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                                                                  EXHIBIT 10.3

                                 LEASE AGREEMENT      BLDG: Marriott 5
                                                      OWNER:  500
                                                      PROP:   105
                                                      UNIT:   200
                                                      TENANT: 10502

     THIS LEASE, made this 16th day of October, 1997 between JOHN ARRILLAGA,
Trustee, or his Successor Trustee, UTA dated 7/20/77 (JOHN ARRILLAGA
SURVIVOR'S TRUST) as amended and RICHARD T. PEERY, Trustee, or his Successor
Trustee, UTA dated 7/20/77 (RICHARD T. PEERY SEPARATE PROPERTY TRUST) as
amended, hereinafter called Landlord, and TRIPATH TECHNOLOGY, INC., a
California corporation, hereinafter called Tenant.

                                   WITNESSETH:

     Landlord hereby leases to Tenant and Tenant hereby hires and takes from
Landlord those certain premises (the "Premises") outlined in red on Exhibit "A",
attached hereto and incorporated herein by this reference thereto more
particularly described as follows:

A portion of that certain 45,000 PLUS OR MINUS square foot, two-story
building located at 3900 Freedom Circle, Suite 200, Santa Clara, California
95054, consisting of approximately 23,440 PLUS OR MINUS square feet on the
first and second floors of the building. Said Premises is more particularly
shown within the area outlined in Red on EXHIBIT A attached hereto. The
entire parcel, of which the Premises is a part, is shown within the area
outlined in Green on EXHIBIT A attached. The Premises shall be improved by
Landlord as shown on EXHIBIT B to be attached hereto, and except as otherwise
provided herein, is leased on an "as-is" basis, in its present condition, and
in the configuration as shown in Red on EXHIBIT B attached hereto.

As used herein the Complex shall mean and include all of the land outlined in
Green and described in Exhibit "A", attached hereto, and all of the buildings,
improvements, fixtures and equipment now or hereafter situated on said land.

   Said letting and hiring is upon and subject to the terms, covenants and
conditions hereinafter set forth and Tenant covenants as a material part of the
consideration for this Lease to perform and observe each and all of said terms,
covenants and conditions. This Lease is made upon the conditions of such
performance and observance.

1. USE  Tenant shall use the Premises only in conformance with applicable
governmental laws, regulations, rules and ordinances for the purpose of
general office, light manufacturing, research and development, and storage
and other uses necessary for Tenant to conduct Tenant's business, provided
that such uses shall be in accordance with all applicable governmental laws
and ordinances and for no other purpose. Tenant shall not do or permit to be
done in or about the Premises or the Complex nor bring or keep or permit to
be brought or kept in or about the Premises or the Complex anything which is
prohibited by or will in any way increase the existing rate of (or otherwise
affect) fire or any insurance covering the Complex or any part thereof, or
any of its contents, or will cause a cancellation of any insurance covering
the Complex or any part thereof, or any of its contents. Tenant shall not do
or permit to be done anything in, on or about the Premises or the Complex
which will in any way obstruct or interfere with the rights of other tenants
or occupants of the Complex or injure or annoy them, or use or allow the
Premises to be used for any improper, immoral, unlawful or objectionable
purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or
about the Premises or the Complex. No sale by auction shall be permitted on
the Premises. Tenant shall not place any loads upon the floors, walls, or
ceiling, which endanger the structure, or place any harmful fluids or other
materials in the drainage system of the building, or overload existing
electrical or other mechanical systems. No waste materials or refuse shall be
dumped upon or permitted to remain upon any part of the Premises or outside
of the building in which the Premises are a part, except in trash containers
placed inside exterior enclosures designated by Landlord for that purpose or
inside of the building proper where designated by Landlord. No materials,
supplies, equipment, finished products or semi-finished products, raw
materials or articles of any nature shall be stored upon or permitted to
remain outside the Premises or on any portion of common area of the Complex.
No loudspeaker or other device, system or apparatus which can be heard
outside the Premises shall be used in or at the Premises without the prior
written consent of Landlord. Tenant shall not commit or suffer to be
committed any waste in or upon the Premises. Tenant shall indemnify, defend
and hold Landlord harmless against any loss, expense, damage, attorneys'
fees, or liability arising out of failure of Tenant to comply with any
applicable law. Tenant shall comply with any covenant, condition, or
restriction ("CC&R's") affecting the Premises. The provisions of this
paragraph are for the benefit of Landlord only and shall not be construed to
be for the benefit of any tenant or occupant of the Complex.

2. TERM *

     A. The term of the Lease shall be for a period of FIVE ( 5 ) years (unless
sooner terminated as hereinafter provided) and, subject to Paragraphs 2(B) and
3, shall commence on the 1st day of December, 1997 and end the 30th day
November, of 2002.

     B. Possession of the Premises shall be deemed tendered and the term of
this Lease shall commence when the first of the following occurs:

     (a) One day after a Certificate of Occupancy is granted by the proper
governmental agency, or, if the governmental agency having jurisdiction over the
area in which the Premises are situated does not issue certificates of
occupancy, then the same number of days after certification by Landlord's
architect or contractor that Landlord's construction work has been completed; or

     (b) Upon the occupancy of the Premises by any of Tenant's operating
personnel; or

     (c) When the Tenant Improvements have been substantially completed for
Tenant's use and occupancy, in accordance and compliance with Exhibit B of this
Lease Agreement; or

     (d) As otherwise agreed in writing.

3. POSSESSION  If Landlord, for any reason whatsoever, cannot deliver
possession of said premises to Tenant at the commencement of the said term,
as hereinbefore specified, this Lease shall not be void or voidable; no
obligation of Tenant shall be affected thereby; nor shall Landlord or
Landlord's agents be liable to Tenant for any loss or damage resulting
therefrom; but in that event the commencement and termination dates of the
Lease, and all other dates affected thereby shall be revised to conform to
the date of Landlord's delivery of possession, as specified in Paragraph
2(b), above. The above is, however, subject to the provision that the period
of delay, of delivery of the premises shall not exceed 30 days from the
commencement date herein (except those delays caused by Acts of God, strikes,
war, utilities, governmental bodies, weather, unavailable materials, and
delays beyond Landlord's control shall be excluded in calculating such
period) in which instance Tenant, at its option, may, by written notice to
Landlord, terminate this Lease.

* It is agreed in the event said Lease commences on a date other than the
first day of the month the term of the Lease will be extended to account for
the number of days in the partial month. The Basic Rent during the resulting
partial month will be pro-rated (for the number of days in the partial month)
at the Basic Rent scheduled for the projected commencement date as shown in
Paragraph 43.

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4. RENT

     A. BASIC RENT. Tenant agrees to pay to Landlord at such place as
Landlord may designate without deduction, offset, prior notice, or demand,
and Landlord agrees to accept as Basic Rent for the leased Premises the total
sum of THREE MILLION THREE HUNDRED FIVE THOUSAND FORTY AND NO/100
($3,305,040.00 ) Dollars in lawful money of the United States of America,
payable as follows:

     SEE PARAGRAPH 43 FOR BASIC RENT SCHEDULE

     B. TIME FOR PAYMENT. In the event that the term of this Lease commences on
a date other than the first day of a calendar month, on the date of commencement
of the term hereof Tenant shall pay to Landlord as rent for the period from such
date of commencement to the first day of the next succeeding calendar month that
proportion of the monthly rent hereunder which the number of days between such
date of commencement and the first day of the next succeeding calendar month
bears to thirty (30). In the event that the term of this Lease for any reason
ends on a date other than the last day of a calendar month, on the first day of
the last calendar month of the term hereof Tenant shall pay to Landlord as rent
for the period from said first day of said last calendar month to and including
the last day of the term hereof that proportion of the monthly rent hereunder
which the number of days between said first day of said last calendar month and
the last day of the term hereof bears to thirty (30).

     C. LATE CHARGE. Notwithstanding any other provision of this Lease, if
Tenant is in default in the payment of rental as set forth in this Paragraph 4
when due, or any part thereof, Tenant agrees to pay Landlord, in addition to the
delinquent rental due, a late charge for each rental payment in default ten (10)
days. Said late charge shall equal ten (10%) percent of each rental payment so
in default.

     D. ADDITIONAL RENT. Beginning with the commencement date of the term of
this Lease, Tenant shall pay to Landlord in addition to the Basic Rent and as
Additional Rent the following:

     (a) Tenant's proportionate share of all Taxes relating to the Complex as
         set forth in Paragraph 12, and

     (b) Tenant's proportionate share of all insurance premiums relating to
         the Complex, as set forth in Paragraph 15, and

     (c) Tenant's proportionate share of expenses for the operation,
         management, maintenance and repair of the Building (including common
         areas of the Building) and Common Areas of the Complex in which the
         Premises are located as set forth in Paragraph 7, and

     (d) All charges, costs and expenses, which Tenant is required to pay
         hereunder, together with all interest and penalties, costs and
         expenses including attorneys' fees and legal expenses, that may
         accrue thereto in the event of Tenant's failure to pay such amounts,
         and all damages, reasonable costs and expenses which Landlord may
         incur by reason of default of Tenant or failure on Tenant's part to
         comply with the terms of this Lease. In the event of nonpayment by
         Tenant of Additional Rent, Landlord shall have all the rights and
         remedies with respect thereto as Landlord has for nonpayment of rent.

The Additional Rent due hereunder shall be paid to Landlord or Landlord's
agent (i) within five days for taxes and insurance and within thirty days for
all other Additional Rent items after presentation of invoice from Landlord
or Landlord's agent setting forth such Additional Rent and/or (ii) at the
option of Landlord, Tenant shall pay to Landlord monthly, in advance,
Tenant's prorata share of an amount estimated by Landlord to be Landlord's
approximate average monthly expenditure for such Additional Rent items, which
estimated amount shall be reconciled within 120 days of the end of each
calendar year or more frequently if Landlord so elects to do so at Landlord's
sole and absolute discretion, as compared to Landlord's actual expenditure
for said Additional Rent items, with Tenant paying to Landlord, upon demand,
any amount of actual expenses expended by Landlord in excess of said
estimated amount, or Landlord crediting to Tenant (providing Tenant is not in
default in the performance of any of the terms, covenants and conditions of
this Lease) any amount of estimated payments made by Tenant in excess of
Landlord's actual expenditures for said Additional Rent items. Within thirty
(30) days after receipt of Landlord's reconciliation, Tenant shall have the
right, at Tenant's sole expense, to audit, at a mutually convenient time at
Landlord's office, Landlord's records relating to the foregoing expenses.
Such audit must be conducted by Tenant or an independent nationally
recognized accounting firm that is not being compensated by Tenant or other
third party on a contingency fee basis. Landlord shall be provided a complete
copy of said audit at no expense to Landlord. If such audit reveals that
Landlord has overcharged Tenant, the amount overcharged shall be credited to
Tenant's account within thirty (30) days after the audit is concluded.

     The respective obligations of Landlord and Tenant under this paragraph
shall survive the expiration or other termination of the term of this Lease, and
if the term hereof shall expire or shall otherwise terminate on a day other than
the last day of a calendar year, the actual Additional Rent incurred for the
calendar year in which the term hereof expires or otherwise terminates shall be
determined and settled on the basis of the statement of actual Additional Rent
for such calendar year and shall be prorated in the proportion which the number
of days in such calendar year preceding such expiration or termination bears to
365.

     E. FIXED MANAGEMENT FEE. Beginning with the Commencement Date of the Term
of this Lease, Tenant shall pay to Landlord, in addition to the Basic Rent and
Additional Rent, a fixed monthly management fee ("Management Fee") equal to 3%
of the Basic Rent due for each month during the Lease Term.

     F. PLACE OF PAYMENT OF RENT AND ADDITIONAL RENT. All basic Rent
hereunder and all payments hereunder for Additional Rent shall be paid to
Landlord at the office of Landlord at Peery/Arrillaga, File 1504, Box 60000,
San Francisco, CA 94160 or to such other person or to such other place as
Landlord may from time to time designate in writing.

     G. SECURITY DEPOSIT. Concurrently with Tenant's execution of this Lease,
Tenant shall deposit with Landlord the sum of ONE HUNDRED FOURTEEN THOUSAND
EIGHT HUNDRED FIFTY SIX AND NO/100 ($114,856.00) Dollars. Said sum shall be
held by Landlord as a Security Deposit for the faithful performance by Tenant
of all of the terms, covenants, and conditions of this Lease to be kept and
performed by Tenant during the term hereof. If Tenant defaults with respect
to any provision of this Lease, including, but not limited to, the provisions
relating to the payment of rent and any of the monetary sums due herewith,
Landlord may (but shall not be required to) use, apply or retain all or any
part of this Security Deposit for the payment of any other amount which
Landlord may spend by reason of Tenant's default or to compensate Landlord
for any other loss or damage which Landlord may suffer by reason of Tenant's
default. If any portion of said Deposit is so used or applied, Tenant shall,
within ten (10) days after written demand therefor, deposit cash with
Landlord in the amount sufficient to restore the Security Deposit to its
original amount. Tenant's failure to do so shall be a material breach of this
Lease. Landlord shall not be required to keep this Security Deposit separate
from its general funds, and Tenant shall not be entitled to interest on such
Deposit. If Tenant fully and faithfully performs every provision of this
Lease to be performed by it, the Security Deposit or any balance thereof
shall be returned to Tenant (or at Landlord's option, to the last assignee of
Tenant's interest hereunder) at the expiration of the Lease term and after
Tenant has vacated the Premises. In the event of termination of Landlord's
interest in this Lease, Landlord shall transfer said Deposit to Landlord's
successor in interest whereupon Tenant agrees to release Landlord from
liability for the return of such deposit or the accounting therefor.

     5. RULES AND REGULATIONS AND COMMON AREA  Subject to the terms and
conditions of this Lease and such Rules and Regulations as Landlord may from
time to time prescribe, Tenant and Tenant's employees, invitees and customers
shall, in common with other occupants of the Complex in which the Premises
are located, and their respective employees, invitees and customers, and
others entitled to the use thereof, have the non-exclusive right to use the
access roads, parking areas, and facilities provided and designated by
Landlord for the general use and convenience of the occupants of the Complex
in which the Premises are located, which areas and facilities are referred to
herein as "Common Area". This right shall terminate upon the termination of
this Lease. Landlord reserves the right from time to time to make changes in
the shape, size location, amount and extent of Common Area, provided such
change does not materially increase Tenant's obligations (financial or
otherwise) under the Lease and so long as such change does not materially
interfere with Tenant's occupancy of the Premises or parking rights. Landlord
further reserves the right to promulgate such reasonable rules and
regulations relating to the use of the Common Area, and any part or parts
thereof, as Landlord may deem appropriate for the best interests of the
occupants of the Complex. The Rules and Regulations shall be binding upon
Tenant upon delivery of a copy of them to Tenant, and Tenant shall abide by
them and cooperate in their observance. Such Rules and Regulations may be
amended by Landlord from time to time, with or without advance notice, and
all amendments shall be effective upon delivery of a copy to Tenant. Landlord
shall not be responsible to Tenant for the non-performance by any other
tenant or occupant of the Complex of any of said Rules and Regulations.

 Landlord shall operate, manage and maintain the Common Area. The
manner in which the Common Area shall be maintained and the expenditures for
such maintenance shall be at the discretion of Landlord.

