exv10w7w1







Exhibit 10.7.1




Lease Agreement




By And Between




Harbor Investment Partners,




a California general partnership




As Landlord




And




Financial Engines, Inc.,

a California corporation




As Tenant




Dated July 14, 1997














 





Table Of Contents




	 	 	 	 	 
	 	 	Page
	Basic Lease Information
	 	iv
	 
	 	 	 	 
	1. Demise
	 	 	1	 
	 
	 	 	 	 
	2. Premises
	 	 	1	 
	 
	 	 	 	 
	3. Term
	 	 	2	 
	 
	 	 	 	 
	4. Rent
	 	 	2	 
	 
	 	 	 	 
	5. Utilities And Services
	 	 	7	 
	 
	 	 	 	 
	6. Late Charge
	 	 	8	 
	 
	 	 	 	 
	7. Letter of Credit
	 	 	9	 
	 
	 	 	 	 
	8. Security Deposit
	 	 	10	 
	 
	 	 	 	 
	9. Possession
	 	 	11	 
	 
	 	 	 	 
	10. Use Of Premises
	 	 	11	 
	 
	 	 	 	 
	11. Acceptance Of Premises
	 	 	13	 
	 
	 	 	 	 
	12. Surrender
	 	 	14	 
	 
	 	 	 	 
	13. Alterations And Additions
	 	 	15	 
	 
	 	 	 	 
	14. Maintenance and Repairs Of Premises
	 	 	16	 
	 
	 	 	 	 
	15. Landlord’s Insurance
	 	 	17	 
	 
	 	 	 	 
	16. Tenant’s Insurance
	 	 	18	 
	 
	 	 	 	 
	17. Indemnification
	 	 	19	 
	 
	 	 	 	 
	18. Subrogation
	 	 	20	 
	 
	 	 	 	 
	19. Signs
	 	 	20	 
	 
	 	 	 	 
	20. Free From Liens
	 	 	21	 
	 
	 	 	 	 
	21. Entry By Landlord
	 	 	21	 
	 
	 	 	 	 
	22. Destruction And Damage
	 	 	21	 
	 
	 	 	 	 
	23. Condemnation
	 	 	24	 
	 
	 	 	 	 
	24. Assignment And Subletting
	 	 	25	 






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	 	 	Page
	25. Tenant’s Default
	 	 	28	 
	 
	 	 	 	 
	26. Landlord’s Remedies
	 	 	30	 
	 
	 	 	 	 
	27. Landlord’s Right to Perform Tenant’s Obligations
	 	 	33	 
	 
	 	 	 	 
	28. Attorney’s Fees
	 	 	34	 
	 
	 	 	 	 
	29. Taxes
	 	 	34	 
	 
	 	 	 	 
	30. Effect Of Conveyance
	 	 	35	 
	 
	 	 	 	 
	31. Tenant’s Estoppel Certificate
	 	 	35	 
	 
	 	 	 	 
	32. Subordination 
	 	 	36	 
	 
	 	 	 	 
	33. Environmental Covenants
	 	 	36	 
	 
	 	 	 	 
	34. Notices
	 	 	40	 
	 
	 	 	 	 
	35. Waiver
	 	 	40	 
	 
	 	 	 	 
	36. Holding Over
	 	 	41	 
	 
	 	 	 	 
	37. Successors And Assigns
	 	 	41	 
	 
	 	 	 	 
	38. Time
	 	 	41	 
	 
	 	 	 	 
	39. Brokers
	 	 	41	 
	 
	 	 	 	 
	40. Limitation Of Liability
	 	 	42	 
	 
	 	 	 	 
	41. Financial Statements
	 	 	42	 
	 
	 	 	 	 
	42. Rules And Regulations
	 	 	42	 
	 
	 	 	 	 
	43. Mortgagee Protection
	 	 	43	 
	 
	 	 	 	 
	44. Entire Agreement
	 	 	43	 
	 
	 	 	 	 
	45. Interest
	 	 	43	 
	 
	 	 	 	 
	46. Construction
	 	 	44	 
	 
	 	 	 	 
	47. Representations And Warranties Of Tenant
	 	 	44	 
	 
	 	 	 	 
	48. Security
	 	 	44	 
	 
	 	 	 	 
	49. Jury Trial Waiver
	 	 	45	 






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	Exhibit	 	 
	 
	 	 
	A

	 	Diagram of the Premises
	 
	 	 
	B

	 	Commencement and Expiration Date Memorandum
	 
	 	 
	C

	 	Rules and Regulations
	 
	 	 
	D

	 	Hazardous Materials Disclosure Certificate






iii









 





Lease Agreement




Basic Lease Information




	 	 	 
	Lease Date:

	 	July 14, 1997
	 
	 	 
	Landlord:

	 	Harbor Investment Partners,

a California general partnership
	 
	 	 
	Landlord’s Address:

	 	c/o Allegis Realty Investors LLC
 455 Market
Street, Suite 1540 
San Francisco, California
94105
	 
	 	 
	 

	 	All notices sent to Landlord under this Lease
shall be sent to the above address, with copies
to:
	 
	 	 
	 

	 	Insignia Commercial Group, Inc.

160 West Santa Clara Street, Suite 1350

San Jose, California 95113.
	 
	 	 
	Tenant:

	 	Financial Engines, Inc., 
a California corporation
	 
	 	 
	Tenant’s Contact Person:

	 	Jeff Maggioncalda
	 
	 	 
	Tenant’s Address and

Telephone Number:

	 	1804 Embarcadero Road

Suite 200

Palo Alto, California 94303

(415) _____
	 
	 	 
	Premises Square Footage:

	 	Approximately Eleven Thousand One Hundred Forty-Five 
(11,145) rentable square feet
	 
	 	 
	Premises Address:

	 	1804 Embarcadero Road

Suite 200

Palo Alto, California 94303
	 
	 	 
	Project:

	 	The Harbor Business Park, 1800-1858 Embarcadero
Road and 2445-2465 Faber Place, Palo Alto,
California, together with the land on which the
Project is situated and all Common Areas







iv









 








	 	 	 
	Building (if not the same
 as the Project):

	 	1804 Embarcadero Road 
Palo
Alto, California 94303
	 
	 	 
	Tenant’s Proportionate
 Share of Project:

	 	4.30% 
	 
	 	 
	Tenant’s Proportionate 
Share of Building:

	 	27.86% 
	 
	 	 
	Length of Term:

	 	Sixty (60) months 
	 
	 	 
	Estimated Commencement Date:

	 	August 7, 1997 
	 
	 	 
	Estimated Expiration Date:

	 	August 6, 2002 






	 	 	 	 	 	 	 	 	 	 	 
	Monthly Base Rent:

	 	 	 	 	 	 	 	Monthly Base
	 	Monthly Base
	 

	 	Months
	 	Sq. Ft.
	 	Rate
	 	Rent
	 

	 	1-12
	 	11,145	 	x$3.50
	 	=$39,007.50
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	13-60	 	 	Monthly Base Rent to be increased in accordance with
the Consumer Price Index Price (see Paragraph 4(a) of
the Lease)






	 	 	 
	Prepaid Rent:

	 	Thirty-Nine Thousand Seven and 50/100 Dollars ($39,007.50) 
	 
	 	 
	Month to which
Prepaid Base Rent
will be Applied:

	 	First (1st) month of the Term
	 
	 	 
	Base Year:

	 	1997 
	 
	 	 
	Security Deposit:

	 	Forty Seven Thousand Four Hundred Thirteen and 86/100 Dollars ($47,413.86) 
	 
	 	 
	Letter of Credit:

	 	Four Hundred Sixty-Eight Thousand Ninety Dollars ($468,090.00) 
	 
	 	 
	Permitted Use:

	 	General office use for software development firm
	 
	 	 
	Unreserved Parking 

Spaces:

	 	Thirty-three (33) nonexclusive and undesignated parking spaces






v









 






	 	 	 
	Broker (s):

	 	Cornish & Carey Commercial (Landlord’s Broker) BT
Commercial (Tenant’s Broker)







vi











 





Lease agreement




     This Lease Agreement is made and entered into by and between Landlord and Tenant on the Lease
Date. The defined terms used in this Lease which are defined in the Basic Lease Information
attached to this Lease Agreement (“Basic Lease Information”) shall have the meaning and definition
given them in the Basic Lease Information. The Basic Lease Information, the exhibits, the addendum
or addenda described in the Basic Lease Information, and this Lease Agreement are and shall be
construed as a single instrument and are referred to herein as the “Lease”.



1. Demise




     In consideration for the rents and all other charges and payments payable by Tenant, and for
the agreements, terms and conditions to be performed by Tenant in this Lease, Landlord does hereby
lease to Tenant, and Tenant does hereby hire and take from Landlord, the Premises described below (the “Premises”), upon the
agreements, terms and conditions of this Lease for the Term hereinafter stated.



2. Premises




     The Premises demised by this Lease is located in that certain building (the “Building”)
specified in the Basic Lease Information, which Building is located in that certain real estate
development (the “Project”) specified in the Basic Lease Information. The Premises has the address
and contains the square footage specified in the Basic Lease Information. The location and
dimensions of the Premises are depicted on Exhibit A, which is attached hereto and incorporated
herein by this reference. Tenant shall have the non-exclusive right (in common with the other
tenants, Landlord and any other person granted use by Landlord) to use the Common. Areas (as
hereinafter defined), except that, with respect to parking, Tenant shall have only a license to use
the number of non-exclusive and undesignated parking spaces set forth in the Basic Lease
Information in the Project’s parking areas (the “Parking Areas”); provided, however, that Landlord
shall not be required to enforce Tenant’s right to use such parking spaces; and, provided further,
that the number of parking spaces allocated to Tenant hereunder shall be reduced on a proportionate
basis in the event any of the parking spaces in the Parking Areas are taken or otherwise eliminated
as a result of any Condemnation (as hereinafter defined) or casualty event affecting such Parking
Areas. No easement for light or air is incorporated in the Premises. For purposes of this Lease,
the term “Common Areas” shall mean all areas and facilities outside the Premises and within the
exterior boundary line of the Project that are provided and designated by Landlord for the
non-exclusive use of Landlord, Tenant and other tenants of the Project and their respective
employees, guests and invitees.



1









 





     Landlord has the right, in its sole discretion, from time to time, to: (a) make changes to the
Common Areas, including, without limitation, changes in the location, size, shape and number of
driveways, entrances, parking spaces, parking areas, ingress, egress, direction of driveways,
entrances, corridors and walkways; (b) close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available; (c) add additional
buildings and improvements to the Common Areas or remove existing buildings or improvements
therefrom; (d) use the Common Areas while engaged in making additional improvements, repairs or
alterations to the Project or any portion thereof; and (e) do and perform any other acts or make
any other changes in, to or  with respect to the Common Areas and the Project as Landlord may,
in its sole discretion, deem to be appropriate.



3. Term




          The term of this Lease (the “Term”) shall be for the period of months specified in the Basic
Lease Information, commencing on the date Landlord delivers possession of the Premises to Tenant
(the “Commencement Date”). In the event the actual Commencement Date is a date other than the
Estimated Commencement Date specified in the Basic Lease Information, then Landlord and Tenant
shall promptly execute a Commencement and Expiration Date Memorandum in the form attached hereto as
Exhibit B, wherein the parties shall specify the Commencement Date and the date on which the Term
expires (the “Expiration Date”).



4. Rent




     (a) Base Rent. Tenant shall pay to Landlord, in advance on the first day of each month,
without further notice or demand and without offset or deduction, the monthly installments of rent
specified in the Basic Lease Information (the “Base Rent”).



          The Base Rent under this Paragraph 4(a) shall be adjusted, as stated below, on August 1 of
each year during the Term commencing on August 1, 1998 to reflect percentage increases in the cost
of living. The Consumer Price Index (U.S. Department of Labor Consumer Price Index (all items) for
Urban Wage Earners and Clerical Workers, San Francisco Bay Area (1982-1984=100), hereinafter
referred to as the “Index”) published for the month immediately preceding each such adjustment date
(each, an “Adjustment Index”) and the Index published for the month immediately preceding the
Commencement Date of this Lease (“Base Index”) shall be compared and the percentage difference
between the Adjustment Index and the Base Index shall be determined. The initial Base Rent
specified in the Basic Lease Information shall be increased by adding to said initial Base Rent the
percentage amount of said initial Base Rent equal to the percentage



2









 




difference between the Base Index and the applicable Adjustment Index; provided, however, in no
event shall the initial Base Rent hereunder be increased by less than five percent (5%) or more
than eight percent (8%) for any one year. When the adjusted Base Rent is determined after each
adjustment date, Landlord shall give Tenant written notice indicating the amount thereof and the
method of computation. If the Consumer Price Index is changed or discontinued, Landlord shall
substitute an official index published by the Bureau of Labor Statistics or its successor or
similar governmental agency as may then be in existence and shall be most nearly equivalent
thereto.




          Upon execution of this Lease, Tenant shall pay to Landlord the Prepaid Base Rent specified in
the Basic Lease Information to be applied toward Base Rent for the month of the Term specified in
the Basic Lease Information.



     (b) Additional Rent. During the term, in addition to the Base Rent, Tenant shall pay to
Landlord as additional rent (the “Additional Rent”), in accordance with this Paragraph 4, Tenant’s
Proportionate Share(s) of the total dollar increase, if any, in Expenses (as defined below) each
calendar year over Expenses in the Base Year (as specified in the Basic Lease Information). As used
in this Lease, “Expenses” means all costs and expenses paid or incurred by Landlord in connection
with the ownership, operation, maintenance, management and repair of the Premises, the Building
and/or the Project or any part thereof, including, without limitation, all the following items:



          (1) Taxes and Assessments. All real estate taxes and assessments, which shall include any
form of tax, assessment, fee, license fee, business license fee, levy, penalty (if a result of
Tenant’s delinquency), or tax (other than net income, estate, succession, inheritance, transfer or
franchise taxes), imposed by any authority having the direct or indirect power to tax, or by any
city, county, state or federal government or any improvement or other district or division thereof,
whether such tax is (i) determined by the area of the Premises, the Building and/or the Project or
any part thereof, or the Rent and other sums payable hereunder by Tenant or by other tenants,
including, but not limited to, any gross income or excise tax levied by any of the foregoing
authorities with respect to receipt of Rent and/or other sums due under this Lease; (ii) upon any
legal or equitable interest of Landlord in the Premises, the Building and/or the Project or any
part thereof; (iii) upon this transaction or any document to which Tenant is a party creating or
transferring any interest in the Premises, the Building and/or the Project; (iv) levied or assessed
in lieu of, in substitution for, or in addition to, existing or additional taxes against the
Premises, the Building and/or the Project, whether or not now customary or within the contemplation
of the parties; or (v) surcharged against the parking area. Tenant and Landlord acknowledge that
Proposition 13 was adopted by the voters of the State of California in the June, 1978 election and
that assessments, taxes, fees, levies and charges may be imposed by governmental




3









 







agencies for such purposes as fire protection, street, sidewalk, road, utility construction and
maintenance, refuse removal and for other governmental services which may formerly have been
provided without charge to property owners or occupants. It is the intention of the parties that
all new and increased assessments, taxes, fees, levies and charges due to any cause whatsoever are
to be included within the definition of real property taxes for purposes of this Lease. “Taxes and
assessments” shall also include legal and consultants’ fees, costs and disbursements incurred in
connection with proceedings to contest, determine or reduce taxes, Landlord specifically reserving
the right, but not the obligation, to contest by appropriate legal proceedings the amount or
validity of any taxes.




          (2) Insurance. All insurance premiums for the Building and/or the Project or any part thereof,
including premiums for “all risk” fire and extended coverage insurance, commercial general
liability insurance, rent loss or abatement insurance, earthquake insurance, flood or surface water
coverage, and other insurance as Landlord deems necessary in its sole discretion, and any
deductibles paid under policies of any such insurance.



          (3) Utilities. The cost of all electricity, water, gas, sewers, oil and other utilities
(collectively, “Utilities”), including any surcharges imposed, serving the Premises, the Building
and the Project that are not separately metered to Tenant or any other tenant, any assessments or
charges for Utilities or similar purposes included within any tax bill for the Building or the
Project, including without limitation, entitlement fees, allocation unit fees, and/or any similar
fees or charges and any penalties (if a result of Tenant’s delinquency) related thereto, and any
amounts, taxes, charges, surcharges, assessments or impositions levied, assessed or imposed upon
the Premises, the Building or the Project or any part thereof, or upon Tenant’s use and occupancy
thereof, as a result of any rationing of Utility services or restriction on Utility use affecting
the Premises, the Building and/or the Project, as contemplated in Paragraph 5 below (collectively,
“Utility Expenses”).



          (4) Common Area Expenses. All costs to operate, maintain, repair,
replace, supervise, insure and administer the Common Areas, including supplies, materials, labor
and equipment used in or related to the operation and maintenance of the Common Areas, including
parking areas (including, without limitation, all costs of resurfacing and restriping parking
areas), signs and directories on the Building and/or the Project, landscaping (including
maintenance contracts and fees payable to landscaping consultants), amenities, sprinkler systems,
sidewalks, walkways, driveways, curbs, lighting systems and security services, if any, provided by
Landlord for the Common Areas, and any charges, assessments, costs or fees levied by any
association or entity of which the Project or any part thereof is a member or to which the Project
or any part thereof is subject.



4









 





          (5) Parking Charges. Any parking charges or other costs levied, assessed or imposed by, or at
the direction of, or resulting from statutes or regulations, or interpretations thereof,
promulgated by any governmental authority or insurer in connection with the use or occupancy of the
Building or the Project.



          (6) Maintenance and Repair Costs. Except for costs which are the responsibility of Landlord
pursuant to Paragraph 14(b) below, all costs to maintain, repair, and replace the Premises, the
Building and/or the Project or any part thereof, including without limitation, (i) all costs paid
under maintenance, management and service agreements such as contracts for janitorial, security and
refuse removal, (ii) all costs to maintain, repair and replace the roof coverings of the Building
or the Project or any part thereof, (iii) all costs to maintain, repair and replace the heating,
ventilating, air conditioning, plumbing, sewer, drainage, electrical, fire protection, life safety
and security systems and other mechanical and electrical systems and equipment serving the
Premises, the Building and/or the Project or any part thereof (collectively, the “Systems”), (iv)
the cost of all cleaning and janitorial services and supplies, and (v) the cost of window glass
replacement and repair.



          (7) Life Safety Costs. All costs to install, maintain, repair and replace all life safety
systems, including, without limitation, all fire alarm systems, serving the Premises, the Building
and/or the Project or any part thereof (including all maintenance contracts and fees payable to
life safety consultants) whether such systems are or shall be required by Landlord’s insurance
carriers, Laws (as hereinafter defined) or otherwise.



          (8) Management and Administration. All costs for management and administration of the
Premises, the Building and/or the Project or any part thereof, including, without limitation, a
property management fee, accounting, auditing, billing, postage, salaries and benefits for clerical
and supervisory employees, whether located on the Project or off-site, payroll taxes and legal and
accounting costs and fees for licenses and permits related to the ownership and operation of the
Project.



               Notwithstanding anything in this Paragraph 4(b) to the contrary, with respect to all sums
payable as Additional Rent under this Paragraph 4(b) for the repair or replacement of any item or
the construction of any new item in connection with the physical operation of the Premises, the
Building or the Project (i.e., HVAC, roof membrane or coverings and parking area) which is a
capital item the repair or replacement of which properly would be capitalized under generally
accepted accounting principles, Tenant shall be required to pay only its Percentage Share of the
prorata share of the cost of the item falling due within the Term (including any Renewal Term)
based upon the amortization of the same over the useful life of such item, as reasonably determined
by Landlord.



5









 





     (c) Payment of Additional Rent.



          (1) During the last month of the Base Year and each calendar year thereafter, or as soon
thereafter as practicable, Landlord shall submit to Tenant an estimate of monthly Additional Rent
for the following calendar year, and Tenant shall pay such estimated Additional Rent on a monthly
basis, in advance, on the first day of each month. Tenant shall continue to make said monthly
payments until notified by Landlord of a change therein. By April 1 of each calendar year,
Landlord shall endeavor to provide to Tenant a statement showing the actual Additional Rent due to
Landlord for the prior calendar year. If the total of the monthly payments of Additional Rent that
Tenant has made for the prior calendar year is less than the actual Additional Rent chargeable to
Tenant for such prior calendar year, then Tenant shall pay the difference in a lump sum within ten
(10) days after receipt of such statement from Landlord. Any overpayment by Tenant of Additional Rent for the prior calendar year shall be credited towards the Additional Rent
next due.



          (2) Landlord’s then-current annual operating and capital budgets for the Building and the
Project or the pertinent part thereof shall be used for purposes of calculating Tenant’s monthly
payment of estimated Additional Rent for the current year, subject to adjustment as provided
above. Landlord shall make the final determination of Additional Rent for the year in which this
Lease terminates as soon as possible after termination of such year. Even though the Term has
expired and Tenant has vacated the Premises, Tenant shall remain liable for payment of any amount
due to Landlord in excess of the estimated Additional Rent previously paid by Tenant, and,
conversely, Landlord shall promptly return to Tenant any overpayment. Failure of Landlord to
submit statements as called for herein shall not be deemed a waiver of Tenant’s obligation to pay
Additional Rent as herein provided.



          (3) With respect to Expenses which Landlord allocates to the Building, Tenant’s
“Proportionate Share” shall be the percentage set forth in the Basic Lease Information as Tenant’s
Proportionate Share of the Building, as adjusted by Landlord from time to time for a remeasurement
of or changes in the physical size of the Premises or the Building, whether such changes in size
are due to an addition to or a sale or conveyance of a portion of the Building or otherwise. With
respect to Expenses which Landlord allocates to the Project as a whole or to only a portion of the
Project, Tenant’s “Proportionate Share” shall be, with respect to Expenses which Landlord
allocates to the Project as a whole, the percentage set forth in the Basic Lease Information as
Tenant’s Proportionate Share of the Project and, with respect to Expenses which Landlord allocates
to only a portion of the Project, a percentage calculated by Landlord from time to time in its
sole discretion and furnished to Tenant in writing, in either case as adjusted by Landlord from
time to time for a remeasurement of or changes in the physical size of the Premises or the




6









 







Project, whether such changes in size are due to an addition to or a sale or conveyance of a
portion of the Project or otherwise. Notwithstanding the foregoing, Landlord may equitably adjust
Tenant’s Proportionate Share(s) for all or part of any item of expense or cost reimbursable by
Tenant that relates to a repair, replacement, or service that benefits only the Premises or only a
portion of the Building and/or the Project or that varies with the occupancy of the Building and/or
the Project. Without limiting the generality of the foregoing, Tenant understands and agrees that
Landlord shall have the right to adjust Tenant’s Proportionate Share(s) of any Utility Expenses
based upon Tenant’s use of the Utilities or similar services as reasonably estimated and determined
by Landlord based upon factors such as size of the Premises and intensity of use of such Utilities
by Tenant such that Tenant shall pay the portion of such charges reasonably consistent with
Tenant’s use of such Utilities and similar services.




          (4) In the event the average occupancy level of the Building or the Project for the Base Year
and/or any subsequent Comparison Year is not ninety percent (90%) or more of full occupancy, then
the Expenses for such year shall be apportioned among the tenants by the Landlord to reflect those
costs which would have occurred had the Building or the Project, as applicable, been ninety percent
(90%) occupied during such year.



     (d) General Payment Terms. The Base Rent, Additional Rent and all other sums payable by
Tenant to Landlord hereunder, including, without limitation, any late charges assessed pursuant to
Paragraph 6 below and any interest assessed pursuant to Paragraph 45 below, are referred to as the
“Rent”. All Rent shall be paid without deduction, offset or abatement in lawful money of the United
States of America. Checks are to be made payable to Harbor Investment Partners and shall be mailed
to: Dept. No. 66218, E1 Monte, California 91735-6128, or to such other person or place as Landlord
may, from time to time, designate to Tenant in writing. The Rent for any fractional part of a
calendar month at the commencement or termination of the Lease term shall be a prorated amount of
the Rent for a full calendar month based upon a thirty (30) day month.



5. Utilities And Services




     (a) From 7:00 a.m. to 6:00 p.m. on weekdays (“Normal Business Hours”) (excluding legal
holidays), Landlord shall furnish to the Premises electricity for lighting and operation of
low-power usage office machines, water, heat and air conditioning, and elevator service. During all
other hours, Landlord shall furnish such service except for heat and air conditioning. Landlord
shall provide janitorial services for the Premises on weekdays (excluding legal holidays) as
determined reasonably necessary by Landlord.



7









 





     (b) If requested by Tenant, Landlord shall furnish heat and air conditioning at times other
than Normal Business Hours and the cost of such services as established by Landlord shall be paid
by Tenant as Additional Rent, payable concurrently with the next installment of Base Rent.



