Document:

SUPPLEMENTAL AGREEMENT

This SUPPLEMENTAL AGREEMENT is made and entered into on September 14th, 2000.

BETWEEN:

          ALCATEL NETWORKS  CORPORATION,  a corporation  incorporated  under the
          laws of Canada,  and having its main  offices at 600 March Road,  P.O.
          Box 13600, Kanata, Ontario, Canada K2K 2E6

          ("Alcatel")

AND:

          TELAXIS,  a corporation  incorporated under the laws of Massachusetts,
          having  its main offices at 20 Industrial Drive East, South Deerfield,
          Massachusetts, U.S.A. 01373

          ("Telaxis")

          Collectively known as the "Parties"

WHEREAS:

A.   Alcatel  (formerly known as "Newbridge  Networks  Corporation") and Telaxis
     (formerly  known  as  "Millitech  Corporation")  entered  into  a  Reseller
     Agreement  dated the 7th day of August,  1998 (the "Reseller  Agreement");
     and

B.   The  Parties  wish to  expand  and amend  their  existing  relationship  to
     encompass   Telaxis   participation   in  Alcatel's   Cross  Polarized  and
     Co-Polarized  product  lines,   including  product  development,   product
     improvements, and manufacturing.

NOW THEREFORE,  in  consideration of the mutual covenants  contained herein, and
for other good and valuable  consideration (the receipt and sufficiency of which
are hereby acknowledged) the parties hereto agree as follows:

1.   Cross Polarized Product Line Development and Deliveries
------------------------------------------------------------

1.1  Telaxis shall deliver,  at its  discretion,  approximately [****] units  of
     Vendor  Product from the remaining  backlog in Alcatel Fiscal Q3 and Fiscal
     Q4, 2000 Q3/Q4-2000. The Vendor Product mix is set out in Table A below.

                    [****] Confidential Treatment Requested

<PAGE>

Table A

<TABLE>
<CAPTION>
-------------------------------------------------------
Bandplan       OTRU            OTU             ORU
-------------------------------------------------------
<S>            <C>             <C>             <C>
[****]         [****]          [****]          [****]
-------------------------------------------------------
[****]         [****]          [****]          [****]
------------------------------------------------------
[****]         [****]          [****]          [****]
-------------------------------------------------------
[****]         [****]          [****]          [****]
-------------------------------------------------------
[****]         [****]          [****]          [****]
-------------------------------------------------------
[****]         [****]          [****]          [****]
-------------------------------------------------------
TOTAL          [****]          [****]          [****]
-------------------------------------------------------
</TABLE>

1.2  Delivery of the remaining  approximately [****] units of Vendor Product  in
     backlog  will be deferred to Alcatel  fiscal Q1 and fiscal Q2 - 2001,  with
     the  schedule of  deliveries  to be  dispersed  equally  over the period of
     January 1, 2001 through to June 30, 2001, unless otherwise agreed to by the
     Parties.

1.3  Additional  units of Vendor  Product  for  delivery in 2000 and 2001 may be
     added as mutually agreed to by the Parties.

1.4  Pricing of the  approximately [****] units of  product as noted above shall
     be as follows:

                        OTRU    US$[***]
                        OTU     US$[***]
                        ORU     US$[***]

1.5  Alcatel  shall pay to Telaxis  the sum of  US$[****]  (US$[***])  over and
     above the unit  pricing as noted in Section 1.4 above.  The  Parties  agree
     that the  additional  sum  reflects  the  increased  costs  of the  amended
     production volume.