* $57,428.00 cash due upon Lease execution.
  $57,428.00 Promissory Note due December 1, 1998.

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6. PARKING  Tenant shall have the right to use with other tenants or
occupants of the Complex 70 parking spaces in the common parking areas of the
Complex. Tenant agrees, that Tenant, Tenant's employees, agents,
representatives and/or invitees shall not use parking spaces in excess of
said 70 spaces allocated to Tenant hereunder. Landlord shall have the right,
at Landlord's sole discretion, to specifically designate the location of
Tenant's parking spaces within the common parking areas of the Complex in the
event of a dispute among the tenants occupying the building and/or Complex
referred to herein, in which event Tenant agrees that Tenant, Tenant's
employees, agents, representatives and/or invitees shall not use any parking
spaces other than those parking spaces specifically designated by Landlord
for Tenant's use. Said parking spaces, if specifically designated by Landlord
to Tenant, may be reasonably relocated by Landlord at any time, and from time
to time. Landlord reserves the right, at Landlord's sole discretion, to
rescind any specific designation of parking spaces, thereby returning
Tenant's parking spaces to the common parking area. Landlord shall give
Tenant written notice of any change in Tenant's parking spaces. Tenant shall
not, at any time, park, or permit to be parked, any trucks or vehicles
adjacent to the loading areas so as to interfere in any way with the use of
such areas, nor shall Tenant at any time park, or permit the parking of
Tenant's trucks or other vehicles or the trucks and vehicles of Tenant's
suppliers or others, in any portion of the common area not designated by
Landlord for such use by Tenant. Tenant shall not park nor permit to be
parked, any inoperative vehicles or equipment on any portion of the common
parking area or other common areas of the Complex. Tenant agrees to assume
responsibility for compliance by its employees with the parking provision
contained herein. If Tenant or its employees park in other than such
designated parking areas, then Landlord may charge Tenant, as an additional
charge, and Tenant agrees to pay, ten ($10.00) Dollars per day for each day
or partial day each such vehicle is parked in any area other than that
designated. Tenant hereby authorizes Landlord at Tenant's sole expense to tow
away from the Complex any vehicle belonging to Tenant or Tenant's employees
parked in violation of these provisions, or to attach violation stickers or
notices to such vehicles. Tenant shall use the parking areas for vehicle
parking only, and shall not use the parking areas for storage.

7. EXPENSES OF OPERATION, MANAGEMENT, AND MAINTENANCE OF THE COMMON AREAS OF
THE COMPLEX AND BUILDING IN WHICH THE PREMISES ARE LOCATED  As Additional
Rent and in accordance with Paragraph 4D of this Lease, Tenant shall pay to
Landlord Tenant's proportionate share (calculated on a square footage or
other equitable basis as calculated by Landlord) of all expenses of
operation, management, maintenance and repair of the Common Areas of the
Complex including, but not limited to, license, permit, and inspection fees;
security; utility charges associated with exterior landscaping and lighting
(including water and sewer charges); all charges incurred in the maintenance
and replacement of landscaped areas, lakes, parking lots and paved areas
(including repairs, replacement, resealing and restriping), sidewalks,
driveways; maintenance, repair and replacement of all fixtures and
electrical, mechanical, and plumbing systems; structural elements and
exterior surfaces of the buildings; salaries and employee benefits of
personnel and payroll taxes applicable thereto; supplies, materials,
equipment and tools; the cost of capital expenditures which have the effect
of reducing operating expenses, provided, however, that in the event Landlord
makes such capital improvements, Landlord may amortize its investment in said
improvements (together with interest at the rate of fifteen (15%) percent per
annum on the unamortized balance) as an operating expense in accordance with
standard accounting practices, provided, that such amortization is not at a
rate greater than the anticipated savings in the operating expenses.
     "Additional Rent" as used herein shall not include Landlord's debt
repayments; interest on charges; expenses directly or indirectly incurred by
Landlord for the benefit of any other tenant; cost for the installation of
partitioning or any other tenant improvements; cost of attracting tenants;
depreciation; interest, or executive salaries.
     As Additional Rent and in accordance with paragraph 4 D of this Lease,
Tenant shall pay its proportionate share (calculated on a square footage or
other equitable basis as calculated by Landlord) of the cost of operation
(including common utilities), management, maintenance, and repair of the
building (including common areas such as lobbies, restrooms, janitor's
closets, hallways, elevators, mechanical and telephone rooms, stairwells,
entrances, spaces above the ceilings and janitorization of said common areas)
in which the Premises are located. The maintenance items herein referred to
include, but are not limited to, all windows, window frames, plate glass,
glazing, truck doors, main plumbing systems of the building (such as water
and drain lines, sinks, toilets, faucets, drains, showers and water
fountains), main electrical systems (such as panels and conduits), heating
and airconditioning systems (such as compressors, fans, air handlers, ducts,
boilers, heaters), store fronts, roofs, downspouts, building common area
interiors (such as wall coverings, window coverings, floor coverings and
partitioning), ceilings, building exterior doors, skylights (if any),
automatic fire extinguishing systems, and elevators; license, permit, and
inspection fees; security; salaries and employee benefits of personnel and
payroll taxes applicable thereto; supplies, materials, equipment and tools;
the cost of capital expenditures which have the effect of reducing operating
expenses, provided, however, that in the event Landlord makes such capital
improvements, Landlord shall amortize its investment in said improvements
(together with interest at the rate of fifteen (15%) percent per annum on the
unamortized balance) as an operating expense in accordance with standard
accounting practices, provided, that such amortization is not at a rate
greater than the anticipated savings in the operating expenses. Tenant hereby
waives all rights under, and benefits of, subsection 1 of Section 1932 and
Sections 1941 and 1942 of the California Civil Code and under any similar
law, statute or ordinance now or hereafter in effect.

8. ACCEPTANCE AND SURRENDER OF PREMISES  By entry hereunder, Tenant accepts
the Premises as being in good and sanitary order, condition and repair and
accepts the building and improvements included in the Premises in their
present condition and without representation or warranty by Landlord as to
the condition of such building or as to the use or occupancy which may be
made thereof. Any exceptions to the foregoing must be by written agreement
executed by Landlord and Tenant. Tenant agrees on the last day of the Lease
term, or on the sooner termination of this Lease, to surrender the Premises
promptly and peaceably to Landlord in good condition and repair (damage by
Acts of God, fire, normal wear and tear excepted), with all interior walls
painted, or cleaned so that they appear freshly painted, and repaired and
replaced, if damaged; all floors cleaned and waxed; all carpets cleaned and
shampooed; the airconditioning and heating equipment serviced by a reputable
and licensed service firm and in good operating condition (provided the
maintenance of such equipment has been Tenant's responsibility during the
term of this Lease) together with all alterations, additions, and
improvements which may have been made in, to, or on the Premises (except
movable trade fixtures installed at the expense of Tenant) except that Tenant
shall ascertain from Landlord within thirty (30) days before the end of the
term of this Lease whether Landlord desires to have the Premises or any part
or parts thereof restored to their condition and configuration as when the
Premises were delivered to Tenant and if Landlord shall so desire, then
Tenant shall restore said Premises or such part or parts thereof before the
end of this Lease at Tenant's sole cost and expense. Tenant, on or before the
end of the term or sooner termination of this Lease, shall remove all of
Tenant's personal property and trade fixtures from the Premises, and all
property not so removed on or before the end of the term or sooner
termination of this Lease shall be deemed abandoned by Tenant and title to
same shall thereupon pass to Landlord without compensation to Tenant.
Landlord may, upon termination of this Lease, remove all moveable furniture
and equipment so abandoned by Tenant, at Tenant's sole cost, and repair any
damage caused by such removal at Tenant's sole cost. If the Premises be not
surrendered at the end of the term or sooner termination of this Lease,
Tenant shall indemnify Landlord against loss or liability resulting from the
delay by Tenant in so surrendering the Premises including, without
limitation, any claims made by any succeeding tenant founded on such delay.
Nothing contained herein shall be construed as an extension of the term
hereof or as a consent of Landlord to any holding over by Tenant. The
voluntary or other surrender of this Lease or the Premises by Tenant or a
mutual cancellation of this Lease shall not work as a merger and, at the
option of Landlord, shall either terminate all or any existing subleases or
subtenancies or operate as an assignment to Landlord of any such subleases or
subtenancies.

9. ALTERATIONS AND ADDITIONS  Tenant shall not make, or suffer to be made,
any alteration or addition to the Premises, or any part thereof, without the
written consent of Landlord first had and obtained by Tenant (which written
consent (i) shall not be unreasonably withheld, and (ii) will specify whether
Landlord shall require removal of said alterations and/or additions, provided
Tenant requests such determination from Landlord), but at the cost of Tenant,
and any addition to, or alteration of, the Premises, except moveable
furniture and trade fixtures, shall at once become a part of the Premises and
belong to Landlord. Landlord reserves the right to approve all contractors
and mechanics proposed by Tenant to make such alterations and additions.
Tenant shall retain title to all moveable furniture and trade fixtures placed
in the Premises. All heating, lighting, electrical, airconditioning, floor to
ceiling partitioning, drapery, carpeting, and floor installations made by
Tenant, together with all property that has become an integral part of the
Premises, shall not be deemed trade fixtures. Tenant agrees that it will not
proceed to make such alteration or additions, without having obtained consent
from Landlord to do so, and until five (5) days from the receipt of such
consent, in order that Landlord may post appropriate notices to avoid any
liability to contractors or material suppliers for payment for Tenant's
improvements. Tenant will at all times permit such notices to be posted and
to remain posted until the completion of work. Tenant shall, if required by
Landlord, secure at Tenant's own cost and expense, a completion and lien
indemnity bond, satisfactory to Landlord, for such work. Tenant further
covenants and agrees that any mechanic's lien filed against the Premises or
against the Complex for work claimed to have been done for, or materials
claimed to have been furnished to Tenant, will be discharged by Tenant, by
bond or otherwise, within ten (10) days after the filing thereof, at the cost
and expense of Tenant. Any exceptions to the foregoing must be made in
writing and executed by both Landlord and Tenant.

10. TENANT MAINTENANCE  Tenant shall, at its sole cost and expense, keep and
maintain the Premises (including appurtenances) and every part thereof in a
high standard of maintenance and repair, and in good and sanitary condition.
Tenant's maintenance and repair responsibilities herein referred to include,
but are not limited to, janitorization, plumbing systems within the
non-common areas exclusively serving the Premises (such as water and drain
lines, sinks), electrical systems within the non-common areas exclusively
serving the Premises (such as outlets, lighting fixtures, lamps, bulbs,
tubes, ballasts), heating and airconditioning controls within the non-common
areas exclusively serving the Premises (such as mixing boxes, thermostats,
time clocks, supply and return grills), all interior improvements within the
premises including but not limited to: wall coverings, window coverings,
acoustical ceilings, vinyl tile, carpeting, partitioning, doors (both
interior and exterior, including closing mechanisms, latches, locks), and all
other interior improvements of any nature whatsoever. Tenant agrees to
provide carpet shields under all rolling chairs or to otherwise be
responsible for wear and tear of the carpet caused by such rolling chairs if
such wear and tear exceeds that caused by normal foot traffic in surrounding
areas. Areas of excessive wear shall be replaced at Tenants sole expense upon
Lease termination.

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11. UTILITIES OF THE BUILDING IN WHICH THE PREMISES ARE LOCATED  As
Additional Rent and in accordance with paragraph 4 D of this Lease, Tenant
shall pay its proportionate share (calculated on a square footage or other
equitable basis as calculated by Landlord) of the cost of all utility charges
such as water, gas, electricity, telephone, telex and other electronic
communications service, sewer service, waste-pick-up and any other utilities,
materials or services furnished directly to the building in which the
Premises are located, including, without limitation, any temporary or
permanent utility surcharge or other exactions whether or not herein after
imposed.
     Landlord shall not be liable for and Tenant shall not be entitled to any
abatement or reduction of rent by reason of any interruption or failure of
utility services in the Premises when such interruption or failure is caused by
accident, breakage, repair, strikes, lockouts, or other labor disturbances or
labor disputes of any nature, or by any other cause, similar or dissimilar,
beyond the reasonable control of Landlord.
     Provided that Tenant is not in default in the performance or observance of
any of the terms, covenants or conditions of this Lease to be performed or
observed by it, Landlord shall furnish to the Premises between the hours of
8:00AM and 6:00PM, Mondays through Fridays (holidays excepted) and subject to
the rules and regulations of the Complex hereinbefore referred to, reasonable
quantities of water, gas and electricity suitable for the intended use of the
Premises and heat and airconditioning required in Landlord's judgment for the
comfortable use and occupation of the Premises for such purposes. Tenant agrees
that at all times it will cooperate fully with Landlord and abide by all
regulations and requirements that Landlord may prescribe for the proper
functioning and protection of the building heating, ventilating and
airconditioning systems. Whenever heat generating machines, equipment, or any
other devices (including exhaust fans) are used in the Premises by Tenant which
affect the temperature or otherwise maintained by the airconditioning system,
Landlord shall have the right to install supplementary airconditioning units in
the Premises and the cost thereof, including the cost of installation and the
cost of operation and maintenance thereof, shall be paid by Tenant to Landlord
upon demand by Landlord. Tenant will not, without the written consent of
Landlord, use any apparatus or device in the Premises (including, without
limitation), electronic data processing machines or machines using current in
excess of 110 Volts which will in any way increase the amount of electricity,
gas, water or airconditioning usually furnished or supplied to premises being
used as general office space, or connect with electric current (except through
existing electrical outlets in the Premises), or with gas or water pipes any
apparatus or device for the purposes of using electric current, gas, or water.
IF Tenant shall require water, gas, or electric current in excess of that
usually furnished or supplied to premises being used as general office space,
Tenant shall first obtain the written consent of Landlord, which consent shall
not be unreasonably withheld and Landlord may cause an electric current, gas, or
water meter to be installed in the Premises in order to measure the amount of
electric current, gas or water consumed for any such excess use. The cost of any
such meter and of the installation, maintenance and repair thereof, all charges
for such excess water, gas and electric current consumed (as shown by such
meters and at the rates then charged by the furnishing public utility); and any
additional expense incurred by Landlord in keeping account of electric current,
gas, or water so consumed shall be paid by Tenant, and Tenant agrees to pay
Landlord therefor promptly upon demand by Landlord.

12. TAXES  A. As Additional Rent and in accordance with Paragraph 4 D of this
Lease, Tenant shall pay to Landlord Tenant's proportionate share of all Real
Property Taxes, which prorata share shall be allocated to the leased Premises
by square footage or other equitable basis, as reasonably calculated by
Landlord. The term "Real Property Taxes", as used herein, shall mean (i) all
taxes, assessments, levies and other charges of any other kind or nature
whatsoever, general and special, foreseen and unforeseen (including all
installments 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 of the Complex) 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 against, or with respect to the
value, occupancy or use of, all or any portion of the Complex (as now
constructed or as may at any time hereafter be constructed, altered or
otherwise changed) or Landlord's interest therein; any improvements located
within the Complex (regardless of ownership); the fixtures, equipment and
other property of Landlord, real or personal, that are an integral part of
and located in the Complex; or parking areas, public utilities, or energy
within the Complex; (ii) all charges, levies or fees imposed by reason of
environmental regulation or other governmental control of the Complex; and
(iii) all costs and fees (including attorneys' fees) 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 term of this Lease the
taxation or assessment of the Complex prevailing as of the commencement date
of this Lease shall be altered so that in lieu of or in addition to any Real
Property Tax described above there shall be levied, assessed 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 or
additional tax or charge (i) on the value, use or occupancy of the Complex or
Landlord's interest therein or (ii) on or measured by the gross receipts,
income or rentals from the Complex, on Landlord's business of leasing the
Complex, or computed in any manner with respect to the operation of the
Complex, then any such tax or charge, however designated, shall be included
within the meaning of the term "Real Property Taxes" for purposes of this
Lease. If any Real Property Tax is based upon property or rents unrelated to
the Complex, then only that part of such real Property Tax that is fairly
allocable to the Complex shall be included within the meaning of the term
"Real Property Taxes". Notwithstanding the foregoing, the term "Real Property
Taxes" shall not include estate, inheritance, gift or franchise taxes of
Landlord or the federal or state net income tax imposed on Landlord's income
from all sources.