     (c) Tenant acknowledges that the Premises, the Building and/or the Project may become subject
to the rationing of Utility services or restrictions on Utility use as required by a public utility
company, governmental agency or other similar entity having jurisdiction thereof. Tenant
acknowledges and agrees that its tenancy and occupancy hereunder shall be subject to such rationing
or restrictions as may be imposed upon Landlord, Tenant, the Premises, the Building and/or the
Project, and Tenant shall in no event be excused or relieved from any covenant or obligation to be
kept or performed by Tenant by reason of any such rationing or restrictions. Tenant agrees to
comply with energy conservation programs implemented by Landlord by reason of rationing,
restrictions or Laws.



     (d) Landlord shall not be liable for any loss, injury or damage to property caused by or
resulting from any variation, interruption, or failure of Utilities due to any cause whatsoever, or
from failure to make any repairs or perform any maintenance. No temporary interruption or failure
of such services incident to the making of repairs, alterations, improvements, or due to accident,
strike, or conditions or other events shall be deemed an eviction of Tenant or relieve Tenant from
any of its obligations hereunder. In no event shall Landlord be liable to Tenant for any damage to
the Premises or for any loss, damage or injury to any property therein or thereon occasioned by
bursting, rupture, leakage or overflow of any plumbing or other pipes (including, without
limitation, water, steam, and/or refrigerant lines), sprinklers, tanks, drains, drinking fountains
or washstands, or other similar cause in, above, upon or about the Premises, the Building, or the
Project.



6. Late Charge




     Notwithstanding any other provision of this Lease, Tenant hereby acknowledges that late
payment to Landlord of Rent, or other amounts due hereunder will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. If
any Rent or other sums due from Tenant are not received by Landlord or by Landlord’s designated
agent within three (3) days after their due date, then Tenant shall pay to Landlord a late charge
equal to ten percent (10%) of such overdue amount, plus any costs and attorneys’ fees incurred by
Landlord by reason of Tenant’s failure to pay Rent and/or other charges when due hereunder.
Landlord and Tenant hereby agree that such late charges represent a fair and reasonable estimate of
the cost that Landlord will incur by reason of Tenant’s late payment and shall not be construed as
a penalty. Landlord’s acceptance of such late charges shall not constitute a waiver



8









 




of Tenant’s default with respect to such overdue amount or estop Landlord from exercising any of
the other rights and remedies granted under this Lease.




Initials: Landlord CDS            Tenant JM




7. Letter of Credit




     (a) Upon execution of this Lease, Tenant shall deliver to Landlord, at Tenant’s sole cost and
expense, the Letter of Credit described below in the amount specified in the Basic Lease
Information (the “LC Face Amount”) as security for Tenant’s performance of all of Tenant’s
covenants and obligations under this Lease, which security shall be in addition to the Security
Deposit provided pursuant to Paragraph 8 below; provided, however, that neither the Letter of
Credit nor any Letter of Credit Proceeds (as defined below) shall be deemed an advance rent deposit
or an advance payment of any other kind, or a measure of Landlord’s damages upon Tenant’s Default.
The Letter of Credit shall be maintained in effect from the date hereof through the date that is
sixty (60) days after the Expiration Date (the “LC Termination Date”). On the LC Termination
Date, Landlord shall return to Tenant the Letter of Credit and any Letter of Credit Proceeds then
held by Landlord (other than those Letter of Credit Proceeds Landlord is entitled to retain under
the terms of this Paragraph 7(a)); provided, however, that in no event shall any such return be
construed as an admission by Landlord that Tenant has performed all of its obligations hereunder.
Landlord shall not be required to segregate the Letter of Credit Proceeds from its other funds and
no interest shall accrue or be payable to Tenant with respect thereto. Landlord may (but shall not
be required to) draw upon the Letter of Credit and use the proceeds therefrom (the “Letter of
Credit Proceeds”) or any portion thereof to cure any Default under this Lease and to compensate
Landlord for any damage Landlord incurs as a result of such Default, and for any other purpose for
which Landlord is entitled to use, apply or retain the Security Deposit or any portion thereof
pursuant to Paragraph 8 below, it being understood that any use of the Letter of Credit Proceeds
shall not constitute a bar or defense to any of Landlord’s remedies set forth in Paragraph 26
below. In such event and upon written notice from Landlord to Tenant specifying the amount of the
Letter of Credit Proceeds so utilized by Landlord and the particular purpose for which such amount
was applied, Tenant shall immediately deliver to Landlord an amendment to the Letter of Credit or a
replacement Letter of Credit in an amount equal to the full LC Face Amount. Tenant’s failure to
deliver such replacement Letter of Credit to Landlord within ten (10) days of Landlord’s notice
shall constitute a Default hereunder.



     (b) Upon the third (3rd) anniversary of the Commencement Date, Landlord shall review Tenant’s
financial statements and other information requested by Landlord regarding the prospects for
Tenant’s continued business operations throughout the remainder of the Term (collectively,
“Tenant’s Financials”). In the




9









 







event Tenant’s Financials are acceptable to Landlord in its sole and absolute discretion, then
Landlord shall permit Tenant to reduce the LC Face Amount to an amount equal to six (6) months of
Base Rent at the time of such reduction.




     (c) As used herein, Letter of Credit shall mean an unconditional, stand-by irrevocable
letter of credit (herein referred to as the “Letter of Credit”) issued by the San Francisco office
of a major national bank insured by the Federal Deposit Insurance Corporation and otherwise
satisfactory to Landlord (the “Bank”), naming Landlord as beneficiary, in the amount of the LC Face
Amount, and otherwise in form and substance satisfactory to Landlord. The Letter of Credit shall be
for a one-year term and shall provide: (i) that Landlord may make partial and multiple draws
thereunder, up to the face amount thereof, (ii) that Landlord may draw upon the Letter of Credit up
to the full amount thereof and the Bank will pay to Landlord the amount of such draw upon receipt
by the Bank of a sight draft signed by Landlord and accompanied by a written certification from
Landlord to the Bank stating either that: (A) a Default has occurred and is continuing under this
Lease and any applicable grace period has expired, or (B) Landlord has not received notice from the
Bank at least thirty (30) days prior to the then current expiry date of the Letter of Credit that
the Letter of Credit will be renewed by the Bank for at least one (1) year beyond the relevant
annual expiration date or, in the case of the last year of the Term, sixty (60) days after the
Expiration Date, together with a replacement Letter of Credit or a modification to the existing
Letter of Credit effectuating such renewal, and Tenant has not otherwise furnished Landlord with a
replacement Letter of Credit as hereinafter provided; and (iii) that, in the event of Landlord’s
assignment or other transfer of its interest in this Lease, the Letter of Credit shall be freely
transferable by Landlord, without recourse and without the payment of any fee or consideration, to
the assignee or transferee of such interest and the Bank shall confirm the same to Landlord and
such assignee or transferee. In the event that the Bank shall fail to (y) notify Landlord that the
Letter of Credit will be renewed for at least one (1) year beyond the then applicable expiration
date, and (z) deliver to Landlord a replacement Letter of Credit or a modification to the existing
Letter of Credit effectuating such renewal, and Tenant shall not have otherwise delivered to
Landlord, at least thirty (30) days prior to the relevant annual expiration date, a replacement
Letter of Credit in the amount required hereunder and otherwise meeting the requirements set forth
above, then Landlord shall be entitled to draw on the Letter of Credit as provided above, and shall
hold the proceeds of such draw as Letter of Credit Proceeds pursuant to Paragraph 7(a) above.



8. Security Deposit




     Concurrently with Tenant’s execution of the Lease, Tenant shall deposit with Landlord, in
addition to the Letter of Credit provided pursuant to Paragraph 7 above, the Security Deposit
specified in the Basic Lease Information as security for



10









 




the full and faithful performance of each and every term, covenant and condition of this Lease.
Landlord may use, apply or retain the whole or any part of the Security Deposit as may be
reasonably necessary (a) to remedy any Default by Tenant under this Lease, (b) to repair damage to
the Premises caused by Tenant, (c) to clean the Premises upon termination of this Lease, (d) to
reimburse Landlord for the payment of any amount which Landlord may reasonably spend or be required
to spend by reason of Tenant’s Default, and (e) to compensate Landlord for any other loss or damage
which Landlord may suffer by reason of Tenant’s Default. Should Tenant faithfully and fully comply
with all of the terms, covenants and conditions of this Lease, within thirty (30) days following
the expiration of the Term, the Security Deposit or any balance thereof shall be returned to Tenant
or, at the option of Landlord, to the last assignee of Tenant’s interest in this Lease. Landlord
shall not be required to keep the Security Deposit separate from its general funds and Tenant shall
not be entitled to any interest on such deposit. If Landlord so uses or applies all or any portion
of said deposit, within five (5) days after written demand therefor Tenant shall deposit cash with
Landlord in an amount sufficient to restore the Security Deposit to the full extent of the above
amount, and Tenant’s failure to do so shall be a default under this Lease. In the event Landlord
transfers its interest in this Lease, Landlord shall transfer the then remaining amount of the
Security Deposit to Landlord’s successor in interest, and thereafter Landlord shall have no further
liability to Tenant with respect to such Security Deposit.




9. Possession




     (a) Tenant’s Right of Possession. Subject to Paragraph 9(b), Tenant shall be entitled to
possession of the Premises upon commencement of the Term.



     (b) Delay in Delivering Possession. If for any reason whatsoever, Landlord cannot deliver
possession of the Premises to Tenant on or before the Estimated Commencement Date, this Lease shall
not be void or voidable, nor shall Landlord, or Landlord’s agents, advisors, employees, partners,
shareholders, directors, invitees or independent contractors (collectively, “Landlord’s Agents”),
be liable to Tenant for any loss or damage resulting therefrom. Tenant shall not be liable for Rent
until Landlord delivers possession of the Premises to Tenant. The Expiration Date shall be extended
by the same number of days that Tenant’s possession of the Premises was delayed beyond the
Estimated Commencement Date.



10. Use Of Premises




     (a) Permitted Use. The use of the Premises by Tenant and Tenant’s agents, advisors,
employees, partners, shareholders, directors, invitees and independent contractors (collectively,
“Tenant’s Agents”) shall be solely for the Permitted Use specified in the Basic Lease Information
and for no other use. Tenant shall not permit any objectionable or unpleasant odor, smoke, dust,
gas, noise or vibration to




11









 







emanate from or near the Premises. The Premises shall not be used to create any nuisance or
trespass, for any illegal purpose, for any purpose not permitted by Laws, for any purpose that
would invalidate the insurance or increase the premiums for insurance on the Premises, the Building
or the Project or for any purpose or in any manner that would interfere with other tenants’ use or
occupancy of the Project. If any of Tenant’s office machines or equipment disturb any other tenant
in the Building, then Tenant shall provide adequate insulation or take such other action as may be
necessary to eliminate the noise or disturbance. Tenant agrees to pay to Landlord, as Additional
Rent, any increases in premiums on policies resulting from Tenant’s Permitted Use or any other use
or action by Tenant or Tenant’s Agents which increases Landlord’s premiums or requires additional
coverage by Landlord to insure the Premises, Tenant agrees not to overload the floor(s) of the
Building.




     (b) Compliance with Governmental Regulations and Private Restrictions.
Tenant and Tenant’s Agents shall, at Tenant’s expense, faithfully observe and comply with (1) all
municipal, state and federal laws, statutes, codes, rules, regulations, ordinances, requirements,
and orders (collectively, “Laws”), now in force or which may hereafter be in force pertaining to
the Premises or Tenant’s use of the Premises, the Building or the Project; (2) all recorded
covenants, conditions and restrictions affecting the Project (“Private Restrictions”) now in force
or which may hereafter be in force; and (3) any and all rules and regulations set forth in Exhibit
C and any other rules and regulations now or hereafter promulgated by Landlord related to parking
or the operation of the Premises, the Building and/or the Project (collectively, the “Rules and
Regulations”). The judgment of any court of competent jurisdiction, or the admission of Tenant in
any action or proceeding against Tenant, whether Landlord be a party thereto or not, that Tenant
has violated any such Laws or Private Restrictions, shall be conclusive of that fact as between
Landlord and Tenant.



     (c) Compliance with Americans with Disabilities Act. Landlord and Tenant hereby agree and
acknowledge that the Premises, the Building and/or the Project may be subject to, among other Laws,
the requirements of the Americans with Disabilities Act, a federal law codified at 42 U.S.C. 12101
et seq., including, but not limited to Title III thereof, and all regulations and guidelines
related thereto, together with any and all laws, rules, regulations, ordinances, codes and statutes
now or hereafter enacted by local or state agencies having jurisdiction thereof, including all
requirements of Title 24 of the State of California, as the same may be in effect on the date of
this Lease and may be hereafter modified, amended or supplemented (collectively, the “ADA”). Any
Tenant Improvements to be constructed hereunder shall be in compliance with the requirements of the
ADA, and all costs incurred for purposes of compliance therewith shall be a part of and included in
the costs of the Tenant Improvements. Tenant shall be solely responsible for conducting its own
independent investigation of this matter and for



12









 




ensuring that the design of all Tenant Improvements strictly complies with all requirements of the
ADA. Subject to reimbursement pursuant to Paragraph 4 above, if any barrier removal work or other
work is required to the Building, the Common Areas or the Project under the ADA, then such work
shall be the responsibility of Landlord; provided, if such work is required under the ADA as a
result of Tenant’s use of the Premises or any work or Alteration (as hereinafter defined) made to
the Premises by or on behalf of Tenant, then such work shall be performed by Landlord at the sole
cost and expense of Tenant. Except as otherwise expressly provided in this provision, Tenant shall
be responsible at its sole cost and expense for fully and faithfully complying with all applicable
requirements of the ADA, including without limitation, not discriminating against any disabled
persons in the operation of Tenant’s business in or about the Premises, and offering or otherwise
providing auxiliary aids and services as, and when, required by the ADA. Within ten (10) days after
receipt, Tenant shall advise Landlord in writing, and provide Landlord with copies of (as
applicable), any notices alleging violation of the ADA relating to any portion of the Premises, the
Building or the Project; any claims made or threatened orally or in writing regarding noncompliance
with the ADA and relating to any portion of the Premises, the Building, or the Project; or any
governmental or regulatory actions or investigations instituted or threatened regarding
noncompliance with the ADA and relating to any portion of the Premises, the Building or the
Project. Tenant shall and hereby agrees to protect, defend (with counsel acceptable to Landlord)
and hold Landlord and Landlord’s Agents harmless and indemnify Landlord and Landlord’s Agents from
and against all liabilities, damages, claims, losses, penalties, judgments, charges and expenses
(including attorneys’ fees, costs of court and expenses necessary in the prosecution or defense of
any litigation including the enforcement of this provision) arising from or in any way related to,
directly or indirectly, Tenant’s or Tenant’s Agents’ violation or alleged violation of the ADA.
Tenant agrees that the obligations of Tenant herein shall survive the expiration or earlier
termination of this Lease




11. Acceptance Of Premises




     (a) By entry hereunder, Tenant accepts the Premises as suitable for Tenant’s intended use and
as being in good and sanitary operating order, condition and repair, AS IS, and without
representation or warranty by Landlord as to the condition, use or occupancy which may be made
thereof. Any exceptions to the foregoing must be by written agreement executed by Landlord and
Tenant.



     (b) Prior to the Commencement Date, Landlord shall clean the carpet and touch up the paint in
the Premises. Except for the foregoing, Landlord shall have no obligation to remodel, improve or
otherwise alter the Premises prior to or after the Commencement Date.



13









 





12. Surrender




     Tenant agrees that on the last day of the Term, or on the sooner termination of this Lease,
Tenant shall surrender the Premises to Landlord (a) in good condition and repair (damage by acts of
God, fire, and normal wear and tear excepted), but with all interior walls painted or cleaned so
they appear painted, any carpets cleaned, all floors cleaned and waxed and all non-working light
bulbs and ballasts replaced, and (b) otherwise in accordance with Paragraph 33(h). Normal wear and
tear shall not include any damage or deterioration to the floors of the Premises arising from the
use of forklifts in, on or about the Premises (including, without limitation, any marks or stains
on any portion of the floors) any damage or deterioration that would have been prevented by proper
maintenance by Tenant, or Tenant otherwise performing all of its obligations under this Lease. On
or before the expiration or sooner termination of this Lease, (i) Tenant shall remove all of
Tenant’s Property (as hereinafter defined) and Tenant’s signage from the Premises, the Building and
the Project and repair any damage caused by such removal, and (ii) Landlord may, by notice to
Tenant given not later than ninety (90) days prior to the Expiration Date (except in the event of a
termination of this Lease prior to the scheduled Expiration Date, in which event no advance notice
shall be required), require Tenant at Tenant’s expense to remove any or all Alterations and to
repair any damage caused by such removal. Any of Tenant’s Property not so removed by Tenant as
required herein shall be deemed abandoned and may be stored, removed, and disposed of by Landlord
at Tenant’s expense, and Tenant waives all claims against Landlord for any damages resulting from
Landlord’s retention and disposition of such property; provided, however, that Tenant shall remain
liable to Landlord for all costs incurred in storing and disposing of such abandoned property of
Tenant. All Tenant Improvements and Alterations except those which Landlord requires Tenant to
remove shall remain in the Premises as the property of Landlord. If the Premises are not
surrendered at the end of the Term or sooner termination of this Lease, and in accordance with the
provisions of this Paragraph 12 and Paragraph 33(h) below, Tenant shall continue to be responsible
for the payment of Rent (as the same may be increased pursuant to Paragraph 36 below) until the
Premises are so surrendered in accordance with said Paragraphs, and Tenant shall indemnify, defend
and hold Landlord harmless from and against any and all loss or liability resulting from delay by
Tenant in so surrendering the Premises including, without limitation, any loss or liability
resulting from any claim against Landlord made by any succeeding tenant or prospective tenant
founded on or resulting from such delay and losses to Landlord due to lost opportunities to lease
any portion of the Premises to any such succeeding tenant or prospective tenant, together with, in
each case, actual attorneys’ fees and costs.



14









 





13. Alterations And Additions



     (a) Tenant shall not make, or permit to be made, any alteration, addition or improvement
(hereinafter referred to individually as an “Alteration” and collectively as the “Alterations”) to
the Premises or any part thereof without the prior written consent of Landlord, which consent
shall not be unreasonably withheld; provided, however, that Landlord shall have the right in its
sole and absolute discretion to consent or to withhold its consent to any Alteration which affects
the structural portions of the Premises, the Building or the Project or the Systems serving the
Premises, the Building and/or the Project or any portion thereof.



     (b) Any Alteration to the Premises shall be at Tenant’s sole cost and expense, in compliance
with all applicable Laws and all requirements requested by Landlord, including, without
limitation, the requirements of any insurer providing coverage for the Premises or the Project or
any part thereof, and in accordance with plans and specifications approved in writing by Landlord,
and shall be constructed and installed by a contractor approved in writing by Landlord. As a
further condition to giving consent, Landlord may require Tenant to provide Landlord, at Tenant’s
sole cost and expense, a payment and performance bond in form acceptable to Landlord, in a
principal amount not less than one and one-half times the estimated costs of such Alterations, to
ensure Landlord against any liability for mechanic’s and materialmen’s liens and to ensure
completion of work. Before Alterations may begin, valid building permits or other permits or licenses required must be
furnished to Landlord, and, once the Alterations begin, Tenant will diligently and
continuously pursue their completion. Landlord may monitor construction of the Alterations and
Tenant shall reimburse Landlord for its costs (including, without limitation, the costs of any
construction manager retained by Landlord) in reviewing plans and documents and in monitoring
construction. Tenant shall maintain during the course of construction, at its sole cost and
expense, builders’ risk insurance for the amount of the completed value of the Alterations on
an all-risk non-reporting form covering all improvements under construction, including
building materials, and other insurance in amounts and against such risks as Landlord shall
reasonably require in connection with the Alterations. In addition to and without limitation
on the generality of the foregoing, Tenant shall ensure that its contractor(s) procure and
maintain in full force and effect during the course of construction a “broad form” commercial
general liability and property damage policy of insurance naming Landlord, Tenant and
Landlord’s lenders as additional insureds. The minimum limit of coverage of the aforesaid
policy shall be in the amount of not less than Three Million Dollars ($3,000,000.00) for
injury or death of one person in any one accident or occurrence and in the amount of not less
than Three Million Dollars ($3,000,000.00) for injury or death of more than one person in any
one accident or occurrence, and shall contain a severability of interest clause or a cross
liability endorsement. Such



15









 




insurance shall further insure Landlord and Tenant against liability for property damage of
at least One Million Dollars ($1,000,000.00).




     (c) All Alterations, including, but not limited to, heating, lighting, electrical, air
conditioning, fixed partitioning, drapery, wall covering and paneling, built-in cabinet work and
carpeting installations made by Tenant, together with all property that has become an integral part
of the Premises or the Building, shall at once be and become the property of Landlord, and shall
not be deemed trade fixtures or Tenant’s Property.



     (d) No private telephone systems and/or other related computer or telecommunications equipment
or lines may be installed without Landlord’s prior written consent. If Landlord gives such
consent, all equipment must be installed within the Premises and, at the request of Landlord made
at any time prior to the expiration of the Term, removed upon the expiration or sooner termination
of this Lease and the Premises restored to the same condition as before such installation.



     (e) Notwithstanding anything herein to the contrary, before installing any equipment or lights
which generate an undue amount of heat in the Premises, or if Tenant plans to use any high-power
usage equipment in the Premises, Tenant shall obtain the written permission of Landlord. Landlord
may refuse to grant such permission unless Tenant agrees to pay the costs to Landlord for
installation of supplementary air conditioning capacity or electrical systems necessitated by such
equipment.



     (f) Tenant agrees not to proceed to make any Alterations, notwithstanding consent from
Landlord to do so, until Tenant notifies Landlord in writing of the date Tenant desires to commence
construction or installation of such Alterations and Landlord has approved such date in writing, 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.



14. Maintenance and Repairs Of Premises




     (a) Maintenance by Tenant. Throughout the Term, Tenant shall, at its sole expense, subject
to Paragraphs 5(a) and 14(b) hereof, (1) keep and maintain in good order and condition the Premises
and Tenant’s Property, and (2) keep and maintain in good order and condition, repair and replace
all of Tenant’s security systems in or about or serving the Premises. Tenant shall not do nor shall
Tenant allow Tenant’s Agents to do anything to cause any damage, deterioration or unsightliness to
the Premises, the Building or the Project.



16









 





     (b) Maintenance by Landlord. Subject to the provisions of Paragraphs 13(a), 22 and 23, and
further subject to Tenant’s obligation under Paragraph 4 to reimburse Landlord, in the form of
Additional Rent, for Tenant’s Proportionate Share(s) of the cost and expense of the following
items, Landlord agrees to repair and maintain the following items: the roof coverings (provided
that Tenant installs no additional air conditioning or other equipment on the roof that damages the
roof coverings, in which event Tenant shall pay all costs resulting from the presence of such
additional equipment); the Systems serving the Premises and the Building; and the Parking Areas,
pavement, landscaping, sprinkler systems, sidewalks, driveways, curbs, and lighting systems in the
Common Areas. Subject to the provisions of Paragraphs 14(a), 22 and 23, Landlord, at its own cost
and expense, agrees to repair and maintain the following items: the structural portions of the roof
(specifically excluding the roof coverings), the foundation, the footings, the floor slab, and the
load bearing walls and exterior walls of the Building (excluding any glass and any routine
maintenance, including, without limitation, any painting, sealing, patching and waterproofing of
such walls). Notwithstanding anything in this Paragraph 14 to the contrary, Landlord shall have the
right to either repair or to require Tenant to repair any damage to any portion of the Premises,
the Building and/or the Project caused by or created due to any act, omission, negligence or
willful misconduct of Tenant or Tenant’s Agents and to restore the Premises, the Building and/or
the Project, as applicable, to the condition existing prior to the occurrence of such damage;
provided, however, that in the event Landlord elects to perform such repair and restoration work,
Tenant shall reimburse Landlord upon demand for all costs and expenses incurred by Landlord in
connection therewith. Landlord’s obligation hereunder to repair and maintain is subject to the
condition precedent that Landlord shall have received written notice of the need for such repairs
and maintenance and a reasonable time to perform such repair and maintenance. Tenant shall promptly
report in writing to Landlord any defective condition known to it which Landlord is required to
repair, and failure to so report such defects shall make Tenant responsible to Landlord for any
liability incurred by Landlord by reason of such condition.



     (c) Tenant’s Waiver of Rights. Tenant hereby expressly waives all rights to make repairs at
the expense of Landlord or to terminate this Lease, as provided for in California Civil Code
Sections 1941 and 1942, and 1932(1), respectively, and any similar or successor statute or law in
effect or any amendment thereof during the Term.



15. Landlord’s Insurance




     Landlord shall purchase and keep in force fire, extended coverage and “all risk” insurance
covering the Building and the Project. Tenant shall, at its sole cost and expense, comply with any
and all reasonable requirements pertaining to the Premises, the Building and the Project of any
insurer necessary for the maintenance




17









 







of reasonable fire and commercial general liability insurance, covering the Building and the
Project. Landlord, at Tenant’s cost, may maintain “Loss of Rents” insurance, insuring that the Rent
will be paid in a timely manner to Landlord for a period of at least twelve (12) months if the
Premises, the Building or the Project or any portion thereof are destroyed or rendered unusable or
inaccessible by any cause insured against under this Lease.




