, in which event Tenant shall pay all
costs of rebuilding or restoration), and this Lease shall continue in full force
and effect, or (b) terminate this Lease, in which event Landlord shall give
written notice to Tenant within sixty (60) days following the event of damage or
destruction of Landlord's election to terminate this Lease as of the date of the
event of damage or destruction, and if the damage or destruction was caused by
the negligence or willful misconduct of Tenant, its employees, agents,
contractors or invitees, Tenant shall be liable therefor to Landlord.

                  Section 11.4. TENANT'S ELECTION. Notwithstanding anything to
the contrary contained in this Article 11, Tenant may elect to terminate this
Lease in the event the Premises are damaged or destroyed and, in the reasonable
opinion of Landlord's architect or construction consultant, the repair or
restoration of the Premises cannot be substantially completed within three
hundred sixty (360) days, or cannot be commenced within one hundred eighty (180)
days following the event of damage or destruction. Tenant's election shall be
made by written notice to Landlord given within ten (10) days following Tenant's
receipt from Landlord of the estimate of the time required to complete the
repair or restoration of the Premises which Landlord shall deliver within thirty
(30) days after the occurrence of the event of damage or destruction. If Tenant
does not deliver such notice within such ten-day period, Tenant may not later
terminate this Lease even if substantial completion of the rebuilding or
restoration occurs subsequent to such 360-day period, provided that Landlord is
proceeding with diligence to rebuild or restore the Premises and has commenced
such rebuilding and restoration within the 180-day period provided for above. If
Tenant delivers such notice within such ten-day period, this Lease shall
terminate as of the date of occurrence of the event of damage or destruction.

                  Section 11.5. END OF TERM. Notwithstanding anything to the
contrary contained in this Article 11, in the event that the Premises, the
Building and/or the Project are damaged or destroyed in whole or in part from
any cause during the last twelve (12) months of the Term, Landlord, at
Landlord's option, may terminate this Lease as of the date of the event of
damage or destruction by giving written notice to Tenant of Landlord's election
to do so within thirty (30) days following the event of such damage or
destruction. If Tenant has been granted an option to extend or renew the Term
pursuant to any other provision of this Lease, then, unless otherwise permitted
herein, Landlord shall not be entitled to terminate this Lease by reason of such
damage or destruction during the last twelve (12) months of the Term if Tenant
exercises its option to extend or renew in accordance with this Lease within
twenty (20) days following the date of occurrence of the event of damage or
destruction.

                                      24
<PAGE>

                  Section 11.6. ABATEMENT OF RENTALS. If Landlord is required or
elects to rebuild or restore the Premises pursuant to this Article 11, the
then-current Monthly Base Rent, Excess Taxes and Excess Insurance Costs shall be
proportionately reduced during the period of repair or restoration, based upon
the extent to which the damage or making of repairs interferes with Tenant's
business conducted in the Premises, as reasonably determined by Landlord, but
only to the extent of any rental loss insurance proceeds received by Landlord
with respect to such damage or destruction to the Premises. All other
obligations of Tenant under this Lease shall continue unaffected.

                  Section 11.7. LIABILITY FOR PERSONAL PROPERTY. In no event
shall Landlord have any liability for, nor shall Landlord be required to repair
or restore, any injury or damage to any Alterations made by Tenant, trade
fixtures, equipment, merchandise, furniture or any other property installed by
Tenant or at the expense of Tenant. If Landlord or Tenant do not elect to
terminate this Lease pursuant to this Article 11, Tenant shall promptly rebuild
or restore all such property to the condition existing immediately prior to the
event of damage or destruction.

                  Section 11.8. WAIVER OF CERTAIN REMEDIES. Landlord and Tenant
acknowledge that the rights and obligations of the parties in the event of the
damage or destruction of the Premises are as set forth in this Article 11.
Tenant hereby expressly waives any rights to terminate this Lease upon damage or
destruction of the Premises, except as specifically provided by this Lease,
including, without limitation, any rights pursuant to the provisions of Sections
1932(2) and 1933(4) of the California Civil Code, as amended, or any other,
similar provisions of law.

                           ARTICLE 12 - EMINENT DOMAIN

                  Section 12.1. TAKING OF PREMISES. If all or any portion of the
Premises shall be taken by any public or quasi-public authority as a result of
the exercise of the power of eminent domain (which shall include a voluntary
sale or transfer by Landlord of all or any portion of the Premises under threat
of condemnation), this Lease shall terminate as to the part so taken as of the
date of taking, and, in the case of a partial taking which, in the reasonable
judgment of Tenant, materially impairs Tenant's ability to conduct its business
on the remainder of the Premises, Tenant shall have the right to terminate this
Lease as to the remainder of the Premises by written notice given to Landlord
within thirty (30) days after the date of such taking. If a material portion of
the Building or the Project is taken or if substantial alteration or
reconstruction of the Premises, the Building and/or the Project will, in
Landlord's reasonable judgment, be necessary or desirable as a result of such
condemnation or taking, Landlord may terminate this Lease by written notice
given to Tenant within thirty (30) days after the date of such taking.

                  Section 12.2. TEMPORARY TAKING. If all of the Premises shall
be temporarily condemned or taken for governmental occupancy for a period of
more than

                                      25
<PAGE>

one (1) year, this Lease shall terminate as of the date of taking, and Landlord
shall be entitled to any and all compensation, damages, income, rent and awards
in connection therewith. In the event of a temporary taking for a period of one
(1) year or less, this Lease shall remain in full force and effect, and all
compensation awarded as a result of such taking during the term of this Lease
(regardless of whether such temporary taking lasts for less or more than one (1)
year) shall be payable to Tenant.

                  Section 12.3. ABATEMENT OF RENT. If any portion of the
Premises shall be taken in eminent domain and this Lease shall not be terminated
as provided in this Article 12, as of the date of the taking, the Monthly Base
Rent, the Excess Taxes and Excess Insurance Costs shall be reduced in the same
proportion that the rentable area of that portion of the Premises so taken bears
to the original rentable area of the Premises.

                  Section 12.4. CONDEMNATION AWARD. Except as otherwise provided
in Section 12.2 above, in the event of any taking, Landlord shall be entitled to
any and all compensation, damages, income, rent, awards, and any interest
therein whatsoever which may be paid or made in connection therewith; provided,
however, that Tenant may make a separate petition, if such a separate petition
is permitted, for the cost of its moving expenses and the value of its personal
property (whether or not affixed to the Premises). In no event shall Tenant be
entitled to receive any award for any "bonus value" of this Lease or otherwise
attributable to the value of Tenant's interest under this Lease or in or to the
Premises. Each party hereby waives the provisions of California Code of Civil
Procedure Sections 1265.120 and 1265.130 allowing either party to petition the
Superior Court to terminate this Lease in the event of a partial taking of the
Premises.