1.6  Alcatel shall pay the sum of US$[***] as stated in Section 1.4 as follows:

     a)   The sum of $[***] shall be paid to Telaxis in Alcatel fiscal Q3 - 2000
          upon  shipment  of the last unit of Vendor  Product  from  Telaxis  to
          Alcatel in Alcatel fiscal Q3 2000;

     b)   The sum of $[***] shall be paid to Telaxis in Alcatel fiscal Q4 - 2000
          upon successful  completion by Telaxis of mutually  agreeable  Product
          Improvement Milestones as set out in Appendix A attached hereto:

     c)   The sum of $[***] shall be paid to  Telaxis in each of Alcatel  fiscal
          Q4 - 2000 and Alcatel fiscal Q1 - 2001 upon accomplishment of mutually
          agreeable Product Compatibility Milestones establishing  compatibility
          between the Telaxis  Cross  Polarized  ODUs and the Alcatel NIU and as
          more particularly described in Appendix B attached hereto; and

                    [****] Confidential Treatment Requested

<PAGE>

2.   Co-Polarized Product Line
------------------------------

2.1  Alcatel shall  purchase the following  minimum  quantities of  co-polarized
     products for delivery on or before December 31, 2000 as set out in Table B
     below.

Table B

<TABLE>
<CAPTION>
----------------------------------------------------------
  Sept       Oct        Nov        Dec        Total 2000
----------------------------------------------------------
<S>          <C>        <C>        <C>           <C>
[****]       [****]     [****]     [****]        [****]
----------------------------------------------------------
</TABLE>

2.2  In  addition  to the units set out in Table B,  Alcatel  shall  purchase  a
     minimum  of [****]  units of Vendor  Product to be  delivered  on or before
     December 31, 2001.  The [****] units of Vendor Product may be a combination
     of [****] and [****] products. Vendor Products delivered during the Alcatel
     fiscal year 2001 shall be at a nominal rate of [****] per month.

2.3  Purchases  made pursuant to Section 2.1 and 2.2 above shall be  conditional
     upon the Parties agreeing to mutually  acceptable terms including,  but not
     limited to, pricing, performance and quality.

3.   Product Improvement Concepts
---------------------------------

3.1  Telaxis agrees to arrange and conduct engineering  discussions with Alcatel
     of potential product  improvement and cost reduction  concepts at quarterly
     intervals.

4.   New Product Development
----------------------------

4.1  The sum of  $[****]  shall  be paid to  Telaxis  upon  accomplishment  of a
     successful  Preliminary  Design Review (PDR),  and a further sum of $[****]
     will be paid to Telaxis upon accomplishment of a successful Critical Design
     Review  (CDR) on a future BTS or CPE product to be  determined  by Alcatel.
     The PDR and CDR are more  particularly  described  in  Appendix  B attached
     hereto.

5.   Terms
----------

5.1  Section 6.3 of the Reseller  Agreement shall not apply to this Supplemental
     Agreement.  In all other respects the terms and conditions contained in the
     Reseller   Agreement  shall  be  deemed  to  be   incorporated   into  this
     Supplemental  Agreement.  In the event of conflict between the terms of the
     Reseller  Agreement and this  Agreement,  the terms of this Agreement shall
     prevail.

                    [****] Confidential Treatment Requested

<PAGE>

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.

Alcatel Networks Corporation                 Telaxis

By:   /c/ Hubert de Pasquidoux           By:   /c/ Ransom Reynolds
      ------------------------                 ------------------------
Name: Hubert de Pasquidoux               Name: Ransom Reynolds