     B. TAXES ON TENANT'S PROPERTY
(a) Tenant shall be liable for and shall pay ten days before delinquency,
taxes levied against any personal property or trade fixtures placed by Tenant
in or about the Premises. If any such taxes on Tenant's personal property or
trade fixtures are levied against Landlord or Landlord's property or if the
assessed value of the Premises is increased by the inclusion therein of a
value placed upon such personal property or trade fixtures of Tenant and if
Landlord, after written notice to Tenant, pays the taxes based on such
increased assessment, which Landlord shall have the right to do regardless of
the validity thereof, but only under proper protest if requested by Tenant,
Tenant shall upon demand, as the case may be, repay to Landlord the taxes so
levied against Landlord, or the proportion of such taxes resulting from such
increase in the assessment; provide that in any such event Tenant shall have
the right, in the name of Landlord and with Landlord's full cooperation, to
bring suit in any court of competent jurisdiction to recover the amount of
any such taxes so paid under protest, and any amount so recovered shall
belong to Tenant.
(b) If the Tenant improvements in the Premises, whether installed, and/or
paid for by Landlord or Tenant and whether or not affixed to the real
property so as to become a part thereof, are assessed for real property tax
purposes at a valuation higher than the valuation at which standard office
improvements in other space in the Complex are assessed, then the real
property taxes and assessments levied against Landlord or the Complex by
reason of such excess assessed valuation shall be deemed to be taxes levied
against personal property of Tenant and shall be governed by the provisions
of 12Ba, above. If the records of the County Assessor are available and
sufficiently detailed to serve as a basis for determining whether said Tenant
improvements are assessed at higher valuation than standard office
improvements in other space in the Complex, such records shall be binding on
both the Landlord and the Tenant. If the records of the County Assessor are
not available or sufficiently detailed to serve as a basis for making said
determination, the actual cost of construction shall be used.

13. LIABILITY INSURANCE  Tenant, at Tenant's expense, agrees to keep in force
during the term of this Lease a policy of commercial general liability
insurance with a combined single limit coverage of not less than Two Million
Dollars ($2,000,000) per occurrence for injuries to or death of persons
occurring in, on or about the Premises or the Complex, and property damage.
The policy or policies affecting such insurance, certificates of insurance of
which shall be furnished to Landlord, shall name Landlord as additional
insureds, and shall insure any liability of Landlord, contingent or
otherwise, as respects acts or omissions of Tenant, its agents, employees or
invitees or otherwise by any conduct or transactions of any of said persons
in or about or concerning the Premises, including any failure of Tenant to
observe or perform any of its obligations hereunder; shall be issued by an
insurance company admitted to transact business in the State of California;
and shall provide that the insurance effected thereby shall not be canceled,
except upon thirty (30) days' prior written notice to Landlord. If, during
the term of this Lease, in the considered opinion of Landlord's Lender, or
insurance advisor, or counsel, the amount of insurance described in this
paragraph 13 is not adequate, Tenant agrees to increase said coverage to such
reasonable amount as Landlord's Lender, insurance advisor, or counsel shall
deem adequate.

14. TENANT'S PERSONAL PROPERTY INSURANCE AND WORKMAN'S COMPENSATION INSURANCE
Tenant shall maintain a policy or policies of fire and property damage insurance
in "all risk" form with a sprinkler leakage endorsement insuring the personal
property, inventory, trade fixtures, and leasehold improvements within the
leased Premises for the full replacement value thereof. The proceeds from any of
such policies shall be used for the repair or replacement of such items so
insured.
     Tenant shall also maintain a policy or policies of workman's
compensation insurance and any other employee benefit insurance sufficient to
comply with all laws.

15. PROPERTY INSURANCE  Landlord shall purchase and keep in force and as
Additional Rent and in accordance with Paragraph 4D of this Lease, Tenant
shall pay to Landlord (or Landlord's agent if so directed by Landlord)
Tenant's proportionate share (calculated on a square footage or other
equitable basis as calculated by Landlord) of the deductibles on insurance
claims and the cost of policy or policies of insurance covering loss or
damage to the Premises and Complex in the amount of the full replacement
value thereof, providing protection against those perils included within the
classification of "all risks" insurance and flood and/or earthquake
insurance, if available, plus a policy of rental income insurance in the
amount of one hundred (100%) percent of twelve (12) months Basic Rent, plus
sums paid as Additional Rent. If such insurance cost is increased due to
Tenant's use of the Premises or the Complex, Tenant agrees to pay to Landlord
the full cost of such increase. Tenant shall have no interest in nor any
right to the proceeds of any insurance procured by Landlord for the Complex.
     Landlord and Tenant do each hereby respectively release the other, to the
extent of the insurance coverage of the releasing party, from any liability for
loss or damage caused by fire or any of the extended coverage casualties
included in the releasing party's insurance policies, irrespective of the cause
of such fire or casualty; provided, however, that if the insurance policy of
either releasing party prohibits such waiver, then this waiver shall not take
effect until consent to such waiver is obtained. If such waiver is so
prohibited, the insured party affected shall promptly notify the other party
thereof.

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16. INDEMNIFICATION  Landlord shall not be liable to Tenant and Tenant hereby
waives all claims against Landlord for any injury to or death of any person
or damage to or destruction of property in or about the Premises or the
Complex by or from any cause whatsoever, including, without limitation, gas,
fire, oil, electricity or leakage of any character from the roof, walls,
basement or other portion of the Premises or the Complex but excluding,
however, the willful misconduct or negligence of Landlord, its agents,
servants, employees, invitees, or contractors of which negligence Landlord
has knowledge and reasonable time to correct. Except as to injury to persons
or damage to property to the extent arising from the willful misconduct or
the negligence of Landlord, its agents, servants, employees, invitees, or
contractors, Tenant shall hold Landlord harmless from and defend Landlord
against any and all expenses, including reasonable attorneys' fees, in
connection therewith, arising out of any injury to or death of any person or
damage to or destruction of property occurring in, on or about the Premises,
or any part thereof, from any cause whatsoever.

17. COMPLIANCE  Tenant, at its sole cost and expense, shall promptly comply
with all laws, statutes, ordinances and governmental rules, regulations or
requirements now or hereafter in effect; with the requirements of any board
of fire underwriters or other similar body now or hereafter constituted; and
with any direction or occupancy certificate issued pursuant to law by any
public officer; provided, however, that no such failure shall be deemed a
breach of the provisions if Tenant, immediately upon notification, commences
to remedy or rectify said failure. The judgment of any court of competent
jurisdiction or the admission of Tenant in any action against Tenant, whether
Landlord be a party thereto or not, that Tenant has violated any such law,
statute, ordinance or governmental rule, regulation, requirement, direction
or provision, shall be conclusive of that fact as between Landlord and
Tenant. This paragraph shall not be interpreted as requiring Tenant to make
structural changes or improvements, except to the extent such changes or
improvements are required as a result of Tenant's use of the Premises. Tenant
shall, at its sole cost and expense, comply with any and all requirements
pertaining to said Premises, of any insurance organization or company,
necessary for the maintenance of reasonable fire and public liability
insurance covering the Premises.

18. LIENS  Tenant shall keep the Premises and the Complex free from any liens
arising out of any work performed, materials furnished or obligation incurred
by Tenant. In the event that Tenant shall not, with ten (10) days following
the imposition of such lien, cause the same to be released of record,
Landlord shall have, in addition to all other remedies provided herein and by
law, the right, but no obligation, to cause the same to be released by such
means as it shall deem proper, including payment of the claim giving rise to
such lien. All sums paid by Landlord for such purpose, and all expenses
incurred by it in connection therewith, shall be payable to Landlord by
Tenant on demand with interest at the prime rate of interest as quoted by the
Bank of America.

19. ASSIGNMENT AND SUBLETTING  Tenant shall not assign, transfer, or
hypothecate the leasehold estate under this Lease, or any interest therein,
and shall not sublet the Premises, or any part thereof, or any right or
privilege appurtenant thereto, or suffer any other person or entity to occupy
or use the Premises, or any portion thereof, without, in each case, the prior
written consent of Landlord which consent will not be unreasonably withheld.
As a condition for granting this consent to any assignment, transfer, or
subletting, Landlord shall require Tenant to pay Landlord, as Additional
Rent, all rents and/or additional consideration due Tenant from its
assignees, transferees, or subtenants in excess of the Rent payable by Tenant
to Landlord hereunder for the assigned, transferred, and/or subleased space.
Tenant shall, by thirty (30) days' written notice, advise Landlord of its
intent to assign or transfer Tenant's interest in the Lease or sublet the
Premises or any portion thereof for any part of the term hereof. Within
thirty (30) days after receipt of said written notice, Landlord may, in its
sole discretion, elect to terminate this Lease as to the portion of the
Premises described in Tenant's notice on the date specified in Tenant's
notice by giving written notice of such election to terminate. If no such
notice to terminate is given to Tenant within said thirty (30) day period,
Tenant may proceed to locate an acceptable sublessee, assignee, or other
transferee for presentment to Landlord for Landlord's approval, all in
accordance with the terms, covenants, and conditions of this paragraph 19. If
Tenant intends to sublet the entire Premises and Landlord elects to terminate
this Lease, this Lease shall be terminated on the date specified in Tenant's
notice. If, however, this Lease shall terminate pursuant to the foregoing
with respect to less than all the Premises, the rent, as defined and reserved
hereinabove shall be adjusted on a pro rata basis to the number of square
feet retained by Tenant, and this Lease as so amended shall continue in full
force and effect. In the event Tenant is allowed to assign, transfer or
sublet the whole or any part of the Premises, with the prior written consent
of Landlord, no assignee, transferee or subtenant shall assign or transfer
this Lease, either in whole or in part, or sublet the whole or any part of
the Premises, without also having obtained the prior written consent of
Landlord. A consent of Landlord to one assignment, transfer, hypothecation,
subletting, occupation or use by any other person shall not release Tenant
from any of Tenant's obligations hereunder or be deemed to be a consent to
any subsequent similar or dissimilar assignment, transfer, hypothecation,
subletting, occupation or use by any other person. Any such assignment,
transfer, hypothecation, subletting, occupation or use without such consent
shall be void and shall constitute a breach of this Lease by Tenant and
shall, at the option of Landlord exercised by written notice to Tenant,
terminate this Lease. The leasehold estate under this Lease shall not, nor
shall any interest therein, be assignable for any purpose by operation of law
without the written consent of Landlord. As a condition to its consent,
Landlord shall require Tenant to pay all expenses in connection with the
assignment, and Landlord shall require Tenant's assignee or transferee (or
other assignees or transferees) to assume in writing all of the obligations
under this Lease and for Tenant to remain liable to Landlord under the Lease.
     Notwithstanding the above, in no event will Landlord consent to a
sub-sublease.

20. SUBORDINATION AND MORTGAGES  In the event Landlord's title or leasehold
interest is now or hereafter encumbered by a deed of trust, upon the interest
of Landlord in the land and buildings in which the demised Premises are
located, to secure a loan from a lender (hereinafter referred to as "Lender")
to Landlord, Tenant shall, at the request of Landlord or Lender, execute in
writing an agreement subordinating its rights under this Lease to the lien of
such deed of trust, or, if so requested, agreeing that the lien of Lender's
deed of trust shall be or remain subject and subordinate to the rights of
Tenant under this Lease. Notwithstanding any such subordination, Tenant's
possession under this Lease shall not be disturbed if Tenant is not in
default and so long as Tenant shall pay all rent and observe and perform all
of the provisions set forth in this Lease.

21. ENTRY BY LANDLORD  Landlord reserves, and shall at all reasonable times
after at least 24 hours notice (except in emergencies) have, the right to
enter the Premises to inspect them; to perform any services to be provided by
Landlord hereunder; to submit the Premises to prospective purchasers,
mortgagers or tenants; to post notices of nonresponsibility; and to alter,
improve or repair the Premises and any portion of the Complex, all without
abatement of rent; and may erect scaffolding and other necessary structures
in or through the Premises where reasonably required by the character of the
work to be performed; provided, however that the business of Tenant shall be
interfered with to the least extent that is reasonably practical. For each of
the foregoing purposes, any entry to the Premises obtained by Landlord by any
of said means, or otherwise, shall not under any circumstances be construed
or deemed to be a forcible or unlawful entry into or a detainer of the
Premises or an eviction, actual or constructive, of Tenant from the Premises
or any portion thereof. Landlord shall also have the right at any time to
change the arrangement or location of entrances or passageways, doors and
doorways, and corridors, elevators, stairs, toilets or other public parts of
the Complex and to change the name, number or designation by which the
Complex is commonly known, and none of the foregoing shall be deemed an
actual or constructive eviction of Tenant, or shall entitle Tenant to any
reduction of rent hereunder.