16. Tenant’s Insurance




     (a) Commercial General Liability Insurance. Tenant shall, at Tenant’s expense, secure and keep
in force a “broad form” commercial general liability insurance and property damage policy covering
the Premises, insuring Tenant, and naming Landlord and its lenders as additional insureds, against
any liability arising out of the ownership, use, occupancy or maintenance of the Premises. The
minimum limit of coverage of such policy shall be in the amount of not less than Three Million
Dollars ($3,000,000.00) for injury or death of one person in any one accident or occurrence and in
the amount of not less than Three Million Dollars ($3,000,000.00) for injury or death of more than
one person in any one accident or occurrence, shall include an extended liability endorsement
providing contractual liability coverage (which shall include coverage for Tenant’s indemnification
obligations in this Lease), and shall contain a severability of interest clause or a cross
liability endorsement. Such insurance shall further insure Landlord and Tenant against liability
for property damage of at least Three Million Dollars ($3,000,000.00). Landlord may from time to
time require reasonable increases in any such limits if Landlord believes that additional coverage
is necessary or desirable. The limit of any insurance shall not limit the liability of Tenant
hereunder. No policy maintained by Tenant under this Paragraph 16(a) shall contain a deductible
greater than two thousand five hundred dollars ($2,500.00). No policy shall be cancelable or
subject to reduction of coverage without thirty (30) days prior written notice to Landlord, and
loss payable clauses shall be subject to Landlord’s approval. Such policies of insurance shall be
issued as primary policies and not contributing with or in excess of coverage that Landlord may
carry, by an insurance company authorized to do business in the State of California for the
issuance of such type of insurance coverage and rated A:XIII or better in Best’s Key Rating Guide.



     (b) Personal Property Insurance. Tenant shall maintain in full force and effect on all of its
personal property, furniture, furnishings, trade or business fixtures and equipment (collectively,
“Tenant’s Property”) on the Premises, a policy or policies of fire and extended coverage insurance
with standard coverage endorsement to the extent of the full replacement cost thereof. No such
policy shall contain a deductible greater than two thousand five hundred dollars
($2,500.00). During the term of this Lease the proceeds from any such policy or policies of
insurance shall be used for the repair or replacement of the fixtures and



18









 




equipment so insured. Landlord shall have no interest in the insurance upon Tenant’s equipment and
fixtures and will sign all documents reasonably necessary in connection with the settlement of any
claim or loss by Tenant. Landlord will not carry insurance on Tenant’s possessions.




     (c) Worker’s Compensation Insurance; Employer’s Liability Insurance.
Tenant shall, at Tenant’s expense, maintain in full force and effect worker’s compensation
insurance with not less than the minimum limits required by law, and employer’s liability insurance
with a minimum limit of coverage of One Million Dollars ($1,000,000).



     (d) Evidence of Coverage. Tenant shall deliver to Landlord certificates of insurance and true
and complete copies of any and all endorsements required herein for all insurance required to be
maintained by Tenant hereunder at the time of execution of this Lease by Tenant. Tenant shall, at
least thirty (30) days prior to expiration of each policy, furnish Landlord with certificates of
renewal or “binders” thereof. Each certificate shall expressly provide that such policies shall not
be cancellable or otherwise subject to modification except after thirty (30) days prior written
notice to Landlord and the other parties named as additional insureds as required in this Lease
(except for cancellation for nonpayment of premium, in which event cancellation shall not take
effect until at least ten (10) days notice has been given to Landlord).



17. Indemnification




     (a) Of Landlord. Tenant shall indemnify and hold harmless Landlord and Landlord’s Agents
against and from any and all claims, liabilities, judgments, costs, demands, causes of action and
expenses (including, without limitation, reasonable attorneys’ fees) arising from (1) the use of
the Premises, the Building or the Project by Tenant or Tenant’s Agents, or from any activity done,
permitted or suffered by Tenant or Tenant’s Agents in or about the Premises, the Building or the
Project, and (2) any act, neglect, fault, willful misconduct or omission of Tenant or Tenant’s
Agents, or from any breach or default in the terms of this Lease by Tenant or Tenant’s Agents, and
(3) any action or proceeding brought on account of any matter in items (1) or (2). If any action or
proceeding is brought against Landlord by reason of any such claim, upon notice from Landlord,
Tenant shall defend the same at Tenant’s expense by counsel reasonably satisfactory to Landlord. As
a material part of the consideration to Landlord, Tenant hereby releases Landlord and Landlord’s
Agents from responsibility for, waives its entire claim of recovery for and assumes all risk of (i)
damage to property or injury to persons in or about the Premises, the Building or the Project from
any cause whatsoever (except that which is caused by the sole active gross negligence or willful
misconduct of Landlord or Landlord’s Agents or by the failure of Landlord to observe any of the
terms and conditions of this Lease, if such failure has persisted for an unreasonable period of




19









 







time after written notice of such failure), or (ii) loss resulting from business interruption or
loss of income at the Premises. The obligations of Tenant under this Paragraph 17 shall survive any
termination of this Lease.




     (b) No Impairment of Insurance. The foregoing indemnity shall not relieve any insurance
carrier of its obligations under any policies required to be carried by either party pursuant to
this Lease, to the extent that such policies cover the peril or occurrence that results in the
claim that is subject to the foregoing indemnity.



18. Subrogation




     Landlord and Tenant hereby mutually waive any claim against the other and its Agents for any
loss or damage to any of their property located on or about the Premises, the Building or the
Project that is caused by or results from perils covered by property insurance carried by the
respective parties, to the extent of the proceeds of such insurance actually received with respect
to such loss or damage, whether or not due to the negligence of the other party or its Agents.
Because the foregoing waivers will preclude the assignment of any claim by way of subrogation to an insurance company or any other person, each
party now agrees to immediately give to its insurer written notice of the terms of these mutual waivers
and shall have their insurance policies endorsed to prevent the invalidation of the insurance coverage because of these waivers. Nothing in this Paragraph 18 shall relieve a party of
liability to the other for failure to carry insurance required by this Lease.



19. Signs




     Tenant shall not place or permit to be placed in, upon, or about the Premises, the Building or the Project any exterior lights, decorations, balloons, flags, pennants, banners, advertisements or notices, or erect or install any signs, windows or door lettering, placards, decorations, or advertising media of any type which can be viewed from the exterior the Premises without
obtaining Landlord’s prior written consent
or without complying with Landlord’s signage criteria,
as the same may be modified by Landlord from time to time, and with all applicable Laws,
and will not conduct, or permit to be conducted, any sale by auction on the Premises or
otherwise on the Project. Tenant shall remove any sign, advertisement or notice placed on
the Premises, the Building or the Project by Tenant upon the’expiration of the Term
or sooner termination of this Lease, and Tenant shall repair any damage or injury to the
 Premises, the Building or the Project caused thereby, all at Tenant’s expense. If any
signs are not removed, or necessary repairs not made, Landlord shall have the right to remove
the signs and repair any damage or injury to the Premises, the Building or the Project at
Tenant’s sole cost and expense.




20












 





20. Free From Liens




     Tenant shall keep the Premises, the Building and the Project free from any liens arising out
of any work performed, material furnished or obligations incurred by or for Tenant. In the event
that Tenant shall not, within ten (10) days following the imposition of any such lien, cause the
lien to be released of record by payment or posting of a proper bond, Landlord shall have in
addition to all other remedies provided herein and by law the right but not the obligation to cause
same to be released by such means as it shall deem proper, including payment of the claim giving
rise to such lien. All such sums paid by Landlord and all expenses incurred by it in connection
therewith (including, without limitation, attorneys’ fees) shall be payable to Landlord by Tenant
upon demand. Landlord shall have the right at all times to post and keep posted on the Premises any
notices permitted or required by law or that Landlord shall deem proper for the protection of
Landlord, the Premises, the Building and the Project, from mechanics’ and materialmen’s liens.
Tenant shall give to Landlord at least five (5) business days’ prior written notice of commencement
of any repair or construction on the Premises.



21. Entry By Landlord




     Tenant shall permit Landlord and Landlord’s Agents to enter into and upon the Premises at all
reasonable times, upon reasonable notice (except in the case of an emergency, for which no notice
shall be required), and subject to Tenant’s reasonable security arrangements, for the purpose of
inspecting the same or showing the Premises to prospective purchasers, lenders or tenants or to
alter, improve, maintain and repair the Premises or the Building as required or permitted of
Landlord under the terms hereof, or for any other business purpose, without any rebate of Rent and
without any liability to Tenant for any loss of occupation or quiet enjoyment of the Premises
thereby occasioned (except for actual damages resulting from the sole active gross negligence or
willful misconduct of Landlord); and Tenant shall permit Landlord to post notices of
non-responsibility and ordinary “for sale” or “for lease” signs. No such entry shall be construed
to be a forcible or unlawful entry into, or a detainer of, the Premises, or an eviction of Tenant
from the Premises. Landlord may temporarily close entrances, doors, corridors, elevators or other
facilities without liability to Tenant by reason of such closure in the case of an emergency and
when Landlord otherwise deems such closure necessary.



22. Destruction And Damage




     (a) If the Premises are damaged by fire or other perils covered by extended coverage
insurance, Landlord shall, at Landlord’s option:



21









 





          (1) In the event of total destruction (which shall mean destruction or
damage in excess of twenty-five percent (25%) of the full insurable value thereof)
of the Premises, elect either to commence promptly to repair and restore the
Premises and prosecute the same diligently to completion, in which event this
Lease shall remain in full force and effect; or not to repair or restore the Premises,
in which event this Lease shall terminate. Landlord shall give Tenant written notice
of its intention within sixty (60) days after the date (the “Casualty Discovery
Date”) Landlord obtains actual knowledge of such destruction. If Landlord elects
not to restore the Premises, this Lease shall be deemed to have terminated as of the
date of such total destruction.




          (2) In the event of a partial destruction (which shall mean destruction or
damage to an extent not exceeding twenty-five percent (25%) of the full insurable
value thereof) of the Premises for which Landlord will receive insurance proceeds
sufficient to cover the cost to repair and restore such partial destruction and, if the
damage thereto is such that the Premises may be substantially repaired or restored
to its condition existing immediately prior to such damage or destruction within
one hundred eighty (180) days from the Casualty Discovery Date, Landlord shall
commence and proceed diligently with the work of repair and restoration, in which
event the Lease shall continue in full force and effect. If such repair and
restoration requires longer than one hundred eighty (180) days or if the insurance
proceeds therefor (plus any amounts Tenant may elect or is obligated to contribute)
are not sufficient to cover the cost of such repair and restoration, Landlord may
elect either to so repair and restore, in which event the Lease shall continue in full
force and effect, or not to repair or restore, in which event the Lease shall
terminate. In either case, Landlord shall give written notice to Tenant of its
intention within sixty (60) days after the Casualty Discovery Date. If Landlord
elects not to restore the Premises, this Lease shall be deemed to have terminated as
of the date of such partial destruction.




          (3) Notwithstanding anything to the contrary contained in this Paragraph,
in the event of damage to the Premises occurring during the last twelve (12) months
of the Term, Landlord may elect to terminate this Lease by written notice of such
election given to Tenant within thirty (30) days after the Casualty Discovery Date.




     (b) If the Premises are damaged by any peril not covered by extended coverage insurance, and
the cost to repair such damage exceeds any amount Tenant may agree to contribute, Landlord may
elect either to commence promptly to repair and restore the Premises and prosecute the same
diligently to completion, in which event this Lease shall remain in full force and effect; or not
to repair or restore the Premises, in which event this Lease shall terminate. Landlord shall give
Tenant written notice of its intention within sixty (60) days after the Casualty Discovery Date. If
Landlord elects not to restore the Premises, this Lease shall be deemed to have terminated as of
the date on which Tenant surrenders possession of the



22









 




Premises to Landlord, except that if the damage to the Premises materially impairs Tenant’s
ability to continue its business operations in the Premises, then this Lease shall be deemed to
have terminated as of the date such damage occurred.




     (c) Notwithstanding anything to the contrary in this Paragraph 22, Landlord
shall have the option to terminate this Lease, exercisable by notice to Tenant within
sixty (60) days after the Casualty Discovery Date, in each of the following
instances:



          (1) If more than twenty-five percent (25%) of the full insurable value of
the Building or the Project is damaged or destroyed, regardless of whether or not
the Premises are destroyed.




          (2) If the Building or the Project or any portion thereof is damaged or
destroyed and the repair and restoration of such damage requires longer than one
hundred eighty (180) days from the Casualty Discovery Date.




          (3) If the Building or the Project or any portion thereof is damaged or
destroyed and the insurance proceeds therefor are not sufficient to cover the costs
of repair and restoration.




          (4) If the Building or the Project or any portion thereof is damaged or
destroyed during the last twelve (12) months of the Term.




     (d) In the event of repair and restoration as herein provided, the monthly
installments of Base Rent shall be abated proportionately in the ratio which
Tenant’s use of the Premises is impaired during the period of such repair or
restoration, but only to the extent of rental abatement insurance proceeds received
by Landlord; provided, however, that Tenant shall not be entitled to such abatement
to the extent that such damage or destruction resulted from the acts or inaction of
Tenant or Tenant’s Agents. Except as expressly provided in the immediately
preceding sentence with respect to abatement of Base Rent, Tenant shall have no
claim against Landlord for, and hereby releases Landlord and Landlord’s Agents
from responsibility for and waives its entire claim of recovery for any cost, loss or
expense suffered or incurred by Tenant as a result of any damage to or destruction
of the Premises, the Building or the Project or the repair or restoration thereof,
including, without limitation, any cost, loss or expense resulting from any loss of
use of the whole or any part of the Premises, the Building or the Project and/or any
inconvenience or annoyance occasioned by such damage, repair or restoration.



     (e) If Landlord is obligated to or elects to repair or restore as herein provided,
Landlord shall repair or restore only the initial tenant improvements, if any,
constructed by Landlord in the Premises pursuant to the terms of this Lease,
substantially to their condition existing immediately prior to the occurrence of the



23









 




damage or destruction; and Tenant shall promptly repair and restore, at Tenant’s expense,
Tenant’s Alterations which were not constructed by Landlord.




     (f) Tenant hereby waives the provisions of California Civil Code Section 1932(2) and Section
1933(4) which permit termination of a lease upon destruction of the leased premises, and the
provisions of any similar law now or hereinafter in effect, and the provisions of this Paragraph 22
shall govern exclusively in case of such destruction.



23. Condemnation




     (a) If twenty-five percent (25%) or more of either the Premises, the Building or the
Project or the parking areas for the Building or the Project is taken for any public or
quasi-public purpose by any lawful governmental power or authority, by exercise of the right of
appropriation, inverse condemnation, condemnation or eminent domain, or sold to prevent such
taking (each such event being referred to as a “Condemnation”), Landlord may, at its option,
terminate this Lease as of the date title vests in the condemning party. If twenty-five percent
(25%) or more of the Premises is taken and if the Premises remaining after such Condemnation and
any repairs by Landlord would be untenantable for the conduct of Tenant’s business operations,
Tenant shall have the right to terminate this Lease as of the date title vests in the condemning
party. If either party elects to terminate this Lease as provided herein, such election shall be
made by written notice to the other party given within thirty (30) days after the nature and
extent of such Condemnation have been finally determined. If neither Landlord nor Tenant elects
to terminate this Lease to the extent permitted above, Landlord shall promptly proceed to restore
the Premises, to the extent of any Condemnation award received by Landlord, to substantially the
same condition as existed prior to such Condemnation, allowing for the reasonable effects of such
Condemnation, arid a proportionate abatement shall be made to the Base Rent corresponding to the
time during which, and to the portion of the floor area of the Premises (adjusted for any
increase thereto resulting from any reconstruction) of which, Tenant is deprived on account of
such Condemnation and restoration, as reasonably determined by Landlord. Except as expressly
provided in the immediately preceding sentence with respect to abatement of Base Rent, Tenant
shall have no claim against Landlord for, and hereby releases Landlord and Landlord’s Agents from
responsibility for and waives its entire claim of recovery for any cost, loss or expense suffered
or incurred by Tenant as a result of any Condemnation or the repair or restoration of the
Premises, the Building or the Project or the parking areas for the Building or the Project
following such Condemnation, including, without limitation, any cost, loss or expense resulting
from any loss of use of the whole or any part of the Premises, the Building, the Project or the
parking areas and/or any inconvenience or annoyance occasioned by such Condemnation, repair or
restoration. The provisions of California Code of Civil Procedure



24









 




Section 1265.130, which allows either party to petition the Superior Court to terminate the Lease
in the event of a partial taking of the Premises, the Building or the Project or the parking
areas for the Building or the Project, and any other applicable law now or hereafter enacted, are
hereby waived by Tenant.




     (b) Landlord shall be entitled to any and all compensation, damages, income, rent, awards,
or any interest therein whatsoever which may be paid or made in connection with any Condemnation,
and Tenant shall have no claim against Landlord for the value of any unexpired term of this Lease
or otherwise; provided, however, that Tenant shall be entitled to receive any award separately
allocated by the condemning authority to Tenant for Tenant’s relocation expenses or the value of
Tenant’s Property (specifically excluding fixtures, Alterations and other components of the
Premises which under this Lease or by law are or at the expiration of the Term will become the
property of Landlord), provided that such award does not reduce any award otherwise allocable or
payable to Landlord.



24. Assignment And Subletting




     (a) Tenant shall not voluntarily or by operation of law, (1) mortgage, pledge, hypothecate
or encumber this Lease or any interest herein, (2) assign or transfer this Lease or any interest
herein, sublease the Premises or any part thereof, or any right or privilege appurtenant thereto,
or allow any other person (the employees and invitees of Tenant excepted) to occupy or use the
Premises, or any portion thereof, without first obtaining the written consent of Landlord, which
consent shall not be withheld unreasonably provided that (i) Tenant is not then in Default under
this Lease nor is any event then occurring which with the giving of notice or the passage of
time, or both, would constitute a Default hereunder, and (ii) except for a Limited Sublease (as
hereinafter defined), Tenant has not previously assigned or transferred this Lease or any
interest herein or subleased the Premises or any part thereof. When Tenant requests Landlord’s
consent to such assignment or subletting, it shall notify Landlord in writing of the name and
address of the proposed assignee or subtenant and the nature and character of the business of the
proposed assignee or subtenant and shall provide current and prior financial statements for the
proposed assignee or subtenant prepared in accordance with generally accepted accounting
principles. Tenant shall also provide Landlord with a copy of the proposed sublease or assignment
agreement, including all material terms and conditions thereof. Landlord shall have the option,
to be exercised within thirty (30) days of receipt of the foregoing, to (1) terminate this Lease
as of the commencement date stated in the proposed sublease or assignment (provided that Landlord
shall not have the right to terminate this Lease under this clause (1) in the event of a Limited
Sublease), (2) sublease or take an assignment, as the case may be, from Tenant of the interest,
or any portion thereof, in this Lease arid/or the Premises that Tenant proposes to assign or
sublease, on the same terms and conditions as stated in the proposed sublet or assignment
agreement, (3) consent to



25









 




the proposed assignment or sublease, or (4) refuse its consent to the proposed assignment or
sublease, providing that such consent shall not be unreasonably withheld so long as Tenant is not
then in Default under this Lease nor is any event then occurring which with the giving of notice or
the passage of time, or both, would constitute a Default hereunder. In the event Landlord elects to
terminate this Lease or sublease or take an assignment from Tenant of the interest, or portion
thereof, in the Lease and/or the Premises that Tenant proposes to assign or sublease as provided in
the foregoing clauses (1) and (2), respectively, then Landlord shall have the additional right to
negotiate directly with Tenant’s proposed assignee or subtenant and to enter into a direct lease or
occupancy agreement with such party on such terms as shall be acceptable to Landlord in its sole
and absolute discretion, and Tenant hereby waives any claims against Landlord related thereto,
including, without limitation, any claims for any compensation or profit related to such lease or
occupancy agreement.




     (b) Without otherwise limiting the criteria upon which Landlord may
withhold its consent, Landlord shall be entitled to consider all reasonable criteria
including, but not limited to, the following: (1) whether or not the proposed
subtenant or assignee is engaged in a business which, and the use of the Premises
will be in an manner which, is in keeping with the then character and nature of all
other tenancies in the Project, (2) whether the use to be made of the Premises by
the proposed subtenant or assignee will conflict with any so-called “exclusive” use
then in favor of any other tenant of the Building or the Project, and whether such
use would be prohibited by any other portion of this Lease, including, but not
limited to, any rules and regulations then in effect, or under applicable Laws, and
whether such use imposes a greater load upon the Premises and the Building and
Project services then imposed by Tenant, (3) the business reputation of the
proposed individuals who will be managing and operating the business operations
of the assignee or subtenant, and the long-term financial and competitive business
prospects of the proposed assignee or subtenant, and (4) the creditworthiness and
financial stability of the proposed assignee or subtenant in light of the
responsibilities involved. In any event, Landlord may withhold its consent to any
assignment or sublease, if (i) the actual use proposed to be conducted in the
Premises or portion thereof conflicts with the provisions of Paragraph 10(a) or (b)
above or with any other lease which restricts the use to which any space in the
Building or the Project may be put, or (ii) the proposed assignment or sublease
requires alterations, improvements or additions to the Premises or portions thereof.



     (c) If Landlord approves an assignment or subletting as herein provided,
Tenant shall pay to Landlord, as Additional Rent, the difference, if any, between
(1) the Base Rent plus Additional Rent allocable to that part of the Premises
affected by such assignment or sublease pursuant to the provisions of this Lease,
and (2) the rent and any additional rent payable by the assignee or sublessee to
Tenant, less reasonable legal fees (not to exceed the sum of five thousand dollars



26









 




($5,000.00) and reasonable and customary market-based leasing commissions, if any, incurred by
Tenant in connection with such assignment or sublease. The assignment or sublease agreement, as
the case may be, after approval by Landlord, shall not be amended without Landlord’s prior written
consent, and shall contain a provision directing the assignee or subtenant to pay the rent and
other sums due thereunder directly to Landlord upon receiving written notice from Landlord that
Tenant is in default under this Lease with respect to the payment of Rent. In the event that,
notwithstanding the giving of such notice, Tenant collects any rent or other sums from the assignee
or subtenant, then Tenant shall hold such sums in trust for the benefit of Landlord and shall
immediately forward the same to Landlord. Landlord’s collection of such rent and other sums shall
not constitute an acceptance by Landlord of attornment by such assignee or subtenant. A consent to
one assignment, subletting, occupation or use shall not be deemed to be a consent to any other or
subsequent assignment, subletting, occupation or use, and consent to any assignment or subletting
shall in no way relieve Tenant of any liability under this Lease. Any assignment or subletting
without Landlord’s consent shall be void, and shall, at the option of Landlord, constitute a
Default under this Lease.




     (d) Notwithstanding any assignment or subletting, Tenant and any guarantor
or surety of Tenant’s obligations under this Lease shall at all times remain fully
responsible and liable for the payment of the Rent and for compliance with all of
Tenant’s other obligations under this Lease (regardless of whether Landlord’s ‘
approval has been obtained for any such assignment or subletting).



     (e) Tenant shall pay Landlord’s reasonable fees (including, without
limitation, the fees of Landlord’s counsel), incurred in connection with Landlord’s
review and processing of documents regarding any proposed assignment or
sublease.



     (f) Notwithstanding anything in this Lease to the contrary, in the event
Landlord consents to an assignment or subletting (including, without limitation, a
Limited Sublease) by Tenant in accordance with the terms of this Paragraph 24,
Tenant’s assignee or subtenant shall have no right to further assign this Lease or
any interest therein or thereunder or to further sublease all or any portion of the
Premises. In furtherance of the foregoing, Tenant acknowledges and agrees on
behalf of itself and any assignee or subtenant claiming under it (and any such
assignee or subtenant by accepting such assignment or sublease shall be deemed to
acknowledge and agree) that no sub-subleases or further assignments of this Lease
shall be permitted at any time.



     (g) Tenant acknowledges and agrees that the restrictions, conditions and
limitations imposed by this Paragraph 24 on Tenant’s ability to assign or transfer
this Lease or any interest herein, to sublet the Premises or any part thereof, to
transfer or assign any right or privilege appurtenant to the Premises, or to allow any



27









 




other person to occupy or use the Premises or any portion thereof, are, for the purposes of
California Civil Code Section 1951.4, as amended from time to time, and for all other purposes,
reasonable at the time that the Lease was entered into, and shall be deemed to be reasonable at
the time that Tenant seeks to assign or transfer this Lease or any interest herein, to sublet the
Premises or any part thereof, to transfer or assign any right or privilege appurtenant to the
Premises, or to allow any other person to occupy or use the Premises or any portion thereof.