Title: Chief Executive Officer           Title: Sr. Vice President

<PAGE>

<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------------------------
 Payment            OTU                                   [****]      [****]    [****]    [****]    [****]   [****]    [****]
-----------------------------------------------------------------------------------------------------------------------------
<S>          <C>                                           <C>        <C>       <C>       <C>       <C>      <C>       <C>
  [****]     Eng Analysis & Test                           3Q2000     1Q2001    2Q2001    2Q2001    3Q2001   3Q2001    3Q2001
   Upon      Develop [****] Tone Test Set
Completion   Develop [****] Tone Simulation Software
    of       ----------------------------------------------------------------------------------------------------------------
  [****]     Release specs                                 4Q2000     1Q2001    2Q2001    2Q2001    3Q2001   3Q2001    3Q2001
 Activity    [****] power [****] evaluation
             Linearizer test
             Test set manifold match improvement
             ----------------------------------------------------------------------------------------------------------------
             1st Board Spin into production [some risk to  4Q2000     1Q2001    2Q2001    2Q2001    3Q2001   3Q2001    3Q2001
             MS l level Gain Flatness - get as much as
             possible]
             DAC
             IF Amp
             Temp Sensor location
             Improved IF match to 2GHz
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
 Payment            ORU                                   [****]      [****]    [****]    [****]    [****]   [****]    [****]
-----------------------------------------------------------------------------------------------------------------------------
<S>          <C>                                           <C>        <C>       <C>       <C>       <C>      <C>       <C>
   [****]    Eng Analysis & Test                           3Q2000     1Q2001    2Q2001    2Q2001    3Q2001   3Q2001    3Q2001
    Upon
 Completion  LNA evaluation and others
     of      ----------------------------------------------------------------------------------------------------------------
   [****]    Release specs                                 4Q2000     1Q2001    2Q2001    2Q2001    3Q2001   3Q2001    3Q2001
  Activity   1st Board Spin into production
             Move gain stages
             New LNA [on [****] + existing bands that
             use new MMIC]
             IF output VSWR improvement
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
 Payment            OTRU                                  [****]      [****]    [****]    [****]    [****]   [****]    [****]
-----------------------------------------------------------------------------------------------------------------------------
<S>          <C>                                           <C>        <C>       <C>       <C>       <C>      <C>       <C>
   [****]    Xmtr [****] fix implemented for [****]        3Q2000     1Q2001    2Q2001    2Q2001    3Q2001   3Q2001    3Q2001
    Upon     Max IF input power [****]
 Completion  Inrush fix (all but [****])
     of      ----------------------------------------------------------------------------------------------------------------
   [****]    Release specs                                 4Q2000     1Q2001    2Q2001    2Q2001    3Q2001   3Q2001    3Q2001
  Activity   IF VSWR fix     (all below for [****])
             Rx RF image rejection - para 3.1.29([****]
             at greater than / equal to 200mhz - improved
             filter)
             Tx/Rx gain [****] fix (target [****])-
             validate approach
             Tx noise figure [****] improvement - confirm no
             issues with [****] degredation
             Rx noise figure [****] improvement
             Rx out of band [****] implementation
             ([****] first)
             Crossover fix (validate approach)
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

                    [****] Confidential Treatment Requested

<PAGE>

                                   APPENDIX B

                        PRODUCT COMPATIBILITY MILESTONES

To Be agreed to

                           PRELIMIMARY DESIGN REVIEW

PDR (Preliminary  Design Review):  Held at the point in the development at which
the first theoretical concept design is available.  This review usually consists
of a "paper" design augmented with simulations and sometimes a limited amount of
measured results.

                             CRITICAL DESIGN REVIEW

CDR (Critical  Design  Review) Held at the point in development at which most if
not all of the  sub-components  have been  built and  tested  for  module  level
compliance  with the  specifications.  Measured  results are  available  on most
parameters.  Last  point in the  design  cycle  where the  design may be revised
before fully functional prototypes are fabricated.INDEMNIFICATION AGREEMENT

           This  Indemnification  Agreement  (this  "Agreement")  is  made as of
September  18,  2000  by  and  between  Telaxis  Communications  Corporation,  a
Massachusetts    corporation   (the    "Corporation"),    and    _______________
("Indemnitee"), a director or officer of the Corporation.

           WHEREAS,  it is essential to the Corporation to retain and attract as
directors and officers the most capable persons available, and

           WHEREAS,  the substantial  increase in corporate  litigation subjects
directors and officers to expensive litigation risks, and

           WHEREAS,  the Restated  Articles of Organization  and the Amended and
Restated  By-laws of the  Corporation  permit the  Corporation  to indemnify its
officers and directors to the fullest extent permitted by law and Indemnitee has
been serving and continues to serve as a director or officer of the  Corporation
in part on reliance on such Articles and such By-laws, and

