DIGITAL MICROWAVE CORP /DE/
EXHIBIT 10-26
<DOCUMENT>
<TYPE>EX-10.26
<SEQUENCE>8
<FILENAME>ex-10_26.txt
<DESCRIPTION>EXHIBIT 10-26
<TEXT>

<PAGE>

                                      LEASE

                                 BY AND BETWEEN

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

                                   as Landlord
                                       and

                         DIGITAL MICROWAVE CORPORATION,
                             a Delaware corporation

                                    as Tenant

                                February 16, 2000
                              180 Rose Orchard Way


<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                     PAGE

<S>                                                                                   <C>
ARTICLE 1        REFERENCE.............................................................1

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     4.4      Transh Disposal..........................................................5

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


                                       i.
<PAGE>



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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE II       CONDEMNATION ........................................................15

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


                                      ii.
<PAGE>

              (a)   ReaL Property Taxes...............................................20

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


                                      iii.
<PAGE>

                                      LEASE

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

                                    RECITALS

         A. Metropolitan Life Insurance Company ("MetLife") and Tenant entered
into a lease dated April 5, 1995, as amended (the "Original Lease"), for the
leased Premises (as defined below);

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

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

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

                                   AGREEMENT

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

                                    ARTICLE 1

                                    REFERENCE

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

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

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

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

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

         Intended Commencement Date:             January 1, 2001

         Intended Term:                          Ten (10) years

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

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

         First Month's Prepaid Rent:             $20,151.45

         Tenant's Security Deposit:              $26,257.95

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

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

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


                                       1.
<PAGE>

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

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

         Building:                               That certain building on the Property in which the Leased
                                                 Premises are located commonly known as or otherwise
                                                 described as 180 Rose Orchard Way, California. (the "Building")
                                                 located on Assessor's Parcel No. 97-03-078, which Building is
                                                 shown outlined on Exhibit "A" hereto.

         Outside Areas:                          The "Outside Areas" shall mean all areas within Assessor's
                                                 Parcel No. 97-03-078 which are located outside the Building,
                                                 such as pedestrian walkways, parking areas, landscaped areas,
                                                 open areas and enclosed trash disposal areas.

         Leased Premises:                        Certain interior space within the Building, consisting of
                                                 approximately 12,213 square feet and, for purposes of this
                                                 Lease, agreed to contain said number of square feet.

         Tenant's Expense Share:                 The term "Tenant's Expense Share" shall mean the percentage
                                                 obtained by dividing the rentable square footage of the Leased
                                                 Premises at the time of calculation by the rentable square
                                                 footage of the Building. Such percentage is currently 21.61%.

         Tenant's Project Share:                 The term "Tenant's Project Share" shall mean the percentage
                                                 obtained by dividing the rentable square footage of the Leased
                                                 Premises at the time of calculation by the rentable square
                                                 footage of all buildings located on the Property at the time of
                                                 calculation. Such percentage is currently 3.92%. In the event
                                                 that any portion of the Property is sold by Landlord, or the
                                                 rentable square footage of the Leased Premises or the Property
                                                 is otherwise changed, Tenant's Expense Share shall be recalculated
                                                 to equal the percentage described in the first sentence of this
                                                 paragraph, so that the aggregate Tenant's Expense Share of all
                                                 tenants of the Property shall equal 100%. Tenant's Expense Share
                                                 is subject to adjustment as set forth in Paragraphs 13.12(b) and
                                                 13.12(c).

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

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

                                                 1/1/01-12/31/01                          $20,151.45
                                                 1/1/02-12/31/02                          $20,762.10
                                                 1/1103-12/31/03                          $21,372.75
                                                 1/1/04-12/31/04                          $21,983.40
                                                 1/1/05-12/31/05                          $22,594.05
                                                 1/1/06-12/31/06                          $23,326.83
                                                 1/1/07-12/31/07                          $24,059.61
                                                 1/1/08-12/31/08                          $24,792.39
                                                 1/1/09-12/31/09                          $25,525.17
                                                 1/1/10-12/31/10                          $26,257.95