     (h) Notwithstanding anything in Paragraph 24(a) above to the contrary, Tenant shall have the
right with the consent of Landlord, which consent shall not be unreasonably withheld, to sublet up
to three thousand rentable square feet (3,000) of the Premises for a term commencing not later
than the first (1st) anniversary of the Commencement Date and expiring not later than the third
(3rd) anniversary of the Commencement Date (the “Limited Sublease”). Except as otherwise expressly
set forth in this Paragraph 24, the Limited Sublease shall be subject to all of the terms and
conditions of this Paragraph 24.



25. Tenant’s Default




     The occurrence of any one of the following events shall constitute an event of default on the
part of Tenant (“Default”):



     (a) The vacation or abandonment of the Premises by Tenant for a period of
ten (10) consecutive days or any vacation or abandonment of the Premises by
Tenant which would cause any insurance policy to be invalidated or otherwise
lapse, or the failure of Tenant to continuously operate Tenant’s business in the
Premises, in each of the foregoing cases irrespective of whether or not Tenant is
then in monetary default under this Lease. Tenant agrees to notice and service of
notice as provided for in this Lease and waives any right to any other or further
notice or service of notice which Tenant may have under any statute or law now or
hereafter in effect;



     (b) Failure to pay any installment of Rent or any other monies due and
payable hereunder, said failure continuing for a period of three (3) days after the
same is due;



     (c) A general assignment by Tenant or any guarantor or surety of Tenant’s
obligations hereunder (collectively, “Guarantor”) for the benefit of creditors;



     (d) The filing of a voluntary petition in bankruptcy by Tenant or any
Guarantor, the filing by Tenant or any Guarantor of a voluntary petition for an
arrangement, the filing by or against Tenant or any Guarantor of a petition,
voluntary or involuntary, for reorganization, or the filing of an involuntary petition



28









 




by the creditors of Tenant or any Guarantor, said involuntary petition remaining undischarged for a
period of sixty (60) days;




     (e) Receivership, attachment, or other judicial seizure of substantially all of
Tenant’s assets on the Premises, such attachment or other seizure remaining
undismissed or undischarged for a period of sixty (60) days after the levy thereof;



     (f) Death or disability of Tenant or any Guarantor, if Tenant or such
Guarantor is a natural person, or the failure by Tenant or any Guarantor to maintain
its legal existence, if Tenant or such Guarantor is a corporation, partnership,
limited liability company, trust or other legal entity;



     (g) Failure of Tenant to execute and deliver to Landlord any estoppel
certificate, subordination agreement, or lease amendment within the time periods
and in the manner required by Paragraphs 31 or 32 or 42;



     (h) An assignment or sublease, or attempted assignment or sublease, of this Lease or the
Premises by Tenant contrary to the provision of Paragraph 24, unless such assignment or sublease is
expressly conditioned upon Tenant having received Landlord’s consent thereto;



     (i) Failure of Tenant to restore the Letter of Credit or the Security Deposit to the amount
and within the time period provided in Paragraph 7 or Paragraph 8, respectively, above;



     (j) Failure in the performance of any of Tenant’s covenants, agreements or obligations
hereunder (except those failures specified as events of Default in subparagraphs (b), (1) or (m)
above or any other subparagraphs of this Paragraph 25, which shall be governed by such other
Paragraphs), which failure continues for ten (10) days after written notice thereof from Landlord
to Tenant, provided that, if Tenant has exercised reasonable diligence to cure such failure and
such failure cannot be cured within such ten (10) day period despite reasonable diligence, Tenant
shall not be in default under this subparagraph so long as Tenant thereafter diligently and
continuously prosecutes the cure to completion and actually completes such cure within thirty (30)
days after the giving of the aforesaid written notice;



     (k) Chronic delinquency by Tenant in the payment of Rent, or any other periodic payments
required to be paid by Tenant under this Lease. “Chronic delinquency” shall mean failure by Tenant
to pay Rent, or any other payments required to be paid by Tenant under this Lease within three (3)
days after written notice thereof for any three (3) months (consecutive or nonconsecutive) during
any period of twelve (12) months. In the event of a Chronic Delinquency, in addition to Landlord’s
other remedies for Default provided in this Lease, at Landlord’s



29









 




option, Landlord shall have the right to require that Rent be paid by Tenant quarterly, in
advance;




     (1) Chronic overuse by Tenant or Tenant’s Agents of the number of undesignated parking
spaces set forth in the Basic Lease Information. “Chronic Overuse” shall mean use by Tenant or
Tenant’s Agents of a number of parking spaces greater than the number of parking spaces set
forth in the Basic Lease Information more than three (3) times during the Term after written
notice by Landlord;



     (m) Any insurance required to be maintained by Tenant pursuant to this Lease shall be
canceled or terminated or shall expire or be reduced or materially changed, except as permitted
in this Lease; and



     (n) Any failure by Tenant to discharge any lien or encumbrance placed on the Project or any
part thereof in violation of this Lease within ten (10) days after the  date such lien or
encumbrance is filed or recorded against the Project or any part thereof.



     Tenant agrees that any notice given by Landlord pursuant to Paragraph 25(j), (k) or (l)
above shall satisfy the requirements for notice under California Code of Civil Procedure Section
1161, and Landlord shall not be required to give any additional notice in order to be entitled to
commence an unlawful detainer proceeding.



26. Landlord’s Remedies




     (a) Termination. In the event of any Default by Tenant, then in addition to any other
remedies available to Landlord at law or in equity and under this Lease, Landlord shall have the
immediate option to terminate this Lease and all rights of Tenant hereunder by giving written
notice of such intention to terminate. In the event that Landlord shall elect to so terminate
this Lease then Landlord may recover from Tenant:



          (1) the worth at the time of award of any unpaid Rent and any other sums
due and payable which have been earned at the time of such termination; plus




          (2) the worth at the time of award of the amount by which the unpaid
Rent and any other sums due and payable which would have been earned after
termination until the time of award exceeds the amount of such rental loss Tenant
proves could have been reasonably avoided; plus




          (3) the worth at the time of award of the amount by which the unpaid
Rent and any other sums due and payable for the balance of the term of this Lease




30









 




after the time of award exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided; plus




          (4) any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant’s failure to perform its obligations under
this Lease or which in the ordinary course would be likely to result therefrom,
including, without limitation, (A) any costs or expenses incurred by Landlord (1) in
retaking possession of the Premises; (2) in maintaining, repairing, preserving,
restoring, replacing, cleaning, altering, remodeling or rehabilitating the Premises or
any affected portions of the Building or the Project, including such actions
undertaken in connection with the reletting or attempted reletting of the Premises
to a new tenant or tenants; (3) for leasing commissions, advertising costs and other
expenses of reletting the Premises; or (4) in carrying the Premises, including taxes,
insurance premiums, utilities and security precautions; (B) any unearned brokerage
commissions paid in connection with this Lease; (C) reimbursement of any
previously waived or abated Base Rent or Additional Rent or any free rent or
reduced rental rate granted hereunder; and (D) any concession made or paid by
Landlord to the benefit of Tenant in consideration of this Lease including, but not
limited to, any moving allowances, contributions, payments or loans by Landlord
for tenant improvements or build-out allowances (including without limitation, any
unamortized portion of the Tenant Improvement Allowance (such Tenant
Improvement Allowance to be amortized over the Term in the manner reasonably
determined by Landlord), if any, and any outstanding balance (principal and
accrued interest) of the Tenant Improvement Loan, if any), or assumptions by
Landlord of any of Tenant’s previous lease obligations; plus




          (5) such reasonable attorneys’ fees incurred by Landlord as a result of a
Default, and costs in the event suit is filed by Landlord to enforce such remedy; and plus




          (6) at Landlord’s election, such other amounts in addition to or in lieu of
the foregoing as may be permitted from time to time by applicable law.



As used in subparagraphs (1) and (2) above, the “worth at the time of award” is computed by
allowing interest at an annual rate equal to twelve percent (12%) per annum or the maximum rate
permitted by law, whichever is less. As used in subparagraph (3) above, the “worth at the time of
award” is computed by discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award, plus one percent (1 %). Tenant waives redemption or relief
from forfeiture under California Code of Civil Procedure Sections 1174 and 1179, or under any other
pertinent present or future Law, in the event Tenant is evicted or Landlord takes possession of the
Premises by reason of any Default of Tenant hereunder.




31









 





     (b) Continuation of Lease. In the event of any Default by Tenant, then in
addition to any other remedies available to Landlord at law or in equity and under
this Lease, Landlord shall have the remedy described in California Civil Code
Section 1951.4 (Landlord may continue this Lease in effect after Tenant’s Default
and abandonment and recover Rent as it becomes due, provided Tenant has the
right to sublet or assign, subject only to reasonable limitations). In addition,
Landlord shall not be liable in any way whatsoever for its failure or refusal to relet
the Premises. For purposes of this Paragraph 26(b), the following acts by Landlord
will not constitute the termination of Tenant’s right to possession of the Premises:



          (1) Acts of maintenance or preservation or efforts to relet the Premises,
including, but not limited to, alterations, remodeling, redecorating, repairs,
replacements and/or painting as Landlord shall consider advisable for the purpose
of reletting the Premises or any part thereof; or




          (2) The appointment of a receiver upon the initiative of Landlord to
protect Landlord’s interest under this Lease or in the Premises.




     (c) Re-entry. In the event of any Default by Tenant, Landlord shall also have
the right, with or without terminating this Lease, in compliance with applicable
law, to re-enter the Premises and remove all persons and property from the
Premises; such property may be removed and stored in a public warehouse or
elsewhere at the cost of and for the account of Tenant.



     (d) Reletting. In the event of the abandonment of the Premises by Tenant or
in the event that Landlord shall elect to re-enter as provided in Paragraph 26(c) or
shall take possession of the Premises pursuant to legal proceeding or pursuant to
any notice provided by law, then if Landlord does not elect to terminate this Lease
as provided in Paragraph 26(a), Landlord may from time to time, without
terminating this Lease, relet the Premises or any part thereof for such term or terms
and at such rental or rentals and upon such other terms and conditions as Landlord
in its sole discretion may deem advisable with the right to make alterations and
repairs to the Premises in Landlord’s sole discretion. In the event that Landlord
shall elect to so relet, then rentals received by Landlord from such reletting shall be
applied in the following order: (1) to reasonable attorneys’ fees incurred by
Landlord as a result of a Default and costs in the event suit is filed by Landlord to
enforce such remedies; (2) to the payment of any indebtedness other than Rent due
hereunder from Tenant to Landlord; (3) to the payment of any costs of such
reletting; (4) to the payment of the costs of any alterations and repairs to the
Premises; (5) to the payment of Rent due and unpaid hereunder; and (6) the
residue, if any, shall be held by Landlord and applied in payment of future Rent
and other sums payable by Tenant hereunder as the same may become due and
payable hereunder. Should that portion of such rentals received from such reletting
during any month, which is applied to the payment of Rent hereunder, be less than



32









 




the Rent payable during the month by Tenant hereunder, then Tenant shall pay such deficiency to
Landlord. Such deficiency shall be calculated and paid monthly. Tenant shall also pay to Landlord,
as soon as ascertained, any costs and expenses incurred by Landlord in such reletting or in making
such alterations and repairs not covered by the rentals received from such reletting.




     (e) Termination. No re-entry or taking of possession of the Premises by
Landlord pursuant to this Paragraph 26 shall be construed as an election to
terminate this Lease unless a written notice of such intention is given to Tenant or
unless the termination thereof is decreed by a court of competent jurisdiction.
Notwithstanding any reletting without termination by Landlord because of any
Default by Tenant, Landlord may at any time after such reletting elect to terminate
this Lease for any such Default.



     (f) Cumulative Remedies. The remedies herein provided are not exclusive
and Landlord shall have any and all other remedies provided herein or by law or in
equity.



     (g) No Surrender. No act or conduct of Landlord, whether consisting of the
 acceptance of the keys to the Premises, or otherwise, shall be deemed to be or constitute an
acceptance of the surrender of the Premises by Tenant prior to the expiration of the Term, and such
acceptance by Landlord of surrender by Tenant shall only flow from and must be evidenced by a
written acknowledgment of acceptance of surrender signed by Landlord. The surrender of this Lease
by Tenant, voluntarily or otherwise, shall not work a merger unless Landlord elects in writing that
such merger take place, but shall operate as an assignment to Landlord of any and all existing
subleases, or Landlord may, at its option, elect in writing to treat such surrender as a merger
terminating Tenant’s estate under this Lease, and thereupon Landlord may terminate any or all such
subleases by notifying the sublessee of its election so to do within five (5) days after such
surrender.



27. Landlord’s Right To Perform Tenant’s Obligations




     (a) Without limiting the rights and remedies of Landlord contained in Paragraph 26 above, if
Tenant shall be in Default in the performance of any of the terms, provisions, covenants or
conditions to be performed or complied with by Tenant pursuant to this Lease, then Landlord may at
Landlord’s option, without any obligation to do so, and without notice to Tenant perform any such
term, provision, covenant, or condition, or make any such payment and Landlord by reason of so
doing shall not be liable or responsible for any loss or damage thereby sustained by Tenant or
anyone holding under or through Tenant or any of Tenant’s Agents.



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     (b) Without limiting the rights of Landlord under Paragraph 27(a) above,
Landlord shall have the right at Landlord’s option, without any obligation to do
so, to perform any of Tenant’s covenants or obligations under this Lease without
notice to Tenant in the case of an emergency, as determined by Landlord in its
sole and absolute judgment, or if Landlord otherwise determines in its sole
discretion that such performance is necessary or desirable for the proper
management and operation of the Building or the Project or for the preservation of
the rights and interests or safety of other tenants of the Building or the Project.



     (c) If Landlord performs any of Tenant’s obligations hereunder in accordance
with this Paragraph 27, the full amount of the cost and expense incurred or the
payment so made or the amount of the loss so sustained shall immediately be
owing by Tenant to Landlord, and Tenant shall promptly pay to Landlord upon
demand, as Additional Rent, the full amount thereof with interest thereon from the
date of payment by Landlord at the lower of (1) ten percent (10%) per annum, or
(2) the highest rate permitted by applicable law.



28. Attorney’s Fees




     (a) If either party hereto fails to perform any of its obligations under this
Lease or if any dispute arises between the parties hereto concerning the meaning or
interpretation of any provision of this Lease, then the defaulting party or the party
not prevailing in such dispute, as the case may be, shall pay any and all costs and
expenses incurred by the other party on account of such default and/or in enforcing
or establishing its rights hereunder, including, without limitation, court costs and
reasonable attorneys’ fees and disbursements. Any such attorneys’ fees and other
expenses incurred by  either party in enforcing a judgment in its favor under this
Lease shall be recoverable separately from and in addition to any other amount
included in such judgment, and such attorneys’ fees obligation is intended to be
severable from the other provisions of this Lease and to survive and not be merged
into any such judgment.



     (b) Without limiting the generality of Paragraph 27(a) above, if Landlord
utilizes the services of an attorney for the purpose of collecting any Rent due and
unpaid by Tenant or in connection with any other breach of this Lease by Tenant,
Tenant agrees to pay Landlord actual attorneys’ fees as determined by Landlord for
such services, regardless of the fact that no legal action may be commenced or filed
by Landlord.



29. Taxes




     Tenant shall be liable for and shall pay, prior to delinquency, all taxes levied against
Tenant’s Property. If any Alteration installed by Tenant pursuant to Paragraph 13 or any of
Tenant’s Property is assessed and taxed with the Project or



34









 




Building, Tenant shall pay such taxes to Landlord within ten (10) days after delivery to
Tenant of a statement therefor.




30. Effect Of Conveyance




     The term “Landlord” as used in this Lease means, from time to time, the then current owner of
the Building or the Project containing the Premises, so that, in the event of any sale of the
Building or the Project, Landlord shall be and hereby is entirely freed and relieved of all
covenants and obligations of Landlord hereunder, and it shall be deemed and construed, without
further agreement between the parties and the purchaser at any such sale, that the purchaser of
the Building or the Project has assumed and agreed to carry out any and all covenants and
obligations of Landlord hereunder.



31. Tenant’s Estoppel Certificate




     From time to time, upon written request of Landlord, Tenant shall execute,  acknowledge and
deliver to Landlord or its designee, a written certificate stating (a) the date this Lease was
executed, the Commencement Date of the Term and the date the Term expires; (b) the date Tenant
entered into occupancy of the Premises; (c) the amount of Rent and the date to which such Rent has
been paid; (d) that this Lease is in full force and effect and has not been assigned, modified,
supplemented or amended in any way (or, if assigned, modified, supplemented or amended, specifying
the date and terms of any agreement so affecting this Lease); (e) that this Lease represents the
entire agreement between the parties with respect to Tenant’s right to use and occupy the Premises
(or specifying such other agreements, if any); (f) that all obligations under this Lease to be
performed by Landlord as of the date of such certificate have been satisfied (or specifying those
as to which Tenant claims that Landlord has yet to perform); (g) that all required contributions by
Landlord to Tenant on account of Tenant’s improvements have been received (or stating exceptions
thereto); (h) that on such date there exist no defenses or offsets that Tenant has against the
enforcement of this Lease by Landlord (or stating exceptions thereto); (i) that no Rent or other
sum payable by Tenant hereunder has been paid more than one (1) month in advance (or stating
exceptions thereto); (j) that security has been deposited with Landlord, stating the original
amount thereof and any increases thereto; and (k) any other matters evidencing the status of this
Lease that may be required either by a lender making a loan to Landlord to be secured by a deed of
trust covering the Building or the Project or by a purchaser of the Building or the Project. Any
such certificate delivered pursuant to this Paragraph 31 may be relied upon by a prospective
purchaser of Landlord’s interest or a mortgagee of Landlord’s interest or assignee of any mortgage
upon Landlord’s interest in the Premises. If Tenant shall fail to provide such certificate within
ten (10) days of receipt by Tenant of a written request by Landlord as herein provided, such
failure shall, at Landlord’s election,



35









 




constitute a Default under this Lease, and Tenant shall be deemed to have given such certificate as
above provided without modification and shall be deemed to have admitted the accuracy of any
information supplied by Landlord to a prospective purchaser or mortgagee.




32. Subordination




     Landlord shall have the right to cause this Lease to be and remain subject and subordinate to
any and all mortgages, deeds of trust and ground leases, if any (“Encumbrances”) that are now or
may hereafter be executed covering the Premises, or any renewals, modifications, consolidations,
replacements or extensions thereof, for the full amount of all advances made or to be made
thereunder and without regard to the time or character of such advances, together with interest
thereon and subject to all the terms and provisions thereof; provided only, that in the event of
termination of any such ground lease or upon the foreclosure of any such mortgage or deed of trust,
so long as Tenant is not in default, the holder thereof (“Holder”) shall agree to recognize
Tenant’s rights under this Lease as long as Tenant shall pay the Rent and observe and perform all
the provisions of this Lease to be observed and performed by Tenant. Within ten (10) days after
Landlord’s written request, Tenant shall execute, acknowledge and deliver any and all reasonable
documents required by Landlord or the Holder to effectuate such subordination. If Tenant fails to
do so, such failure shall constitute a Default by Tenant under this Lease. Notwithstanding anything
to the contrary set forth in this Paragraph 32, Tenant hereby attorns and agrees to attorn to any
person or entity purchasing or otherwise acquiring the Premises at any sale or other proceeding or
pursuant to the exercise of any other rights, powers or remedies  under such Encumbrance.



33. Environmental Covenants




     (a) Prior to executing this Lease, Tenant has completed, executed and delivered to Landlord a
Hazardous Materials Disclosure Certificate (“Initial Disclosure Certificate”), a fully completed
copy of which is attached hereto as Exhibit D and incorporated herein by this reference. Tenant
covenants, represents and warrants to Landlord that the information on the Initial Disclosure
Certificate is true and correct and accurately describes the Hazardous Materials which will be
manufactured, treated, used or stored on or about the Premises by Tenant or Tenant’s Agents. Tenant
shall, on each anniversary of the Commencement Date and at such other times as Tenant desires to
manufacture, treat, use or store on or about the Premises new or additional Hazardous Materials
which were not listed on the Initial Disclosure Certificate, complete, execute and deliver to
Landlord an updated Disclosure Certificate (each, an “Updated Disclosure Certificate”) describing
Tenant’s then current and proposed future uses of Hazardous Materials on or about the Premises,
which Updated Disclosure Certificates shall be in the



36









 




same format as that which is set forth in Exhibit D or in such updated format as Landlord may
require from time to time. Tenant shall deliver an Updated Disclosure Certificate to Landlord not
less than thirty (30) days prior to the date Tenant intends to commence the manufacture, treatment,
use or storage of new or additional Hazardous Materials on or about the Premises, and Landlord
shall have the right to approve or disapprove such new or additional Hazardous Materials in its
sole and absolute discretion. Tenant shall make no use of Hazardous Materials on or about the
Premises except as described in the Initial Disclosure Certificate or as otherwise approved by
Landlord in writing in accordance with this Paragraph 33(a).




     (b) As used in this Lease, the term “Hazardous Materials” shall mean and
include any substance that is or contains (1) any “hazardous substance” as now or
hereafter defined in § 101(14) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (“CERCLA”) (42 U.S.C.
§ 9601 et seq.) or any regulations promulgated under CERCLA; (2) any “hazardous waste” as now or
hereafter defined in the Resource Conservation and Recovery Act, as amended (“RCRA”) (42 U.S.C. §
6901 et seq.) or any regulations promulgated under RCRA; (3) any substance now or hereafter
regulated by the Toxic Substances Control Act, as amended (“TSCA”) (15 U.S.C. § 2601 et seq.) or
any regulations promulgated under TSCA; (4) petroleum, petroleum by-products, gasoline, diesel
fuel, or other petroleum hydrocarbons; (5) asbestos and asbestos-containing material, in any form,
whether friable or non-friable; (6) polychlorinated biphenyls; (7) lead and lead-containing
materials; or (8) any additional substance, material or waste (A) the presence of which on or about
the Premises (i) requires reporting, investigation or remediation under any Environmental Laws (as
hereinafter defined), (ii) causes or threatens to cause a nuisance on the Premises or any adjacent
area or property or poses or threatens to pose a hazard to the health or safety of persons on the
Premises or any adjacent area or property, or (iii) which, if it emanated or migrated from the
Premises, could constitute a trespass, or . (B) which is now or is hereafter classified or
considered to be hazardous or toxic under any Environmental Laws.



     (c) As used in this Lease, the term “Environmental Laws” shall mean and
include (1) CERCLA, RCRA and TSCA; and (2) any other federal, state or local
laws, ordinances, statutes, codes, rules, regulations, orders or decrees now or
hereinafter in effect relating to (A) pollution, (B) the protection or regulation of
human health, natural resources or the environment, (C) the treatment, storage or
disposal of Hazardous Materials, or (D) the emission, discharge, release or
threatened release of Hazardous Materials into the environment.



     (d) Tenant agrees that during its use and occupancy of the Premises it will
(1) not (A) permit Hazardous Materials to be present on or about the Premises
except in a manner and quantity necessary for the ordinary performance of Tenant’s



37









 




business or (B) release, discharge or dispose of any Hazardous Materials on, in, at, under, or
emanating from, the Premises, the Building or the Project; (2) comply with all Environmental Laws
relating to the Premises and the use of Hazardous Materials on or about the Premises and not engage
in or permit others to engage in any activity at the Premises in violation of any Environmental
Laws; and (3) immediately notify Landlord of (A) any inquiry, test, investigation or enforcement
proceeding by any governmental agency or authority against Tenant, Landlord or the Premises,
Building or Project relating to any Hazardous Materials or under any Environmental Laws or (B) the
occurrence of any event or existence of any condition that would cause a breach of any of the
covenants set forth in this Paragraph 33.




     (e) If Tenant’s use of Hazardous Materials on or about the Premises results in
a release, discharge or disposal of Hazardous Materials on, in, at, under, or
emanating from, the Premises, the Building or the Project, Tenant agrees to
investigate, clean up, remove or remediate such Hazardous Materials in full
compliance with (1) the requirements of (A) all Environmental Laws and (B) any
governmental agency or authority responsible for the enforcement of any
Environmental Laws; and (2) any additional requirements of Landlord that are
reasonably necessary to protect the value of the Premises, the Building or the
Project.



     (f) Upon reasonable notice to Tenant, Landlord may inspect the Premises and
surrounding areas for the purpose of determining whether there exists on or about
the Premises any Hazardous Material or other condition or activity that is in
violation of the requirements of this Lease or of any Environmental Laws. Such
inspections may include, but are not limited to, entering the Premises or adjacent
property with drill rigs or other machinery for the purpose of obtaining laboratory
samples. Landlord shall not be limited in the number of such inspections during
the Term of this Lease. In the event (1) such inspections reveal the presence of any
such Hazardous Material or other condition or activity in violation of the
requirements of this Lease or of any Environmental Laws, or (2) Tenant or its
Agents contribute or knowingly consent to the presence of any Hazardous Materials
in, on, under, through or about the Premises, the Building or the Project or
exacerbate the condition of or the conditions caused by any Hazardous Materials in,
on, under, through or about the Premises, the Building or the Project, Tenant shall
reimburse Landlord for the cost of such inspections within ten (10) days of receipt
of a written statement therefor. Tenant will supply to Landlord such historical and
operational information regarding the Premises and surrounding areas as may be
reasonably requested to facilitate any such inspection and will make available for
meetings appropriate personnel having knowledge of such matters. Tenant agrees
to give Landlord at least sixty (60) days’ prior notice of its intention to vacate the
Premises so that Landlord will have an opportunity to perform such an inspection
prior to such vacation. The right granted to Landlord herein to perform inspections



38









 




shall not create a duty on Landlord’s part to inspect the Premises, or liability on the part of
Landlord for Tenant’s use, storage, treatment or disposal of Hazardous Materials, it being
understood that Tenant shall be solely responsible for all liability in connection therewith.