           WHEREAS,   in  recognition  of  Indemnitee's   need  for  substantial
protection against personal liability in order to enhance Indemnitee's continued
service to the Corporation in an effective manner and  Indemnitee's  reliance on
the  aforesaid  Articles and  By-laws,  and in part to provide  Indemnitee  with
specific contractual assurance that the protection promised by such Articles and
such By-laws will be available to Indemnitee (regardless of, among other things,
any amendment to or revocation of such Articles or such By-laws or any change in
the  composition  of the  Corporation's  Board of Directors  or any  acquisition
transaction  relating to the Corporation),  the Corporation wishes to provide in
this Agreement for  indemnification  of and the advancing expenses to Indemnitee
to the fullest extent (whether partial or complete)  permitted by law and as set
forth in this  Agreement,  and, to the extent  insurance is maintained,  for the
continued  coverage  of  Indemnitee  under  the  Corporation's   directors'  and
officers' liability insurance policies;

           NOW  THEREFORE,  the  Corporation  and  Indemnitee do hereby agree as
follows:

           1. Agreement to Serve. Indemnitee agrees to serve or continue to
serve as a director or officer of the Corporation for so long as he is duly
elected or appointed or until such time as he tenders his resignation in
writing.

           2. Definitions. As used in this Agreement:

              (a) The term "Proceeding" shall include any threatened, pending or
completed action, suit, or proceeding, whether brought by or in the right of the
Corporation  or otherwise and whether of a civil,  criminal,  administrative  or
investigative nature, and any appeal therefrom.

              (b) The term "Corporate  Status" shall mean the status of a person
who is or was a director, officer, agent or consultant of or to the Corporation,
or is or was serving or has agreed to serve, at the request of the  Corporation,
as a director,  officer, employee or agent of another corporation,  partnership,
joint venture, trust or other enterprise.

<PAGE>

              (c) The term "Expenses"  shall include,  without  limitation,  all
reasonably incurred attorneys' fees, retainers,  court costs,  transcript costs,
fees of experts, travel expenses, duplicating costs, printing and binding costs,
telephone and facsimile charges, postage and overnight delivery service fees and
other disbursements or expenses of the types customarily  incurred in connection
with  investigations,  judicial or  administrative  proceedings or appeals,  but
shall not include the amount of judgments, fines or penalties against Indemnitee
or amounts paid in settlement in connection with such matters.

              (d)  References  to  "other  enterprise"  shall  include  employee
benefit plans;  references to "fines" shall include any excise tax assessed with
respect to any employee  benefit plan;  references to "serving at the request of
the Corporation" shall include any service as a director,  officer,  employee or
agent of the Corporation  which imposes duties on, or involves services by, such
director,  officer,  employee,  or  agent in any  capacity  with  respect  to an
employee  benefit plan, its  participants,  or  beneficiaries;  and a person who
acted in good  faith in the  reasonable  belief  that his action was in the best
interest of the participant or  beneficiaries  of an employee benefit plan shall
be deemed to have acted in good faith in the  reasonable  belief that his action
was in the best interest of the "Corporation" as referred to in this Agreement.

              (e) The term  "Indemnified  Costs" shall mean all Expenses and any
and all costs,  liabilities,  obligations,  losses,  damages,  claims,  actions,
judgments, fines, penalties, and amounts paid in settlement.

           3. Indemnification In Third-Party Proceedings.  The Corporation shall
indemnify  Indemnitee,  and hold  Indemnitee  harmless,  in accordance  with the
provisions of this  Paragraph 3 from and against any and all  Indemnified  Costs
which may be imposed on, incurred by or asserted against  Indemnitee at any time
as a result of or in connection with  Indemnitee  being a party to or threatened
to be made a party to or  otherwise  involved  in any  Proceeding  (other than a
Proceeding  by or in the right of the  Corporation  to procure a judgment in its
favor) by reason of his Corporate  Status or by reason of any action  alleged to
have been  taken or  omitted  by  Indemnitee  or any  other  person or entity in
connection  therewith;  except that no indemnification  shall be made under this
Paragraph 3 with  respect to any matter as to which  Indemnitee  shall have been
adjudicated  in any Proceeding not to have acted in good faith in the reasonable
belief  that  his  action  was in the  best  interest  of the  Corporation.  The
termination of any Proceeding by judgment, order, settlement, conviction or upon
a plea of nolo  contendere,  or its equivalent,  shall not, of itself,  create a
presumption  that Indemnitee did not act in good faith in the reasonable  belief
that his action was in the best interest of the Corporation.