22. BANKRUPTCY AND DEFAULT  The commencement of a bankruptcy action or
liquidation action or reorganization action or insolvency action or an
assignment of or by Tenant for the benefit of creditors, or any similar action
undertaken by Tenant, or the insolvency of Tenant, shall, at Landlord's option,
constitute a breach of this Lease by Tenant. If the trustee or receiver
appointed to serve during a bankruptcy, liquidation, reorganization, insolvency
or similar action elects to reject Tenant's unexpired Lease, the trustee or
receiver shall notify Landlord in writing of its election within thirty (30)
days after an order for relief in a liquidation action or within thirty (30)
days after the commencement of any action.
     Within thirty (30) days after court approval of the assumption of this
Lease, the trustee or receiver shall cure (or provide adequate assurance to
the reasonable satisfaction of Landlord that the trustee or receiver shall
cure) any and all previous defaults under the unexpired Lease and shall
compensate Landlord for all actual pecuniary loss and shall provide adequate
assurance of future performance under said Lease to the reasonable
satisfaction of Landlord. Adequate assurance of future performance, as used
herein, includes, but shall not be limited to: (i) assurance of source and
payment of rent, and other consideration due under this Lease; (ii) assurance
that the assumption or assignment of this Lease will not breach substantially
any provision, such as radius, location, use, or exclusivity provision, in
any agreement relating to the above described Premises.
     Nothing contained in this section shall affect the existing right of
Landlord to refuse to accept an assignment upon commencement of or in
connection with a bankruptcy, liquidation, reorganization or insolvency
action or an assignment of Tenant for the benefit of creditors or other
similar act. Nothing contained in this Lease shall be construed as giving or
granting or creating an equity in the demised Premises to Tenant. In no event
shall the leasehold estate under this Lease, or any interest therein, be
assigned by voluntary or involuntary bankruptcy proceeding without the prior
written consent of Landlord. In no event shall this Lease or any rights or
privileges hereunder be an asset of Tenant under any bankruptcy, insolvency
or reorganization proceedings.
     The failure to perform or honor any covenant, condition or
representation made under this Lease shall constitute a default hereunder by
Tenant upon expiration of the appropriate grace period hereinafter provided.
Tenant shall have a period of five (5) days from the date of written notice
from Landlord within which to cure any default in the payment of rental or
adjustment thereto. Tenant shall have a period of thirty (30) days from the
date of the written notice from Landlord within which to cure any other
default under this Lease. Upon an uncured default of this Lease by Tenant,
Landlord shall have the following rights and remedies in addition to any
other rights or remedies available to Landlord at law or in equity:
     (a). The rights and remedies provided for by California Civil Code Section
1951.2, including but not limited to, recovery of 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 rental loss for the same period that Tenant
proves could be reasonably avoided, as computed pursuant to subsection (b) of
said Section 1951.2. Any proof by Tenant under subparagraphs (2) and (3) of
Section 1951.2 of the California Civil Code of the amount of rental loss that
could be reasonably avoided shall be made in the following manner: Landlord and
Tenant shall each select a licensed real estate broker in the business of
renting property of the same type and use as the Premises and in the same
geographic vicinity. Such two real estate brokers shall select a third licensed
real estate

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broker, and the three licensed real estate brokers so selected shall determine
the amount of the rental loss that could be reasonably avoided from the balance
of the term of this Lease after the time of award. The decision of the majority
of said licensed real estate brokers shall be final and binding upon the parties
hereto.
     (b). The rights and remedies provided by California Civil Code Section
which allows Landlord to continue the Lease in effect and to enforce all of
its rights and remedies under this Lease, including the right to recover rent
as it becomes due, for so long as Landlord does not terminate Tenant's right
to possession; acts of maintenance or preservation, efforts to relet the
Premises, or the appointment of a receiver upon Landlord's initiative to
protect its interest under this Lease shall not constitute a termination of
Tenant's right to possession.
     (c). The right to terminate this Lease by giving notice to Tenant in
accordance with applicable law.
     (d). To the extent permitted by law the right and power to enter the
Premises and remove therefrom all persons and property, to store such
property in a public warehouse or elsewhere at the cost of and for the
account of Tenant, and to sell such property and apply such proceeds
therefrom pursuant to applicable California law. Landlord may from time to
time sublet the Premises or any part thereof for such term or terms (which
may extend beyond the term of this Lease) and at such rent and such other
terms as Landlord in its sole discretion may deem advisable, with the right
to make alterations and repairs to the Premises. Upon each subletting, (i)
Tenant shall be immediately liable to pay Landlord, in addition to
indebtedness other than rent due hereunder, the cost of such subletting,
including, but not limited to, reasonable attorneys' fees, and any real
estate commissions actually paid, and the cost of such alterations and
repairs incurred by Landlord and the amount, if any, by which the rent
hereunder for the period of such subletting (to the extent such period does
not exceed the term hereof) exceeds the amount to be paid as rent for the
Premises for such period or (ii) at the option of Landlord, rents received
from such subletting shall be applied first to payment of indebtedness other
than rent due hereunder from Tenant to Landlord; second, to the payment of
any costs of such subletting and alterations and repairs; third to payment of
rent due and unpaid hereunder; and the residue, if any, shall be held by
Landlord and applied in payment of future rent as the same becomes due
hereunder. If Tenant has been credited with any rent to be received by such
subletting under option (i) and such rent shall not be promptly paid to
Landlord by the subtenant(s), or if such rentals received from such
subletting under option (ii) during any month be less than that to be paid
during that month by Tenant hereunder, Tenant shall pay any such deficiency
to Landlord. Such deficiency shall be calculated and paid monthly. For all
purposes set forth in this subparagraph d..No taking possession of the
Premises by Landlord, shall be construed as an election on its part to
terminate this Lease unless a written notice of such intention be given to
Tenant. Notwithstanding any such subletting without termination, Landlord may
at any time hereafter elect to terminate this Lease for such previous breach.
     (e). The right to have a receiver appointed for Tenant upon application
by Landlord, to take possession of the Premises and to apply any rental
collected from the Premises and to exercise all other rights and remedies
granted to Landlord pursuant to subparagraph d. above.

23. ABANDONMENT  Tenant shall not vacate or abandon the Premises at any time
during the term of this Lease and if Tenant shall abandon, vacate or
surrender said Premises, or be dispossessed by the process of law, or
otherwise, any personal property belonging to Tenant and left on the Premises
shall be deemed to be abandoned, at the option of Landlord, except such
property as may be mortgaged to Landlord.

24. DESTRUCTION  In the event the Premises are destroyed in whole or in part
from any cause, except for routine maintenance and repairs and incidental
damage and destruction caused from vandalism and accidents for which Tenant
is responsible for under Paragraph 10, Landlord may, at its option:
     (a) Rebuild or restore the Premises to their condition prior to the damage
or destruction, or
     (b) Terminate this Lease. (providing that the Premises is damaged to the
extent of 33 1/3% of the replacement cost)
     If Landlord does not give Tenant notice in writing within thirty (30)
days from the destruction of the Premises of its election to either rebuild
and restore them, or to terminate this Lease, Landlord shall be deemed to
have elected to rebuild or restore them, in which event Landlord agrees, at
its expense, promptly to rebuild or restore the Premises to their condition
prior to the damage or destruction. Tenant shall be entitled to a reduction
in rent while such repair is being made in the proportion that the area of
the Premises rendered untenantable by such damage bears to the total area of
the Premises. If Landlord initially estimates that the rebuilding or
restoration will exceed 180 days or if Landlord does not complete the
rebuilding or restoration within one hundred eighty (180) days following the
date of destruction (such period of time to be extended for delays caused by
the fault or neglect of Tenant or because of Acts of God, acts of public
agencies, labor disputes, strikes, fires, freight embargoes, rainy or stormy
weather, inability to obtain materials, supplies or fuels, acts of
contractors or subcontractors, or delay of the contractors or subcontractors
due to such causes or other contingencies beyond the control of Landlord),
then Tenant shall have the right to terminate this Lease by giving fifteen
(15) days prior written notice to Landlord. Notwithstanding anything herein
to the contrary, Landlord's obligation to rebuild or restore shall be limited
to the building and interior improvements constructed by Landlord as they
existed as of the commencement date of the Lease and shall not include
restoration of Tenant's trade fixtures, equipment, merchandise, or any
improvements, alterations or additions made by Tenant to the Premises, which
Tenant shall forthwith replace or fully repair at Tenant's sole cost and
expense provided this Lease is not cancelled according to the provisions
above.
     Unless this Lease is terminated pursuant to the foregoing provisions,
this Lease shall remain in full force and effect. Tenant hereby expressly
waives the provisions of Section 1932, Subdivision 2, in Section 1933,
Subdivision 4 of the California Civil Code.
     In the event that the building in which the Premises are situated is
damaged or destroyed to the extent of not less than 33 1/3% of the
replacement cost thereof, Landlord may elect to terminate this Lease, whether
the Premises be injured or not. Notwithstanding anything to the contrary
herein, Landlord may terminate this Lease in the event of an uninsured event
or if insurance proceeds are insufficient to cover 100% of the rebuilding
costs net of the deductible.

25. EMINENT DOMAIN  If all or any part of the Premises shall be taken by any
public or quasi-public authority under the power of eminent domain or
conveyance in lieu thereof, this Lease shall terminate as to any portion of
the Premises so taken or conveyed on the date when title vests in the
condemnor, and Landlord shall be entitled to any and all payment, income,
rent, award, or any interest therein whatsoever which may be paid or made in
connection with such taking or conveyance, and Tenant shall have no claim
against Landlord or otherwise for the value of any unexpired term of this
Lease. Notwithstanding the foregoing paragraph, any compensation specifically
awarded Tenant for loss of business, Tenant's personal property, moving cost
or loss of good will, shall be and remain the property of Tenant.
     If (i) any action or proceeding is commenced for such taking of the
Premises or any part thereof, or if Landlord is advised in writing by any
entity or body having the right or power of condemnation of its intention to
condemn the premises or any portion thereof, or (ii) any of the foregoing
events occur with respect to the taking of any space in the Complex not
leased hereby, or if any such spaces so taken or conveyed in lieu of such
taking and Landlord shall decide to discontinue the use and operation of the
Complex, or decide to demolish, alter or rebuild the Complex, then, in any of
such events Landlord shall have the right to terminate this Lease by giving
Tenant written notice thereof within sixty (60) days of the date of receipt
of said written advice, or commencement of said action or proceeding, or
taking conveyance, which termination shall take place as of the first to
occur of the last day of the calendar month next following the month in which
such notice is given or the date on which title to the Premises shall vest in
the condemnor.
     In the event of such a partial taking or conveyance of the Premises, if the
portion of the Premises taken or conveyed is so substantial that the Tenant can
no longer reasonably conduct its business, Tenant shall have the privilege of
terminating this Lease within sixty (60) days from the date of such taking or
conveyance, upon written notice to Landlord of its intention so to do, and upon
giving of such notice this Lease shall terminate on the last day of the calendar
month next following the month in which such notice is given, upon payment by
Tenant of the rent from the date of such taking or conveyance to the date of
termination.
     If a portion of the Premises be taken by condemnation or conveyance in lieu
thereof and neither Landlord nor Tenant shall terminate this Lease as provided
herein, this Lease shall continue in full force and effect as to the part of the
Premises not so taken or conveyed, and the rent herein shall be apportioned as
of the date of such taking or conveyance so that thereafter the rent to be paid
by Tenant shall be in the ratio that the area of the portion of the Premises not
so taken or conveyed bears to the total area of the Premises prior to such
taking.

26. SALE OR CONVEYANCE BY LANDLORD  In the event of a sale or conveyance of
the Complex or any interest therein, by any owner of the reversion then
constituting Landlord, the transferor shall thereby be released from any
further liability upon any of the terms, covenants or conditions (express or
implied) herein contained in favor of Tenant, and in such event, insofar as
such transfer is concerned, Tenant agrees to look solely to the
responsibility of the successor in interest of such transferor in and to the
Complex and this Lease. This Lease shall not be affected by any such sale or
conveyance, and Tenant agrees to attorn to the successor in interest of such
transferor.

27. ATTORNMENT TO LENDER OR THIRD PARTY  In the event the interest of
Landlord in the land and buildings in which the leased Premises are located
(whether such interest of Landlord is a fee title interest or a leasehold
interest) is encumbered by deed of trust, and such interest is acquired by
the lender or any third party through judicial foreclosure or by exercise of
a power of sale at private trustee's foreclosure sale, Tenant hereby agrees
to attorn to the purchaser at any such foreclosure sale and to recognize such
purchaser as the Landlord under this Lease. In the event the lien of the deed
of trust securing the loan from a Lender to Landlord is prior and paramount
to the Lease, this Lease shall nonetheless continue in full force and effect
for the remainder of the unexpired term hereof, at the same rental herein
reserved and upon all the other terms, conditions and covenants herein
contained.

28. HOLDING OVER  Any holding over by Tenant after expiration or other
termination of the term of this Lease with the written consent of Landlord
delivered to Tenant shall not constitute a renewal or extension of the Lease
or give Tenant any rights in or to the leased Premises except as expressly
provided in this Lease. Any holding over after the expiration or other
termination of the term of this Lease, with the consent of Landlord, 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 monthly
Basic Rent shall be increased to an amount equal to one hundred fifty (150%)
percent of the monthly Basic Rent required during the last month of the Lease
term.

                                 page 6 of 8
                                                           INITIAL
                                                         [ILLEGIBLE]
                                                         [ILLEGIBLE]

<PAGE>

29. CERTIFICATE OF ESTOPPEL  Tenant shall at any time upon not less than ten
(10) days' prior written notice from Landlord execute, acknowledge and
deliver to Landlord a statement in writing (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) and the date to which the rent and other charges are
paid in advance, if any, and (ii) 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. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Premises. Tenant's failure to deliver such statement within such time shall
be conclusive upon Tenant that this Lease is in full force and effect,
without modification except as may be represented by Landlord; that there are
no uncured defaults in Landlord's performance, and that not more than one
month's rent has been paid in advance.

30. CONSTRUCTION CHANGES  It is understood that the description of the
Premises and the location of ductwork, plumbing and other facilities therein
are subject to such minor changes as Landlord or Landlord's architect
determines to be desirable in the course of construction of the Premises, and
no such changes, or any changes in plans for any other portions of the
Complex shall affect this Lease or entitle Tenant to any reduction of rent
hereunder or result in any liability of Landlord to Tenant. Landlord does not
guarantee the accuracy of any drawings supplied to Tenant and verification of
the accuracy of such drawings rests with Tenant.

31. RIGHT OF LANDLORD TO PERFORM  All terms, covenants and conditions of this
Lease to be performed or observed by Tenant shall be performed or observed by
Tenant at Tenant's sole cost and expense and without any reduction of rent.
If Tenant shall fail to pay any sum of money, or other rent, required to be
paid by it hereunder and such failure shall continue for five (5) days after
written notice by Landlord, or shall fail to perform any other term or
covenant hereunder on its part to be performed, and such failure shall
continue for thirty (30) days after written notice thereof by Landlord.
Landlord, without waiving or releasing Tenant from any obligations of Tenant
hereunder, may, but shall not be obligated to, make any such payment or
perform any such other term or covenant on Tenant's part to be performed. All
sums so paid by Landlord and all necessary costs of such performance by
Landlord together with interest thereon at the rate of the prime rate of
interest per annum as quoted by the Bank of America from the date of such
payment or performance by Landlord, shall be paid (and Tenant covenants to
make such payment) to Landlord on demand by Landlord, and Landlord shall have
(in addition to any other right or remedy of Landlord) the same rights and
remedies in the event of nonpayment by Tenant as in the case of failure by
Tenant in the payment of rent hereunder.

32. ATTORNEYS' FEES.
     (A) In the event that either Landlord or Tenant should bring suit for the
possession of the Premises, for the recovery of any sum due under this Lease, or
because of the breach of any provision of this Lease, or for any other relief
against the other party hereunder, then all costs and expenses, including
reasonable attorneys' fees, incurred by the prevailing party therein shall be
paid by the other party, which obligation on the part of the other party shall
be deemed to have accrued on the date of the commencement of such action and
shall be enforceable whether or not the action is prosecuted to judgement.
     (B) Should Landlord be named as a defendant in any suit brought against
Tenant in connection with or arising out of Tenant's occupancy hereunder, Tenant
shall pay to Landlord its costs and expenses incurred in such suit, including a
reasonable attorney's fee.

33. WAIVER  The waiver by either party of the other party's failure to
perform or observe any term, covenant or condition herein contained to be
performed or observed by such waiving party shall not be deemed to be a
waiver of such term, covenant or condition or of any subsequent failure of
the party failing to perform or observe the same or any other such term,
covenant or condition therein contained, and no custom or practice which may
develop between the parties hereto during the term hereof shall be deemed a
waiver of, or in any way affect, the right of either party to insist upon
performance and observance by the other party in strict accordance with the
terms hereof.