     (g) Landlord shall have the right, but not the obligation, prior or subsequent to a Default,
without in any way limiting Landlord’s other rights and remedies under this Lease, to enter upon
the Premises, or to take such other actions as it deems necessary or advisable, to investigate,
clean up, remove or remediate any Hazardous Materials or contamination by Hazardous Materials
present on, in, at, under, or emanating from, the Premises, the Building or the Project in
violation of Tenant’s obligations under this Lease or under any Environmental Laws. Notwithstanding
any other provision of this Lease, Landlord shall also have the right, at its election, in its own
name or as Tenant’s agent, to negotiate, defend, approve and appeal, at Tenant’s expense, any
action taken or order issued by any governmental agency or authority with regard to any such
Hazardous Materials or contamination by Hazardous Materials. All costs and expenses paid or
incurred by Landlord in the exercise of the rights set forth in this Paragraph 33 shall be payable
by Tenant upon demand.



     (h) Tenant shall surrender the Premises to Landlord upon the expiration or earlier
termination of this Lease free of debris, waste or Hazardous Materials placed on, about or near the
Premises by Tenant or Tenant’s Agents and, to the extent of any such debris, waste or Hazardous
Materials, in a condition which complies with all Environmental Laws and any additional
requirements of Landlord that are reasonably necessary to protect the value of the Premises, the
Building or the Project, including, without limitation, the obtaining of any closure permits or
other governmental permits or approvals related to Tenant’s use of Hazardous Materials in or about
the Premises. Tenant’s obligations and liabilities pursuant to the provisions of this Paragraph 33
shall survive the expiration or earlier termination of this Lease. If it is determined by Landlord
that the condition of all or any portion of the Premises, the Building, and/or the Project is not
in compliance with the provisions of this Lease with respect to Hazardous Materials, including,
without limitation, all Environmental Laws, at the expiration or earlier termination of this Lease,
then at Landlord’s sole option, Landlord may require Tenant to hold over possession of the
Premises until Tenant can surrender the Premises to Landlord in the condition in which the Premises
existed as of the Commencement Date and prior to the appearance of such Hazardous Materials except
for normal wear and tear, including, without limitation, the conduct or performance of any closures
as required by any Environmental Laws. The burden of proof hereunder shall be upon Tenant. For
purposes hereof, the term “normal wear and tear” shall not include any deterioration in the
condition or diminution of the value of any portion of the Premises, the Building, and/or the
Project in any manner whatsoever related to directly, or indirectly, Hazardous Materials. Any



39









 




such holdover by Tenant will be with Landlord’s consent, will not be terminable by Tenant in any
event or circumstance and will otherwise be subject to the provisions of Paragraph 36 of this
Lease.




     (i) Tenant agrees to indemnify and hold harmless Landlord from and against any and all
claims, losses (including, without limitation, loss in value of the Premises, the Building or the
Project, liabilities and expenses (including attorney’s fees)) sustained by Landlord attributable
to (1) any Hazardous Materials placed on or about the Premises, the Building or the Project by
Tenant or Tenant’s Agents, or (2) Tenant’s breach of any provision of this Paragraph 33.



     (j) The provisions of this Paragraph 33 shall survive the expiration or earlier termination
of this Lease.



34. Notices




     All notices and demands which are required or may be permitted to be given to either party by
the other hereunder shall be in writing and shall be sent by United States mail, postage prepaid,
certified, or by personal delivery or overnight courier, addressed to the addressee at Tenant’s
Address or Landlord’s Address as specified in the Basic Lease Information, or to such other place
as either party may from time to time designate in a notice to the other party given as provided
herein. Copies of all notices and demands given to Landlord shall additionally be sent to
Landlord’s property manager at the address specified in the Basic Lease Information or at such
other address as Landlord may specify in writing from time to time. Notice shall be deemed given
upon actual receipt (or attempted delivery if delivery is refused ), if personally delivered, or
one (1) business day following deposit with a reputable overnight courier that provides a receipt,
or on the third (3rd) day following deposit in the United States mail in the manner described
above.



35. Waiver




     The waiver of any breach of any term, covenant or condition of this Lease shall not be deemed
to be a waiver of such term, covenant or condition or of any subsequent breach of the same or any
other term, covenant or condition herein contained. The subsequent acceptance of Rent by Landlord
shall not be deemed to be a waiver of any preceding breach by Tenant, other than the failure of
Tenant to pay the particular rental so accepted, regardless of Landlord’s knowledge of such
preceding breach at the time of acceptance of such Rent. No delay or omission in the exercise of
any right or remedy of Landlord in regard to any Default by Tenant shall impair such a right or
remedy or be construed as a waiver. Any waiver by Landlord of any Default must be in writing and
shall not be a waiver of any other Default concerning the same or any other provisions of this
Lease.



40









 





36. Holding Over




     Any holding over after the expiration of the Term, without the express written consent of
Landlord, shall constitute a Default and, without limiting Landlord’s remedies provided in this
Lease, such holding over shall be construed to be a tenancy at sufferance, at a rental rate of one
hundred fifty percent (150%) of the Base Rent last due in this Lease, plus Additional Rent, and
shall otherwise be on the terms and conditions herein specified, so far as applicable; provided,
however, in no event shall any renewal or expansion option or other similar right or option
contained in this Lease be deemed applicable to any such tenancy at sufferance. If the Premises are
not surrendered at the end of the Term or sooner termination of this Lease, and in accordance with
the provisions of Paragraphs 12 and 33(h), Tenant shall indemnify, defend and hold Landlord
harmless from and against any and all loss or liability resulting from delay by Tenant in so
surrendering the Premises including, without limitation, any loss or liability resulting from any
claim against Landlord made by any succeeding tenant or prospective tenant founded on or resulting
from such delay and losses to Landlord due to lost opportunities to lease any portion of the
Premises to any such succeeding tenant or prospective tenant, together with, in each case, actual
attorneys’ fees and costs.



37. Successors And Assigns




     The terms, covenants and conditions of this Lease shall, subject to the provisions as to
assignment, apply to and bind the heirs, successors, executors, administrators and assigns of all
of the parties hereto. If Tenant shall consist of more than one entity or person, the obligations
of Tenant under this Lease shall be joint and several.



38. Time




     Time is of the essence of this Lease and each and every term, condition and provision herein.



39. Brokers




     Landlord and Tenant each represents and warrants to the other that neither it nor its officers
or agents nor anyone acting on its behalf has dealt with any real estate broker except the
Broker(s) specified in the Basic Lease Information in the negotiating or making of this Lease, and
each party agrees to indemnify and hold harmless the other from any claim or claims, and costs and
expenses, including attorneys’ fees, incurred by the indemnified party in conjunction with any such
claim or claims of any other broker or brokers to a commission in connection with this Lease as a
result of the actions of the indemnifying party. Landlord shall be responsible for a commission
payable to Landlord’s Broker in connection with the



41









 




execution of this Lease pursuant to a separate written agreement between Landlord and Landlord’s
Broker, and Landlord’s Broker shall be solely responsible for any commission or fee payable to
Tenant’s Broker in connection with this Lease or the subject matter hereof.




40. Limitation Of Liability




     Tenant agrees that, in the event of any default or breach by Landlord with respect to any of
the terms of the Lease to be observed and performed by Landlord (1) Tenant shall look solely to the
then-current landlord’s interest in the Building for the satisfaction of Tenant’s remedies for the
collection of a judgment (or other judicial process) requiring the payment of money by Landlord;
(2) no other property or assets of Landlord, its partners, shareholders, officers, directors,
employees, investment advisors, or any successor in interest of any of them (collectively, the
“Landlord Parties”) shall be subject to levy, execution or other enforcement procedure for the
satisfaction of Tenant’s remedies; (3) no personal liability shall at any time be asserted or
enforceable against the Landlord Parties; and (4) no judgment will be taken against the Landlord
Parties. The provisions of this section shall apply only to the Landlord and the parties herein
described, and shall not be for the benefit of any insurer nor any other third party.



41. Financial Statements




     Within ten (10) days after Landlord’s request, Tenant shall deliver to Landlord the then
current financial statements of Tenant (including interim periods following the end of the last
fiscal year for which annual statements are available), prepared or compiled by a certified public
accountant, including a balance sheet and profit and loss statement for the most recent prior year,
all prepared in accordance with generally accepted accounting principles consistently applied.



42. Rules And Regulations




     Tenant agrees to comply with such reasonable rules and regulations as Landlord may adopt from
time to time for the orderly and proper operation of the Building and the Project. Such rules may
include but shall not be limited to the following: (a) restriction of employee parking to a
limited, designated area or areas; and (b) regulation of the removal, storage and disposal of
Tenant’s refuse and other rubbish at the sole cost and expense of Tenant. The then current rules
and regulations shall be binding upon Tenant upon delivery of a copy of them to Tenant. Landlord
shall not be responsible to Tenant for the failure of any other person to observe and abide by any
of said rules and regulations. Landlord’s current rules and regulations are attached to this Lease
as Exhibit C.



42









 





43. Mortgagee Protection




     (a) Modifications for Lender. If, in connection with obtaining financing for
the Project or any portion thereof, Landlord’s lender shall request reasonable
modifications to this Lease as a condition to such financing, Tenant shall not
unreasonably withhold, delay or defer its consent to such modifications, provided
such modifications do not materially adversely affect Tenant’s rights or increase
Tenant’s obligations under this Lease.



     (b) Rights to Cure. Tenant agrees to give to any trust deed or mortgage
holder (“Holder”), by registered mail, at the same time as it is given to Landlord, a
copy of any notice of default given to Landlord, provided that prior to such notice
Tenant has been notified, in writing, (by way of notice of assignment of rents and
leases, or otherwise) of the address of such Holder. Tenant further agrees that if
Landlord shall have failed to cure such default within the time provided for in this
Lease, then the Holder shall have an additional twenty (20) days after expiration of
such period, or after receipt of such notice from Tenant (if such notice to the Holder is
required by this Paragraph 43(b)), whichever shall last occur within which to cure such
default or if such default cannot be cured within that time, then such additional time as may
be necessary if within such twenty (20) days, any Holder has commenced and is diligently
pursuing the remedies necessary to cure such default (including but not limited to
commencement of foreclosure proceedings, if necessary to effect such cure), in which event
this Lease shall not be terminated.



44. Entire Agreement




     This Lease, including the Exhibits and any Addenda attached hereto, which are hereby
incorporated herein by this reference, contains the entire agreement of the parties hereto, and no
representations, inducements, promises or agreements, oral or otherwise, between the parties, not
embodied herein or therein, shall be of any force and effect.



45. Interest




     Any installment of Rent and any other sum due from Tenant under this Lease which is not
received by Landlord within ten (10) days from when the same is due shall bear interest from the
date such payment was originally due under this Lease until paid at an annual rate equal to the
maximum rate of interest permitted by law. Payment of such, interest shall not excuse or cure any
Default by Tenant. In addition, Tenant shall pay all costs and attorneys’ fees incurred by Landlord
in collection of such amounts.



43









 





46. Construction




     This Lease shall be construed and interpreted in accordance with the laws of the State of
California. The parties acknowledge and agree that no rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall be employed in the interpretation
of this Lease, including the Exhibits and any Addenda attached hereto. All captions in this Lease
are for reference only and shall not be used in the interpretation of this Lease. Whenever required
by the context of this Lease, the singular shall include the plural, the masculine shall include
the feminine, and vice versa. If any provision of this Lease shall be determined to be illegal or
unenforceable, such determination shall not affect any other provision of this Lease and all such
other provisions shall remain in full force and effect.



47. Representations And Warranties Of Tenant




     Tenant hereby makes the following representations and warranties, each of which is material
and being relied upon by Landlord, is true in all respects as of the date of this Lease, and shall
survive the expiration or termination of the Lease.



     (a) If Tenant is an entity, Tenant is duly organized, validly existing and in
good standing under the laws of the state of its organization and the persons
executing this Lease on behalf of Tenant have the full right and authority to
execute this Lease on behalf of Tenant and to bind Tenant without the consent or
approval of any other person or entity. Tenant has full power, capacity, authority
and legal right to execute and deliver this Lease and to perform all of its
obligations hereunder. This Lease is a legal, valid and binding obligation of
Tenant, enforceable in accordance with its terms.



     (b) Tenant has not (1) made a general assignment for the benefit of creditors,
(2) filed any voluntary petition in bankruptcy or suffered the filing of an
involuntary petition by any creditors, (3) suffered the appointment of a receiver to
take possession of all or substantially all of its assets, (4) suffered the attachment
or other judicial seizure of all or substantially all of its assets, (5) admitted in
writing its inability to pay its debts as they come due, or (6) made an offer of
settlement, extension or composition to its creditors generally.



48. Security




     (a) Tenant acknowledges and agrees that, while Landlord may engage security personnel to
patrol the Building or the Project, Landlord is not providing any security services with respect to
the Premises, the Building or the Project and that Landlord shall not be liable to Tenant for, and
Tenant waives any claim against Landlord with respect to, any loss by theft or any other damage
suffered or incurred



44









 




by Tenant in connection with any unauthorized entry into the Premises or any other breach of
security with respect to the Premises, the Building or the Project.




     (b) Tenant hereby agrees to the exercise by Landlord and Landlord’s Agents, within their
sole discretion, of such security measures as, but not limited to, the evacuation of the Premises,
the Building or the Project for cause, suspected cause or for drill purposes, the denial of any
access to the Premises, the Building or the Project and other similarly related actions that it
deems necessary to prevent any threat of property damage or bodily injury. The exercise of such
security measures by Landlord and Landlord’s Agents, and the resulting interruption of service and
cessation of Tenant’s business, if any, shall not be deemed an eviction or disturbance of Tenant’s
use and possession of the Premises, or any part thereof, or render Landlord or Landlord’s Agents
liable to Tenant for any resulting damages or relieve Tenant from Tenant’s obligations under this
Lease.



49. Jury Trial Waiver




     Tenant hereby waives any right to trial by jury with respect to any action or proceeding (i)
brought by Landlord, Tenant or any other party, relating to (A) this Lease and/or any
understandings or prior dealings between the parties hereto, or (B) the Premises, the Building or
the Project or any part thereof, or (ii) to which Landlord is a party. Tenant hereby agrees that
this Lease constitutes a written consent to waiver of trial by jury pursuant to the provisions of
California Code of Civil Procedure Section 631, and Tenant does hereby constitute and appoint
Landlord its true and lawful attorney-in-fact, which appointment is coupled with an interest, and
Tenant does hereby authorize and empower Landlord, in the name, place and stead of Tenant, to file
this Lease with the clerk or judge of any court of competent jurisdiction as a statutory written
consent to waiver of trial by jury.



     Landlord and Tenant have executed and delivered this Lease as of the Lease Date specified in
the Basic Lease Information.



45









 





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Landlord:	 	 	 	Tenant:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Harbor Investment Partners,	 	 	 	Financial Engines, Inc.,	 	 
	a California general partnership	 	 	 	a California corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	Aetna Life Insurance Company,	 	 	 	 	 	 	 	 
	 	 	a Connecticut corporation, 
General Partner	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	By:

Print Name:
	 	/s/ Jeff Maggioncalda
 

Jeff Maggioncalda
	 	 
	 	 	By:	 	Allegis Realty Investors llc,	 	 	 	Its:	 	President CEO	 	 
	 	 	 	 	Its Investment Advisor and Agent	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Cynthia Stevenin
	 	 	 	Print Name:
	 	 

	 	 
	 

	 	 	 	 	 	 

     Cynthia Stevenin
	 	 
	 	
Its:
	 	 

	 	 
	 

	 	 	 	 	 	     Vice President
	 	 	 	 	 	 

	 	 







46











 





EXHIBIT A









 









 








Exhibit B




	 	 	 
	Commencement and Expiration Date Memorandum
	 
	 	 
	Landlord:

	 	Harbor Investment Partners
	 
	 	 
	Tenant:

	 	Financial Engines, Inc.
	 
	 	 
	Lease Date:

	 	July 14, 1997
	 
	 	 
	Premises:

	 	Located at 1804 Embarcadero Road, Suite 200,
Palo Alto, California 94303






     Tenant hereby accepts the Premises as being in the condition required under the Lease, with all
Tenant Improvements completed (except for minor punchlist items which Landlord agrees to complete).



     The
Commencement Date of the Lease is hereby established as                     ,
 1997 and the Expiration Date is
                          ,
___.



	 	 	 	 	 
	Tenant: 	Financial Engines, Inc.,

a California corporation

 	 
	 	By:  	/s/ Jeff Maggioncalda
 	 
	 	 	Print Name:  	JEFF MAGGIONCALDA 	 
	 	 	Its:  	PRESIDENT 	 
	 



Approved and Agreed:




LandLord:




Harbor Investment Partners,

a California general partnership




	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	
	 	Its: _______________________________	 	 
	 

	 	 

	 	 






B-1









 





Exhibit C




Rules And Regulations





     This exhibit,
entitled “Rules and Regulations,” is and shall constitute Exhibit C to the Lease
Agreement, dated as of the Lease Date, by and between landlord and Tenant for the Premises. The
terms and conditions of this Exhibit C are hereby incorporated into and are made a part of the
Lease. Capitalized terms used, but not otherwise defined, in this Exhibit C have the meanings
ascribed to such terms in the Lease.



     1. Tenant shall not use any
method of heating or air conditioning other than that supplied by
Landlord without the consent of Landlord.



     2. All window coverings
installed by Tenant and visible from the outside of the building require the
prior written approval of Landlord.



     3. Tenant shall not use, keep
or permit to be used or kept any foul or noxious gas or substance or
any flammable or combustible materials on or around the Premises, except to the extent that Tenant
is permitted to use the same under the terms of Paragraph 33 of the Lease.



     4. Tenant shall not alter any
lock or install any new locks or bolts on any door at the Premises
without the prior consent of Landlord.



     5. Tenant shall not make any duplicate keys without the prior consent of Landlord.



     6. Tenant shall park motor vehicles in parking areas designated by Landlord except for loading and
unloading. During those periods of loading and unloading, Tenant shall not unreasonably interfere
with traffic flow around the Building or the Project and loading and unloading areas of other
tenants. Tenant shall not park motor vehicles in designated parking areas after the conclusion of
normal daily business activity.



     7. Tenant shall not disturb, solicit or canvas any tenant or other occupant of the Building or
Project and shall cooperate to prevent same.



     8. No person shall go on the roof without Landlord’s permission.



     9. Business machines and mechanical equipment belonging to Tenant which cause noise or vibration
that may be transmitted to the structure of the Building, to such a degree as to be objectionable
to Landlord or other tenants, shall be placed and maintained by Tenant, at Tenant’s expense, on
vibration eliminators or in




C-1











 





noise-dampening housing or other devices sufficient to eliminate noise or vibration.



     10. All goods, including material used to store goods, delivered to the
Premises of Tenant shall be immediately moved into the Premises and shall not be
left in parking or receiving areas overnight.



     11. Tractor trailers which must be unhooked or parked with dolly wheels
beyond the concrete loading areas must use steel plates or wood blocks under the
dolly wheels to prevent damage to the asphalt paving surfaces. No parking or
storing of such trailers will be permitted in the auto parking areas of the Project or
on streets adjacent thereto.



     12. Forklifts which operate on asphalt paving areas shall not have solid rubber
tires and shall only use tires that do not damage the asphalt.



     13. Tenant is responsible for the storage and removal of all trash and refuse.
All such trash and refuse shall be contained in suitable receptacles stored behind
screened enclosures at locations approved by Landlord.



     14. Tenant shall not store or permit the storage or placement of goods or
merchandise in or around the common areas surrounding the Premises. No displays or sales of merchandise shall be allowed in the parking lots or other common areas.



     15. Tenant shall not permit any animals, including but not limited to, any
household pets, to be brought or kept in or about the Premises, the Building, the
Project or any of the common areas.



Initials:




Tenant: JM





Landlord: CDC




C-2









 





Exhibit D




Hazardous Materials Disclosure Certificate




     Your cooperation in this matter is appreciated. Initially, the information provided by you in
this Hazardous Materials Disclosure Certificate is necessary for the Landlord to evaluate your
proposed uses of the premises (the “Premises”) and to determine whether to enter into a lease
agreement with you as tenant. If a lease agreement is signed by you and the Landlord (the “Lease
Agreement”), on an annual basis in accordance with the provisions of Paragraph 33 of the Lease
Agreement, you are to provide an update to the information initially provided by you in this
certificate. Any questions regarding this certificate should be directed to, and when completed,
the certificate should be delivered to:




	 	Landlord: 	 	 Harbor Investment Partners

c/o Allegis Realty Investors LLC
455 Market, Suite 1540

San Francisco, California 94105

Attention: Cynthia Stevenin

Phone: (415) 538-4800





     Name of (Prospective) Tenant: Financial Engines, Inc.




Mailing Address: 1961 Laudingo Drive Mountain View, CA 94043




Contact
Person, Title and Telephone Number(s): Tara Raydar, Operations and Resource Manager 415-962-1887 x 16




Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s): Same




Address of (Prospective) Premises: 1804 Embarcadero Rd. Palo Alto CA 94303




Length of (Prospective) initial Term: 60 months



D-l





 









 









	1.	 	GENERAL INFORMATION:






     Describe the proposed operations to take place in, on, or about the Premises,
including, without limitation, principal products processed, manufactured or
assembled, and services and activities to be provided or otherwise conducted.
Existing tenants should describe any proposed changes to on-going operations.




     Financial
planning software
(non-manufacturing)




	2.	 	USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS






	 	2.1	 	Will any Hazardous Materials (as hereinafter defined) be used,
generated, treated, stored or disposed of in, on or about the Premises?
Existing tenants should describe any Hazardous Materials, which
continue to be used, generated, treated, stored or disposed of in, on or
about the Premises.





	 	 	 	 	 
	Wastes

	 	Yes o
	 	No þ
	Chemical Products

	 	Yes o
	 	No þ
	Other

	 	Yes o
	 	No þ







	 	 	If Yes is marked, please explain: 


 

 







	2.2	 	If Yes is marked in Section 2.1, attach a list of any Hazardous
Materials to be used, generated, treated, stored or disposed of in, on
or about the Premises, including the applicable hazard class and an
estimate of the quantities of such Hazardous Materials to be present
on or about the Premises at any given time; estimated annual
throughput; the proposed location(s) and method of storage
(excluding nominal amounts of ordinary household cleaners and
janitorial supplies which are not regulated by any Environmental
Laws, as hereinafter defined); and the proposed location(s) and
method(s) of treatment or disposal for each Hazardous Material,
including, the estimated frequency, and the proposed contractors or
subcontractors. Existing tenants should attach a list setting forth the
information requested above and such list should include actual data
from on-going operations and the identification of any variations in
such information from the prior year’s certificate.





D-2





 











 






	3.	 	STORAGE TANKS AND SUMPS






	 	3.1	 	Is any above or below ground storage or treatment of gasoline, diesel,
petroleum, or other Hazardous Materials in tanks or sumps proposed in, on or
about the Premises? Existing tenants should describe any such actual or proposed
activities.
	 
	 	 	 	Yes o     No þ
	 
	 	 	 	If yes, please explain: 

 

 







	4.	 	WASTE MANAGEMENT






	 	4.1	 	Has your company been issued an EPA Hazardous Waste Generator
I.D. Number? Existing tenants should describe any additional
identification numbers issued since the previous certificate.
	 
	 	 	 	Yes o     No þ
	 
	 	4.2	 	Has your company filed a biennial or quarterly reports as a hazardous
waste generator? Existing tenants should describe any new reports
filed.



Yes o     No þ
	 
	 	 	 	If yes, attach a copy of the most recent report filed.






	5.	 	WASTEWATER TREATMENT AND DISCHARGE






	 	5.1	 	Will your company discharge wastewater or other wastes
to: 





	 	 	 
	o storm drain?

	 	o sewer?
	o surface water?

	 	þ no wastewater or other wastes discharged.






	 	 	 	Existing tenants should indicate any actual discharges. If so,
describe the nature of any proposed or actual discharge(s).


 

 






D-3









 









 












	 	5.2	 	Will any such wastewater or waste be treated before discharge?
	 
	 	 	 	Yes o     No þ
	 
	 	 	 	If yes, describe the type of treatment proposed to be conducted. Existing
tenants should describe the actual treatment conducted.