                             ARTICLE 13 - INSURANCE

                  Section 13.1. LIABILITY INSURANCE. Tenant, at its sole cost
and expense, shall procure and maintain in full force and effect throughout the
Term (a) a policy of commercial general liability insurance in the minimum
amount of not less than Five Million Dollars ($5,000,000.00) combined annual
aggregate limits for bodily injury and property damage (with no lower per
occurrence limits), including contractual liability and personal injury
coverage, insuring Tenant against any liability arising out of or in connection
with Tenant's use, occupancy and/or maintenance of the Premises, the Building or
the Project, or arising out of this Lease, and (b) commercial automobile
insurance in the minimum amount of Two Million Dollars ($2,000,000) combined
single limit coveting all owned, non-owned or leased vehicles on or about the
Premises and Project. Such commercial general liability insurance shall name
Landlord, Landlord's mortgagee (of whom Tenant has been notified), if any, and
Landlord's property manager (of whom Tenant has been notified), if any, as
additional insureds, shall specifically include the liability assumed hereunder
by Tenant (provided, however, that the amount of such insurance shall not be
construed to limit the liability of Tenant hereunder), and shall provide that it
is primary insurance and not "excess over" or contributory with any other

                                      26
<PAGE>

insurance in force for or on behalf of Landlord. The policy shall eliminate
cross-liability and shall contain a severability of interest clause. Landlord
shall have the right, periodically during the Term, but not more frequently than
once each twelve (12) months, to require that Tenant increase the minimum
liability limits specified in this Section to an amount equal to the
then-prevailing minimum liability limits required by prudent landlords of
comparable office buildings in Menlo Park/Palo Alto, California area, as
determined by Landlord in its reasonable judgment.

                  Section 13.2. TENANT'S PROPERTY INSURANCE. Tenant, at its sole
cost and expense, shall procure and maintain in full force and effect throughout
the Term a policy of "all risk" property insurance, with theft, vandalism and
malicious mischief endorsements, covering any Alterations and Tenant's trade
fixtures, equipment, fixtures, furnishings and other personal property located
in or on the Premises, to the extent of at least full replacement cost thereof,
without any deduction for depreciation, and with a stated value endorsement
specifying an amount not less than the actual replacement cost thereof. Such
property insurance shall include "loss of rents" coverage sufficient to cover
Tenant's obligation to pay Monthly Base Rental and other amount payable under
this Lease for a twelve (12) month period. In the event that Tenant shall suffer
an insurable loss under such policy, the proceeds from any such policy shall be
used by Tenant for the replacement or restoration of such Alterations, trade
fixtures, equipment, inventory, fixtures, furnishings and personal property.

                  Section 13.3. TENANT'S ADDITIONAL INSURANCE. Tenant, at its
sole cost and expense, shall also procure and maintain in full force and effect
throughout the Term such additional insurance with such forms of coverage and in
such amounts as Landlord shall reasonably require, including, without
limitation, workers' compensation and employers' liability coverage as required
by law.

                  Section 13.4. INSURANCE CRITERIA. All insurance required to be
maintained by Tenant under this Lease shall (a) be issued by insurance companies
authorized to do business in the State of California (or if not so authorized,
reasonably approved by Landlord in writing) with a financial rating of at least
a A-VIII or better as rated in the most recent edition of "Best's Insurance
Guide"; (b) be issued as a primary policy; and (c) contain an endorsement
requiring not less than thirty (30) days' written notice from the insurance
company to Landlord and to Landlord's mortgagee before cancellation of any such
policy, except in the case of nonpayment, in which event such policy may be
cancelled upon ten (10) days' prior written notice.

                  Section 13.5. EVIDENCE OF COVERAGE. Tenant shall deposit
with Landlord, at the commencement of the Term, and on renewal of each policy
not less than twenty (20) days prior to expiration of such policy, a certified
copy of each insurance policy required to be carried by Tenant hereunder, or a
certificate of insurance as to such policy, together with evidence of payment of
premiums.

                                      27
<PAGE>

                  Section 13.6. WAIVER OF SUBROGATION. Landlord and Tenant each
hereby waives any and all rights of recovery against the other party for loss of
or damage to such waiving party or its property, where such loss or damage is
insured against under any insurance policy in force at the time of such loss or
damage. To the extent that such insurance endorsement is available at no or
nominal additional premium charge and does not adversely affect the ability of
such party to obtain such insurance, Landlord and Tenant each agree to obtain
for the benefit of the other party in the insurance policies carried by the
first party a waiver of any right of subrogation which any insurer of the party
may acquire.

                         ARTICLE 14 - WAIVER; INDEMNITY

                  Section 14.1. WAIVER OF LIABILITY. Landlord shall not be
liable for, and Tenant hereby waives all claims against Landlord with respect
to, any death or injury of any nature whatsoever that may be suffered or
sustained by Tenant or any employee, licensee, invitee, guest, agent or customer
of Tenant or any other person, from any causes whatsoever; or for any loss or
damage or injury to any property outside or within the Premises belonging to
Tenant or its employees, agents, customers, licensees, invitees, guests or any
other person, except to the extent that, in either event, such injury or damage
is caused by the gross negligence or willful misconduct of Landlord, its
employees or agents. Without limiting the generality of the waiver of liability
contained in this Section, Landlord shall not be liable for any damage of any
nature whatsoever to persons or property caused by explosion, fire or theft; by
breakage of any sprinkler, drainage or plumbing systems; by failure for any
cause to supply adequate drainage; by the interruption of any utility or other
service; by steam, gas, water, rain or other substances leaking, issuing or
flowing into any part of the Premises; by acts of God or the elements, acts of
public enemy, riot, strike, insurrection, war, court order, requisition or order
of governmental body or authority; by repair, maintenance or alteration of any
part of the Building or the Project (including any repair, maintenance or work
of construction performed by Tenant), or by anything done or omitted to be done
by any tenant, occupant or person in the Building or the Project, except to the
extent that any of the foregoing shall be caused by the gross negligence or
willful misconduct of Landlord, its employees or agents. Notwithstanding the
foregoing, in no event shall Landlord be liable or responsible in any way for
any loss of business by Tenant, lost profits of Tenant or any other
consequential damages of Tenant or its employees, agents, customers, licensees,
invitees, guests or any other person, regardless of the cause therefor.

                  Section 14.2. TENANT'S INDEMNITY. Tenant shall indemnify,
defend and hold Landlord, its employees, agents and contractors, harmless from
and against any and all losses, costs, claims, damages, liabilities or causes of
action (including attorneys' fees) arising out of or in any way connected with:
(a) Tenant's use or occupancy of the Premises or the conduct of Tenant's
business thereon, or any activity, work or other thing done, permitted or
suffered by Tenant in or about the Premises, the Building or the

                                      28
<PAGE>

Project, except to the extent caused by the gross negligence or willful
misconduct of Landlord, its employees or agents; (b) any damage to any property,
or injury, illness or death of any person occurring in, on, or about the
Premises, or any part thereof, arising at any time and from any cause
whatsoever, except to the extent caused by the gross negligence or willful
misconduct of Landlord, its employees or agents; (c) any damage to any property
or injury, illness or death of any person occurring in, on, or about any part of
the Building or the Project other than the Premises, to the extent such damage,
injury, illness or death shall be caused in whole or in part by the negligence
or willful misconduct of Tenant, its agents, employees, invitees, licensees or
customers; and (d) arising out of Tenant's breach of the provisions of this
Lease. The provisions of this Section shall survive the termination of this
Lease.