           4.  Indemnification  in  Proceedings  by  or  in  the  Right  of  the
Corporation.  The Corporation  shall indemnify  Indemnitee,  and hold Indemnitee
harmless, in accordance with the provisions of this Paragraph 4 from and against
any and all  Indemnified  Costs which may be imposed on, incurred by or asserted
against  Indemnitee at any time as a result of or in connection  with Indemnitee
being a party to or  threatened  to be made a party to or otherwise  involved in
any  Proceeding by or in the right of the  Corporation  to procure a judgment in
its favor by reason of his Corporate  Status or by reason of any action  alleged
to have been  taken or omitted by  Indemnitee  or any other  person or entity in
connection therewith, except that (a) no indemnification shall be made under

                                      -2-

<PAGE>

this  Paragraph 4 with respect to any matter as to which  Indemnitee  shall have
been  adjudicated  in any  Proceeding  not to have  acted  in good  faith in the
reasonable  belief that his action was in the best  interest of the  Corporation
and (b) no  indemnification  shall be made under this  Paragraph 4 in respect of
any claim,  issue, or matter as to which  Indemnitee shall have been adjudged to
be liable to the  Corporation,  unless  and only to the  extent  that a court of
Massachusetts shall determine upon application that, despite the adjudication of
such liability but in view of all the  circumstances of the case,  Indemnitee is
fairly and reasonably  entitled to indemnity for such  Indemnified  Costs as the
court shall deem proper.  The termination of any Proceeding by judgment,  order,
settlement,  conviction or upon a plea of nolo  contendere,  or its  equivalent,
shall not, of itself,  create a presumption  that Indemnitee did not act in good
faith in the  reasonable  belief that his action was in the best interest of the
Corporation.

           5. Exceptions to Right of Indemnification.  Notwithstanding  anything
to the  contrary in this  Agreement,  except as set forth in  Paragraph  10, the
Corporation  shall not indemnify  Indemnitee  under this Agreement in connection
with  a  Proceeding  (or  part  thereof)  initiated  by  Indemnitee  unless  the
initiation  thereof was approved by the Board of  Directors of the  Corporation.
Notwithstanding  anything to the  contrary in this  Agreement,  the  Corporation
shall not  indemnify  Indemnitee  to the extent  Indemnitee  has  actually  been
reimbursed from the proceeds of insurance maintained by the Corporation,  and in
the event the Corporation makes any  indemnification  payments to Indemnitee and
Indemnitee  is   subsequently   reimbursed  from  such  proceeds  of  insurance,
Indemnitee   shall  promptly  refund  such   indemnification   payments  to  the
Corporation to the extent of such insurance reimbursement.

           6.  Indemnification of Expenses of Successful Party.  Notwithstanding
any other  provision of this  Agreement,  to the extent that Indemnitee has been
successful, on the merits or otherwise, in defense of any Proceeding in which he
is involved by reason of his Corporate Status or by reason of any action alleged
to have been  taken or omitted by  Indemnitee  or any other  person or entity in
connection  therewith,  Indemnitee  shall be indemnified,  to the maximum extent
permitted by applicable law, against all Indemnified Costs incurred by him or on
his behalf in connection therewith.  Without limiting the foregoing, if any such
Proceeding or any claim,  issue or matter  therein is disposed of, on the merits
or  otherwise  (including  a  disposition  without  prejudice),  without  (i) an
adjudication  that  Indemnitee  was  liable  to  the  Corporation,  or  (ii)  an
adjudication  that Indemnitee did not act in good faith in the reasonable belief
that his action was in the best interest of the Corporation, Indemnitee shall be
considered for the purposes  hereof to have been wholly  successful with respect
thereto.