 


 







	6.	 	AIR DISCHARGES






	 	6.1	 	Do you plan for any air filtration systems or stacks to be used in your
company’s operations in, on or about the Premises that will discharge
into the air; and will such air emissions be monitored? Existing
tenants should indicate whether or not there are any such air filtration
systems or stacks in use in, on or about the Premises which discharge
into the air and whether such air emissions are being monitored.
	 
	 	 	 	Yes o     No þ
	 
	 	 	 	If yes, please describe: 

 

 

	 
	 	6.2	 	Do you propose to operate any of the following types of equipment,
or any other equipment requiring an air emissions permit? Existing
tenants should specify any such equipment being operated in, on or
about the Premises.





	 	 	 
	o Spray booth(s)

	 	o Incinerator(s)
	o Dip tank(s)

	 	o Other (Please describe)
	o Drying oven(s)

	 	þ No Equipment Requiring Air Permits






	 	 	 	If yes, please describe: 

 

 






D-4









 









 












	 	6.3	 	Please describe (and submit copies of with this Hazardous Materials
Disclosure Certificate) any reports you have filed in the past [thirty-six]
months with any governmental or quasi-governmental agencies or authorities
related to air discharges or clean air requirements and any such reports which
have been issued during such period by any such agencies or authorities with
respect to you or your business operations.






	7.	 	HAZARDOUS MATERIALS DISCLOSURES






	 	7.1	 	Has your company prepared or will it be required to prepare a
Hazardous Materials management plan (“Management Plan”) or
Hazardous Materials Business Plan and Inventory (“Business Plan”)
pursuant to Fire Department or other governmental or regulatory
agencies’ requirements? Existing tenants should indicate whether or
not a Management Plan is required and has been prepared.
	 
	 	 	 	Yes o     No þ
	 
	 	 	 	If yes, attach a copy of the Management Plan or Business Plan. Existing
tenants should attach a copy of any required updates to the Management Plan
or Business Plan.
	 
	 	7.2	 	Are any of the Hazardous Materials, and in particular chemicals,
proposed to be used in your operations in, on or about the Premises
listed or regulated under Proposition 65? Existing tenants should
indicate whether or not there are any new Hazardous Materials being
so used which are listed or regulated under Proposition 65.
	 
	 	 	 	Yes o     No þ
	 
	 	 	 	If yes, please explain: 

 

 






D-5





 











 






	8.	 	ENFORCEMENT ACTIONS AND COMPLAINTS






	 	8.1	 	With respect to Hazardous Materials or Environmental Laws, has
your company ever been subject to any agency enforcement actions,
administrative orders, or consent decrees or has your company
received requests for information, notice or demand letters, or any
other inquiries regarding its operations? Existing tenants should
indicate whether or not any such actions, orders or decrees
have been,
or are in the process of being, undertaken or if any such requests have
been received.
	 
	 	 	 	Yes o          No þ
	 
	 	 	 	If yes, describe the actions, orders or decrees and any continuing compliance
obligations imposed as a result of these actions, orders or decrees and also
describe any requests, notices or demands, and attach a copy of all such
documents. Existing tenants should describe and attach a copy of any new actions,
orders, decrees, requests, notices or demands not already delivered to Landlord
pursuant to the provisions of Paragraph 33 of the Lease Agreement.
	 
	 
	 	 	 	 

	 
	 	 	 	 

	 
	 
	 	 	 	 

	 
	 	8.2	 	Have there ever been, or are there now pending, any lawsuits against
your company regarding any environmental or health and safety
concerns?
	 
	 	 	 	Yes o          No þ
	 
	 	 	 	If yes, describe any such lawsuits and attach copies of the complaint(s),
cross-complaint(s), pleadings and other documents related thereto as requested by
Landlord. Existing tenants should describe and attach a copy of any new
complaint(s), cross-complaint(s), pleadings and other related documents not already
delivered to Landlord pursuant to the provisions of Paragraph 33 of
the Lease Agreement.
	 
	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	 	 	 





D-6









 












	 	8.3	 	Have there been any problems or complaints from adjacent tenants, owners or
other neighbors at your company’s current facility with regard to environmental or
health and safety concerns? Existing tenants should indicate whether or not there
have been any such problems or complaints from adjacent tenants, owners or other
neighbors at, about or near the Premises and the current status of any such
problems or complaints.
	 
	 	 	 	Yes o           No þ
	 
	 	 	 	If yes, please describe. Existing tenants should describe any such problems or
complaints not already disclosed to Landlord under the provisions of the signed
Lease Agreement and the current status of any such problems or complaints.
	 
	 
	 	 	 	 

	 
	 	 	 	 

	 
	 	 	 	 







	9.	 	PERMITS AND LICENSES






	 	9.1	 	Attach copies of all permits and licenses issued to your company
with respect to its proposed operations in, on or about the Premises,
including, without limitation, any Hazardous Materials permits,
wastewater discharge permits, air emissions permits, and use permits
or approvals. Existing tenants should attach copies of any new
permits and licenses as well as any renewals of permits or licenses
previously issued.





     As used herein, “Hazardous Materials” shall mean and include any substance that is or contains
(a) any “hazardous substance” as now or hereafter defined in § 101(14) of the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended (“CERCLA”) (42 U.S.C. §
9601 et seq.) or any regulations promulgated under CERCLA; (b) any “hazardous waste” as now or
hereafter defined in the Resource Conservation and Recovery Act, as amended (“RCRA”) (42 U.S.C. §
6901 et seq.) or any regulations promulgated under RCRA; (c) any substance now or hereafter
regulated by the Toxic Substances Control Act, as amended (“TSCA”) (15 U.S.C. § 2601 et seq.) or
any regulations promulgated under TSCA; (d) petroleum, petroleum by-products, gasoline, diesel
fuel, or other petroleum hydrocarbons; (e) asbestos and asbestos-containing material, in any form,
whether friable or non-friable; (f) polychlorinated biphenyls; (g) lead and lead-containing
materials; or (h) any additional substance, material or waste (A) the presence of which on or about
the Premises (i) requires reporting, investigation or remediation under any Environmental Laws (as
hereinafter defined), (ii) causes or threatens to cause a nuisance on the Premises or any adjacent
property or poses or






D-7









 







threatens to pose a hazard to the health or safety of persons on the Premises or any adjacent
property, or (iii) which, if it emanated or migrated from the Premises, could constitute a
trespass, or (B) which is now or is hereafter classified or considered to be hazardous or toxic
under any Environmental Laws; and “Environmental Laws” shall mean and include (a) CERCLA, RCRA and
TSCA; and (b) any other federal, state or local laws, ordinances, statutes, codes, rules,
regulations, orders or decrees now or hereinafter in effect relating to (i) pollution, (ii)
the protection or regulation of human health, natural resources or the environment, (iii) the
treatment, storage or disposal of Hazardous Materials, or (iv) the emission, discharge, release or
threatened release of Hazardous Materials into the environment.




     The undersigned hereby acknowledges and agrees that this Hazardous Materials Disclosure
Certificate is being delivered to Landlord in connection with the evaluation of a Lease Agreement
and, if such Lease Agreement is executed, will be attached thereto as an exhibit. The undersigned
further acknowledges and agrees that if such Lease Agreement is executed, this Hazardous Materials
Disclosure Certificate will be updated from time to time in accordance with Paragraph 33 of the
Lease Agreement. The undersigned further acknowledges and agrees that the Landlord and its
partners, lenders and representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness thereof in entering into the Lease
Agreement and the continuance thereof throughout the term, and any renewals thereof, of the Lease
Agreement. I [print name] JEFF MAGGIONCALDA acting with full authority to bind the (proposed) Tenant
and on behalf of the (proposed) Tenant, certify, represent and warrant that the information
contained in this certificate is true and correct.




D-8









 








	 	 	 	 	 
	(PROSPECTIVE) TENANT:



Financial Engines, Inc.,

a California corporation

 	 	 
	By:  	/s/ Jeff Maggioncalda
 	 	 
	 	Title: PRESIDENT 	 	 
	 
	Date: 	 7/14/97 	 	 
	 



INITIALS:




TENANT: JM




LANDLORD: CDS





D-9











 





First Amendment to Lease Agreement




     This
First Amendment To Lease Agreement (this “Amendment”) is made as of November 24,
1998, by and between Harbor Investment Partners, a California general partnership
(“Landlord”), and
Financial Engines, Inc., a California corporation (“Tenant”).



Recitals




     A. Landlord and Tenant have previously entered into that certain Lease Agreement, dated as of
July 14, 1997 (the “Lease”), which Lease covers certain premises consisting of approximately eleven
thousand one hundred forty-five (11,145) rentable square feet located at 1804 Embarcadero Road,
Suite 200, Palo Alto, California (the “Existing Premises”). Capitalized terms used but not defined
herein shall have the meanings ascribed to them in the Lease.



     B. Tenant desires to expand the Existing Premises by leasing that certain additional space
(the “New Premises”) consisting of seventeen thousand six hundred seventy-two (17,672) rentable
square feet, located at 1804 Embarcadero Road, Suite 100, Palo Alto, California, as more
particularly shown on Exhibit A attached hereto, effective as of December 15, 1998 (the “New
Premises Commencement Date”) and continuing through December 14, 2001 (the “New Premises Expiration
Date”). Except as stated herein to the contrary, during the New Premises Term (as defined below),
the “Premises”, as used in the Lease, shall be deemed to include the Existing Premises and the New
Premises.



     C. Landlord and Tenant desire to amend the Lease to provide for the addition of the New
Premises for the New Premises Term (as defined below), all upon and subject to the terms, covenants
and conditions hereinafter set forth.



Agreement




     Now Therefore, in consideration of the agreements of Landlord and Tenant herein
contained and other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:



1. New Premises




     Effective as of the New Premises Commencement Date, Landlord hereby leases to Tenant and
Tenant hereby leases from Landlord the New Premises for a term of thirty-six (36) months (the “New
Premises Term”). Prior to the New Premises Commencement Date, Landlord shall paint and carpet the
New Premises with Building-standard paint and carpeting (the “Tenant Improvements”). Except for the
foregoing Tenant Improvements, Landlord shall deliver the New Premises to Tenant in its “AS-IS”
condition and Landlord shall have no obligation to improve, remodel or otherwise alter



1









 







the New Premises prior to or after the New Premises Commencement Date. Notwithstanding the
foregoing, Landlord shall cause the roof to be in good condition and the building systems including
the HVAC, electrical and plumbing systems serving the Premises to be in good working order on the
New Premises Commencement Date. Any claims by Tenant under the preceding sentence shall be made in
writing not later than the thirtieth (30th) day after the New Premises Commencement Date. In the
event Tenant fails to deliver a written claim to Landlord on or before such thirtieth (30th) day,
then Landlord shall be conclusively deemed to have satisfied its obligations under this Paragraph
1.



2. Early Occupancy




     Notwithstanding anything to the contrary contained herein, Tenant shall have the right to
enter upon the New Premises beginning on November 1, 1998, for the sole purpose of preparing the
New Premises for occupancy, provided that Tenant shall not conduct its business in the Premises
during such period, and provided further, that such entry shall be subject to all of the terms and
conditions of the Lease, excluding only the obligation to pay Rent.



3. Base Monthly Rent for New Premises




     Notwithstanding anything to the contrary contained in the Lease, during the New Premises Term
in addition to all Rent due under the Lease, Tenant shall pay Base Rent for the New Premises in the
amounts set forth below:



	 	 	 	 	 	 	 	 	 
	 	 	Rent per Square 	 	 
	Term:	 	Foot per Month:	 	Base Rent:
	December 15, 1998 — December 14,
1999
	 	$	3.95	 	 	$	69,804.40	 
	December 15, 1999 — December 14,
2000
	 	$	4.11	 	 	$	72,631.92	 
	December 15, 2000 — December 14, 2001
	 	$	4.27	 	 	$	75,459.44	 






4. Additional Rent; Proportionate Shares




     During the New Premises Term, Tenant shall pay Additional Rent with respect to the New
Premises in accordance with the terms of Paragraph 4(b) of the Lease. With respect to the New
Premises, Tenant’s Proportionate Shares of the Building and the Project shall be 44.2% and 6.8%,
respectively.



2









 





5. Prepaid Rent




     Concurrently with the execution of this Amendment, Tenant shall pay to Landlord the Rent owing
with respect to the New Premises for the first month following the New Premises Commencement Date.



6. Renewal Option




     (a) Tenant shall have one (1) option (the “Renewal Option”) to extend the New Premises Term
for a period of two (2) years beyond the New Premises Expiration Date (the “Renewal Term”). The
Renewal Option shall be effective only if Tenant is not in Default under the Lease, nor has any
event occurred which with the giving of notice or the passage of time, or both, would constitute a
Default thereunder, either at the time of exercise of the Renewal Option or the time of
commencement of the Renewal Term. The Renewal Option must be exercised, if at all, by written
notice (the “Election Notice”) from Tenant to Landlord given not more than nine (9) months nor less
than six (6) months prior to the expiration of the New Premises Term. Except as hereinafter
provided in this Paragraph 6, any such notice given by Tenant to Landlord shall be irrevocable. If
Tenant fails to exercise the Renewal Option in a timely manner as provided for above, the Renewal
Option shall be void (time being of the essence) and this Agreement shall automatically terminate
on the New Premises Expiration Date without the necessity of notice from either party to the other.
Tenant’s lease of the New Premises during the Renewal Term shall be upon the same terms and
conditions as during the New Premises Term, except that the annual Base Rent during the Renewal
Term shall be equal to the prevailing market rate for space in similarly situated buildings in the
vicinity of the Building comparable to the New Premises in location, size, condition, quality and
type at the commencement of the Renewal Term; provided however that in no event shall the Base Rent
for the Renewal Term be less than the Base Rent for the last month of the New Premises Term. As
used herein, the term “prevailing market rate” shall mean the base annual rental for such
comparable space, taking into account any additional rental and all other payments and escalations
payable hereunder and by tenants under leases of such comparable space. Landlord shall notify
Tenant in writing (such notice being hereinafter referred to as the “Renewal Rate Notice”) of the
prevailing market rate for the Renewal Term within sixty (60) days after Landlord’s receipt of the
Election Notice. Tenant shall have ten (10) days after receipt of the Renewal Rate Notice (the
“Response Period”) to advise Landlord whether or not Tenant agrees with Landlord’s determination of
the prevailing market rate. If Tenant agrees with Landlord’s determination, then Landlord and
Tenant shall promptly enter into an amendment to the Lease providing for the lease of the New
Premises by Tenant during the Renewal Term upon the terms stated in the Renewal Rate Notice. If
Tenant disputes Landlord’s determination of the prevailing market rate, Tenant shall have the right
to rescind its Election Notice in writing within the Response Period and neither party shall have
any further rights or obligations under this Paragraph 6(a). If Tenant fails to provide Landlord
with written notice of rescission prior to the expiration of the




3











 




Response Period, then Tenant shall be deemed to have accepted Landlord’s
determination of the prevailing market rate.




     (b) Except as expressly provided in Paragraph 6(a) above with respect to the New Premises,
Tenant shall have no options or rights to renew or extend the Term of the Lease.



7. Parking




     During the New Premises Term, the number of non-exclusive and undesignated parking spaces
allocated to Tenant with respect to the New Premises shall be fifty-eight (58).



8. Expansion




     In the event that the suite immediately adjacent to the New Premises which contains
approximately 2,117 square feet (“Expansion Space”) shall be available for lease any time between
May 15, 1999 (or such earlier date as the existing tenant vacates the Expansion Space) and the New
Premises Expiration Date, Landlord shall immediately lease to Tenant and Tenant shall immediately
lease from Landlord the Expansion Space in its AS-IS condition (except that Landlord shall paint
and carpet the Expansion Space with Building-standard paint and carpeting) and at the
per-square-foot Base Rent in effect hereunder from time to time. Tenant shall pay Additional Rent
with respect to the Expansion Space on the terms specified in Paragraph 4 above. In the event
Tenant leases the Expansion Space as provided herein, the parties shall promptly execute an
amendment to the Lease providing for the lease of such Expansion Space, which amendment shall be
substantially similar in form to this Amendment. Tenant acknowledges and agrees that its
willingness to lease the Expansion Space from Landlord in accordance with this Paragraph 8 is an
integral part of the consideration to Landlord for the execution of this Amendment and that
Landlord would not execute this Amendment but for Tenant’s willingness to lease the Expansion
Space. Any failure of Tenant to lease the Expansion Space from Landlord in accordance with this
Paragraph 8 shall constitute an immediate Default under the Lease and shall entitle Landlord to all
of its rights and remedies thereunder.



9. Brokers




     Landlord and Tenant each represents and warrants to the other that neither it nor its officers
or agents nor anyone acting on its behalf has dealt with any real estate broker except Cornish &
Carey Commercial and BT Commercial (collectively, “Landlord’s Broker”) and BT Commercial (“Tenant’s
Broker”) in the negotiating or making of this Amendment, and each party agrees to indemnify and
hold harmless the other from any claim or claims, and costs and expenses, including attorneys’
fees, incurred by the indemnified party in conjunction with any such claim or claims of any other
broker or brokers to a commission in connection with this Amendment as a result of the actions



4









 




of the indemnifying party. Landlord shall be responsible for a commission payable to Landlord’s
Broker in connection with the execution of this Amendment pursuant to a separate written agreement
between Landlord and Landlord’s Broker, and Landlord’s Broker shall be solely responsible for any
commission or fee payable to Tenant’s Broker in connection with this Amendment or the subject
matter hereof.




10. Subletting




     Paragraph 24(h) of the Lease shall not apply to the New Premises.



11. Miscellaneous




     (a) As amended hereby, the Lease is hereby ratified and confirmed in all respects.
In the event of any inconsistencies between the terms of this Amendment and the Lease,
the terms of this Amendment shall prevail.



     (b) This Amendment shall bind and inure to the benefit of Landlord and Tenant
and their respective legal representatives and successors and assigns.



     In Witness Whereof, Landlord and Tenant have executed this Amendment as of the date
first above written.



	 	 	 	 	 
	Landlord:  	Harbor Investment Partners,

a California general partnership

 	 
	 	By:  	Aetna Life Insurance Company,
a Connecticut corporation,
General Partner
 	 
	 
	 	By:  	Allegis Realty Investors llc,
Its Investment Advisor and Agent
 	 
	 
	 	By:  	                                       /s/ Cynthia Stevenin
 	 
	 	 	Cynthia Stevenin 	 
	 	 	Vice President 	 
	 
	Tenant:  	Financial Engines, Inc.

a California corporation

 	 
	 	By:  	/s/ Jeff Maggioncalda
 	 
	 	 	Its:  PRESIDENT & CEO 	 
	 	 	 	 



5









 






	 	 	 	 	 



EXHIBIT A



















 























 





Second Amendment to Lease Agreement




     This Second Amendment To Lease Agreement (this “Amendment”) is made effective as of
November 15, 1999 (the “Effective Date”), by and between Harbor Investment Partners, a
California general partnership (“Landlord”), and Financial Engines, Inc., a
California corporation (“Tenant”).



Recitals




     A. Landlord and Tenant have previously entered into that certain Lease Agreement, dated as of
July 14, 1997 (the “Master Lease”), as amended by that certain First Amendment to Lease Agreement
(the “First Amendment”), dated as of November 24, 1998 (the Master Lease as amended by the First
Amendment is referred to herein as the “Lease”), which Lease covers certain premises consisting of
approximately (i) eleven thousand one hundred forty-five (11,145) rentable square feet located at
1804 Embarcadero Road, Suite 200, Palo Alto, California (the “Original Premises”), and (ii)
seventeen thousand six hundred seventy-two (17,672) rentable square feet located at 1804
Embarcadero Road, Suite 100, Palo Alto, California (the “Additional Premises”; the Original
Premises and the Additional Premises are collectively referred to herein as the “Existing
Premises”). Capitalized terms used but not defined herein shall have the meanings ascribed to them
in the Lease.



     B. The suite immediately adjacent to the Additional Premises became available, and pursuant to
Paragraph 8 of the First Amendment, Landlord is required to immediately lease to Tenant and Tenant
is required to immediately lease from Landlord that certain expansion space (the “Suite 102
Expansion Premises”) consisting of approximately two thousand one hundred seventeen (2,117)
rentable square feet, located at 1804 Embarcadero Road, Suite 102, Palo Alto, California, as more
particularly shown on Exhibit A attached hereto, effective as of the Effective Date (the “Suite 102
Expansion Premises Commencement Date”). Except as stated herein to the contrary, during the Suite
102 Expansion Premises Term (as defined below), the “Premises”, as used in the Lease, shall be
deemed to include the Existing Premises and the Suite 102 Expansion Premises.



     C. Landlord and Tenant desire to amend the Lease to provide for the addition of the Suite 102
Expansion Premises for the Suite 102 Expansion Premises Term, all upon and subject to the terms,
covenants and conditions hereinafter set forth.



Agreement 




     Now Therefore, in consideration of the agreements of Landlord and Tenant herein
contained and other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:



1. Suite 102 Expansion Premises




     Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Suite 102
Expansion Premises for a term commencing on the Suite 102 Expansion Premises Commencement Date and
expiring on December 14, 2001 (the “Suite 102 Expansion Premises




1









 







Term”). Prior to the Suite 102 Expansion Premises Commencement Date, Landlord has painted and
carpeted the Suite 102 Expansion Premises with Building-standard paint and carpeting (the “Tenant
Improvements”). Except for the foregoing Tenant Improvements, Landlord has delivered the Suite 102
Expansion Premises to Tenant in its “AS-IS” condition and Landlord has no obligation to improve,
remodel or otherwise alter the Suite 102 Expansion Premises prior to or after the Suite 102
Expansion Premises Commencement Date.




2. Base Monthly Rent for Suite 102 Expansion Premises




     Notwithstanding anything to the contrary contained in the Lease, during the Suite 102
Expansion Premises Term, in addition to all Rent due under the Lease, Tenant shall pay Base Rent
for the Suite 102 Expansion Premises in the amounts set forth below:



	 	 	 	 	 	 	 	 	 
	 	 	Rent per Square	 	 
	Term:	 	Foot per Month:	 	Base Rent:
	November 15, 1999 — December 14, 1999
	 	$	3.95	 	 	$	8,362.15	 
	December 15,
1999 — December 14, 2000
	 	$	4.11	 	 	$	8,700.87	 
	December 15,
2000 — December 14, 2001
	 	$	4.27	 	 	$	9,039.59	 






3. Additional Rent; Proportionate Shares




     During the Suite 102 Expansion Premises Term, Tenant shall pay Additional Rent with respect to
the Suite 102 Expansion Premises in accordance with the terms of Paragraph 4(b) of the Lease. With
respect to the Suite 102 Expansion Premises, Tenant’s Proportionate Shares of the Building and the
Project shall be 5.2% and .82%, respectively. With respect to the Premises, Tenant’s Proportionate
Share of the Building shall be 77.33%.



4. Parking




     During the Suite 102 Expansion Premises Term, the number of non-exclusive and
undesignated parking spaces allocated to Tenant with respect to the Suite 102 Expansion
Premises shall be seven (7).



5. Brokers




     Landlord and Tenant each represents and warrants to the other that neither it nor its officers
or agents nor anyone acting on its behalf has dealt with any real estate broker except BT
Commercial (“Landlord’s Broker”) and BT Commercial (“Tenant’s Broker”) in the negotiating or making
of this Amendment, and each party agrees to indemnify and hold harmless the other from any claim or
claims, and costs and expenses, including attorneys’ fees, incurred by the indemnified party in
conjunction with any such claim or claims of any other broker or



2









 




brokers to a commission in connection with this Amendment as a result of the actions of the
indemnifying party. Landlord shall be responsible for a commission payable to Landlord’s
Broker in connection with the execution of this Amendment pursuant to a separate written
agreement between Landlord and Landlord’s Broker, and Landlord’s Broker shall be solely
responsible for any commission or fee payable to Tenant’s Broker in connection with this
Amendment or the subject matter hereof.




6. Subletting




     Paragraph 24(h) of the Lease shall not apply to the Suite 102 Expansion Premises.



7. Miscellaneous




     (a) As amended hereby, the Lease is hereby ratified and confirmed in all respects. In the
event of any inconsistencies between the terms of this Amendment and the Lease, the terms of this
Amendment shall prevail.



     (b) This Amendment shall bind and inure to the benefit of Landlord and Tenant and their
respective legal representatives and successors and assigns.



     (c) This Amendment may be executed in multiple counterparts and by the parties in separate
counterparts, each of which shall be deemed to be an original and all of which shall together
constitute one and the same agreement. The parties may execute and deliver this Amendment by
forwarding signed facsimile copies of this Amendment. Such facsimile signatures shall have the same
binding effect as original signatures, and the parties hereby waive any defense to validity based
on any such copies of signatures.



3









 





     In Witness Whereof, Landlord and Tenant have executed this Amendment as of the date
first above written.