                              ARTICLE 15 - DEFAULT

                  Section 15.1. EVENTS OF DEFAULT. In addition to any other
event specified in this Lease as an event of default, the occurrence of any one
or more of the following events shall constitute a default under this Lease by
Tenant:

                  (a)      Tenant's failure to pay when due any Monthly Base
Rent, Excess Taxes. Excess Insurance Costs, Excess Utility Charges or any other
amounts that Tenant is obligated to pay to Landlord pursuant to this Lease;
provided, however, on not more than one occasion in any twelve (12) consecutive
month period throughout the Term, Tenant's failure to pay rent when due shall
not constitute an Event of Default unless such failure shall continue for five
(5) days following written notice thereof from Landlord;

                  (b)      Tenant's failure to perform any other covenant,
agreement or obligation of Tenant contained in this Lease within thirty (30)
days following Landlord's written notice thereof to Tenant;

                  (c)      Tenant's abandonment of the Premises, or Tenant's
vacation of the Premises without providing adequate security for the Premises;

                  (d)      Tenant's making of any general assignment for the
benefit of creditors; or the commencement and continuation for at least thirty
(30) days of any case, action or proceeding by, against or concerning Tenant
under the Bankruptcy Code or any other federal or state bankruptcy, insolvency
or debtor's relief law or otherwise seeking Tenant's financial reorganization or
an arrangement with any of Tenant's creditors;

                  (e)      Appointment of receiver, trustee or other person to
take possession of substantially all of Tenant's assets;

                  (f)      Commencement of proceedings for winding up or
dissolving (whether voluntary or involuntary) Tenant, if Tenant is a
corporation, partnership or limited liability company;

                                      29
<PAGE>

                  (g)      Levy of a writ of attachment or execution on Tenant's
interest under this Lease, if such writ continues for a period of thirty (30)
days; and

                  (h)      Assignment of this Lease or any interest hereunder,
or sublease of all or any portion of this Premises, in violation of the
provisions of Article 10 of this Lease.

                  Section 15.2. LANDLORD'S REMEDIES. If a default by Tenant
under this Lease shall occur, in addition to any other rights and remedies
available to Landlord at law or in equity (including, without limitation, the
provisions of Section 1951.4 of the California Civil Code or any successor
statutory provision), Landlord at any time thereafter shall have the right to
give a written notice of termination of this Lease to Tenant, and on the date
specified in such notice (which shall be not less than three (3) days after the
giving of such notice), Tenant's right to possession of the Premises and this
Lease shall terminate, unless on or before such date all arrears of Monthly Base
Rent and all other sums payable by Tenant under this Lease and all costs and
expenses incurred by Landlord with respect to such default shall have been paid
by Tenant, and any other breaches of this Lease by Tenant at that time existing
shall have been fully remedied to the satisfaction of Landlord. If Landlord
shall terminate this Lease pursuant to the provisions of this Section, Landlord
shall have all the rights and remedies of a landlord provided by Section 1951.2
of the California Civil Code or any successor statutory provision. Upon such
termination, in addition to any other rights and remedies to which Landlord may
be entitled under applicable law, Landlord may recover from Tenant: (a) the
worth at the time of award of all unpaid rent which had been earned at the time
of termination; (b) the worth at the time of award of the amount by which all
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rent loss that Tenant proves could have been
reasonably avoided; (c) the worth at the time of award of the amount by which
all unpaid rent for the balance of the term of this Lease after the time of
award exceeds the amount of such rent loss that Tenant proves could be
reasonably avoided; and (d) any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including, without limitation, attorneys' fees and
costs; brokerage commissions; the cost of alterations, additions, improvements,
renovations, refurbishment and repair of the Premises; the cost of removal and
storage of Tenant's trade fixtures, equipment, fixtures, furnishings and other
personal property located in the Premises; and the unamortized portion, as of
the date of termination of this Lease, of any Tenant Improvements constructed or
installed by Landlord at its expense (as amortized over the Term with interest
thereon at the Interest Rate). The "worth at the time of award" of the amounts
referred to in clauses (a) and (b) above shall be computed by allowing interest
at the Interest Rate. The worth at the time of award of the amount referred to
in clause (c) above shall be computed by discounting such amount at a rate equal
to the discount rate of the Federal Reserve Bank of San Francisco at the time of
award plus one percent (1%).

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<PAGE>

                  Section 15.3. LATE CHARGES; INTEREST. Tenant acknowledges that
late payment by Tenant to Landlord of Monthly Base Rent, Excess Expenses, Excess
Taxes, Excess Insurance Costs, Excess Utility Charges or any other amounts
payable by Tenant to Landlord under this Lease will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of such costs being
extremely difficult and impracticable to ascertain. Such costs include, without
limitation, processing and accounting charges, and late charges that may be
imposed on Landlord by the terms of any indebtedness secured by an encumbrance
covering the Premises. Therefore, if any such amount due from Tenant is not
received by Landlord within seven (7) days after the same shall become due and
payable, Tenant shall pay to Landlord on demand an additional sum equal to five
percent (5%) of the overdue amount as a late charge. The parties agree that this
late charge represents a fair and reasonable estimate of the costs that Landlord
will incur by reason of such late payment by Tenant. Acceptance of any late
charge shall not constitute a waiver of Tenant's default with respect to the
overdue amount, or prevent Landlord from exercising any of the other rights and
remedies available to Landlord. In addition, each installment of Monthly Base
Rent and any other amount payable by Tenant to Landlord under this Lease which
shall not have been paid within seven (7) days after the same shall have become
due and payable shall bear interest at the Interest Rate from the date that the
same became due and payable until paid, whether or not any demand shall be made
therefor.

                  Section 15.4. LEASE CONTINUES UNTIL TERMINATION. In the event
of a default by Tenant, this Lease shall continue in effect for so long as
Landlord shall not terminate Tenant's right to possession, and Landlord may
enforce all its rights and remedies under this Lease, including the right to
recover the rent as it becomes due under this Lease. Acts of maintenance or
preservation or efforts to relet the Premises or the appointment of a receiver
upon initiative of Landlord to protect Landlord's interest under this Lease
shall not constitute a termination of Tenant's right to possession.

                  Section 15.5. RELETTING PREMISES. In the event of a default by
Tenant, Landlord, at Landlord's election, may re-enter the Premises and, without
terminating this Lease, at any time and from time to time, relet the Premises or
any portion thereof for the account and in the name of Tenant. Landlord, at
Landlord's election, may eject Tenant or any of Tenant's assignees, sublessees
or any other person claiming any right in or through this Lease. Tenant shall
nevertheless pay to Landlord on the dates specified in this Lease all amounts
payable by Tenant to Landlord under this Lease, plus Landlord's costs and
expenses in connection therewith, less the proceeds of any sublease or
reletting. No act by or on behalf of Landlord under this Section shall
constitute a termination of this Lease unless Landlord gives Tenant written
notice of termination as provided in Section 15.2. Notwithstanding any prior
reletting without termination, Landlord may later elect to terminate this Lease
by reason of such default by Tenant.

                                   31
<PAGE>

                  Section 15.6. CURE BY LANDLORD. If Tenant shall fail to pay
any amount payable by Tenant to Landlord hereunder or shall fail to perform any
other covenant, agreement or obligation of Tenant hereunder and such failure
shall continue for thirty (30) days after notice thereof by Landlord, then
Landlord may, but shall not be obligated to, and without waiving or releasing
Tenant from any obligation, make any such payment or perform any such covenant,
agreement or obligation on Tenant's behalf. All sums so paid by Landlord and all
costs incurred by Landlord in taking such action shall be paid to Landlord on
demand, together with interest thereon at the Interest Rate until the date of
payment. In addition to all other rights and remedies of Landlord, Landlord
shall have the same rights and remedies in the event of the non-payment thereof
by Tenant as in the case of default by Tenant in the payment of rent.