34. NOTICES  All notices, demands, requests, advices or designations which
may be or are required to be given by either party to the other hereunder
shall be in writing. All notices, demands, requests, advices or designations
by Landlord to Tenant shall be sufficiently given, made or delivered if
personally served on Tenant by leaving the same at the Premises or if sent by
United States certified or registered mail, postage prepaid, addressed to
Tenant at the Premises. All notices demands, requests, advices or
designations by Tenant to Landlord shall be sent by United States certified
or registered mail, postage prepaid, addressed to Landlord at its offices at
Peery/Arrillaga, 2560 Mission College Blvd., Suite 101, Santa Clara, CA
95054. Each notice, request, demand, advice or designation referred to in
this paragraph shall be deemed received on the date of the personal service
or mailing thereof in the manner herein provided, as the case may be.

35. EXAMINATION OF LEASE  Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or option for a
lease, and this instrument is not effective as a lease or otherwise until its
execution and delivery by both Landlord and Tenant.

36. DEFAULT BY LANDLORD  Landlord shall not be in default unless Landlord
fails to perform obligations required of Landlord within a reasonable time,
but in no event earlier than thirty (30) days after written notice by Tenant
to Landlord and to the holder of any first mortgage or deed of trust covering
the Premises whose name and address shall have heretofore been furnished to
Tenant in writing, specifying wherein Landlord has failed to perform such
obligations; provided, however, that if the nature of Landlord's obligations
is such that more than thirty (30) days are required for performance, then
Landlord shall not be in default if Landlord commences performance within
such thirty (30) day period and thereafter diligently prosecutes the same to
completion.

37. CORPORATE AUTHORITY  If Tenant is a corporation, (or a partnership) each
individual executing this Lease on behalf of said corporation (or
partnership) represents and warrants that he is duly authorized to execute
and deliver this Lease on behalf of said corporation (or partnership) in
accordance with the by-laws of said corporation (or partnership in accordance
with the partnership agreement) and that this Lease is binding upon said
corporation (or partnership) in accordance with its terms. If Tenant is a
corporation, Tenant shall, within thirty (30) days after execution of this
Lease, deliver to Landlord a certified copy of the resolution of the Board of
Directors of said corporation authorizing or ratifying the execution of this
Lease.

38. [This paragraph deleted]

39. LIMITATION OF LIABILITY In consideration of the benefits accruing hereunder,
Tenant and all successors and assigns covenant and agree that, in the event of
any actual or alleged failure, breach or default hereunder by Landlord:
     (i) the sole and exclusive remedy shall be against Landlord's interest
in the Premises leased herein;
     (ii) no partner of Landlord shall be sued or named as party in any suit
or action (except as may be necessary to secure jurisdiction of the
partnership)
     (iii) no service of process shall be made against any partner of
Landlord (except as may be necessary to secure jurisdiction of the
partnership)
     (iv) no partner of Landlord shall be required to answer or otherwise
plead to any service of process;
     (v) no judgment will be taken against any partner of Landlord;
     (vi) any judgment taken against any partner of Landlord may be vacated
and set aside at any time without hearing;
     (vii) no writ of execution will ever be levied against the assets of any
partner of Landlord;
     (viii) these covenants and agreements are enforceable both by Landlord
and also by any partner of Landlord.
     Tenant agrees that each of the foregoing covenants and agreements shall be
applicable to any covenant or agreement either expressly contained in this Lease
or imposed by statute or at common law.

                                 page 7 of 8

<PAGE>

   40. MISCELLANEOUS AND GENERAL PROVISIONS

     a. Tenant shall not, without the written consent of Landlord, use the name
     of the building for any purpose other than as the address of the business
     conducted by Tenant in the Premises.

     b. This Lease shall in all respects be governed by and construed in
     accordance with the laws of the State of California. If any provision of
     this Lease shall be invalid, unenforceable or ineffective for any reason
     whatsoever, all other provisions hereof shall be and remain in full force
     and effect.

     c. The term "Premises" includes the space leased hereby and any
     improvements now or hereafter installed therein or attached thereto. The
     term "Landlord" or any pronoun used in place thereof includes the plural as
     well as the singular and the successors and assigns of Landlord. The term
     "Tenant" or any pronoun used in place thereof includes the plural as well
     as the singular and individuals, firms, associations, partnerships and
     corporations, and their and each of their respective heirs, executors,
     administrators, successors and permitted assigns, according to the
     context hereof, and the provisions of this Lease shall inure to the
     benefit of and bind such heirs, executors, administrators, successors
     and permitted assigns.
        The term "person" includes the plural as well as the singular and
     individuals, firms, associations, partnerships and corporations. Words used
     in any gender include other genders. If there be more than one Tenant the
     obligations of Tenant hereunder are joint and several. The paragraph
     headings of this Lease are for convenience of reference only and shall have
     no effect upon the construction or interpretation of any provisions hereof.

     d. Time is of the essence of this Lease and of each and all of its
     provisions.

     e. At the expiration or earlier termination of this Lease, Tenant shall
     execute, acknowledge and deliver to Landlord, within ten (10) days after
     written demand from Landlord to Tenant, any quitclaim deed or other
     document required by any reputable title company, licensed to operate in
     the State of California, to remove the cloud or encumbrance created by this
     Lease from the real property of which Tenant's Premises are a part.

     f. This instrument along with any exhibits and attachments hereto
     constitutes the entire agreement between Landlord and Tenant relative to
     the Premises and this agreement and the exhibits and attachments may be
     altered, amended or revoked only by an instrument in writing signed by
     both Landlord and Tenant. Landlord and Tenant agree hereby that all
     prior or contemporaneous oral agreements between and among themselves
     and their agents or representatives relative to the leasing of the
     Premises are merged in or revoked by this agreement.

     g. Neither Landlord nor Tenant shall record this Lease or a short form
     memorandum hereof without the consent of the other.

     h. Tenant further agrees to execute any amendments required by a lender to
     enable Landlord to obtain financing, so long as Tenant's rights hereunder
     are not substantially affected.

     i. Paragraphs 43 through 59 are added hereto and are included as a part of
     this lease.

     j. Clauses, plats and riders, if any, signed by Landlord and Tenant and
     endorsed on or affixed to this Lease are a part hereof.

     k. Tenant covenants and agrees that no diminution or shutting off of light,
     air or view by any structure which may be hereafter erected (whether or not
     by Landlord) shall in any way affect his Lease, entitle Tenant to any
     reduction of rent hereunder or result in any liability of Landlord to
     Tenant.

41. BROKERS Tenant warrants that it had dealings with only the following real
estate brokers or agents in connection with the negotiation of this Lease: None
and that it knows of no other real estate broker or agent who is entitled to a
commission in connection with this Lease.

42. SIGNS No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside
of the Premises or any exterior windows of the Premises without the written
consent of Landlord first had and obtained and Landlord shall have the right
to remove any such sign, placard, picture, advertisement, name or notice
without notice to and at the expense of Tenant. If Tenant is allowed to print
or affix or in any way place a sign in, on, or about the Premises, upon
expiration or other sooner termination of this Lease, Tenant at Tenant's sole
cost and expense shall both remove such sign and repair all damage in such a
manner as to restore all aspects of the appearance of the Premises to the
condition prior to the placement of said sign.
     All approved signs or lettering on outside doors shall be printed, painted,
affixed or inscribed at the expense of Tenant by a person approved of by
Landlord.
     Tenant shall not place anything or allow anything to be placed near the
glass of any window, door partition or wall which may appear unsightly from
outside the Premises.

     IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this
Lease as of the day and year last written below.

LANDLORD:                                     TENANT:
JOHN ARRILLAGA SURVIVOR'S TRUST               TRIPATH TECHNOLOGY, INC.
                                              a California corporation

By /s/ John Arrillaga                         By /s/ Adya S. Tripathi
   ----------------------------                  -------------------------------
   John Arrillaga, Trustee                       Adya S. Tripathi, President

Date:    11/26/97                             Date:    11/26/97
      -------------------------                     ----------------------------

RICHARD T. PEERY SEPARATE PROPERTY TRUST

By /s/ Richard T. Peery
   ----------------------------
   Richard T. Peery, Trustee

Date:    11/26/97
      -------------------------

                                 page 8 of 8

<PAGE>

Paragraphs 43 through 59 to Lease Agreement dated October 16, 1997, By and
Between the John Arrillaga Survivor's Trust and the Richard T. Peery Separate
Property Trust, as Landlord, and TRIPATH TECHNOLOGY, INC., a California
corporation, as Tenant for 23,400+/- Square Feet of Space Located at 3900
Freedom Circle, Santa Clara, California.

43. BASIC RENT: In accordance with Paragraph 4A herein and subject to Paragraph
44 below, the total aggregate sum of THREE MILLION THREE HUNDRED FIVE THOUSAND
FORTY AND NO/100 DOLLARS ($3,305,040.00), shall be payable as follows:

         On December 1, 1997, the sum of FIFTY TWO THOUSAND SEVEN HUNDRED FORTY
AND NO/100 DOLLARS ($52,740.00) shall be due, and a like sum due on the first
day of each month thereafter, through and including November 1, 1998.

         On December 1, 1998, the sum of FIFTY THREE THOUSAND NINE HUNDRED
TWELVE AND NO/100 DOLLARS ($53,912.00) shall be due, and a like sum due on the
first day of each month thereafter, through and including November 1, 1999.

         On December 1, 1999, the sum of FIFTY FIVE THOUSAND EIGHTY FOUR AND
NO/100 DOLLARS ($55,084.00) shall be due, and a like sum due on the first day of
each month thereafter, through and including November 1, 2000.

         On December 1, 2000, the sum of FIFTY SIX THOUSAND TWO HUNDRED FIFTY
SIX AND NO/100 DOLLARS ($56,256.00) shall be due, and a like sum due on the
first day of each month thereafter, through and including November 1, 2001.

         On December 1, 2001, the sum Of FIFTY SEVEN THOUSAND FOUR HUNDRED
TWENTY EIGHT AND NO/100 DOLLARS ($57,428.00) shall be due, and a like sum due on
the first day of each month thereafter, through and including November 1, 2002;
or until the entire aggregate sum of THREE MILLION THREE HUNDRED FIVE THOUSAND
FORTY AND NO/100 DOLLARS ($3,305,040.00) has been paid.

44. BASIC RENT OFFSET: To accommodate Tenant and provided Tenant is not in
default (pursuant to Paragraph 22 of the Lease, I.E., Tenant has received notice
and any applicable cure period has expired without cure) in any of the terms,
covenants, and conditions of this Lease Agreement, and provided Tenant is not in
default of its lease with Koll/Intereal Bay Area ("Koll") and subject to the
terms of this Paragraph 44, Landlord agrees to allow Tenant to offset Tenant's
Basic Rent payments due under this Lease by fifty percent (50%) of the Basic
Rent amount (the "Offset Allowance") due during the period following the
Commencement Date of this Lease through February 28, 1998 (the "Offset Period")
under Tenant's current lease agreement with Koll, for premises leased at 2041
Mission College Blvd., Suite 159, Santa Clara, California (hereinafter referred
to as the "Koll Lease").

         This right of offset is granted to Tenant with the following warrants
and representations from Tenant.

         A. The Basic Rent amounts due and the periods listed herein as related
to the Koll Lease are accurate based on the lease documentation and agreements
between Tenant and Koll.

         B. Tenant agrees to and is responsible for: (i) maintaining the Koll
Lease space in good repair and clean condition; (ii) actively marketing or
having marketed the Koll Lease space to secure a subtenant or subtenants for
Koll Lease space; and (iii) paying any and all leasing commissions to be paid
for any and all sublease(s) related to the Koll Lease space. Tenant agrees to
allow Landlord to approve the terms of any sublease for the Koll Lease space as
related to the amount of Basic Rent and the timing of Basic Rent to be paid by
any and all subtenants for said Koll Lease space.

         The following schedule identifies the maximum Offset Allowance allowed
Tenant on a monthly basis, during the Offset Period. It is agreed that the
Offset Period and the Offset Allowance shall be reduced if the Koll Lease is,
for any reason, terminated prior to or during the Offset Period or if the Basic
Rent payments due under the Koll Lease are reduced for any reason whatsoever,
including but not limited to, any reduction in Basic Rent due to basic rent
payment(s) due Tenant from any and all subtenants and/or assignees during the
Offset Period.

                                Page 9                 Initial: [ILLEGIBLE]
                                                               -------------

<PAGE>

<TABLE>
<CAPTION>
                           MONTHLY                                                TOTAL
                           PAYMENT                                                DURING
PERIOD                     DUE                       # OF MONTHS               OFFSET PERIOD
------                     ---                       -----------               -------------
<S>                        <C>                       <C>                       <C>
Peery/Arrillaga Lease      $52,740.00                x 3 months        =        $158,220.00
12/01/97-02/28/98          (Basic Rent)

Koll Lease (50%)           ($7,049.95)               x 3 months        =        ($21,149.85)
12/01/97-02/28/98          (Basic Rent)

DUE PEERY/ARRILLAGA        ----------                                           -----------
12/01/97-02/28/98          $45,690.05                                           $137,070.15
                           ==========                                           ===========

TOTAL MAXIMUM OFFSET ALLOWED:                                                    $21,149.85
                                                                                 ==========
</TABLE>

Tenant agrees to give Landlord written notification, at the beginning of each
month during the Offset Period, confirming that: (i) Tenant has not subleased or
assigned any or all of the Koll Lease space; or (ii) the amount of any Basic
Rent due Tenant from any and all subtenant(s); or (iii) the amount of any and
all Basic Rent obligations Tenant is relieved of resulting from an assignment;
or (iv) the effective date of any early termination or amendment agreement(s)
which reduce the term and/or Basic Rent due under the Koll Lease and the amount
of any reduction in Basic Rent obligation under the Koll Lease. Tenant's Basic
Rent due under this Lease, for any month during the Offset Period, shall be
offset only after Landlord's receipt of Tenant's written notification as
specified in this Paragraph. It is further agreed that in the event any of the
space Tenant leases under this Lease Agreement is assigned or sublet, as
permitted under Paragraphs 19, Tenant's monthly and maximum Offset Allowance
shall be reduced by the amount of any and all Basic Rent due Tenant from a
subtenant and/or assignee.

45. "AS-IS" BASIS: Subject only to Paragraphs 54 and 55 and to Landlord making
the improvements shown on EXHIBIT B to be attached hereto, it is hereby agreed
that the Premises leased hereunder is leased strictly on an "as-is" basis and in
its present condition, and in the configuration as shown on EXHIBIT B to be
attached hereto, and by reference made a part hereof. Except as otherwise set
forth herein, it is specifically agreed between the parties that after Landlord
makes the interior improvements as shown on EXHIBIT B, Landlord shall not be
required to make, nor be responsible for any cost, in connection with any
repair, restoration, and/or improvement to the Premises in order for this Lease
to commence, or thereafter, throughout the Term of this Lease. Notwithstanding
anything to the contrary within this Lease, Landlord makes no warranty or
representation of any kind or nature whatsoever as to the condition or repair of
the Premises, nor as to the use or occupancy which may be made thereof.

46. CONSENT: Whenever the consent of one party to the other is required
hereunder, such consent shall not be unreasonably withheld.

47. CHOICE OF LAW; SEVERABILITY. This Lease shall in all respects be governed by
and construed in accordance with the laws of the State of California. If any
provisions of this Lease shall be invalid, unenforceable, or ineffective for any
reason whatsoever, all other provisions hereof shall be and remain in full force
and effect.