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

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

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

                                                 Exhibit "B" - Work Letter

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


                                       2.
<PAGE>

                                    ARTICLE 2

                      LEASED PREMISES, TERM AND POSSESSION

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

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

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

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

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

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


                                       3.
<PAGE>

                                    ARTICLE 3

                    RENT, LATE CHARGES AND SECURITY DEPOSITS

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       4.
<PAGE>

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

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

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

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

                                    ARTICLE 4

                     USE OF LEASED PREMISES AND OUTSIDE AREA

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

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

                                       5.
<PAGE>

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

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

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

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

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

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

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

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


                                       6.
<PAGE>

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

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

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

         (a) As used herein, the term "Hazardous Materials" shall mean any toxic
or hazardous substance, material or waste or any pollutant or infectious or
radioactive material, including but not limited to those substances, materials
or wastes regulated now or in the future under any of the following statutes or
regulations and any and all of those substances included within the definitions
of "hazardous substances," "hazardous materials," "hazardous waste" "hazardous
chemical substance or mixture," "imminently hazardous chemical substance or
mixture," "toxic substances," "hazardous air pollutant," "toxic pollutant," or
"solid waste" in the (a) Comprehensive Environmental Response, Compensation and
Liability Act of 1990 ("CERCLA" or "Superfund"), as amended by the Superfund
Amendments and Reauthorization Act of 1986 ("SARA"), 42 U.S.C. Section 9601 ET
SEQ., (b) Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C.
Section 6901 ET SEQ., (c) Federal Water Pollution Control Act ("FSPCA"), 33
U.S.C. SECTION 1251 ET SEQ., (d) Clean Air Act ("CAA"), 42 U.S.C. Section 7401
ET SEQ., (e) Toxic Substances Control Act ("TSCA"), 14 U.S.C. Section 2601 ET
SEQ., (f) Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, ET
SEQ., (g) Carpenter-Presley-Tanner Hazardous Substance Account Act ("California
Superfund"), Cal. Health & Safety Code SECTION 25300 ET SEQ., (h) California
Hazardous Waste Control Act, Cal. Health & Safety code Section 25100 ET SEQ.,
(i) Porter-Cologne Water Quality Control Act ("Porter-Cologne Act"), Cal. Water
Code Section 13000 ET SEQ., (j) Hazardous Waste Disposal Land Use Law, Cal.
Health & Safety codes Section 25220 ET SEQ., (k) Safe Drinking Water and Toxic
Enforcement Act of 1986 ("Proposition 65"), Cal. Health & Safety code Section
25249.5 ET SEQ., (1) Hazardous Substances Underground Storage Tank Law, Cal.
Health & Safety code Section 25280 ET SEQ., (m) Air Resources Law, Cal. Health &
Safety Code Section 39000 ET SEQ., and (n) regulations promulgated pursuant to
said laws or any replacement thereof, or as similar terms are defined in the
federal, state and local laws, statutes, regulations, orders or rules.
hazardous Materials shall also mean any and all other biohazardous wastes and
substances, materials and wastes which are, or in the future become, regulated
under applicable Laws for the protection of health or the environment, or which
are classified as hazardous or toxic substances, materials or wastes, pollutants
or contaminants, as defined, listed or regulated by any federal, state or local
law, regulation or order or by common law decision, including, without
limitation, (i) trichloroethylene, tetrachloroethylene, perchloroethylene and
other chlorinated solvents, (ii) any petroleum products or fractions thereof,
(iii) asbestos, (iv) polychlorinted biphenyls, (v) flammable explosives, (vi)
urea formaldehyde, (vii) radioactive materials and waste, and (viii) materials
and wastes that are harmful to or may threaten human health, ecology or the
environment.

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


                                       7.
<PAGE>

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

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

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

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

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

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

                                    ARTICLE 5

                  REPAIRS, MAINTENANCE, SERVICES AND UTILITIES

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

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


                                       8.
<PAGE>

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

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

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

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

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

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

                                    ARTICLE 6

                          ALTERATIONS AND IMPROVEMENTS

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


                                       9.
<PAGE>

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

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

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

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

                                      10.
<PAGE>

                                    ARTICLE 7

                       ASSIGNMENT AND SUBLETTING BY TENANT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                      11.
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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


                                      12.
<PAGE>

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

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

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

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

                                    ARTICLE 8

                LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY

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

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

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

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

                                       13.
<PAGE>

                                   ARTICLE 9

                                   INSURANCE

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

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

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

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

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

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

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

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

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

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

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

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

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


                                       14.
<PAGE>

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

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

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

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

                                   ARTICLE 10

                            DAMAGE TO LEASED PREMISES

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

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

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

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

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

                                       15.
<PAGE>

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

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

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

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

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

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

                                   ARTICLE 11

                                  CONDEMNATION

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

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

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

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

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

                                      16.
<PAGE>

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

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

                                   ARTICLE 12

                              DEFAULT AND REMEDIES

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

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

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

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

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

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

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

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

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

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

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

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

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

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


                                      17.
<PAGE>

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

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

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

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

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

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

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

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

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

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

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


                                       18.
<PAGE>

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

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

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

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

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

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

                                   ARTICLE 13

                               GENERAL PROVISIONS

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

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

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

                                      19.
<PAGE>

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

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

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

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

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

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

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


                                      20.
<PAGE>

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

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

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

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

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

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

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

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

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

                                      21.
<PAGE>

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

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

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

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

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

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

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

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

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

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


                                      22.
<PAGE>

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

                                   ARTICLE 14

                               CORPORATE AUTHORITY
                          BROKERS AND ENTIRE AGREEMENT

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

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

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

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

                                   ARTICLE 15

                                OPTIONS TO EXTEND

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

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

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

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

                                      23.
<PAGE>

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

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

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

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

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

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

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

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


                                      24.
<PAGE>

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

                                   ARTICLE 16

                                TELEPHONE SERVICE

         Notwithstanding any other provision of this Lease to the contrary:

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

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

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

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

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

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

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

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

                                      25.
<PAGE>

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

                               LANDLORD:

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

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

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

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

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

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

                               TENANT:

                               DIGITAL MICROWAVE CORPORATION, a
                               Delaware corporation

Dated:     2-16-00                   By: /s/ Carl A. Thomson
       ----------------                 ------------------------------------
                                     Title:   SR. VP & CFO
                                           ---------------------------------

Dated:     2-16-00                   By: /s/  [ILLEGIBLE]
       ----------------                 ------------------------------------
                                     Title:  CEO
                                           ---------------------------------


                                      26.
<PAGE>

                                    EXHIBIT A

                                    SITE PLAN


                                       1.
<PAGE>

                                    EXHIBIT B

                                   WORK LETTER

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

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

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

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

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

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

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

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

                           (iii) Evidence of insurance as called for
hereinbelow.

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

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

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


                                       1.
<PAGE>

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

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

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

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

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

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

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

         2. PAYMENT OF COSTS OF THE TENANT IMPROVEMENTS.

                  (a) Unless specified otherwise herein, Landlord shall bear and
pay the cost of the Improvement Work (which cost shall include, without
limitation, the costs of construction, the cost of permits and permit
expediting, and all architectural and engineering services obtained by Landlord
in connection with the Tenant Improvements, the Contractor's fees, Landlord's
fee for construction administration in an amount equal to the amount charged by
Landlord's construction manager (the "Construction Manager), and any Property
Maintenance Costs from the date of this Work Letter until the Lease Commencement
Date) up to a maximum of $85,491.00 (the "Improvement Allowance"). The
Improvement Allowance shall be utilized only for building improvements to the
Building, and not for signage, furniture costs, any third party consulting or
contracting fees (except for Tenant's architect's fees), my telecom/cabling
costs, or any other purpose. Tenant shall bear and pay the cost of the
Improvement Work (including but not limited to all of the foregoing fees and
costs) in excess of the Improvement Allowance, if any, The cost of the
Improvement Work shall exclude the cost of furniture, fixtures and inventory.

                  (b) No less than the amount of $24,426.00 out of the
Improvement Allowance must be utilized by Tenant for replacement of the HVAC
system serving the Leased Premises and for no other purpose. The remainder of
the Improvement Allowance shall be utilized only for building improvements to
the Building or the other buildings in the Project leased to Tenant by
Landlord, and not for signage, furniture costs, any third party consulting or
contracting fees (except for Tenant's architect's fees), any telecom/cabling
costs, or any other purpose. Tenant shall bear and pay the cost of the Tenant
Improvements (including but not limited to all of the foregoing fees and
costs) in excess of the Improvement Allowance, if any.

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

                           (i) Invoices and canceled checks

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

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

                           (iv) Contractor's certification as follows:


                                       2.
<PAGE>

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

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

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

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

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

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

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

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

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

                               IN WITNESS WHEREOF, Landlord and Tenant have
                               executed this Lease as of the respective dates
                               below set forth with the intent to be legally
                               bound thereby as of LANDLORD:

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

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

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

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

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

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

                               TENANT:


                                       3.
<PAGE>

                                     DIGITAL MICROWAVE CORPORATION, a
                                     Delaware corporation

Dated:     2-16-00                   By: /s/ Carol A. Thomas
                                         -----------------------------------
                                     Title:   SR. VP - CFO
                                           ---------------------------------

Dated:     2-16-00                   By: /s/  [ILLEGIBLE]
                                         -----------------------------------
                                     Title:  CEO
                                           ---------------------------------


                                       4.
<PAGE>

                                    EXHIBIT C

                          FORM OF ESTOPPEL CERTIFICATE

__________________, 2000


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

Re        180 Rose Orchard Way
          San Jose, California

Ladies and Gentlemen:

Reference is made to that certain Lease, dated as of February __, 2000,
between CORPORATE TECHNOLOGY CENTRE ASSOCIATES II LLC, a California limited
liability company ("Landlord"), and the undersigned (herein referred to as
the "Lease"). A copy of the Lease [and all amendment thereto] is[are]
attached hereto as EXHIBIT A. At the request of Landlord in connection with
[___________STATE REASONS FOR REQUEST FOR ESTOPPEL CERTIFICATE], the
undersigned hereby certifies to Landlord and to [___________STATE NAMES
OF OTHER PARTIES REQUIRING CERTIFICATION] and each of your respective
successors and assigns as follows:

         1. The undersigned is the tenant under the Lease.

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

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

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

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

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

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

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

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

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

Very truly yours,


DIGITAL MICROWAVE CORPORATION


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


                                       1.
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</DOCUMENT>