                  Section 15.7. LANDLORD'S DEFAULT. In no event shall Landlord
be deemed to be in default under this Lease unless and until Landlord shall have
defaulted in the performance of its obligations under this Lease and Tenant
shall have given Landlord written notice of the default and, within a reasonable
period of time following Landlord's receipt of such notice, but in no event less
than thirty (30) days nor more than forty-five (45) days following Landlord's
receipt of such notice, Landlord shall not commence diligently to prosecute the
cure of such default to completion. In the event of any alleged default on the
part of Landlord under this Lease, Tenant shall give notice by registered mail
to any beneficiary or mortgagee under a deed of trust or mortgage encumbering
the Premises whose address shall have been furnished to Tenant, and shall offer
such beneficiary or mortgagee a reasonable opportunity to cure the default,
including time to obtain possession of the Premises by power of sale or judicial
foreclosure, if such shall be necessary to effect a cure.

                  Section 15.8      REMEDIES CUMULATIVE. The remedies provided
for in this Lease are in addition to any other remedies available to Landlord at
law or in equity by statute or otherwise.

                  Section 15.9.     SECURITY DEPOSIT.

                  (a)      Concurrently with Tenant's execution of this Lease,
Tenant shall deliver to Landlord an unconditional, irrevocable, transferable
letter of credit in the stated amount of Six Hundred Seventy-Six Thousand One
Hundred Dollars ($676,100) issued by a bank approved by Landlord in favor of
Landlord as beneficiary, for the term provided for below and otherwise in form
and substance satisfactory to Landlord ("Letter of Credit"). The Letter of
Credit shall be issued for an initial term of one year following the date of
this Lease, and Tenant shall cause the Letter of Credit to be renewed for
successive twelve-month periods throughout the Term not less than thirty (30)
days prior to each expiration date of the Letter of Credit, until Tenant shall
have the right to reduce the amount of the Letter of Credit as provided in
subparagraph (b) below. The Letter of Credit shall entitle Landlord to draw the
entire stated amount thereof upon presentation of

                                   32
<PAGE>

a sight draft in the amount of the draw. The Letter of Credit shall be held by
Landlord as security for the faithful performance by Tenant of all of the
covenants, agreements and obligations under this Lease to be performed by Tenant
during the Term. If Tenant shall fail to pay Monthly Base Rental or other
amounts payable by Tenant to Landlord under this Lease, or if Tenant shall
otherwise default with respect to any provision of this Lease after the
expiration of any applicable cure period, Landlord shall have the right, but
shall not be obligated, to draw the entire stated amount of the Letter of Credit
and to hold the proceeds thereof as a cash security deposit ("Security
Deposit"), and to use, apply or retain all or any portion of the Security
Deposit for the payment of rental or any other amount which Landlord may expend
or become obligated to expend by reason of Tenant's default, or to compensate
Landlord for any other loss or damage which Landlord may suffer by reason of
Tenant's default. If Landlord shall make any draw upon the Letter of Credit and
apply such draw to the cure of any default, Tenant shall, within ten (10) days
after Landlord's written demand therefor, deposit with Landlord a replacement,
additional or amended Letter or Letters of Credit in the same form (including
total stated amount and issuer) as the Letter of Credit drawn upon by Landlord.
If Landlord shall so use or apply any portion of any cash Security Deposit held
by Landlord. Tenant shall, within ten (10) days after Landlord's written demand
therefor, deposit cash with Landlord in the amount so used or applied by
Landlord. Landlord shall not be required to keep any Security Deposit separate
from Landlord's other funds, and Tenant shall not be entitled to any interest on
any Security Deposit. Landlord shall return the Letter of Credit, any Security
Deposit, and/or any balance thereof not applied in accordance with the
provisions of this Lease, to Tenant within thirty (30) days following the
expiration of this Lease and after Tenant has surrendered the Premises to
Landlord in the condition required under this Lease. In the event that Landlord
shall transfer its interest in the Premises, Landlord shall transfer the Letter
of Credit (to the extent transferable) and/or any funds then held by Landlord on
account of any cash Security Deposit to Landlord's transferee, and Landlord
shall thereupon be released from all liability to Tenant for return of the
Letter of Credit and/or cash Security Deposit.

                  (b)      If a default by Tenant under this Lease after the
expiration of any applicable cure period shall not have occurred at any time
prior to such time, effective not earlier than the first day of the fourth year
of the Term, Tenant shall have the right to cause the stated amount of the
Letter of Credit to be reduced to Three Hundred Forty-Two Thousand Two Hundred
Dollars ($338,100) by delivering to Landlord an amendment to the Letter of
Credit then held by Landlord acceptable to Landlord, or by delivering to
Landlord a new Letter of Credit in such lesser stated amount, but otherwise in
the same form as the Letter of Credit then held by Landlord. Such Letter of
Credit, and any amounts drawn thereunder, shall otherwise be held by Landlord on
all of the terms and provisions of subparagraph (a) above.

                                   33
<PAGE>

                           ARTICLE 16 - SUBORDINATION

                  Section 16.1. SUBORDINATION OF LEASE. This Lease shall be
subject and subordinate at all times to the lien of all mortgages and deeds of
trust in any amount or amounts whatsoever (including all advances thereunder,
renewals, replacement, modifications, supplements, and extensions thereof) now
or hereafter placed on or against the Premises, the Building or the Project, or
on or against Landlord's interest or estate therein, all without the necessity
of having further instruments executed on the part of Tenant to effectuate such
subordination. Tenant agrees to execute and deliver upon demand such further
instruments evidencing such subordination of this Lease to the lien of any such
mortgages or deeds of trust as may be required by Landlord, provided that each
mortgagee or beneficiary under any such mortgage or deed of trust, or purchaser
or grantee in respect thereof, shall agree, in a commercially reasonable
non-disturbance agreement, not to terminate or disturb Tenant's possession of
the Premises under this Lease in the event of termination of such ground or
underlying lease or foreclosure of such mortgage or deed of trust or deed in
lieu thereof, as the case may be, so long as Tenant is not in default under this
Lease beyond any applicable cure period under this Lease. In the event of the
foreclosure of any mortgage or deed of trust encumbering the Premises, the
Building or the Project, or on or against Landlord's estate or interest therein,
or in the event of a deed-in-lieu of foreclosure thereof, Tenant shall be bound
to any such mortgagee or beneficiary under any such mortgage or deed of trust,
or any other purchaser or grantee in foreclosure or under a deed-in-lieu
thereof, and Tenant hereby attorns to any such party as its landlord, such
attornment to be effective and self-operative without the execution of any
further instrument immediately upon such party's succeeding to Landlord's
interest under this Lease.

                  Section 16.2. SUBORDINATION OF DEED OF TRUST. Notwithstanding
anything to the contrary set forth above, any mortgagee or beneficiary under any
mortgage or deed of trust may at any time subordinate its mortgage or deed of
trust to this Lease in whole or in part, without Tenant's consent, by execution
of a written document subordinating such mortgage or deed of trust to this Lease
to the extent set forth in such document, and thereupon this Lease shall be
deemed prior to such mortgage or deed of trust to the extent set forth in such
document without regard to their respective dates of execution, delivery and/or
recording. In that event, to the extent set forth in such document, such
mortgage or deed of trust shall have the same rights with respect to this Lease
as would have existed if this Lease had been executed, and a memorandum thereof
recorded, prior to the execution, deliver and recording of the mortgage or deed
of trust.