48. AUTHORITY TO EXECUTE. The parties executing this Lease Agreement hereby
warrant and represent that they are properly authorized to execute this Lease
Agreement and bind the parties on behalf of whom they execute this Lease
Agreement and to all of the terms, covenants and conditions of this Lease
Agreement as they relate to the respective parties hereto.

49. ASSESSMENT CREDITS: The demised property herein may be subject to a special
assessment levied by the City of Santa Clara as part of an Improvement District.
As a part of said special assessment proceedings (if any), additional bonds were
or may be sold and

                                Page 10                 Initial: [ILLEGIBLE]
                                                                -------------

<PAGE>

assessments were or may be levied to provide for construction contingencies and
reserve funds. Interest shall be earned on such funds created for contingencies
and on reserve funds which will be credited for the benefit of said assessment
district. To the extent surpluses are created in said district through unused
contingency funds, interest earnings or reserve funds, such surpluses shall be
deemed the property of Landlord. Notwithstanding that such surpluses may be
credited on assessments otherwise due against the Leased Premises, Tenant shall
pay to Landlord, as additional rent if, and at the time of any such credit of
surpluses, an amount equal to all such surpluses so credited. For example: if
(i) the property is subject to an annual assessment of $1,000.00, and (ii) a
surplus of $200.00 is credited towards the current year's assessment which
reduces the assessment amount shown on the property tax bill from $1,000.00 to
$800.00, Tenant shall, upon receipt of notice from Landlord, pay to Landlord
said $200.00 credit as Additional Rent.

50.      ASSIGNMENT AND SUBLETTING (CONTINUED):

         A. In addition to and notwithstanding anything to the contrary in
Paragraph 19 of this Lease, Landlord hereby agrees to consent to Tenant's
assigning or subletting said Lease to any parent or subsidiary corporation
(including an assignment resulting from a merger and/or acquisition of Tenant),
provided that the net worth of said parent or subsidiary corporation of said
corporation has a net worth equal to or greater than the net worth of Tenant (a)
at the time of Lease execution or (b) at the time of such assignment (whichever
is greater). No such assignment or subletting will release Tenant from its
liabilities, obligations, and responsibilities under this Lease. Notwithstanding
the above, Tenant shall be required to (a) give Landlord written notice prior to
such assignment or subletting to any party as described above, and (b) execute
Landlord's consent document prepared by Landlord reflecting the assignment or
subletting.

         B. Notwithstanding anything to the contrary in Paragraph 19, before
paying to Landlord any excess sublease rent, Tenant shall be entitled to recover
from such excess sublease rent the amount of any reasonable leasing commissions
paid by Tenant to third parties not affiliated with Tenant.

         C. Any and all sublease agreement(s) between Tenant and any and all
subtenant(s) (which agreements must be consented to by Landlord, pursuant to the
requirements of this Lease) shall contain the following language:

                  "If Landlord and Tenant jointly and voluntarily elect, for any
         reason whatsoever, to terminate the Master Lease prior to the scheduled
         Master Lease termination date, then this Sublease (if then still in
         effect) shall terminate concurrently with the termination of the Master
         Lease. Subtenant expressly acknowledges and agrees that (1) the
         voluntary termination of the Master Lease by Landlord and Tenant and
         the resulting termination of this Sublease shall not give Subtenant any
         right or power to make any legal or equitable claim against Landlord,
         including without limitation any claim for interference with contract
         or interference with prospective economic advantage, and (2) Subtenant
         hereby waives any and all rights it may have under law or at equity
         against Landlord to challenge such an early termination of the
         Sublease, and unconditionally releases and relieves Landlord, and its
         officers, directors, employees and agents, from any and all claims,
         demands, and/or causes of action whatsoever (collectively, "Claims"),
         whether such matters are known or unknown, latent or apparent,
         suspected or unsuspected, foreseeable or unforeseeable, which Subtenant
         may have arising out of or in connection with any such early
         termination of this Sublease. Subtenant knowingly and intentionally
         waives any and all protection which is or may be given by Section 1542
         of the California Civil Code which provides 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
         debtor.

                  The term of this Sublease is therefore subject to early
         termination. Subtenant's initials here below evidence (a) Subtenant's
         consideration of and agreement to this early termination provision, (b)
         Subtenant's acknowledgment that, in determining the net benefits to be
         derived by Subtenant under the terms of this Sublease, Subtenant has
         anticipated the potential for early termination, and (c) Subtenant's
         agreement to the general waiver and release of Claims above.

                                Page 11                 Initial: [ILLEGIBLE]
                                                                -------------

<PAGE>

                               Initials:___________   Initials:_____________
                                         Subtenant                Tenant

51. BANKRUPTCY AND DEFAULT: Paragraph 22 is modified to provide that with
respect to non-monetary defaults not involving Tenant's failure to pay Basic
Rent or Additional Rent, Tenant shall not be in default of any non-monetary
obligation if (i) more than thirty (30) days is required to cure such
non-monetary default, and (ii) Tenant commences cure of such default as soon as
reasonably practicable after receiving written notice of such default from
Landlord and thereafter continuously and with due diligence prosecutes such cure
to completion.

52. ABANDONMENT: Paragraph 23 is modified to provide that Tenant shall not be in
default under the Lease if it leaves all or any part of Premises vacant so long
as (i) Tenant is performing all of its other obligations under the Lease
including the obligation to pay Basic Rent and Additional Rent (ii) Tenant
provides on-site security during normal business hours for those parts of the
Premises left vacant, (iii) such vacancy does not materially and adversely
affect the validity or coverage of any policy of insurance carried by Landlord
with respect to the Premises, and (iv) the utilities and heating and ventilation
system are operated and maintained to the extent necessary to prevent damage to
the Premises or its systems.

53. HAZARDOUS MATERIALS: Landlord and Tenant agree as follows with respect to
the existence or use of "Hazardous Materials" (as defined herein) on, in, under
or about the Premises and real property located beneath said Premises and the
common areas of the Complex (hereinafter collectively referred to as the
"Property"):

         A. As used herein, the term "Hazardous Materials" shall mean any
material, waste, chemical, mixture or byproduct which is or hereafter is
defined, listed or designated under Environmental Laws (defined below) as a
pollutant, or as a contaminant, or as a toxic or hazardous substance, waste or
material, or any other unwholesome, hazardous, toxic, biohazardous, or
radioactive material, waste, chemical, mixture or byproduct, or which is listed,
regulated or restricted by any Environmental Law (including, without limitation,
petroleum hydrocarbons or any distillates or derivatives or fractions thereof,
polychlorinated biphenyls, or asbestos). As used herein, the term "Environmental
Laws" shall mean any applicable Federal, State of California or local government
law (including common law), statute, regulation, rule, ordinance, permit,
license, order, requirement, agreement, or approval, or any determination,
judgment, directive, or order of any executive or judicial authority at any
level of Federal, State of California or local government (whether now existing
or subsequently adopted or promulgated) relating to pollution or the protection
of the environment, ecology, natural resources, or public health and safety.

         B. Tenant shall obtain Landlord's written consent, which may be
withheld in Landlord's discretion, prior to the occurrence of any Tenant's
Hazardous Materials Activities (defined below); provided, however, that
Landlord's consent shall not be required for normal use in compliance with
applicable Environmental Laws of customary household and office supplies (Tenant
shall first provide Landlord with a list of said materials use), such as mild
cleaners, lubricants and copier toner. As used herein, the term "Tenant's
Hazardous Materials Activities" shall mean any and all use, handling,
generation, storage, disposal, treatment, transportation, release, discharge; or
emission of any Hazardous Materials on, in, beneath, to, from, at or about the
Property, in connection with Tenant's use of the Property, or by Tenant or by
any of Tenant's agents, employees, contractors, vendors, invitees, visitors or
its future subtenants or assignees. Tenant agrees that any and all Tenant's
Hazardous Materials Activities shall be conducted in strict, full compliance
with applicable Environmental Laws at Tenant's expense, and shall not result in
any contamination of the Property or the environment. Tenant agrees to provide
Landlord with prompt written notice of any spill or release of Hazardous
Materials at the Property during the term of the Lease of which Tenant becomes
aware, and further agrees to provide Landlord with prompt written notice of any
violation of Environmental Laws in connection with Tenant's Hazardous Materials
Activities of which Tenant becomes aware. If Tenant's Hazardous Materials
Activities involve Hazardous Materials other than normal use of customary
household and office supplies, Tenant also agrees at Tenant's expense: (i) to
install such Hazardous Materials monitoring, storage and containment devices as
Landlord reasonably deems necessary (Landlord shall have no obligation to
evaluate the need for any such installation or to require any such
installation); (ii) provide Landlord with a written inventory of

                                Page 12                 Initial: [ILLEGIBLE]
                                                                -------------

<PAGE>

such Hazardous Materials, including an update of same each year upon the
anniversary date of the Commencement Date of the Lease ("Anniversary Date"); and
(iii) on each Anniversary Date, to retain a qualified environmental consultant,
acceptable to Landlord, to evaluate whether Tenant is in compliance with all
applicable Environmental Laws with respect to Tenant's Hazardous Materials
Activities. Tenant, at its expense, shall submit to Landlord a report from such
environmental consultant which discusses the environmental consultant's findings
within two (2) months of each Anniversary Date. Tenant, at its expense, shall
promptly undertake and complete any and all steps necessary, and in full
compliance with applicable Environmental Laws, to fully correct any and all
problems or deficiencies identified by Tenant's environmental consultant, and
promptly provide Landlord with documentation of all such corrections.

         C. Prior to termination or expiration of the Lease, Tenant, at its
expense, shall (i) properly remove from the Property all Hazardous Materials
which come to be located at the Property in connection with Tenant's Hazardous
Materials Activities, and (ii) fully comply with and complete all facility
closure requirements of applicable Environmental Laws regarding Tenant's
Hazardous Materials Activities, including but not limited to (x) properly
restoring and repairing the Property to the extent damaged by such closure
activities, and (y) obtaining from the local Fire Department or other
appropriate governmental authority with jurisdiction a written concurrence that
closure has been completed in compliance with applicable Environmental Laws.
Tenant shall promptly provide Landlord with copies of any claims, notices, work
plans, data and reports prepared, received or submitted in connection with any
such closure activities.

         D. If Landlord, in its sole discretion, believes that the Property has
become contaminated as a result of Tenant's Hazardous Materials Activities,
Landlord in addition to any other rights it may have under this Lease or under
Environmental Laws or other laws, may enter upon the Property and conduct
inspection, sampling and analysis, including but not limited to obtaining and
analyzing samples of soil and groundwater, for the purpose of determining the
nature and extent of such contamination. Tenant shall promptly reimburse
Landlord for the costs of such an investigation, including but not limited to
reasonable attorneys' fees Landlord incurs with respect to such investigation,
that discloses Hazardous Materials contamination for which Tenant is liable
under this Lease. Except as may be required of Tenant by applicable
Environmental Laws, Tenant shall not perform any sampling, testing, or drilling
to identify the presence of any Hazardous Materials at the Property, without
Landlord's prior written consent which may be withheld in Landlord's discretion.
Tenant shall promptly provide Landlord with copies of any claims, notices, work
plans, data and reports prepared, received or submitted in connection with any
sampling, testing or drilling performed pursuant to the preceding sentence.

         E. Tenant shall indemnify, defend (with legal counsel acceptable to
Landlord, whose consent shall not unreasonably be withheld) and hold harmless
Landlord, its employees, assigns, successors, successors-in-interest, agents and
representatives from and against any and all claims (including but not limited
to third party claims from a private party or a government authority),
liabilities, obligations, losses, causes of action, demands, governmental
proceedings or directives, fines, penalties, expenses, costs (including but not
limited to reasonable attorneys', consultants' and other experts' fees and
costs), and damages, which arise from or relate to: (i) Tenant's Hazardous
Materials Activities; (ii) any Hazardous Materials contamination caused by
Tenant prior to the Commencement Date of the Lease; or (iii) the breach of any
obligation of Tenant under this Paragraph 53 (collectively, "Tenant's
Environmental Indemnification"). Tenant's Environmental Indemnification shall
include but is not limited to the obligation to promptly and fully reimburse
Landlord for losses in or reductions to rental income, and diminution in fair
market value of the Property. Tenant's Environmental Indemnification shall
further include but is not limited to the Obligation to diligently and properly
implement to completion, at Tenant's expense, any and all environmental
investigation, removal, remediation, monitoring, reporting, closure activities,
or other environmental response action (collectively, "Response Actions").
Tenant shall promptly provide Landlord with copies of any claims, notices, work
plans, data and reports prepared, received or submitted in connection with any
Response Actions.

It is agreed that the Tenant's responsibilities related to Hazardous Materials
will survive the expiration or termination of this Lease and that Landlord may
obtain specific performance of Tenant's responsibilities under this Paragraph
53.

54. PUNCH LIST: In addition to and notwithstanding anything to the contrary in
Paragraphs 8 and 45 of this Lease, Tenant shall have thirty (30) days after the
Commencement Date to provide Landlord with a written "punch list" pertaining to
defects in the Building and in the interior improvements constructed by Landlord
for Tenant. As soon as reasonably possible thereafter, Landlord, or one of
Landlord's

                                Page 13                 Initial: [ILLEGIBLE]
                                                                -------------

<PAGE>

representatives (if so approved by Landlord), and Tenant shall conduct a joint
walk-through of the Premises (if Landlord so requires), and inspect such Tenant
Improvements, using their best efforts to agree on the incomplete or defective
construction related to the Tenant Improvements installed by Landlord. After
such inspection has been completed, Landlord shall prepare, and both parties
shall sign, a list of all "punch list" items which the parties reasonably agree
are (i) to be corrected by Landlord (but which shall exclude any damage or
defects caused by Tenant, its employees, agents or parties Tenant has contracted
with to work on the Premises) or (ii) if said defects and/or damaged item(s) are
not material, Landlord may elect, in its sole and absolute discretion, not to
repair such item(s), but to acknowledge in written form the defect and/or
damaged item(s); in which case, notwithstanding anything to the contrary in said
Lease Paragraph 8 ("Acceptance and Surrender"), Tenant shall not be responsible
upon Lease Termination to repair said item(s) so noted by Landlord. Landlord
shall have thirty (30) days thereafter (or longer if necessary, provided
Landlord is diligently pursuing the completion of the same) to complete, at
Landlord's expense, the "punch list" items without the Commencement Date of the
Lease and Tenant's obligation to pay Rental thereunder being affected.
Notwithstanding the foregoing, a crack in the foundation, or exterior walls or
any other defect in the structure or Building that does not endanger the
structural integrity of the building, or which is not life-threatening, shall
not be considered material, nor shall Landlord be responsible for repair of
same. This Paragraph shall be of no force and effect if Tenant shall fail to
give any such notice to Landlord within thirty (30) days after the Commencement
Date of this Lease.

55. COMPLIANCE CONTINUED: Any non-conformance of the improvements installed
and paid for by Landlord as set forth on EXHIBIT B, required to be corrected
by the governing agency, shall be corrected at the cost and expense of
Landlord if such non-conformance exists as of the Commencement Date of the
Lease and further provided that such governing agency's requirement to
correct the non-conformance is not initiated as a result of: (i) any future
improvements made by or for Tenant; or (ii) any permit request made to a
governing agency by or for Tenant. Any non-conformance of the Premises
occurring after the Commencement Date of this Lease Agreement shall be the
responsibility of Tenant to correct at Tenant's cost and expense.