           7. Notification and Defense of Claim. As a condition precedent to his
right to be  indemnified  under  this  Agreement,  Indemnitee  must  notify  the
Corporation  in  writing  as soon as  practicable  of any  Proceeding  for which
Indemnitee  will  seek  indemnification  or for which  indemnification  could be
sought by him and provide the Corporation with a copy of any summons,  citation,
subpoena, complaint, indictment,  information or other document relating to such
Proceeding  with which he is served;  provided that any failure to so notify the
Corporation  shall not relieve the  Corporation  from any  liability  under this
Agreement,  except to the extent any delay or failure by  Indemnitee  to provide
notice to the Corporation shall increase the Corporation's  liability hereunder.
With respect to any Proceeding of which the Corporation is so notified, the

                                      -3-

<PAGE>

Corporation will be entitled to participate therein at its own expense and/or to
assume the defense  thereof at its own expense,  with legal  counsel  reasonably
acceptable  to  Indemnitee.   After  written  notice  from  the  Corporation  to
Indemnitee of its election so to assume such defense,  the Corporation shall not
be  liable  to  Indemnitee  for any fees or  expenses  of  counsel  subsequently
incurred  by  Indemnitee  in  connection  with such  Proceeding,  other  than as
provided  below in this Paragraph 7.  Indemnitee  shall have the right to employ
his own counsel in connection with such Proceeding, but any fees and expenses of
such  counsel  incurred  after  written  notice  from  the  Corporation  of  its
assumption of the defense  thereof shall be at the expense of Indemnitee  unless
(i)  the  employment  of  counsel  by  Indemnitee  has  been  authorized  by the
Corporation,  (ii) counsel to Indemnitee  shall have  reasonably  concluded that
there may be a conflict of interest or position in any significant issue between
the  Corporation  and  Indemnitee  or between  Indemnitee  and any other jointly
represented  party in the  conduct of defense of such  Proceeding,  or (iii) the
Corporation  shall not in fact have  employed  counsel to assume the  defense of
such  Proceeding,  in each of which cases the  reasonable  fees and  expenses of
counsel  for  Indemnitee  shall be at the expense of the  Corporation  except as
otherwise  expressly  provided by this Agreement.  Indemnitee may not settle any
Proceeding for which he seeks indemnification  hereunder without first obtaining
the prior written  consent of the  Corporation,  which shall not be unreasonably
withheld, conditioned or delayed.

           8. Advancement of Expenses.  Subject to the provisions of Paragraph 9
below,  any  Indemnified  Costs  incurred by Indemnitee  in  connection  with or
arising out of any  Proceeding  with  respect to which  Indemnitee  is or may be
entitled to indemnification  under this Agreement shall be paid or reimbursed to
Indemnitee  by the  Corporation  in  advance  of the final  disposition  of such
matter; provided, however, that the payment or reimbursement of such Indemnified
Costs in advance of the final disposition of such matter shall be made only upon
receipt of an  undertaking by or on behalf of Indemnitee to repay all amounts so
advanced in the event that it shall  ultimately be determined that Indemnitee is
not  entitled  to be  indemnified  by the  Corporation  as  authorized  in  this
Agreement or otherwise;  and that no such  advancement of expenses shall be made
with  respect to any matter as to which it shall  have been  adjudicated  in any
Proceeding  that  Indemnitee did not act in good faith in the reasonable  belief
that his action was in the best interest of the  Corporation.  Such  undertaking
shall be accepted  without bond or other  security or reference to the financial
ability of Indemnitee to make repayment.

           9. Procedure for Indemnification.  In order to obtain indemnification
or advancement of Indemnified Costs pursuant to this Agreement, Indemnitee shall
submit to the  Corporation  a written  request,  including  in such request such
documentation   and  information  as  is  reasonably   available  to  Indemnitee
describing  the  amount  of  indemnification  or  advancement  requested.   Upon
Indemnitee's  verification to the reasonable  satisfaction of the Corporation of
the amount of any  Indemnified  Costs  incurred by Indemnitee,  the  Corporation
shall either, at Indemnitee's direction, reimburse Indemnitee or pay as and when
due to the person or other entity entitled thereto the Indemnified Costs covered
by this Agreement.