	 	Landlord:  	 	Harbor Investment Partners, 
a
California general partnership





	 	 	 	 	 
	 	By:  	                                           Aetna Life Insurance Company,
 	 
	 	 	a Connecticut corporation,  	 
	 	 	Its General Partner 	 



	 	 	 	 	 
	 	By:  	                                                 UBS Brinson Realty Investors llc,
 	 
	 	 	Its Investment Advisor and Agent 	 



	 	 	 	 	 
	 	By:  	                                                 /s/ Cynthia Stevenin
 	 
	 	 	Cynthia Stevenin 	 
	 	 	Director 	 
	 




	 	Tenant:  	 	Financial Engines, Inc.,

a California corporation





	 	 	 	 	 
	 	By:  	                                           /s/ Raymond Sims
 	 
	 	 	Name:  	Raymond Sims 	 
	 	 	Title:  	Vice President & CFO 	 



4









 



























 





Third Amendment to Lease




     This Third Amendment To Lease (this “Third Amendment”) is made as of June 5, 2000, by
and between Harbor Investment Partners, a California general partnership (“Landlord”), and
Financial Engines, Inc., a California corporation (“Tenant”).



Recitals




     A. Landlord and Tenant have previously entered into that certain Lease Agreement, dated as of
July 14, 1997, as amended by that certain First Amendment to Lease Agreement, dated as of November
24, 1998, and that certain Second Amendment to Lease Agreement, effective as of November 15, 1999
(as amended, the “Lease”), which Lease covers certain premises consisting of approximately (i)
eleven thousand one hundred forty-five (11,145) rentable square feet located at 1804 Embarcadero
Road, Suite 200, Palo Alto, California (the “Original Premises”), (ii) seventeen thousand six
hundred seventy-two (17,672) rentable square feet located at 1804 Embarcadero Road, Suite 100, Palo
Alto, California, and (iii) two thousand one hundred seventeen (2,117) rentable square feet located
at 1804 Embarcadero Road, Suite 102, Palo Alto, California (Suites 100 and 102 are collectively
referred to herein as the “Expansion Premises”; the Original Premises and the Expansion Premises
are collectively referred to herein as the “Existing Premises”). Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Lease.



     B. Tenant desires to expand the Existing Premises by leasing that certain additional space
(the “Suite 202 Premises”) consisting of three thousand eighty-one (3,081) rentable square feet,
located at 1804 Embarcadero Road, Suite 202, Palo Alto, California, as more particularly shown on
Exhibit A attached hereto, effective as of the date Landlord delivers possession of the Suite 202
Premises to Tenant (the “Suite 202 Premises Commencement Date”). Except as stated herein to the
contrary, during the Suite 202 Premises Term (as defined below), the “Premises”, as used in the
Lease, shall be deemed to include the Existing Premises and the Suite 202 Premises.



     C. Tenant also desires to extend the Lease term and amend the base monthly rent amount with
respect to the Expansion Premises.



     D. Landlord and Tenant desire to amend the Lease to provide for the addition of the Suite 202
Premises and extend the term and amend the base monthly rent amount with respect to the Expansion
Premises, all upon and subject to the terms, covenants and conditions hereinafter set forth.



Agreement




     Now Therefore, in consideration of the agreements of Landlord and Tenant
herein contained and other valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Landlord and Tenant hereby agree as follows:



 









 





1. Suite 202 Premises




     Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Suite 202 Premises
for a term commencing on the Suite 202 Premises Commencement Date and expiring on August 6, 2002
(the “Suite 202 Premises Term”). Promptly following the Suite 202 Premises Commencement Date,
Landlord and Tenant shall execute a Suite 202 Premises Commencement Date Memorandum in the form of
Exhibit B hereto. Landlord shall deliver the Suite 202 Premises to Tenant in its “AS-IS” condition
and Landlord shall have no obligation to improve, remodel or otherwise alter the Suite 202.
Premises prior to or after the Suite 202 Premises Commencement Date: Notwithstanding the
foregoing, Landlord shall cause the roof on the Suite 202 Premises to be in good condition and the
HVAC, electrical and plumbing systems serving the Suite 202 Premises to be in good working order on
the Suite 202 Premises Commencement Date. Any claims by Tenant under the preceding sentence shall
be made in writing not later than the fifteenth (15th) day after the Suite 202 Premises
Commencement Date. In the event Tenant fails to deliver a written claim to Landlord on or before
such fifteenth (15th) day, then Landlord shall be conclusively deemed to have satisfied its
obligations under this Paragraph 1.



2. Base Monthly Rent for Suite 202 Premises




     Notwithstanding anything to the contrary contained in the Lease, during the Suite 202 Premises
Term in addition to all Rent due under the Lease, Tenant shall pay Base Rent for the Suite 202
Premises in accordance with the schedule set forth below:



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Rental Rate Per	 	 
	Period	 	Sq. Ft.	 	Sq. Ft.	 	Monthly Rent
	Suite 202 Premises
Commencement Date
— Day immediately
preceding first
anniversary of
Suite 202 Premises
Commencement Date
	 	 	3,081	 	 	$	8.00	 	 	$	24,648.00	 
	First Anniversary
of Suite 202
Premises
Commencement Date
— Day immediately
preceding second
anniversary of
Suite 202 Premises
Commencement Date
	 	 	3,081	 	 	$	8.32	 	 	$	25,633.92	 
	Second Anniversary
of Suite 202
Premises
Commencement Date
— August 6, 2002
	 	 	3,081	 	 	$	8.65	 	 	$	26,650.65	 






2









 






3. Additional Rent




     During the Suite 202 Premises Term, Tenant shall pay Additional Rent with respect to the Suite
202 Premises in accordance with the terms of Paragraph 4(b) of the Lease. With respect to the Suite
202 Premises, Tenant’s Proportionate Shares of the Building and the Project shall be 7.70% and
1.19%, respectively. With respect to the Premises, Tenant’s Proportionate Shares of the Building
shall be 85.03%.



4. Prepaid Rent




     Concurrently with the execution of this Third Amendment, Tenant shall pay to Landlord the Base
Rent and Additional Rent owing with respect to the Suite 202 Premises for the first month following
the Suite 202 Premises Commencement Date.



5. Parking




     During the Suite 202 Premises Term, the number of non-exclusive and undesignated parking
spaces allocated to Tenant with respect to the Suite 202 Premises shall be ten (10).



6. Security Deposit




     Landlord currently holds a Letter of Credit in the amount of Four Hundred Sixty-Eight Thousand
Ninety and 00/100 Dollars ($468,090.00) and a cash Security Deposit in the amount of Forty-Seven
Thousand Four Hundred Thirteen and 86/100 Dollars ($47,413.86). Upon Tenant’s execution of this
Third Amendment, Tenant shall deposit with Landlord funds sufficient to increase the cash Security
Deposit held by Landlord pursuant to Paragraph 8 of the Lease to the total sum of One Hundred
Thousand Seven Hundred Fifteen and 16/100 Dollars ($100,715.16). Landlord may use, apply or retain
the whole or any part of the Security Deposit in accordance with Paragraph 8 of the Lease.



7. Expansion Premises Term




     The term of the Lease with respect to the Expansion Premises is hereby extended to and shall
expire on August 6, 2002 (the “Expansion Premises Term Expiration”) (the “Extended Term”). All
references in the Lease to the Term with respect to the Expansion Premises shall mean the Term, as
extended through the Extended Term. During the Extended Term, Tenant shall continue to lease the
Expansion Premises in its “AS-IS” condition and Landlord shall have no obligation to remodel,
improve or otherwise alter the Expansion Premises either prior to or after the Extended Term
Commencement Date.




3












 





8. Base Monthly Rent for the Expansion Premises During Extended Term




     Tenant shall pay monthly Base Rent with respect to the Expansion Premises for the
Extended Term in accordance with the schedule set forth below:



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Rental Rate Per	 	 
	Period	 	Sq. Ft.	 	Sq. Ft.	 	Monthly Rent
	December
15, 2001 — August 6,
2002
	 	 	19,789	 	 	$	8.32	 	 	$	164,644.48	 






9. Miscellaneous




     (a) As amended hereby, the Lease is hereby ratified and confirmed in all respects. In the
event of any inconsistencies between the terms of this Third Amendment and the Lease, the
terms of this Third Amendment shall prevail.



     (b) Tenant and Landlord each represents and warrants to the other party that neither it nor
its officers or agents nor anyone acting on its behalf has dealt with any real estate broker
or finder in the negotiating or making of this Third Amendment and each party agrees to
indemnify and hold harmless the other party from any claim or claims, and costs and expenses, including
attorneys’ fees, incurred by the indemnified party in conjunction with any claim or claims of
any broker or brokers to a commission in connection with this Third Amendment as a result of the
actions of the indemnifying party or its officers, agents or anyone acting on its behalf.



     (c) This Third Amendment shall bind and inure to the benefit of Landlord and Tenant and
their respective legal representatives and successors and assigns.



     (d) This Third Amendment may be executed in counterparts each of which counterparts
when taken together shall constitute one and the same agreement.



     (e) Except as set forth in this Third Amendment, all terms and conditions of the Lease
shall remain in full force and effect.



4









 





     In Witness Whereof, Landlord and Tenant have executed this Third Amendment to Lease
as of the date first above written.



	 	 	 	 	 
	Landlord:  	Harbor Investment Partners,

a California general partnership

 	 
	 	By:  	Aetna Life Insurance Company,
a Connecticut corporation,
Its General Partner
 	 
	 
	 	By:  	UBS Brinson Realty Investors llc,
Its Investment Advisor and Agent
 	 
	 
	 	By:  	/s/ Cynthia Stevenin
 	 
	 	 	Cynthia Stevenin 	 
	 	 	Director 	 
	 
	Tenant:  	Financial Engines, Inc.,

a California corporation

 	 
	 	By:  	/s/ Raymond Sims
 	 
	 	 	Name:  	Raymond Sims 	 
	 	 	Title:  	Vice President & CFO 	 



5









 






	 	 	 	 	 


















 





Exhibit B




Commencement Date Memorandum

(Suite 202 Premises)




	 	 	 
	Landlord:

	 	Harbor Investment Partners
	 
	 	 
	Tenant:

	 	Financial Engines
	 
	 	 
	Third Amendment Date:

	 	May ___, 2000
	 
	 	 
	Premises:

	 	Located at 1804 Embarcadero Road, Palo Alto, California






     Tenant hereby accepts the Suite 202 Premises as being in the condition required under the Third Amendment.



     The Commencement Date of the Third Amendment with respect to the Suite 202 Premises is hereby established as                     , 2000.



	 	 	 	 	 
	Tenant:  	Financial Engines, Inc.,
a California corporation

 	 
	 	By:  	/s/ Raymond Sims
 	 
	 	 	Name:  	Raymond Sims 	 
	 	 	Title:  	Vice President & CFO 	 
	 



	 	 	 	 	 
	Approved and Agreed:



Landlord:



Harbor Investment Partners,

a California general partnership

 	 	 
	By:  	Aetna Life Insurance Company,
a Connecticut corporation,
Its General Partner
 	 	 
	 
	By:  	      UBS Brinson Realty Investors llc,
Its Investment Advisor and Agent
 	 	 
	 
	By:  	
 	 	 
	 	Cynthia Stevenin 	 	 
	 	Director 	 	 
	 
















 





Fourth Amendment to Lease Agreement




     This Fourth Amendment to Lease Agreement (this “Amendment”) is made as of March 15,
2002, by and between Harbor Investment Partners, a California general partnership
(“Landlord”), and Financial Engines, Inc., a California corporation (“Tenant”).



Recitals




     A. Landlord and Tenant have previously entered into that certain Lease Agreement, dated
as of July 14, 1997, as amended by that certain First Amendment to Lease Agreement, dated as
of November 24, 1998, that certain Second Amendment to Lease Agreement, dated as of
November 15,1999, that certain Third Amendment to Lease Agreement, dated as of June 5,
2000, and that certain Partial Lease Termination Agreement, dated as of May 16, 2001 (as
amended, the “Lease”), which Lease covers certain premises consisting of approximately
(i) seventeen thousand six hundred seventy-two (17,672) rentable square feet located at 1804
Embarcadero Road, Suite 100, Palo Alto, California (“Suite 100”), (ii) two thousand one hundred
seventeen (2,117) rentable square feet located at 1804 Embarcadero Road, Suite 102, Palo Alto,
California (“Suite 102”), and (iii) three thousand eighty-one (3,081) rentable square feet, located
at 1804 Embarcadero Road, Suite 202, Palo Alto, California (“Suite 202”). Capitalized terms used
but not defined herein shall have the meanings ascribed to them in the Lease.



     B. Landlord and Tenant desire to extend the Term of the Lease and amend the Base Rent
with respect to Suite 100 and Suite 102, and to terminate the Lease with respect to Suite 202.



     C. Landlord and Tenant desire to amend the Lease to reflect the extension of the Term of
the Lease and amendment of the Base Rent with respect to Suite 100 and Suite 102 and the
termination of the Lease with respect to Suite 202.



Agreement




     Now Therefore, in consideration of the agreements of Landlord and Tenant herein
contained and other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:



1. Extension of Term




     The term of the Lease with respect to Suite 100 and Suite 102 is hereby extended for a period
of sixty-one (61) months, commencing on April 1, 2002 and expiring on April 30, 2007 (the
“Extension Period”). All references in the Lease to the Term of the Lease shall mean the previous
term of the Lease as extended through the Extension Period. During the Extension Period, all
references to “Premises” contained in the Lease shall be deemed to refer to Suite 100 and Suite
102.



1









 





2. Monthly Base Rent During Extension Period




     Notwithstanding anything to the contrary contained in the Lease, during the Extension Period,
Tenant shall pay Monthly Base Rent for Suite 100 and Suite 102 in the amount described below:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Monthly Base	 	Monthly Base
	Monthly Base Rent:	 	Months	 	Sq. Ft.	 	Rate	 	Rent
	 
	 	 	1-30	 	 	 	19,789	 	 	 	x $3.00	 	 	 	= $59,367.00	 
	 
	 	 	31-61	 	 	 	19,789	 	 	 	x $3.20	 	 	 	= $63,325.00	 






3. Additional Rent; Base Year




     (a) During the Extension Period, Tenant shall pay Additional Rent with respect to Suite 100
and Suite 102 in accordance with the terms of Paragraph 4(b) of the Lease. Tenant’s
Proportionate Shares of the Building and the Project shall be 49.5% and 7.63%, respectively.



     (b) Effective as of the commencement of the Extension Period, the Base Year shall be
calendar year 2002.



4. Parking




     During the Extension Period, Tenant shall have the right to use sixty-five (65)
nonexclusive and undesignated parking spaces in the Parking Areas on the terms and subject to
the conditions set forth in the Lease.



5. Refurbishment Allowance




     Landlord shall provide an allowance to Tenant in the amount of Fifty Nine Thousand Three
Hundred Sixty-Seven Dollars ($59,367.00) (the “Refurbishment Allowance”) to be applied toward the
cost of painting and carpeting the Premises (the “Work”). The Refurbishment Allowance shall be
available to Tenant any time within the initial forty-two (42) months of the Extension Period. Any
portion of the Refurbishment Allowance which has not been disbursed to Tenant within said
forty-two (42) month period shall no longer be available to Tenant. The Refurbishment Allowance
shall be the maximum contribution by Landlord toward the cost of the Work. Should the actual cost
of the Work be less than the Refurbishment Allowance, the Refurbishment Allowance shall be reduced
to an amount equal to said actual cost. Landlord shall disburse the Refurbishment Allowance to
Tenant following the completion of the Work and the delivery to Landlord of invoices, lien waivers
and other documents reasonably requested by Landlord to substantiate the cost and the lien-free
completion of the Work.




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6. “As-Is” Possession




     Tenant shall continue to occupy Suite 100 and Suite 102 during the Extension Period in their
“AS-IS” condition and, except as expressly set forth in the Lease, Landlord shall have no
obligation to improve, remodel or otherwise alter the Premises at any time prior to or during the
Extension Period.



7. Letter of Credit




     (a) Paragraph 7 of the Lease is hereby deleted in its entirety and the following provisions
are hereby substituted therefor:



          (i) Promptly following the execution of the Fourth Amendment to Lease Agreement, Tenant
shall deliver to Landlord, at Tenant’s sole cost and expense, the Letter of Credit described below
in the amount of One Hundred Seventy-Eight Thousand One Hundred One Dollars ($178,101.00) (the “LC
Face Amount”) as security for Tenant’s performance of all of Tenant’s covenants and obligations
under this Lease; provided, however, that neither the Letter of Credit nor any Letter of Credit
Proceeds (as defined below) shall be deemed an advance rent deposit or an advance payment of any
other kind, or a measure of Landlord’s damages upon Tenant’s Default. The Letter of Credit shall be
maintained in effect from the date hereof through the date that is forty-five (45) days after the
Expiration Date (the “LC Termination Date”). On the LC Termination Date, Landlord shall return to
Tenant the Letter of Credit and any Letter of Credit Proceeds then held by Landlord (other than
those Letter of Credit Proceeds Landlord is entitled to retain under the terms of this Paragraph
7(a)); provided, however, that in no event shall any such return be construed as an admission by
Landlord that Tenant has performed all of its obligations hereunder. Landlord shall not be required
to segregate the Letter of Credit Proceeds from its other funds and no interest shall accrue or be
payable to Tenant with respect thereto. Landlord may (but shall not be required to) draw upon the
Letter of Credit in such amount as is necessary, and may use the proceeds therefrom (the “Letter of
Credit Proceeds”) or any portion thereof, (i) to cure any Default under this Lease and to
compensate Landlord for any loss or damage Landlord incurs as a result of such Default, (ii) to
repair damage to the Premises caused by Tenant, (iii) to clean the Premises upon termination of
this Lease, (iv) to reimburse Landlord for the payment of any amount which Landlord may reasonably
spend or be required to spend by reason of Tenant’s Default, and (v) to compensate Landlord for any
other loss or damage which Landlord may suffer by reason of Tenant’s Default, it being understood
that any use of the Letter of Credit Proceeds shall not constitute a bar or defense to any of
Landlord’s remedies set forth in Paragraph 26 below. In such event and upon written notice from
Landlord to Tenant specifying the amount of the Letter of Credit Proceeds so utilized by Landlord
and the particular purpose for which such amount was applied, Tenant shall immediately deliver to
Landlord an amendment to the Letter of Credit or a replacement Letter of Credit so that the Letter
of Credit is again in the full LC Face Amount. Tenant’s failure to deliver such an amendment or
replacement Letter of Credit to Landlord within ten (10) days of Landlord’s notice shall constitute
an immediate Default hereunder. In the event Landlord transfers its interest in this Lease,
Landlord shall transfer the Letter of Credit and any Letter of Credit Proceeds then held by
Landlord to Landlord’s successor in interest, and thereafter Landlord shall have no further
liability to Tenant with respect to such Letter of Credit or Letter of Credit Proceeds.





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     (i) As used herein, Letter of Credit shall mean an unconditional, stand-by irrevocable
letter of credit (herein referred to as the “Letter of Credit”) issued by the San Francisco
office of a major national bank insured by the Federal Deposit Insurance Corporation with assets
of not less than Fifty Billion Dollars ($50,000,000,000.00) and otherwise reasonably satisfactory
to Landlord (the “Bank”), naming Landlord as beneficiary, in the amount of the LC Face Amount,
and otherwise in form and substance satisfactory to Landlord. If at any time during the Term of
this Lease, Landlord notifies Tenant of Landlord’s disapproval of the Bank (notwithstanding
Landlord’s prior approval of such institution), then Tenant shall replace the Letter of Credit
with a substitute Letter of Credit issued by a bank approved by Landlord and otherwise satisfying
the requirements of this Paragraph 7. The Letter of Credit shall be for a one-year term and shall
provide: (i) that Landlord may make partial and multiple draws thereunder, up to the face amount
thereof, (ii) that Landlord may draw upon the Letter of Credit up to the full amount thereof and
the Bank will pay to Landlord the amount of such draw upon receipt by the Bank of a sight draft
signed by Landlord or UBS Realty Investors llc (“UBS”), Landlord’s investment advisor
and agent, and accompanied by a written certification from Landlord or UBS to the Bank stating
either that: (A) a Default has occurred and is continuing under this Lease and any applicable
grace period has expired or Landlord is otherwise entitled to draw on the Letter of Credit, or
(B) Landlord has not received notice from the Bank at least thirty (30) days prior to the then
current expiry date of the Letter of Credit that the Letter of Credit will be renewed by the Bank
for at least one (1) year beyond the relevant annual expiration date or, in the case of the last
year of the Term, forty-five (45) days after the Expiration Date, together with a replacement
Letter of Credit or a modification to the existing Letter of Credit effectuating such renewal,
and Tenant has not otherwise furnished Landlord with a replacement Letter of Credit as
hereinafter provided; and (iii) that the beneficial interest under the Letter of Credit shall be
freely transferable one or more times and, therefore, in the event of Landlord’s (or any
successor Landlord’s) assignment or other transfer of its interest in this Lease, the Letter of
Credit shall be freely transferable by Landlord (or any successor Landlord), without recourse and
without the payment of any fee or consideration by Landlord, to the assignee or transferee of
such interest and the Bank shall confirm the same to Landlord (or such successor) and such
assignee or transferee. In the event that the Bank shall fail to (y) notify Landlord that the
Letter of Credit will be renewed for at least one (1) year beyond the then applicable expiration
date (or, in the case of the last year of the Term, within forty-five (45) days of the Expiration
Date), and (z) deliver to Landlord a replacement Letter of Credit or a modification to the
existing Letter of Credit effectuating such renewal, and Tenant shall not have otherwise
delivered to Landlord, at least thirty (30) days prior to the relevant annual expiration date, a
replacement Letter of Credit in the amount required hereunder and otherwise meeting the
requirements set forth above, then Landlord shall be entitled to draw on the Letter of Credit as
provided above, and shall hold the proceeds of such draw as Letter of Credit Proceeds pursuant to
Paragraph 7(a) above.



     (b) Promptly following Landlord’s receipt of the Letter of Credit, Landlord shall return to
Tenant the Security Deposit in the amount of Fifty Three Thousand Three Hundred One and
30/100 Dollars ($53,301.30) and the letter of credit in the amount of Three Hundred Thousand
Dollars ($300,000.00) currently held by Landlord under the terms of the Lease.



     (c) Paragraph 8 of the Lease is hereby deleted in its entirety.



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8. Termination of Lease with respect to Suite 202




     (a) Subject to the terms and conditions set forth in this Paragraph 8, Landlord and Tenant
hereby agree that the Lease shall be terminated only with respect to Suite 202 effective as of
the later of (i) the close of business on March 31, 2002, or (ii) the satisfaction of the
termination conditions set forth in Paragraph 9 below (the “Suite 202 Termination Date”). On or before the
Suite 202 Termination Date, Tenant shall vacate and surrender possession of Suite 202 to
Landlord in accordance with the terms of the Lease.



     (b) Upon termination of the Lease with respect to the Suite 202, the vacation and surrender
of Suite 202 by Tenant, and satisfaction of the Suite 202 Termination Conditions (as hereafter
defined), Landlord and Tenant shall have no further rights, obligations or claims with respect
to each other arising under the Lease with respect to Suite 202 except for (i) the
indemnification obligations of Tenant contained in the Lease, (ii) the obligation of Tenant to pay any
remaining Additional Rent owed for calendar years 2001 and 2002 when billed to Tenant or the obligation
of Landlord to repay or credit to Tenant any overpayment by Tenant of Additional Rent, as
applicable, in accordance with Paragraph 4(c) of the Lease, and (iii) any obligations of
Tenant or Landlord under the Lease which expressly survive the termination of the Lease (such
obligations described in the foregoing-clauses (i), (ii) and (iii) being herein referred to as the
"Surviving Obligations”). The Surviving Obligations shall survive the execution of this Agreement and the
termination of the Lease with respect to Suite 202.



     (c) Landlord and Tenant agree and acknowledge that, notwithstanding the cancellation and
termination of the Lease with respect to Suite 202, this Agreement shall have no effect on the
rights and obligations of either Landlord or Tenant with respect to Suite 100 or Suite 102,
and the Lease shall remain in full force and effect with respect to Suite 100 and Suite 102,.



9. Suite 202 Termination Conditions




     The following conditions shall be conditions precedent to the termination of the Lease with
respect to Suite 202 on the Suite 202 Termination Date (collectively, the “Suite 202 Termination
Conditions”):



     (a) Performance by Tenant. Tenant shall have performed all of its obligations under the
Lease through the Suite 202 Termination Date, as and when such obligations shall have become
due, including, without limitation, the payment of monthly installments of base rent,
additional rent and any other sums required to be paid by Tenant to Landlord.



     (b) Surrender of Suite 202. Tenant shall have vacated and surrendered Suite 202 to
Landlord in accordance with the provisions of the Lease on or before the Suite 202 Termination
Date, including, without limitation, the removal by Tenant of all of its personal property.