56. ADDITIONAL RENT CONTINUED: The following items shall be excluded from
"Additional Rent":

         A. Leasing commissions, attorney's fees, costs, disbursements, and
other expenses incurred in connection with negotiations with other tenants, or
disputes between Landlord and other tenants, or in connection with marketing,
leasing, renovating, or improving space for other current or prospective tenants
or other current or prospective occupants of the Complex; notwithstanding
anything to the contrary herein, any costs and expenses Landlord is entitled to
be reimbursed for as stated under Paragraph 22 (Bankruptcy and Default") ARE NOT
excluded Additional Rent items as reflected in this Paragraph 56.

         B. The cost of any service sold to any other tenant or other occupant
whose leased premises are not part of the Premises leased herein and for which
Landlord is entitled to be reimbursed as an additional charge or rental over and
above the basic rent and additional rent payable under the lease agreement with
said other tenant (including, without limitation, after-hours HVAC costs or
over-standard electrical consumption costs incurred by other tenants).

         C. Any costs for which Landlord is entitled to be reimbursed by any
other tenant or other occupant whose leased premises are not part of the
Premises leased herein.

         D. Any costs, fines, or penalties incurred due to violations by
Landlord of any governmental rule or authority.

         E. Wages, salaries, or other compensation paid to executive employees
above the grade of Property Manager.

         F. The cost of correcting any building code or other violations which
are violations prior to the Lease Commencement Date and which violations were
not caused by or contributed to by Tenant pursuant to Paragraph 55.

         G. Repairs or other work occasioned by fire, windstorm, or other
insured peril, to the extent that Landlord shall receive proceeds of such
insurance or would have received such proceeds had Landlord maintained the
insurance coverage required under this Lease providing said insurance
coverage was available and Tenant paid its share of the premium as required
under the Lease (excluding any insurance deductible(s) which Tenant is
responsible for paying).

         H. Except as otherwise noted in this Lease, any mortgage debt, or
ground rents or any other amounts payable under any ground lease for the
Property or any expense which Landlord is

                                Page 14                 Initial: [ILLEGIBLE]
                                                                -------------

<PAGE>

responsible for paying under said Lease or which results from Landlord's willful
misconduct or Landlord's negligence of which negligence Landlord has received
notice of and has reasonable time to correct.

         I. Any amounts paid to any person, firm, or corporation related or
otherwise affiliated with Landlord or any general partner, officer, or director
of Landlord or any general partners, to the extent same exceeds arms-length
competitive prices paid in the Santa Clara, California metropolitan area for the
services or goods provided.

57. SUBORDINATION AND MORTGAGES: Paragraph 20 is modified to provide that,
provided Tenant is not in default in the terms of this Lease, this Lease shall
not be subordinate to a mortgage or deed of trust unless the Lender holding such
mortgage or deed of trust enters into a written subordination, non-disturbance
and attornment agreement in which the Lender agrees that notwithstanding any
subordination of this Lease to such Lender's mortgage or deed of trust, (i) such
Lender shall recognize all of Tenant's rights under this Lease, and (ii) in the
event of a foreclosure, this Lease shall not be terminated so long as Tenant is
not in default of its obligations under this Lease, but shall continue in effect
and Tenant and such Lender (or any party acquiring the Premises through such
foreclosure) shall each be bound to perform the respective obligations of Tenant
and Landlord with respect to the Premises arising after such foreclosure.

58. SIGNS CONTINUED: Notwithstanding anything to the contrary in Paragraph 42
and subject to Landlord's approval of Tenant's signage, Tenant shall be entitled
to use the top fifty percent (50%) of the existing monument sign in front of the
Building in which the Premises are located.

59. TAXES CONTINUED: Paragraph 12 ("Taxes") is modified by the following:

         A. The amount of Real Property Taxes payable by Tenant hereunder shall
be prorated to reflect the dates of Lease Commencement and Lease Termination.

         B. It is agreed that if any special assessments for capital
improvements are assessed, and if Landlord has the option to either pay the
entire assessment in cash or go to bond, and if Landlord elects to pay the
entire assessment in cash in lieu of going to bond, the entire portion of the
assessment assigned to Tenant's Leased Premises will be prorated over the same
period that the assessment would have been prorated had the assessment gone to
bond.

                     (This Space Left Blank Intentionally)

                                Page 15                 Initial: [ILLEGIBLE]
                                                                -------------

<PAGE>

                                                                      Marriott 5

                                 AMENDMENT NO. 1
                                    TO LEASE

         THIS AMENDMENT NO. 1 is made and entered into this 30th day of
December, 1997, by and between JOHN ARRILLAGA, Trustee, or his Successor Trustee
UTA dated 7/20/77 (JOHN ARRILLAGA SURVIVOR'S TRUST) as amended, and RICHARD T.
PEERY, Trustee, or his Successor Trustee UTA dated 7/20/77 (RICHARD T. PEERY
SEPARATE PROPERTY TRUST) as amended, collectively as LANDLORD, and TRIPATH
TECHNOLOGY, INC., a California corporation, as TENANT.

                                    RECITALS

         A. WHEREAS, by Lease Agreement dated October 16, 1997 Landlord
leased to Tenant approximately 23,440 PLUS OR MINUS square feet of that
certain 45,000 PLUS OR MINUS square foot building located at 3900 Freedom
Circle, Suite 200, Santa Clara, California, the details of which are more
particularly set forth in said October 16, 1997 Lease Agreement, and

         B. WHEREAS, it is now the desire of the parties hereto to amend the
Lease by (i) confirming the December 1, 1997 Commencement Date and (ii)
increasing the square footage of the Premises due to a floor plan revision,
(iii) amending the Basic Rent schedule and Aggregate Rent accordingly, (iv)
increasing the Security Deposit required under the Lease, (v) increasing
Tenant's non-exclusive parking spaces and (vi) amending Paragraph 44 ("Basic
Rent Offset") of said Lease Agreement as hereinafter set forth.

                                    AGREEMENT

         NOW THEREFORE, for valuable consideration, receipt of which is hereby
acknowledged, and in consideration of the hereinafter mutual promises, the
parties hereto do agree as follows:

         1. COMMENCEMENT DATE: Due to Tenant's delay in providing Landlord with
Tenant's Interior Improvement plan, said Interior Improvements were not
completed in the Premises prior to the scheduled Lease Commencement Date of
December 1, 1997; however, as a result of Tenant's above mentioned delay in
providing said plans, it is hereby agreed by the parties that the Lease
commenced effective December 1, 1997, regardless of the status of the Interior
Improvements.

         2. LEASED PREMISES SQUARE FOOTAGE: Due to floor plan revisions, it
is agreed between the parties that the square footage of the Leased Premises
shall be changed from 23,440 PLUS OR MINUS square feet to 23,673 PLUS OR
MINUS square feet of space. EXHIBIT B to the Lease shall be replaced by
EXHIBIT B to this Amendment which shows the configuration of the Leased
Premises as of the Lease Commencement Date.

         3. BASIC RENT SCHEDULE: The Basic Rent schedule and Aggregate Rent, as
shown in Paragraphs 4(A) and 43 of the Lease Agreement, shall be amended as
follows:

         On December 1, 1997, the sum of FIFTY THREE THOUSAND TWO HUNDRED SIXTY
FOUR AND 25/100 DOLLARS ($53,264.25) shall be due, and a like sum due on the
first day of each month thereafter, through and including November 1, 1998.

         On December 1, 1998, the sum of FIFTY FOUR THOUSAND FOUR HUNDRED FORTY
SEVEN AND 90/100 DOLLARS ($54,447.90) shall be due, and a like sum due on the
first day of each month thereafter, through and including November 1, 1999.

         On December 1, 1999, the sum of FIFTY FIVE THOUSAND SIX HUNDRED THIRTY
ONE AND 55/100 DOLLARS ($55,631.55) shall be due, and a like sum due on the
first day of each month thereafter, through and including November 1, 2000.

         On December 1, 2000, the sum of FIFTY SIX THOUSAND EIGHT HUNDRED
FIFTEEN AND 20/100 DOLLARS, ($56,815.20) shall be due, and a like sum due on
the first day of each month

                                                        Initial: [ILLEGIBLE]
                                                                -------------

<PAGE>

                                                                      Marriott 5

thereafter, through and including November 1, 2001.

         On December 1, 2001, the sum of FIFTY SEVEN THOUSAND NINE HUNDRED
NINETY EIGHT AND 85/100 DOLLARS ($57,998.85) shall be due, and a like sum due on
the first day of each month thereafter, through and including November 1, 2002.

         As a result of the increase in square feet leased, the Aggregate Rental
shall be increased by $32,853.00, or from $3,305,040.00 to $3,337,893.00.

         4. SECURITY DEPOSIT: Tenant's Security Deposit shall be increased by
$1,141.70, or from $114,856.00 to $115,997.70, payable upon Tenant's execution
of this Amendment No. 1.

         5. INCREASED PARKING: Tenant's nonexclusive parking spaces shall be
increased by one space or from seventy spaces to seventy one spaces.

         6. BASIC RENT OFFSET: The Maximum Offset schedule as shown in Lease
Paragraph 44 ("Basic Rent Offset") shall be amended as follows, to reflect the
increased Basic Rent due under the Lease:

<TABLE>
<CAPTION>
                           MONTHLY                                                TOTAL
                           PAYMENT                                                DURING
PERIOD                     DUE                       # OF MONTHS               OFFSET PERIOD
------                     ---                       -----------               -------------
<S>                        <C>                       <C>                       <C>
Peery/Arrillaga Lease      $53,264.25                x 3 months        =       $159,792.75
12/01/97-02/28/98          (Basic Rent)

Koll Lease (50%)           ($7,049.95)               x 3 months        =        ($21,149.85)
12/01/97-02/28/98          (Basic Rent)

DUE PEERY/ARRILLAGA        ----------                                           -----------
12/01/97-02/28/98          $46,214.30                                           $138,642.90
                           ==========                                           ===========

TOTAL MAXIMUM OFFSET ALLOWED:                                                   $21,149.85
                                                                                ==========
</TABLE>

         EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions
of said October 16, 1997 Lease Agreement shall remain in full force and effect.

         IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment
No. 1 to Lease as of the day and year last written below.

LANDLORD:                                     TENANT:

JOHN ARRILLAGA SURVIVOR'S TRUST               TRIPATH TECHNOLOGY, INC.
                                              a California corporation

By /s/ John Arrillaga                         By /s/ Adya S. Tripathi
   ----------------------------                  -------------------------------
   John Arrillaga, Trustee                       Adya S. Tripathi, President

Date:    6/18/98                              Date:    5/26/98
      -------------------------                     ----------------------------

RICHARD T. PEERY SEPARATE
PROPERTY TRUST

By /s/ Richard T. Peery
   ----------------------------
   Richard T. Peery, Trustee

Date:    6/17/98
      -------------------------

<PAGE>

                                                                      Marriott 5

                                 AMENDMENT NO. 2
                                    TO LEASE

         THIS AMENDMENT NO. 2 is made and entered into this 21st day of
September, 1998, by and between JOHN ARRILLAGA, Trustee, or his Successor
Trustee UTA dated 7/20/77 (JOHN ARRILLAGA SURVIVOR'S TRUST) as amended, and
RICHARD T. PEERY, Trustee, or his Successor Trustee UTA dated 7/20/77
(RICHARD T. PEERY SEPARATE PROPERTY TRUST) as amended, collectively as
LANDLORD, and TRIPATH TECHNOLOGY, INC., a California corporation, as TENANT.

                                    RECITALS

         A. WHEREAS, by Lease Agreement dated October 16, 1997 Landlord
leased to Tenant approximately 23,440 PLUS OR MINUS square feet of that
certain 45,000 PLUS OR MINUS square foot building located at 3900 Freedom
Circle, Suite 200, Santa Clara, California, the details of which are more
particularly set forth in said October 16, 1997 Lease Agreement, and

         B. WHEREAS, said Lease was amended by Amendment No. 1 dated December
30, 1997 which (i) confirmed the December 1, 1997 Commencement Date and (ii)
increased the square footage of the Premises due to a floor plan revision,
(iii) amended the Basic Rent schedule and Aggregate Rent accordingly, (iv)
increased the Security Deposit required under the Lease, (v) increased
Tenant's non-exclusive parking spaces and (vi) amended Paragraph 44 ("Basic
Rent Offset") due to the change in the square feet leased, and

         C. WHEREAS, it is now the desire of the parties hereto to amend the
Lease by (i) increasing the square footage of the Leased Premises by 12,110 +
square feet effective December 1, 1998, (ii) amending the Basic Rent schedule
and Aggregate Rent accordingly, (iv) increasing the Security Deposit required
under the Lease, (v) increasing Tenant's non-exclusive parking spaces, and (vi)
amending Paragraph 19 ("Assignment and Subletting") of said Lease Agreement as
hereinafter set forth.

                                    AGREEMENT

         NOW THEREFORE, for valuable consideration, receipt of which is hereby
acknowledged, and in consideration of the hereinafter mutual promises, the
parties hereto do agree as follows:

         1.  INCREASED PREMISES: Subject to Paragraph 3 below, effective
December 1, 1998, the size of the Leased Premises will be increased by 12,110
PLUS OR MINUS square feet, or from 23,673 PLUS OR MINUS square feet to 35,783
PLUS OR MINUS square feet of space. Total said Premises are more particularly
shown within the area outlined in Red on EXHIBIT A. The entire parcel, of
which the Leased Premises is a part, is shown within the area outlined in
Green on EXHIBIT A. The additional 12,110 PLUS OR MINUS square feet of space
is leased on an "as-is" basis, in its present condition and configuration, as
set forth in Blue on EXHIBIT B attached hereto, with the entire interior
leased Premises shown in Red on EXHIBIT B.

         2.  AMENDMENT SUBJECT TO LANDLORD'S OBTAINING TERMINATION AGREEMENT
WITH CURRENT TENANT FOR CURRENT TENANT'S SPACE: This Amendment is subject to
Landlord obtaining from Pictra Incorporated ("Pictra"), the current tenant
occupying the Premises leased hereunder, a Termination Agreement satisfactory
to Landlord on or before November 30, 1998. In the event Landlord is unable
to obtain said satisfactory Agreement on or before November 30, 1998, and/or
in the event Pictra fails to timely vacate the Premises and surrender same to
Landlord free and clear of its occupancy, this Amendment shall, at Landlord's
option: a) be rescinded, or b) the Commencement Date of the Increased
Premises hereof shall be modified to reflect the date Landlord so obtains
said satisfactory Termination Agreement and receives possession of the
Increased Premises free and clear of Pictra's occupancy; provided, however,
that said period of delay caused by Pictra shall not extend beyond December
31, 1998. In the event Landlord cannot deliver said Increased Premises by
January 1, 1999, this Amendment No. 2 shall be

                                                        Initial: [ILLEGIBLE]
                                                                -------------

<PAGE>

         Exhibit A is a map showing the layout of Marriott Business Park in
Santa Clara, CA.

         Exhibit B is a floor plan layout for building Marriott 5 of Marriott
Business Park.<PAGE>

                                                                    EXHIBIT 10.4

                             TRIPATH TECHNOLOGY INC.