                  Section 16.3. APPROVAL BY MORTGAGEES. Tenant hereby
acknowledges that the provisions of this Lease may be subject to the approval of
any lender that may hereafter make a loan secured by a mortgage or deed of trust
on the Premises, the Building or the Project. If such lender shall require, as a
condition to such financing, any modifications of this Lease in order to protect
the security of such mortgage or deed of

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<PAGE>

trust, at Landlord's request, Tenant agrees to execute appropriate amendments to
this Lease to effect such modifications; provided, however, that no such
modification shall change the size, location or dimension of the Premises or
increase the amount of the rent or other amounts payable by Tenant under this
Lease or otherwise materially, adversely affects any of Tenant's rights or
obligations under this Lease.

                         ARTICLE 17 - ENTRY BY LANDLORD

                  Landlord shall have the right to enter the Premises at
reasonable hours and after reasonable notice (except in the event of an
emergency in which event no notice shall be required) to: (a) inspect the
Premises; (b) exhibit the same to prospective purchasers, lenders or tenants;
(c) determine whether Tenant is complying with all of its obligations hereunder;
(d) provide any service to be provided by Landlord to Tenant hereunder; (e) post
notices of non-responsibility and "for sale" and "for lease" signs; and (f) make
repairs required of Landlord under the terms hereof or make repairs to any
adjoining space or make repairs, alterations or improvements to any other
portion of the Building or the Project. Tenant hereby waives any claim for
damages for any injury or inconvenience to or interference with Tenant's
business, any loss of occupancy or quiet enjoyment of the Premises, and any
other loss occasioned by such entry, provided that Landlord takes reasonable
steps to minimize the interference with Tenant's use and enjoyment of the
Premises. Landlord shall at all times have and retain a key with which to unlock
all of the doors in, on or about the Premises (excluding Tenant's vaults, safes
and similar areas agreed upon in writing by Tenant and Landlord prior to the
date of execution of this Lease by the parties). Landlord shall have the right
to use any and all means which Landlord may deem appropriate to open such doors
in an emergency in order to obtain entry to the Premises, and no entry to the
Premises obtained by Landlord by any of such means shall under any circumstance
be construed or deemed to be a forcible or unlawful entry into, or a detainer
of, the Premises or an eviction, actual or constructive, of Tenant from the
Premises, or any portion thereof.

                       ARTICLE 18 - OPTION TO EXTEND TERM

                  Section 18.1. OPTION. Subject to the provisions of Section
18.2 below, Landlord hereby grants to Tenant the option to extend the Term
hereof for one (1) additional five (5) year period ("Option Term") following
expiration of the initial Term specified in the Basic Lease Information
("Initial Term"), on all of the terms and conditions contained herein, except
that Monthly Base Rent shall be as provided below and that Tenant shall have no
further option to extend the Term. Tenant shall have the right to exercise the
such option by giving written notice of exercise of the option ("Option Notice")
to Landlord not less than twelve (12) months prior to the expiration of the
Initial Term. Notwithstanding the foregoing, if Tenant shall be in default under
this Lease beyond all applicable cure periods on the date of giving the Option
Notice, Tenant shall have no right to extend the Term and, at Landlord's option,
this Lease shall expire at the end of the Initial Term; and if Tenant shall be
in default under this Lease beyond all

                                   35
<PAGE>

applicable cure periods on the date the Option Term is to commence, the Option
Term shall not commence and, at Landlord's option, this Lease shall expire at
the end of the Initial Term. The Monthly Base Rent for the Option Term shall be
equal to the Fair Market Rental (as hereinafter defined) of the Premises at the
commencement of the Option Term. As used in this Lease, the word "Term" shall
mean the Term as the same may be extended pursuant to the provisions of this
Article 18, as applicable.

                  Section 18.2. LANDLORD'S USE. Notwithstanding the provisions
of Section 18.1 above, if Landlord or any affiliate of Landlord shall require
the use of the Premises at any time subsequent to the Initial Term for its own
occupancy, then Tenant shall not have the right to extend the Term of this Lease
for the Option Term, and the Term of this Lease shall expire at the end of the
Initial Term. If Landlord or any affiliate of Landlord shall so require the use
of the Premises, Landlord shall give to Tenant written notice of such fact not
later than fifteen (15) months prior to the end of the Initial Term.

                  Section 18.3. FAIR MARKET RENTAL.

                  (a)      "Fair Market Rental" shall mean the monthly full
service rental being charged for comparable space in comparable office buildings
in the Menlo Park/Palo Alto, California area as of the date of commencement of
the Option Term, with similar amenities, taking into consideration the size,
location, proposed term of the lease, extent of services to be provided, the
time that the particular rate under consideration became or is to become
effective, and other relevant factors; provided, however, that Monthly Base Rent
shall in no event be less than the Monthly Base Rent which was in effect
immediately prior to the date of commencement of the Option Term. Within thirty
(30) days following receipt of the Option Notice, Landlord shall give to Tenant
written notice of Landlord's estimation of Fair Market Rental. If Tenant shall
not agree with such estimation of Fair Market Rental, Landlord and Tenant shall
negotiate in good faith to agree upon the Fair Market Rental for a period of
forty-five (45) days following the date of Landlord's notice to Tenant. If
Landlord and Tenant shall be unable to agree upon the Fair Market Rental within
such period of time, Fair Market Rental shall be determined pursuant to the
arbitration procedure set forth in this Article 18. In the event that such
arbitration not have been concluded prior to the date of commencement of the
Option Term, Tenant shall continue to pay as Monthly Base Rent hereunder, until
the Fair Market Rental has been determined by arbitration, the Monthly Base Rent
payable with respect to the month immediately preceding the commencement of the
Option Term. After the Fair Market Rental has been determined by arbitration,
then any adjustment required to adjust the amount previously paid shall be made
by payment by Tenant to Landlord within ten (10) days after such determination
of Fair Market Rental

                  (b)      In the event that Landlord and Tenant shall be unable
to agree upon Fair Market Rental within the period of time specified in
subparagraph (a) above, within ten (10) days thereafter, each of the parties
shall select a commercial real estate broker

                                   36
<PAGE>

from a recognized real estate brokerage firm having offices in Palo Alto or San
Jose, California, who has at least five (5) years' full-time commercial real
estate brokerage experience and who is familiar with the Fair Market Rental of
commercial office space in comparable office buildings in Menlo Park/Palo Alto,
California area, and shall give written notice of such selection to the other
party specifying therein the name and address of the person to act as the
arbitrator on such party's behalf. If either party shall fail to notify the
other party of its appointment of a broker having such qualifications within or
by the time specified, then the broker appointed by the other party shall make
the sole determination of Fair Market Rental of the Premises, and such
determination shall be binding upon the parties.