           10. Remedies. The right to indemnification or advancement of Expenses
as provided by this Agreement shall be enforceable by Indemnitee in any court of
competent  jurisdiction if the Corporation  denies such request,  in whole or in
part, or if no disposition thereof is made within twenty (20) days of submitting
a request under Paragraph 9 above.  Unless otherwise required by law, the burden
of proving that indemnification or advancement is not appropriate shall be on

                                      -4-

<PAGE>

the Corporation.  Indemnitee's expenses (of the type described in the definition
of   "Indemnified   Costs"  in  Paragraph  2(e))  incurred  in  connection  with
successfully establishing his right to indemnification or advancement,  in whole
or in part, in any such Proceeding shall also be indemnified and advanced by the
Corporation.

           11.  Partial  Indemnification.  If Indemnitee  is entitled  under any
provision of this Agreement to  indemnification by the Corporation for some or a
portion of the Indemnified  Costs incurred by him or on his behalf in connection
with  any  Proceeding  but not,  however,  for the  total  amount  thereof,  the
Corporation  shall  nevertheless  indemnify  Indemnitee  for the portion of such
Indemnified Costs to which Indemnitee is entitled.

           12.  Subrogation.  In the event of any payment under this  Agreement,
the Corporation  shall be subrogated to the extent of such payment to all of the
rights of  recovery of  Indemnitee,  who, at the  Corporation's  expense,  shall
execute all papers required and take all action necessary to secure such rights,
including execution of such documents as are necessary to enable the Corporation
to bring suit to enforce such rights.

           13.  Term of  Agreement.  This  Agreement  shall  continue  until and
terminate upon the later of (a) six years after the date that  Indemnitee  shall
have  ceased to serve as a director  or officer  of the  Corporation  or, at the
request of the Corporation, as a director, officer, employee or agent of another
corporation,  partnership,  joint venture,  trust or other enterprise or (b) the
final  termination  (and  expiration of all appeal  periods) of all  Proceedings
pending on the date set forth in clause (a) in  respect of which  Indemnitee  is
granted rights of  indemnification or advancement of Indemnified Costs hereunder
and of any proceeding  commenced by Indemnitee  pursuant to Paragraph 10 of this
Agreement relating thereto.

           14. Indemnification  Hereunder Not Exclusive. The indemnification and
advancement of Indemnified Costs provided by this Agreement shall be independent
of, in addition to and not be deemed  exclusive  or in  derogation  of any other
rights to which  Indemnitee  may be  entitled  under the  Restated  Articles  of
Organization, the Amended and Restated By-Laws, any other agreement, any vote of
stockholders  or  disinterested  directors,  the  Business  Corporation  Law  of
Massachusetts,  any other law (common or  statutory),  or otherwise,  both as to
action in his  official  capacity  and as to action in  another  capacity  while
holding office for the Corporation. Nothing contained in this Agreement shall be
deemed to prohibit the Corporation from purchasing and maintaining insurance, at
its expense,  to protect itself or Indemnitee against any expense,  liability or
loss incurred by it or him in any such capacity, or arising out of his status as
such,  whether or not  Indemnitee  would be  indemnified  against such  expense,
liability or loss under this Agreement.

           15. No Special  Rights.  Nothing herein shall confer upon  Indemnitee
any right to continue to serve as an officer or director of the  Corporation for
any period of time or at any particular rate of compensation.

           16. Savings Clause. If this Agreement or any portion thereof shall be
held  invalid,  unenforceable  or void in whole or in part on any  ground by any
court of competent jurisdiction, then (a) the parties shall promptly negotiate a
replacement  provision effecting the parties' intent to provide  indemnification
and advancement rights to Indemnitee to the maximum extent permitted by

                                      -5-

<PAGE>

applicable law, (b) the Corporation shall nevertheless  indemnify  Indemnitee as
to Indemnified  Costs to the maximum extent permitted by any applicable  portion
of this Agreement that shall not have been invalidated and, in any event, to the
maximum extent permitted by applicable law, and (c) the remaining  provisions of
this Agreement shall remain in full force and effect.