                                 2000 STOCK PLAN

     1.   PURPOSES OF THE PLAN. The purposes of this 2000 Stock Plan are:

          -    to attract and retain the best available personnel for positions
               of substantial responsibility,

          -    to provide additional incentive to Employees, Directors and
               Consultants, and

          -    to promote the success of the Company's business.

          Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.

     2.   DEFINITIONS. As used herein, the following definitions shall apply:

          (a)  "ADMINISTRATOR" means the Board or any of its Committees as shall
be administering the Plan, in accordance with Section 4 of the Plan.

          (b)  "APPLICABLE LAWS" means the requirements relating to the
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are,
or will be, granted under the Plan.

          (c)  "BOARD" means the Board of Directors of the Company.

          (d)  "CODE" means the Internal Revenue Code of 1986, as amended.

          (e)  "COMMITTEE" means a committee of Directors appointed by the Board
in accordance with Section 4 of the Plan.

          (f)  "COMMON STOCK" means the common stock of the Company.

          (g)  "COMPANY" means Tripath Technology Inc., a Delaware corporation.

          (h)  "CONSULTANT" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services to such entity.

          (i)  "DIRECTOR" means a member of the Board.

          (j)  "DISABILITY" means total and permanent disability as defined in
Section 22(e)(3) of the Code.

<PAGE>

          (k)  "EMPLOYEE" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, then three (3) months following the 91st day of
such leave any Incentive Stock Option held by the Optionee shall cease to be
treated as an Incentive Stock Option and shall be treated for tax purposes as a
Nonstatutory Stock Option. Neither service as a Director nor payment of a
director's fee by the Company shall be sufficient to constitute "employment" by
the Company.

          (l)  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

          (m)  "FAIR MARKET VALUE" means, as of any date, the value of Common
Stock determined as follows:

               (i)  If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system on
the day of determination, as reported in THE WALL STREET JOURNAL or such other
source as the Administrator deems reliable;

               (ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the day of determination, as reported in THE WALL
STREET JOURNAL or such other source as the Administrator deems reliable; or

               (iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

          (n)  "INCENTIVE STOCK OPTION" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

          (o)  "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option.

          (p)  "NOTICE OF GRANT" means a written or electronic notice evidencing
certain terms and conditions of an individual Option or Stock Purchase Right
grant. The Notice of Grant is part of the Option Agreement.

          (q)  "OFFICER" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

          (r)  "OPTION" means a stock option granted pursuant to the Plan.

                                      -2-
<PAGE>

          (s)  "OPTION AGREEMENT" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.

          (t)  "OPTIONED STOCK" means the Common Stock subject to an Option or
Stock Purchase Right.

          (u)  "OPTIONEE" means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.

          (v)  "PARENT" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.

          (w)  "PLAN" means this 2000 Stock Plan.

          (x)  "RESTRICTED STOCK" means shares of Common Stock acquired pursuant
to a grant of Stock Purchase Rights under Section 11 of the Plan.

          (y)  "RESTRICTED STOCK PURCHASE AGREEMENT" means a written agreement
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right. The Restricted Stock
Purchase Agreement is subject to the terms and conditions of the Plan and the
Notice of Grant.

          (z)  "RULE 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

          (aa) "SECTION 16(b) " means Section 16(b) of the Exchange Act.

          (bb) "SERVICE PROVIDER" means an Employee, Director or Consultant.

          (cc) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.

          (dd) "STOCK PURCHASE RIGHT" means the right to purchase Common Stock
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.

          (ee) "SUBSIDIARY" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.

     3.   STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 13 of
the Plan, the maximum aggregate number of Shares that may be optioned and sold
under the Plan is 10,274,502 Shares. The Shares may be authorized, but unissued,
or reacquired Common Stock.

          If an Option or Stock Purchase Right expires or becomes
unexercisable without having been exercised in full the unpurchased Shares
which were subject thereto shall become available for future grant or sale
under the Plan (unless the Plan has terminated); PROVIDED, however, that
Shares that have actually been issued under the Plan, whether upon exercise
of an Option or Right, shall not be returned to the Plan and shall not become
available for future distribution under

                                      -3-
<PAGE>

the Plan, except that if Shares of Restricted Stock are repurchased by the
Company at their original purchase price, such Shares shall become available for
future grant under the Plan.

       4.     ADMINISTRATION OF THE PLAN.

              (a)    PROCEDURE.

                     (i)    MULTIPLE ADMINISTRATIVE BODIES. Different Committees
with respect to different groups of Service Providers may administer the Plan.

                     (ii)   SECTION 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.

                     (iii)  RULE 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.

                     (iv)   OTHER ADMINISTRATION. Other than as provided above,
the Plan shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws.

              (b)    POWERS OF THE ADMINISTRATOR. Subject to the provisions of
the Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:

                     (i)    to determine the Fair Market Value;

                     (ii)   to select the Service Providers to whom Options and
Stock Purchase Rights may be granted hereunder;

                     (iii)  to determine the number of shares of Common Stock to
be covered by each Option and Stock Purchase Right granted hereunder;

                     (iv)   to approve forms of agreement for use under the
Plan;

                     (v)    to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Option or Stock Purchase Right
granted hereunder. Such terms and conditions include, but are not limited to,
the exercise price, the time or times when Options or Stock Purchase Rights may
be exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option or Stock Purchase Right or the shares of Common
Stock relating thereto, based in each case on such factors as the Administrator,
in its sole discretion, shall determine;

                     (vi)   to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;

                                      -4-
<PAGE>

                     (vii)  to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of satisfying applicable foreign laws;

                     (viii) to modify or amend each Option or Stock Purchase
Right (subject to Section 15(c) of the Plan), including the discretionary
authority to extend the post-termination exercisability period of Options longer
than is otherwise provided for in the Plan;

                     (ix)   to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right that number of Shares
having a Fair Market Value equal to the amount required to be withheld. The Fair
Market Value of the Shares to be withheld shall be determined on the date that
the amount of tax to be withheld is to be determined. All elections by an
Optionee to have Shares withheld for this purpose shall be made in such form and
under such conditions as the Administrator may deem necessary or advisable;

                     (x)    to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;

                     (xi)   to make all other determinations deemed necessary or
advisable for administering the Plan.

              (c)    EFFECT OF ADMINISTRATOR'S DECISION. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Purchase Rights.

       5.     ELIGIBILITY. Nonstatutory Stock Options and Stock Purchase Rights
may be granted to Service Providers. Incentive Stock Options may be granted only
to Employees.

       6.     LIMITATIONS.

              (a)    Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

              (b)    Neither the Plan nor any Option or Stock Purchase Right
shall confer upon an Optionee any right with respect to continuing the
Optionee's relationship as a Service Provider with the Company, nor shall they
interfere in any way with the Optionee's right or the Company's right to
terminate such relationship at any time, with or without cause.

              (c)    The following limitations shall apply to grants of Options:

                                      -5-
<PAGE>

                     (i)    No Service Provider shall be granted, in any fiscal
year of the Company, Options to purchase more than 200,000 Shares.

                     (ii)   In connection with his or her initial service, a
Service Provider may be granted Options to purchase up to an additional 500,000
Shares, which shall not count against the limit set forth in subsection (i)
above.

                     (iii)  The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 13.

                     (iv)   If an Option is cancelled in the same fiscal year of
the Company in which it was granted (other than in connection with a transaction
described in Section 13), the cancelled Option will be counted against the
limits set forth in subsections (i) and (ii) above. For this purpose, if the
exercise price of an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.

       7.     TERM OF PLAN. Subject to Section 19 of the Plan, the Plan shall
become effective upon its adoption by the Board. It shall continue in effect for
a term of ten (10) years unless terminated earlier under Section 15 of the Plan.

       8.     TERM OF OPTION. The term of each Option shall be stated in the
Option Agreement. In the case of an Incentive Stock Option, the term shall be
ten (10) years from the date of grant or such shorter term as may be provided in
the Option Agreement. Moreover, in the case of an Incentive Stock Option granted
to an Optionee who, at the time the Incentive Stock Option is granted, owns
stock representing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
term of the Incentive Stock Option shall be five (5) years from the date of
grant or such shorter term as may be provided in the Option Agreement.

       9.     OPTION EXERCISE PRICE AND CONSIDERATION.

              (a)    EXERCISE PRICE. The per share exercise price for the Shares
to be issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

                     (i)    In the case of an Incentive Stock Option

                            (A)    granted to an Employee who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant.

                            (B)    granted to any Employee other than an
Employee described in paragraph (A) immediately above, the per Share exercise
price shall be no less than 100% of the Fair Market Value per Share on the date
of grant.

                     (ii)   In the case of a Nonstatutory Stock Option, the per
Share exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code,

                                      -6-
<PAGE>

the per Share exercise price shall be no less than 100% of the Fair Market Value
per Share on the date of grant.

                     (iii)  Notwithstanding the foregoing, Options may be
granted with a per Share exercise price of less than 100% of the Fair Market
Value per Share on the date of grant pursuant to a merger or other corporate
transaction.

              (b)    WAITING PERIOD AND EXERCISE DATES. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions that must be satisfied before the
Option may be exercised.

              (c)    FORM OF CONSIDERATION. The Administrator shall determine
the acceptable form of consideration for exercising an Option, including the
method of payment. In the case of an Incentive Stock Option, the Administrator
shall determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:

                     (i)    cash;

                     (ii)   check;

                     (iii)  promissory note;

                     (iv)   other Shares, provided Shares acquired from the
Company, (A) have been owned by the Optionee for more than six (6) months on the
date of surrender, and (B) have a Fair Market Value on the date of surrender
equal to the aggregate exercise price of the Shares as to which said Option
shall be exercised;

                     (v)    consideration received by the Company under a
cashless exercise program implemented by the Company in connection with the
Plan;

                     (vi)   a reduction in the amount of any Company liability
to the Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;

                     (vii)  any combination of the foregoing methods of payment;
or

                     (viii) such other consideration and method of payment for
the issuance of Shares to the extent permitted by Applicable Laws.

       10.    EXERCISE OF OPTION.

              (a)    PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. Unless the Administrator provides otherwise,
vesting of Options granted hereunder shall be tolled during any unpaid leave of
absence. An Option may not be exercised for a fraction of a Share.

                                      -7-
<PAGE>

                     An Option shall be deemed exercised when the Company
receives: (i) written or electronic notice of exercise (in accordance with
the Option Agreement) from the person entitled to exercise the Option, and
(ii) full payment for the Shares with respect to which the Option is
exercised. Full payment may consist of any consideration and method of
payment authorized by the Administrator and permitted by the Option Agreement
and the Plan. Shares issued upon exercise of an Option shall be issued in the
name of the Optionee or, if requested by the Optionee, in the name of the
Optionee and his or her spouse. Until the Shares are issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause
to be issued) such Shares promptly after the Option is exercised. No
adjustment will be made for a dividend or other right for which the record
date is prior to the date the Shares are issued, except as provided in
Section 13 of the Plan.

                     Exercising an Option in any manner shall decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.

              (b)    TERMINATION OF RELATIONSHIP AS A SERVICE PROVIDER. If an
Optionee ceases to be a Service Provider, other than upon the Optionee's death
or Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

              (c)    DISABILITY OF OPTIONEE. If an Optionee ceases to be a
Service Provider as a result of the Optionee's Disability, the Optionee may
exercise his or her Option within such period of time as is specified in the
Option Agreement to the extent the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement). In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Optionee's termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.

              (d)    DEATH OF OPTIONEE. If an Optionee dies while a Service
Provider, the Option may be exercised within such period of time as is specified
in the Option Agreement (but in no event later than the expiration of the term
of such Option as set forth in the Notice of Grant), by the Optionee's estate or
by a person who acquires the right to exercise the Option by bequest or
inheritance, but only to the extent that the Option is vested on the date of
death. In the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for twelve (12) months

                                      -8-
<PAGE>

following the Optionee's termination. If, at the time of death, the Optionee is
not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall immediately revert to the Plan. The Option may be
exercised by the executor or administrator of the Optionee's estate or, if none,
by the person(s) entitled to exercise the Option under the Optionee's will or
the laws of descent or distribution. If the Option is not so exercised within
the time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

              (e)    BUYOUT PROVISIONS. The Administrator may at any time offer
to buy out for a payment in cash or Shares an Option previously granted based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.

       11.    STOCK PURCHASE RIGHTS.

              (a)    RIGHTS TO PURCHASE. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing or electronically, by means of a Notice of Grant,
of the terms, conditions and restrictions related to the offer, including the
number of Shares that the offeree shall be entitled to purchase, the price to be
paid, and the time within which the offeree must accept such offer. The offer
shall be accepted by execution of a Restricted Stock Purchase Agreement in the
form determined by the Administrator.

              (b)    REPURCHASE OPTION. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Administrator.

              (c)    OTHER PROVISIONS. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.

              (d)    RIGHTS AS A SHAREHOLDER. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.

       12.    NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS. Unless
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.

                                      -9-
<PAGE>

       13.    ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR
ASSET SALE.

              (a)    CHANGES IN CAPITALIZATION. Subject to any required action
by the shareholders of the Company, the number of shares of Common Stock covered
by each outstanding Option and Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.

              (b)    DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option or Stock Purchase Right shall lapse
as to all such Shares, provided the proposed dissolution or liquidation takes
place at the time and in the manner contemplated. To the extent it has not been
previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.

              (c)    MERGER OR ASSET SALE. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option and Stock Purchase Right
shall be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or exercisable. If
an Option or Stock Purchase Right becomes fully vested and exercisable in lieu
of assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully vested and exercisable for a
period of fifteen (15) days from the date of such notice, and the Option or
Stock Purchase Right shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option or Stock Purchase Right shall be
considered assumed if, following the merger or sale of assets, the option or
right confers the right to purchase or receive, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right immediately prior to the merger or

                                      -10-
<PAGE>

sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.

       14.    DATE OF GRANT. The date of grant of an Option or Stock Purchase
Right shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall be
provided to each Optionee within a reasonable time after the date of such grant.

       15.    AMENDMENT AND TERMINATION OF THE PLAN.

              (a)    AMENDMENT AND TERMINATION. The Board may at any time amend,
alter, suspend or terminate the Plan.

              (b)    SHAREHOLDER APPROVAL. The Company shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

              (c)    EFFECT OF AMENDMENT OR TERMINATION. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company. Termination of the Plan shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to Options
granted under the Plan prior to the date of such termination.

       16.    CONDITIONS UPON ISSUANCE OF SHARES.

              (a)    LEGAL COMPLIANCE. Shares shall not be issued pursuant to
the exercise of an Option or Stock Purchase Right unless the exercise of such
Option or Stock Purchase Right and the issuance and delivery of such Shares
shall comply with Applicable Laws and shall be further subject to the approval
of counsel for the Company with respect to such compliance.

              (b)    INVESTMENT REPRESENTATIONS. As a condition to the exercise
of an Option or Stock Purchase Right, the Company may require the person
exercising such Option or Stock Purchase Right to represent and warrant at the
time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is
required.

       17.    INABILITY TO OBTAIN AUTHORITY. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any

                                      -11-
<PAGE>

liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.

       18.    RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

       19.    SHAREHOLDER APPROVAL. The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Such shareholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.

                                      -12-

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