                  (c)      The Fair Market Rental shall be determined by the two
brokers appointed by the parties in accordance with the following procedures.
Within thirty (30) days following the appointment of the brokers by the parties,
each of the brokers shall state in writing his determination of the Fair Market
Rental supported by the reasons therefor and shall provide copies to each party.
If such determinations do not differ by more than ten percent (10%), the Fair
Market Rental shall be the average of the two determinations. If such
determinations differ by more than ten percent (10%) and the two brokers are
subsequently unable to agree upon the Fair Market Rental, the two brokers shall
appoint a third broker, who shall be a competent and impartial person with
qualifications similar to those required of the first two brokers. If the two
brokers are unable to agree upon such appointment within ten (10) days following
their determinations of Fair Market Rental, then either Landlord or Tenant, on
behalf of both parties, may request appointment of such a qualified person by
the Presiding Judge of the San Mateo County Superior Court acting in his
individual capacity. Following appointment of the third broker, he shall
promptly make his determination of Fair Market Rental in the manner provided
above, and the average of the three determinations shall constitute the Fair
Market Rental. If, however, the low determination of Fair Market Rental and/or
the high determination of Fair Market Rental are more than ten percent (10%)
lower and/or higher than the middle determination, any such low determination
and/or high determination shall be disregarded. If only one determination is
more than ten percent (10%) above or below the middle determination, such that
only one determination needs to be disregarded, the remaining two determinations
shall be added together and their total divided by two; the resulting quotient
shall be the Fair Market Rental. If both the low determination and the high
determination are disregarded, then the middle determination shall establish the
Monthly Base Rent for the Premises for the Option Term and shall be final and
binding upon the parties.

                  (d)      In the event of a failure, refusal or inability of
any broker to act, his successor shall be appointed by him, but in the case of
the third broker, his successor shall be appointed in the same manner as that
set forth herein with respect to the appointment of the original third broker.
The brokers shall make the final determination of Fair Market Rental not later
than sixty (60) days prior to the commencement of the

                                   37
<PAGE>

Option Term. Each party shall pay the fees and expenses of its respective broker
and both shall pay one-half (1/2) of the fees and expenses of the third broker.
Attorneys' fees and expenses of counsel shall be paid by the respective party
engaging such counsel.

                           ARTICLE 19 - MISCELLANEOUS

                  Section 19.1. HOLDING OVER. If Tenant shall remain in
possession of the Premises after the expiration or earlier termination of this
Lease with the written consent of Landlord, such occupancy shall be a tenancy
from month-to-month and all of the terms, covenants and agreements hereof shall
otherwise continue to apply and bind Tenant so long as Tenant shall remain in
possession, except that the Monthly Base Rent shall be one hundred fifty percent
(150%) of the Monthly Base Rent payable for the last month of the Term, prorated
on a daily basis for each day that Tenant remains in possession. If Tenant shall
remain in possession of the Premises after the expiration or earlier termination
of this Lease without the written consent of Landlord, Tenant shall indemnify,
defend and hold Landlord harmless against any and all claims, losses and
liabilities for damages resulting from failure to surrender possession,
including, without limitation, any claims made by any succeeding tenant.

                  Section 19.2. LANDLORD'S INTEREST. The term "Landlord" as used
herein shall mean only the owner or owners at the times in question of fee title
to the Premises. In the event of a sale, conveyance or assignment by Landlord of
Landlord's interest in the Premises, the Building or the Project, Landlord shall
be relieved, from and after the date of such sale, conveyance or assignment, of
any liability thereafter accruing upon any of the agreements, obligations or
covenants of Landlord under the Lease, and for such future period Tenant agrees
to look solely to the successor-in-interest of Landlord in and to this Lease,
provided that any funds in the hands of Landlord, in which Tenant has an
interest, shall be delivered to such successor-in-interest. This Lease shall not
be affected by any such sale, conveyance, or assignment, however, and Tenant
agrees to attorn to the purchaser or assignee, such attornment to be effective
and self-operative without the execution of any further instruments on the part
of any of the parties to this Lease.

                  Section 19.3. QUIET ENJOYMENT. Landlord hereby covenants in
favor of Tenant that, provided that Tenant shall pay all rent and perform all
other covenants, agreements and obligations of Tenant under this Lease, Tenant
shall have and enjoy quiet possession of the Premises throughout the Term
without any hindrance or interruption by Landlord or any person lawfully
claiming by, through or under Landlord, subject to the terms and conditions of
this Lease and any mortgage or deed of trust to which this Lease is subject and
subordinate.

                  Section 19.4. LANDLORD'S LIABILITY. The liability of Landlord
under this Lease or otherwise in connection with the Premises or the Building
shall be limited to Landlord's interest in the Project, and in no event shall
any other assets of Landlord or

                                   38
<PAGE>

any assets of any constituent partner or member of Landlord be subject to any
liability arising out of or in connection with this Lease, the Premises, the
Building or the Project.

                  Section 19.5. NO MERGER. The voluntary or other surrender of
this Lease by Tenant, or a mutual cancellation thereof, shall not work a merger,
and shall, at the option of Landlord, either terminate any or all existing
subleases or operate as an assignment to Landlord of any or all of such
subleases.

                  Section 19.6. SURRENDER OF PREMISES. At the expiration of the
Term or upon earlier termination of this Lease, Tenant shall surrender to
Landlord possession of the Premises, in the same condition as received,
reasonable wear and tear excepted. Tenant shall have the right to remove from
the Premises any of Tenant's movable partitions, trade fixtures, furnishings,
fixtures or equipment which may be removed without causing damage to the
Premises, and shall remove any Alterations and any other alterations, additions
or improvements, trade fixtures, equipment or furnishings which Landlord shall
have directed to be removed, and shall promptly repair any damage to the
Premises caused by such removal. Any personal property of Tenant not removed
from the Premises shall, to the extent permitted by law, be deemed to have been
abandoned by Tenant and shall thereupon become the property of Landlord.

                  Section 19.7. ESTOPPEL CERTIFICATE. At any time and from time
to time, but in no event later than ten (10) days' following a request therefor
by Landlord, Tenant shall execute, acknowledge and deliver to Landlord, a
certificate certifying: (a) that Tenant has accepted the Premises (or, if Tenant
has not done so, that Tenant has not accepted the Premises, and specifying the
reasons therefor); (b) the commencement and expiration dates of this Lease; (c)
whether there are then existing any defaults by Tenant or Landlord in the
performance of its obligations under this Lease (and, if so, specifying the
same); (d) that this Lease is unmodified and in full force and effect (or, if
there have been modifications, that this Lease is in full force and effect, as
modified, and stating the date and nature of each modification); (e) the
capacity of the person executing such certificate, and that such person is duly
authorized to execute the same on behalf of Tenant; (f) the date, if any, to
which rent and other sums payable hereunder have been paid; (g) that no notice
has been received by Tenant of any default which has not been cured, except as
to defaults specified in the certificate; (h) the amount of any security deposit
and prepaid rent; and (i) such other matters as Landlord may request. Any such
certificate may be relied upon by any prospective purchaser of, or any existing
or prospective mortgagee or beneficiary under any deed of trust affecting, the
Building, the Project or any part thereof.

                  Section 19.8. NO LIGHT, AIR OR VIEW EASEMENT. Nothing
contained in this Lease shall grant to or confer upon Tenant any right to
receive any particular amount or level of light, air or view from the Premises.
Any diminution in or shutting off of light, air or view by any structure which
is now or may hereafter be erected in the Project

                                   39
<PAGE>

or on other lands adjacent to the Building shall in no way affect this Lease or
impose any liability upon Landlord. Noise, dust or vibration or other incidents
to new construction of improvements on lands adjacent to the Building, whether
or not owned by Landlord, shall in no way affect this Lease or impose any
liability on Landlord.