           17.  Counterparts.  This  Agreement  may be executed in any number of
counterparts, each of which shall constitute the original.

           18. Successors and Assigns.  This Agreement shall be binding upon the
Corporation  and its  successors  and assigns,  including any direct or indirect
successor  by   purchase,   merger,   consolidation   or  otherwise  to  all  or
substantially  all of the business and/or assets of the  Corporation,  and shall
inure  to the  benefit  of the  estate,  heirs,  executors,  administrators  and
personal representative of Indemnitee.

           19.  Headings.  The headings of the  paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.

           20.  Modification and Waiver. This Agreement may be amended from time
to time to  reflect  changes  in  Massachusetts  law or for  other  reasons.  No
supplement,  modification or amendment of this Agreement shall be binding unless
executed  in  writing  by both of the  parties  hereto.  No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provision hereof nor shall any such waiver constitute a continuing waiver.

           21. Notices. All notices,  requests, demands and other communications
hereunder  shall be in  writing  and shall be deemed to have been given (i) when
delivered by hand or (ii) if mailed by certified or registered mail with postage
prepaid, on the third day after the date on which it is so mailed.

              (a) if to Indemnitee, to:

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

              (b) if to the Corporation, to:

                  Telaxis Communications Corporation
                  20 Industrial Drive East
                  P.O. Box 109
                  South Deerfield, MA  01373-0109
                  Attention:  President

or to such other  addresses  as may have been  furnished  to  Indemnitee  by the
Corporation or to the Corporation by Indemnitee, as the case may be.

                                      -6-

<PAGE>

           22. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the Commonwealth of Massachusetts.

           23.  Attorneys'  Fees. If any action at law or in equity is necessary
to enforce or  interpret  the terms of this  Agreement  or to protect the rights
obtained  hereunder,  the  prevailing  party shall be entitled to its reasonable
attorneys'  fees,  costs and  disbursements  in addition to any other  relief to
which it may be entitled.

                *************************************************
              Following section is just in Mr. Stempel's agreement.

           24. Specific  Coverage.  Indemnitee  currently is the Chief Financial
Officer,  Treasurer and Vice President of the Corporation.  As such,  Indemnitee
signs securities  filings of the Corporation as its principal  financial officer
and principal accounting officer. In addition,  Indemnitee has been appointed as
alternate  Securities  Coordinator  with  respect  to the  Corporation's  Policy
Statement  on  Securities  Trades by Company  Personnel.  For the  avoidance  of
ambiguity,  and  without  limiting  the  generality  of  any  of  the  foregoing
provisions  of  this  Agreement,   the  Corporation  confirms  and  agrees  that
Indemnitee is entitled to the indemnification,  advancement and other rights and
benefits  provided  by  this  Agreement  with  respect  to  and  arising  out of
Indemnitee's roles and activities described above in this Paragraph 24.

                *************************************************

                *************************************************
              Following section is just in Mr. Renauld's agreement.

           24. Specific  Coverage.  Indemnitee  currently is the Vice President,
Legal and Corporate  Affairs of the  Corporation.  The Corporation  acknowledges
that, due to such position and Indemnitee's background, Indemnitee renders legal
opinion letters from time to time. In addition, Indemnitee has been appointed as
Securities  Coordinator  with respect to the  Corporation's  Policy Statement on
Securities  Trades by Company  Personnel.  For the avoidance of  ambiguity,  and
without  limiting the  generality  of any of the  foregoing  provisions  of this
Agreement,  the  Corporation  confirms and agrees that Indemnitee is entitled to
the indemnification,  advancement and other rights and benefits provided by this
Agreement with respect to and arising out of  Indemnitee's  roles and activities
described above in this Paragraph 24.

                *************************************************

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

                                                    TELAXIS COMMUNICATIONS
                                                    CORPORATION

                                                    By:
                                                       --------------------

                                                    Name:
                                                    Title:

                                                    INDEMNITEE:

                                                    -----------------------
                                                    Name:

                                      -7-

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