                  Section 19.9. NOTICES. All notices and other communications
which may or are required or permitted to be given by either party to the other
hereunder shall be in writing and shall be deemed to have been given upon
receipt or refusal of receipt, when personally delivered or transmitted by
private nationally recognized overnight courier service, or by deposit in the
United States mail, certified or registered, with return receipt requested,
postage prepaid, and addressed as follows: prior to the date on which Tenant
accepts possession of the Premises, at Tenant's address prior to occupancy set
out in the Basic Lease Information, and thereafter to Tenant at the Premises, or
to such other place as Tenant may from time to time designate in a written
notice to Landlord; to Landlord at the address specified in the Basic Lease
Information, or to such other place as Landlord may from time to time designate
in a written notice to Tenant.

                  Section 19.10. SUCCESSORS. Subject to the provisions of
Article 10 of this Lease, all of the terms, covenants and conditions contained
in this Lease shall be binding upon, and shall inure to the benefit of, the
heirs, executors, administrators, successors and assigns of the parties hereto.

                  Section 19.11. ATTORNEYS' FEES. In the event of any action or
proceeding brought by either party against the other under this Lease, the
prevailing party shall be entitled to recover court costs and the fees of its
attorneys in such action or proceeding (whether at the administrative, trial or
appellate levels) in such amount as the court or administrative body may award.

                  Section 19.12. WAIVER. The failure of Landlord or Tenant to
exercise their respective rights in connection with any breach by Tenant or
Landlord, as applicable, of any provision of this Lease shall not be deemed to
be a waiver of such provision or any subsequent breach or violation of the same
or any other provision of this Lease. The subsequent acceptance of rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
or violation by Tenant of any provision of this Lease other than the failure of
Tenant to pay the particular rent so accepted, regardless of Landlord's
knowledge of such preceding breach or violation at the time of acceptance of
such rent.

                  Section 19.13. CAPTIONS. The captions and headings of the
Articles and Sections in this Lease are for convenience only and shall not in
any way limit or be deemed to construe or interpret the terms and provisions of
this Lease.

                  Section  19.14.  TIME OF ESSENCE.  Time is of the essence of
this Lease and of all provisions hereof, except as otherwise provided herein.

                                   40

<PAGE>

                  Section 19.15. INTEREST RATE. As used herein, the term
"Interest Rate" shall mean a per annum rate of interest equal to three percent
(3%) plus the rate most recently announced by Wells Fargo Bank, N.A., at its
main office in San Francisco, California, as its "Prime Rate", serving as the
basis upon which effective rates of interest are calculated for those loans
making reference thereto, but in no event in excess of the maximum applicable
usury limitation.

                  Section  19.16.  GOVERNING  LAW. This Lease shall be governed
by, and construed and enforced in accordance with, the laws of the State of
California.

                  Section 19.17. ENTIRE AGREEMENT. The terms of this Lease are
intended by the parties as a final expression of their agreement with respect to
such terms as are included in this Lease and shall supersede any prior
agreements, memoranda or other written communications regarding this Lease. The
parties further intend that this Lease constitutes the complete and exclusive
statement of its terms and that no extrinsic evidence whatsoever may be
introduced in any judicial proceedings, if any, involving this Lease.

                  Section 19.18. INVALIDITY. If any provision of this Lease or
the application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Lease, or the application of
such provision to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each provision of
this Lease shall be valid and be enforceable to the full extent permitted by
law.

                  Section 19.19. AUTHORITY. If Tenant executes this Lease as a
corporation, a partnership or limited liability company, each of the persons
executing this Lease on behalf of Tenant does hereby covenant and warrant that
Tenant is a duly authorized and existing entity, that Tenant has full right and
authority to enter into this Lease, and that each and all of the persons on
behalf of Tenant are authorized to do so. Upon Landlord's request, Tenant shall
provide Landlord with evidence reasonably satisfactory to Landlord confirming
the foregoing covenants and warranties.

                  Section 19.20. NO OFFER. No contractual or other rights shall
exist between Landlord and Tenant with respect to the Premises until both have
executed and delivered this Lease, notwithstanding that Landlord has delivered
to Tenant an unexecuted copy of this Lease. The submission of this Lease to
Tenant shall not constitute the grant of an option for the Tenant to lease, or
otherwise create any interest by Tenant in, the Premises or any other premises
in the Building or Project. The execution of this Lease by Tenant and return to
Landlord shall not be binding upon Landlord, notwithstanding any time interval,
until Landlord has in fact executed and delivered this Lease to Tenant.

                                       41
<PAGE>

                  Section 19.21. NO REPRESENTATIONS OR WARRANTIES. Neither
Landlord nor Landlord's members, partners, employees, agents or contractors have
made any representations or warranties with respect to the Premises, the
Building, the Project or this Lease, except as expressly set forth herein.

                  Section 19.22. BROKERS. Each party hereto represents and
warrants that it has dealt with no broker, finder or salesperson in connection
with this Lease, other than Landlord's Broker and Tenant's Broker listed in the
Basic Lease Information, and each party hereto shall indemnify, defend and hold
the other party harmless from and against and all losses, costs, claims,
damages, liabilities or causes of action (including attorney's fees) arising out
of or relating to any breach of the foregoing representation and warranty or
arising out of or relating to any claim made by any broker, finder or
salesperson claiming to have dealt with the indemnifying party.

                  Section 19.23.  AMENDMENTS.  This Lease may not be modified or
amended except by an instrument in writing executed by both parties hereto.

                  Section 19.24. NAME. Tenant shall not use the name of the
Building or the Project for any purpose other than as an address of the business
to be conducted by Tenant in the Premises. The name of the Building and/or the
Project may be changed from time to time in Landlord's sole discretion.

                  Section 19.25. SIGNS, DIRECTORY. Tenant shall have the right
to place a sign identifying Tenant's occupancy of the Premises on the existing
monument sign for the Building, if any, on the Building and in any directory in
the Building lobby, in each case subject to Landlord's prior written consent,
which consent shall not be unreasonably withheld by Landlord. All signs so
consented to by Landlord and placed by Tenant on any monument sign for the
Building or upon or in the Building or Premises shall be fabricated and
installed by Tenant at its sole cost and expense and shall comply in all
respects with size, design, lettering and material guidelines established from
time to time by Landlord for the Project. Landlord reserves the right to change
or alter such guidelines at such times and for such tenants as Landlord may
determine. Tenant shall comply with all applicable statutes, ordinances, rules
and regulations of governmental authorities with respect to any such signs.

                  Section 19.26. PARKING. Tenant, at no cost or expense to
Tenant, shall have the non-exclusive use of not more than One Hundred
Eighty-Four (184) of the parking spaces in the parking areas of the Project for
the parking of motor vehicles by Tenant's employees working on the Premises.
Landlord shall have the right to relocate such non-exclusive parking spaces from
time to time to other parking areas in or adjacent to the Project. Landlord
shall have no obligation to monitor or police the use of any parking areas or
otherwise to assure Tenant or its employees of the availability of any parking
spaces. Notwithstanding the foregoing, Landlord shall from time to time have

                                       42
<PAGE>

the right to institute and maintain procedures for controlling the use of the
parking areas in the Project, including, without limitation, through the
issuance of stickers or badges to be displayed on the vehicles of authorized
users of the parking areas. Tenant shall cause its employees to comply with any
such procedures instituted and maintained by Landlord from time to time.

                  Section 19.27. BUILDING ACCESS. Landlord shall provide Tenant
with Two Hundred Fifty (250) building access cards for the Building at a cost of
$10 per card. Tenant shall return all such building access cards to Landlord
upon the expiration or early termination of the Term of this Lease. Tenant shall
pay to Landlord such charges as Landlord shall impose from time to time with
respect to any building access card not returned or damaged.

                  Section 19.28. LANDLORD AMENITIES. Notwithstanding anything to
the contrary contained in this Lease, Tenant and its employees shall have the
right to use, in common with the Landlord, its employees, agents, and invitees,
and any other parties to whom Landlord shall grant such rights (a) the
volleyball court, basketball court, picnic tables and lawn area immediately
adjacent to the Premises, and (b) the cafeteria located in the Administration
Building of the Project during Landlord's hours of operation of the cafeteria
from time to time. Tenant's rights under this Section shall be subject to such
rules and regulations, and amendments thereto, as Landlord shall promulgate from
time to time. In no event shall Landlord be obligated to operate the cafeteria
for Tenant's benefit, and Landlord shall have the right to change or reduce
Landlord's hours of operation of the cafeteria and to discontinue any cafeteria
service entirely, at Landlord's sole option.

                  Section 19.29. CONFERENCE ROOMS. Tenant shall have the
right to use the conference room on the first floor of the Administration
Building ("Conference Room") from time to time ("Use Periods") during the
Term. Tenant shall schedule each such Use Period with Landlord in writing a
reasonable period of time in advance of the date of such Use Period, and
availability of the Conference Room shall be subject to the prior right of
use by Landlord, its employees, agents or invitees and other tenants.

                  (b)      Tenant shall pay to Landlord, at the same time and in
the same manner as the payment of Monthly Base Rent, a charge calculated in
accordance with Section 7.3 above for each Use Period. Landlord shall cause the
Conference Room to be unoccupied and available for Tenant's use during the Use
Periods. At the end of each Use Period, Tenant shall leave the Conference Room
in the same condition as it was prior to such Use Period and shall remove
therefrom any garbage or debris created by Tenant and any other parties using
the Conference Room during such Use Period.

                  Section 19.30. SECURITY, CUSTOMER SERVICE AREA. If at any time
during the Term of this Lease, Landlord shall no longer require the security and
customer service

                                       43
<PAGE>

area located on the first floor of the Building and not included in the
Premises, and shall vacate such security and customer service area, such
security and customer service area shall thereupon become a part of the
Premises. Landlord and Tenant shall promptly execute and deliver an appropriate
amendment to this Lease providing for (a) incorporation of such security and
customer service area within the Premises; (b) Tenant's payment of Monthly Base
Rent with respect to such security and customer service area at the rental rate
then provided for under this Lease with respect to the balance of the Premises,
subject to such increases as are provided for under this Lease; (c) an
appropriate adjustment to Tenant's Share; and (d) such other reasonable terms
and provisions as Landlord and Tenant shall agree upon. In no event shall
Landlord be obligated to make any alterations, additions, improvements or
repairs to such security and customer service area, and Tenant shall accept
possession of such security and customer service area in its "as-is" condition.
The security and customer service area consists of 3,672 square feet of rentable
area.

                  (b)      At Tenant's request and upon Landlord's reasonable
approval, Landlord shall caused to be installed a demising wall or door
separating such security and customer service area from the Premises. If
Landlord shall install such demising wall or door, Landlord shall cause such
demising wall or door to be removed following Landlord's vacating such security
and customer service area. Landlord and its employees, agents and contractors
occupying such security and customer service area shall have the reasonable
right to use the restrooms and similar amenities and facilities in the Premises
from time to time. Apart from such use, such occupants shall not enter upon the
Premises and Tenant, its employees, agents and contractors shall not enter upon
such security and customer service area (including through use of the stairway
connecting such areas), except in the case of an emergency requiring such
access.

                  Section 19.31. ANTENNA. Notwithstanding anything to the
contrary contained in this Lease, as long as space is available on the roof of
the Building, Tenant, at its sole cost and expense, shall have the right to
install, operate and maintain an antenna ("Antenna") on the roof of the Building
in a location reasonably approved by Landlord. The size and design
specifications for the Antenna, and the manner in which the Antenna shall be
installed, shall be subject to the reasonable prior written approval of
Landlord. Tenant's installation, operation and maintenance of the Antenna shall
be subject to the following terms and conditions:

                  (a)      Tenant's right to install, operate and maintain the
Antenna shall be subject to all applicable governmental laws, rules and
regulations, and any private covenants, conditions, and restrictions and subject
to Tenant obtaining all required licenses, permits and approvals of governmental
authorities, and Landlord makes no representation or warranty that such laws,
rules and regulations, or private covenants, conditions and restrictions allow
such installation, operation and maintenance;

                                       44
<PAGE>

                  (b)      All costs of installation, operation and maintenance
of the Antenna and the connecting cable (including, without limitation, labor
costs for routing the cable and costs of obtaining any necessary permits) shall
be borne by Tenant;

                  (c)      It is expressly understood that Landlord retains the
right to use the roof of the Building for any purpose whatsoever and to relocate
the Antenna provided that Landlord shall not unreasonably interfere with the use
of the Antenna;

                  (d)      Tenant shall use the Antenna so as not to cause any
interference to Landlord or to other tenants in the Building or Project or with
Landlord's or any other tenant's communication equipment and so as not to damage
or interfere with the operation of the Building or Project;

                  (e)      Landlord shall not have any obligations with respect
to the maintenance or repair of the Antenna, and Landlord shall not be
responsible for any damage that may be caused to Tenant or to the Antenna by any
other tenant in the Building or Project. Landlord makes no representation or
warranty that the Antenna will be able to receive or transmit communication
signals without interference or disturbance and Tenant agrees that Landlord
shall not be liable to Tenant therefor;

                  (f)      Tenant shall (i) be solely responsible for any damage
caused as a result of the Antenna, including damage to the Building, (ii)
promptly pay any tax, license or permit fees charged pursuant to any laws or
regulations in connection with the installation, maintenance or use of the
Antenna and comply with all precautions and safeguards recommended by all
governmental authorities, (iii) pay for all necessary repairs, replacements to
or maintenance of the Antenna, and (iv) indemnify, defend and hold Landlord
harmless from and against any and all losses, costs, claims, damages,
liabilities and causes of action (including attorneys' fees and costs) arising
out of or in any way connected with the installation, operation or removal of
the Antenna;

                  (g)      Tenant shall remove the Antenna and connecting cable
at Tenant's expense upon the expiration or earlier termination of the Lease or
upon the imposition of any governmental law or regulation which may require
removal, and shall repair any damage caused by such removal; and

                  (h)      Tenant's rights hereunder with respect to such
Antenna shall be non-exclusive and Landlord itself shall have the right, and
Landlord may permit others, to install and maintain antenna, satellite dishes
and similar facilities on the Building.

                  Section 19.32. EXHIBIT. Attached hereto is EXHIBIT A, which is
hereby incorporated herein by reference.

                                       45
<PAGE>

                  IN WITNESS WHEREOF, Landlord and Tenant have executed this
Lease as the date set forth in the Basic Lease Information.

LANDLORD:                             TYCO ELECTRONICS CORPORATION,
                                      a Pennsylvania corporation

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

TENANT:                               INTERWAVE COMMUNICATIONS, INC.,
                                      a Delaware corporation

                                      By:        [Illegible]
                                             ---------------------------------
                                      Title:       EVP CFO
                                             ---------------------------------

                                       46
<PAGE>

                                  EXHIBIT "A"

                                  FLOOR PLAN

                               showing the layout
                              of the leased space

                                       1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00000-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00000-of-00352.parquet"}]]