The Termination Conditions are for the sole benefit of Landlord and may, at the sole discretion of
Landlord, be waived by Landlord. If any or all of the Termination Conditions are not satisfied as
required, then Landlord may unilaterally reinstate the Lease with respect to Suite 202 or Landlord
may consider the Lease with respect to Suite 202 terminated as of the Suite 202 Termination Date;
provided, however, that if either or both of the conditions precedent set forth in Paragraphs 9(a)
and 9(b) above are not fully satisfied when the Lease is terminated as of the


5









 






Suite 202 Termination Date, then Tenant shall immediately pay to Landlord any and all damages
arising from the failure or satisfaction of such condition(s) precedent. Tenant agrees to take all
actions necessary to cause the conditions set forth in Paragraphs 9(a) and 9(b) above to be fully
satisfied.




10. Abandoned Property




     In addition to any rights Landlord may have under the Lease or this Amendment, Landlord, at
its sole option, may deem any furniture, fixtures, shelving, cabinets, tables, equipment, lighting,
and other fixtures or personal property in, on or attached to Suite 202 and remaining in or on
Suite 202 after the Suite 202 Termination Date (the “Abandoned Property”), whether or not belonging
to Tenant, to be abandoned, and Landlord may dispose of the Abandoned Property as it, in its sole
discretion, deems appropriate. Tenant shall not be entitled to any proceeds received by Landlord as
a result of the disposition of the Abandoned Property. Tenant waives, to the greatest extent
permitted by law, all of its rights under California Civil Code Sections 1980, et seq. as the same
may be amended from time to time, and any related and successor statutes thereto.



11. Brokers




     Landlord and Tenant each represents and warrants to the other that neither it nor its officers
or agents nor anyone acting on its behalf has dealt with any real estate broker except
Insignia/ESG, Inc. (“Landlord’s Broker”) and BT Commercial Real Estate (“Tenant’s Broker”) in the
negotiating or making of this Amendment, and each party agrees to indemnify and hold harmless the
other from any claim or claims, and costs and expenses, including attorneys’ fees, incurred by the
indemnified party in conjunction with any claim or claims of any other broker or brokers to a
commission in connection with this Amendment as a result of the actions of the indemnifying party.
Landlord’s Broker and Tenant’s Broker shall be collectively referred to herein as the “Brokers.”
Provided that this Amendment is fully executed by the parties hereto, then Landlord shall pay a
commission to the Brokers in accordance with Landlord’s separate written agreements with the
Brokers.



12. Miscellaneous




     (a) Landlord and Tenant acknowledge and agree that this Amendment does not relate to or
affect the Lease Agreement by and between Landlord and Tenant, dated as of December 7, 1999,
relating to certain premises consisting of Thirty Two Thousand Seven Hundred Forty-Two
square feet at 1830 Embarcadero Road (the “1830 Lease”). The 1830 Lease shall remain
unmodified and in full force and effect.



     (b) Tenant acknowledges that it has no option to renew or extend the Term of the Lease
beyond the Extension Period. Tenant’s rights under Paragraph 6 of the First Amendment have
previously expired or are hereby terminated.



     (c) As amended hereby, the Lease is hereby ratified and confirmed in all respects. In the
event of any inconsistencies between the terms of this Amendment and the Lease, the terms of
this Amendment shall prevail.



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     (d) This Amendment shall bind and inure to the benefit of Landlord and Tenant and
their respective legal representatives and successors and assigns.



     In Witness Whereof, Landlord and Tenant have executed this Amendment as of
the date first above written.



	 	 	 	 	 
	Landlord:    	Harbor Investment Partners,

a California general partnership,

 	 
	 	By:  	Embarcadero Road Invest
 	 
	 	 	LLC, a Delaware limited liability company 	 
	 	 	General Partner  	 
	 	 	 
	 	By:  	UBS Realty Investors llc,
 	 
	 	 	a Massachusetts limited liability company 	 
	 	 	its Investment Advisor and Agent 	 
	 
	 	 	 
	 	By:  	/s/ Cynthia Stevenin
 	 
	 	 	Name:  	Cynthia Stevenin 	 
	 	 	Title:  	Director 	 
	 
	Tenant:   	Financial Engines, Inc.,

a California corporation

 	 
	 	By:  	/s/ Raymond Sims
 	 
	 	 	Name:  	RAYMOND J. SIMS 	 
	 	 	Its:  	  EVP & CFO 	 
	 




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Fifth Amendment to Lease




     This Fifth Amendment to Lease (this “Amendment”) is entered into effective as of
September 1, 2006 (the “Effective Date”), by and between Harbor Investment Partners, a
California general partnership (“Landlord”), and Financial Engines, Inc., a California
corporation (“Tenant”).



Recitals




     A. Tenant and Landlord entered into that certain Lease Agreement, dated as of July 14, 1997,
as amended by a First Amendment to Lease, dated as of November 24, 1998, a Second Amendment to
Lease, dated as of November 15, 1999, a Third Amendment to Lease, dated as of June 5, 2000, and a
Fourth Amendment to Lease, dated as of March 15, 2002 (collectively, the “Lease”), which Lease
covers certain premises consisting of approximately nineteen thousand seven hundred eighty-nine
(19,789) rentable square feet located at 1804 Embarcadero Road, Palo Alto, California 94303 (the
“Premises”). Capitalized terms used but not defined herein shall have the meanings ascribed to them
in the Lease.



     B. Landlord and Tenant have also previously entered into that certain Lease Agreement dated
December 7, 1999 (the “1830 Lease”), which covers certain premises consisting of approximately
thirty-two thousand seven hundred forty-two (32,742) rentable square feet (the “1830 Premises”) in
the building located at 1830 Embarcadero Road, Palo Alto, California.



     C. The Lease and the 1830 Lease currently expire on April 30, 2007.



     D. Landlord and Tenant desire to amend the Lease to modify the Base Rent and extend the Term,
subject to each of the terms, conditions, and provisions set forth herein.



Agreement




     Now Therefore, in consideration of the agreements of Landlord and Tenant herein
contained and other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:



1. Lease Term




     The Term of the Lease is hereby extended for a period of approximately sixty-four (64) months,
commencing on May 1, 2007 and ending on August 31, 2012.



2. Base Rent




     (a) Commencing on the Effective Date, the Base Rent shall be payable by Tenant to
Landlord in accordance with the schedule set forth below:



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	 	 	 	 	 	 	Monthly	              Monthly
	Period     	 	Sq. Ft.	 	Base Rate	              Base Rent
	 
	September 1, 2006 – August 31, 2007
	 	 	19,789	 	 	 	x $2.30	 	 	 	= $45,514.70	 
	September 1, 2007 – August 31, 2008
	 	 	19,789	 	 	 	x $2.35	 	 	 	= $46,504.15	 
	September 1, 2008 – August 31, 2009
	 	 	19,789	 	 	 	x $2.40	 	 	 	= $47,493.60	 
	September 1, 2009 – August 31, 2010
	 	 	19,789	 	 	 	x $2.45	 	 	 	= $48,483.05	 
	September 1, 2010 – August 31, 2011
	 	 	19,789	 	 	 	x $2.50	 	 	 	= $49,472.50	 
	September 1, 2011 – August 31, 2012
	 	 	19,789	 	 	 	x $2.55	 	 	 	= $50,461.95	 






     (b) Within five (5) business days following the execution of this Amendment by the parties
hereto, Landlord shall return to Tenant an amount equal to the difference between the Base Rent
actually paid by Tenant and the Base Rent set forth above, in each case for the months of September
and October, 2006.



     (c) The second paragraph of Paragraph 4(a) of the Lease shall be of no further force or
effect.



3. Additional Rent




     (a) Adjustment of Base Year. Tenant shall continue to pay Additional Rent to Landlord in
accordance with Paragraph 4(b) of the Lease; provided, however, that from and after the Effective
Date to the expiration of the Term or the Renewal Term (as hereinafter defined), if applicable, the
Base Year shall be deemed to be calendar year 2007.



     (b) Exclusions from Additional Rent; Tenant’s Audit Rights. The following provisions are
hereby added to the Lease as new Paragraphs (4)(e), (f) and (g):




     (e) Statements Binding. Every statement given by Landlord pursuant to
the third sentence of Paragraph 4(c)(l) above (each, an “Expense Statement”)
shall be conclusive and binding upon Tenant unless (i) within sixty (60) days
after the receipt of such Expense Statement Tenant shall notify Landlord that
it disputes the correctness thereof, specifying the particular respects in
which the Expense Statement is claimed to be incorrect, and (ii) if such
dispute shall not have been settled by agreement, Tenant shall submit the
dispute to arbitration within ninety (90) days after receipt of the Expense
Statement. Pending the determination of such dispute by agreement or
arbitration as aforesaid, Tenant shall, within ten (10) days after receipt of
such Expense Statement, pay Additional Rent in accordance with Landlord’s
Expense Statement and such payment shall be without prejudice to Tenant’s
position. If the dispute shall be determined in Tenant’s favor, Landlord shall
forthwith pay or credit to Tenant the amount of Tenant’s overpayment of
Additional Rent resulting from compliance with Landlord’s Expense Statement.



2









 






     (f) Audit Rights. Provided Tenant is not then in Default under the terms of this Lease
(nor is any event occurring which with the giving of notice or the passage of time, or both,
would constitute a Default hereunder), Tenant, at its sole expense, shall have the right
within thirty (30) days after the delivery of each Expense Statement (as hereinafter defined)
to review and audit Landlord’s books and records regarding such Expense Statement for the
sole purpose of determining the accuracy thereof. Such review or audit shall be performed by
a nationally recognized accounting firm that calculates its fees with respect to hours
actually worked and that does not discount its time or rate (as opposed to a calculation
based upon percentage of recoveries or other incentive arrangement), shall take place during
normal business hours in the office of Landlord or Landlord’s property manager and shall be
completed within three (3) business days after the commencement thereof. If Tenant does not
so review or audit Landlord’s books and records, Landlord’s Expense Statement shall be final
and binding upon Tenant. In the event that Tenant determines on the basis of its review of
Landlord’s books and records that the amount of Expenses paid by Tenant pursuant to this
Paragraph Error! Reference source not found. for the period covered by such Expense Statement
is less than or greater than the actual amount properly payable by Tenant under the terms of
this Lease, Tenant shall promptly pay any deficiency to Landlord or, if Landlord concurs with
the results of such audit, Landlord shall promptly refund any excess payment to Tenant, as
the case may be. As used herein, “Expense Statement” means the statement of actual Additional
Rent provided by Landlord to Tenant at the beginning of each calendar year (relating to the
actual Expenses for the prior calendar year) pursuant to Paragraph 4(c)(1) of the Lease.




     (g) Exclusions from Additional Rent. Notwithstanding anything to the contrary
contained in Paragraph 4(f), the following items shall be specifically excluded from the
definition of “Expenses”:




     (i) Repairs or other work occasioned by fire, acts of God, or other casualties or damage to
the extent Landlord is actually reimbursed by insurance (less costs of collection) for the costs of
restoration;




     (ii) Payments of principal and interest on mortgage indebtedness encumbering the Project;




     (iii) Space planning and other costs incurred in renovating or otherwise improving,
painting or redecorating rentable space at the Project for other tenants;




     (iv) Legal fees and other related expenses associated with the negotiation or
enforcement of leases;




     (v) The costs of any goods or services provided separately to or performed separately for any
other tenant of the Project, but solely to the extent that Landlord



3









 








recovers the costs thereof from such tenant and that Tenant receives no benefits from the
services provided to such tenant;




     (vi) Leasing commissions paid and advertising expenses incurred in connection with
the leasing of space at the Project;




     (vii) Costs of remediating contamination caused by Hazardous Materials (as
hereinafter defined);




     (viii) Penalties and damages assessed against Landlord as a result of the
intentional violation by Landlord of any leases affecting the Project (provided, however,
that the cost of correcting such violation, as opposed to penalties assessed in excess of
such corrective costs and which would not be incurred but for such intentional violation,
shall be included within the definition of “Expenses” hereunder);




     (ix) Costs associated with the operation of the business of the entity which
constitutes Landlord, as opposed to the operation of the Project;




     (x) All salaries for any employees above the rank of senior property manager and
reasonable allocation of the salaries of all employees at or below the rank of senior
property manager whose duties include work on other buildings or projects; and




     (xi) Political or charitable donations or contributions.




Nothing contained in this Paragraph 4(g) shall be deemed to limit, modify or
otherwise affect Tenant’s obligations under any other provisions of this
Lease, including, without limitation, Paragraphs 7 and 33.



4. Improvements to Premises and 1830 Premises




     (a) Tenant has notified Landlord of Tenant’s desire to make Alterations to the Premises and
the 1830 Premises, generally described as follows (collectively, the “Specified Alterations”):



          (i) Carpeting shall be cleaned or replaced in high traffic areas;




          (ii) Interior walls shall be touched up with fresh paint where required;




          (iii) The window in the server room in the 1830 Premises (the “1830 Server Room”) shall be
replaced with a wall;




          (iv) The walls around the 1830 Server Room shall be extended to the ceiling;


          (v) The
carpeting in the 1830 Server Room shall be replaced with vinyl flooring;


          (vi) The exterior windows in the telecommunications room in the 1830 Premises (the “1830 Telco
Room”) shall be replaced with a wall;




          (vii) All telecommunications drop points in the 1830 Telco Room that do not support Tenant
shall be removed or relocated; and


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           (viii) Such additional improvements as may be requested by Tenant and approved by Landlord in
accordance with Paragraph 13(a) of the Lease.




     (b) Tenant shall have the right to make the Specified Alterations, provided that the same are
performed and constructed in full compliance with the terms and conditions of Paragraphs 13(b)
through (f) of the Lease, including, without limitation, to the extent applicable, the review and
approval by Landlord of plans and specifications (which approval shall not be unreasonably
withheld, conditioned or delayed) and the obtaining by Tenant of all required governmental permits
and approvals. Landlord shall have the right to approve the general contractor employed in the
construction and installation of the Improvements (which approval shall not be unreasonably
withheld, conditioned or delayed).



     (c) Tenant shall be entitled to an improvement allowance (the “Allowance”) to pay the cost of
the Specified Alterations in the Premises and the 1830 Premises. The Allowance shall be in the
aggregate amount of up to Two Hundred Ten Thousand One Hundred Twenty-Four Dollars ($210,124.00).
For purposes of clarification, the Allowance described herein is the same “Allowance” that is
provided under the 1830 Lease and Tenant shall be entitled to a total sum not to exceed Two Hundred
Ten Thousand One Hundred Twenty-Four Dollars ($210,124.00). The Allowance shall be applied solely
toward the hard and soft costs incurred by Tenant in designing and constructing the Specified
Alterations, but shall not be used to pay for Tenant’s personal property, equipment or other items
of Tenant’s Property. Landlord shall disburse the Allowance to Tenant following the completion of
the Specified Alterations in a lien-free condition and in accordance with all Laws (to the extent
applicable), and the delivery to Landlord of receipts, lien waivers and other documents reasonably
requested by Landlord to substantiate the actual cost of the Specified Alterations. In the event
the costs of the Specified Alterations shall be less than the amount of the Allowance, then the
Allowance shall be reduced to the actual amount of the Specified Alterations.



     (d) The following sentence is hereby added to the end of Paragraph 13(a) of the Lease:




Landlord shall endeavor to respond to Tenant’s request for consent within
thirty (30) days after Tenant submits to Landlord a written request for
approval, together with the other documents and information required by this
Paragraph 13.



5. Surrender




     Provided that Landlord approves all Alterations hereafter made to the Premises by Tenant
(excluding the Specified Alterations), and provided further that any future Alterations are office
and R&D improvements similar to the improvements then existing in similar buildings in the vicinity
of the Project (as determined by Landlord in good faith), then notwithstanding anything to the
contrary contained in the Lease, Landlord shall not have the right to require Tenant to remove such
Alterations (or any Alterations previously made by Tenant to the Premises) at the expiration of the
Term, and Tenant shall surrender all such Alterations to Landlord at the expiration or sooner
termination of the Lease.



5









 





6. Letter of Credit; Return of Existing Security Deposit




     (a) Landlord currently holds a Security Deposit from Tenant, consisting of cash and letters of
credit (collectively, the “Existing Letters of Credit”), pursuant to the terms of the Lease and the
1830 Lease, in the aggregate amount of One Million Forty-Three Thousand Three Hundred Ninety-Five
Dollars ($1,043,395.00) (the “Existing Security Deposit”). Concurrently with the execution of this
Amendment and the cancellation of the Existing Letters of Credit, Tenant shall deliver to Landlord,
at Tenant’s sole cost and expense, the Letter of Credit described below in the amount of Five
Hundred Fifty Thousand Dollars ($550,000.00) (the “LC Face Amount”) as security for Tenant’s
performance of all of Tenant’s covenants and obligations under the Lease and the 1830 Lease;
provided, however, that neither the Letter of Credit nor any Letter of Credit Proceeds (as defined
below) shall be deemed an advance rent deposit or an advance payment of any other kind, or a
measure of Landlord’s damages upon Tenant’s Default hereunder or under the 1830 Lease. The Letter
of Credit (or a replacement thereof satisfying the requirements of this Section) shall be
maintained in effect from the date hereof through the date that is thirty (30) days after the
expiration of the of the Lease and the 1830 Lease (the “LC Termination Date”). On the LC
Termination Date, Landlord shall return to Tenant the Letter of Credit and any Letter of Credit
Proceeds then held by Landlord (other than those Letter of Credit Proceeds Landlord is entitled to
retain under the terms of this Section); provided, however, that in no event shall any such return
be construed as an admission by Landlord that Tenant has performed all of its obligations hereunder
or under the 1830 Lease. Landlord shall not be required to segregate the Letter of Credit Proceeds
from its other funds and no interest shall accrue or be payable to Tenant with respect thereto.
Landlord may (but shall not be required to) draw upon the Letter of Credit in such amount as is
necessary, and shall use the proceeds therefrom (the “Letter of Credit Proceeds”) or any portion
thereof, to cure any default under the Lease and/or under the 1830 Lease and to compensate Landlord
for any loss or damage Landlord incurs as a result of such default, it being understood that any
use of the Letter of Credit Proceeds shall not constitute a bar or defense to any of Landlord’s
remedies set forth under the Lease or under the 1830 Lease. In such event and upon written notice
from Landlord to Tenant specifying the amount of the Letter of Credit Proceeds so utilized by
Landlord and the particular purpose for which such amount was applied, Tenant shall immediately
deliver to Landlord an amendment to the Letter of Credit or a replacement Letter of Credit in an
amount equal to the full LC Face Amount. Tenant’s failure to deliver such replacement Letter of
Credit to Landlord within ten (10) days of Landlord’s notice shall constitute a Default hereunder
and under the 1830 Lease. In the event Landlord transfers its interest in the Lease and the 1830
Lease, Landlord shall transfer the Letter of Credit and any Letter of Credit Proceeds then held by
Landlord to Landlord’s successor in interest, and thereafter Landlord shall have no further
liability to Tenant with respect to such Letter of Credit or Letter of Credit Proceeds.



     (b) As used herein, Letter of Credit shall mean an unconditional, stand-by irrevocable letter
of credit (herein referred to as the “Letter of Credit”) issued by Silicon Valley Bank or the San
Francisco Bay Area office of a major national bank insured by the Federal Deposit Insurance
Corporation and otherwise reasonably satisfactory to Landlord (the “Bank”), naming Landlord as
beneficiary, in the amount of the LC Face Amount, and otherwise in form and substance satisfactory
to Landlord. The Letter of Credit shall be for a one-year term and shall provide:
(i) that Landlord may make partial and multiple draws thereunder, up to the face amount thereof,
(ii) that Landlord may draw upon the Letter of Credit up to the full amount thereof and the Bank



6









 







will pay to Landlord the amount of such draw upon receipt by the Bank of a sight draft signed by
Landlord and accompanied by a written certification from Landlord to the Bank stating either that:
(A) a Default has occurred and is continuing under the Lease and/or under the 1830 Lease and any
applicable grace period has expired, or (B) Landlord has not received notice from the Bank at least
thirty (30) days prior to the then current expiry date of the Letter of Credit that the Letter of
Credit will be renewed by the Bank for at least one (1) year beyond the relevant annual expiration
date or, in the case of the last year of the Term, thirty (30) days after the Expiration Date,
together with a replacement Letter of Credit or a modification to the existing Letter of Credit
effectuating such renewal, and Tenant has not otherwise furnished Landlord with a replacement
Letter of Credit as hereinafter provided; and (iii) that the beneficial interest under the Letter
of Credit shall be transferable one or more times without cost (other than a transfer fee assessed
by the Bank in an amount not to exceed
1/4 of one percent (1%) of the LC Face Amount at the time
of the transfer, which fee shall be paid by Landlord) and, therefore, in the event of Landlord’s
(or any successor Landlord’s) assignment or other transfer of its interest in the Lease, the Letter
of Credit shall be transferable by Landlord (or any successor Landlord), without recourse, to the
assignee or transferee of such interest and the Bank shall confirm the same to Landlord (or such
successor) and such assignee or transferee. In the event that the Bank shall fail to (y) notify
Landlord that the Letter of Credit will be renewed for at least one (1) year beyond the then
applicable expiration date, and (z) deliver to Landlord a replacement Letter of Credit or a
modification to the existing Letter of Credit effectuating such renewal, and Tenant shall not have
otherwise delivered to Landlord, at least thirty (30) days prior to the relevant annual expiration
date, a replacement Letter of Credit in the amount required hereunder and otherwise meeting the
requirements set forth above, then Landlord shall be entitled to draw on the Letter of Credit as
provided above, and shall hold the proceeds of such draw as Letter of Credit Proceeds pursuant to
Section 6(a) above.



     (c) Tenant hereby waives the provisions of California Civil Code Section 1950.7 (other than
subsection (b) thereof) )and/or any successor statute, it being expressly agreed that Landlord may
apply all or any portion of the Letter of Credit or the proceeds thereof in payment of any and all
sums reasonably necessary to compensate Landlord for any other loss or damage, foreseeable or
unforeseeable, caused by the act or omission of Tenant or any officer, employee, agent or invitee
of Tenant, and that following a Default by Tenant, all or any portion of the Letter of Credit or
the proceeds thereof may be retained by Landlord following a termination of the Lease and applied
to future damages, including damages for future rent, pending determination of the same



     (d) Within five (5) business days following Landlord’s receipt of the Letter of Credit
specified under Section 6(a) above, Landlord shall return the Existing Security Deposit to Tenant
(excluding the Existing Letters of Credit, which shall be cancelled as provided in Section 6(a)
above), and Paragraphs 7 and 8 of the Lease and Paragraphs 7 and 8 of the 1830 Lease shall be of no
further force and effect.



7. Destruction and Damage




     The following provision is hereby added to the Lease as new Paragraph 22(g):



7









 





     If the Premises is damaged or destroyed to the extent that the Premises cannot be
substantially repaired or restored by Landlord within two hundred ten (210) days after the
Casualty Discovery Date, Tenant may terminate this Lease immediately upon notice thereof to
Landlord, which notice shall be given, if at all, not later than fifteen (15) days after
Landlord notifies Tenant of Landlord’s estimate of the period of time required to repair such
damage or destruction.



8. Assignment and Subletting




     Paragraph 24 of the Lease is hereby deleted in its entirety and the following provision is
hereby substituted therefor:




     (a) Tenant shall not voluntarily or by operation of law, (i) mortgage, pledge,
hypothecate or encumber this Lease or any interest herein, (ii) assign or transfer
this Lease or any interest herein, sublease the Premises or any part thereof, or
any right or privilege appurtenant thereto, or allow any other person (the
employees and invitees of Tenant excepted) to occupy or use the Premises, or any
portion thereof, without first obtaining the written consent of Landlord, which
consent shall not be unreasonably withheld, as set forth below in this Paragraph
24; provided, however, that Tenant is not then in Default under this Lease nor is
any event then occurring which with the giving of notice or the passage of time, or
both, would constitute a Default hereunder. Any other provision of the Lease
notwithstanding, Tenant shall have the right to market the Premises in a manner
consistent with other sublease marketing campaigns approved by other landlords of
similarly- situated premises similar in quality to, and in the vicinity of, the
Project, including, if applicable, the use of sublease marketing signage, subject
to the reasonable approval of Landlord.




     (b) When Tenant requests Landlord’s consent to an assignment or subletting, it
shall notify Landlord in writing of the name and address of the proposed assignee
or subtenant and the nature and character of the business of the proposed assignee
or subtenant and shall provide current and one (1) year’s prior financial
statements for the proposed assignee or subtenant, which financial statements shall
be audited to the extent available and shall in any event be prepared in accordance
with generally accepted accounting principles. Tenant shall also provide Landlord
with a copy of the proposed sublease or assignment agreement, including all
material terms and conditions thereof. Landlord shall have the option, to be
exercised within fifteen (15) business days of receipt of the foregoing, to consent
to the proposed assignment or sublease, or refuse its consent to the proposed
assignment or sublease, provided that (A) such consent shall not be unreasonably
withheld so long as Tenant is not then in Default under this Lease nor is any event
then occurring which, with the giving of notice or the passage of time, or both,
would constitute a Default hereunder, and (B) as a condition to providing such
consent, Landlord may require attornment from the proposed subtenant on terms and
conditions acceptable to Landlord.




8











 





     (c) Without otherwise limiting the criteria upon which Landlord may withhold its consent,
Landlord shall be entitled to consider all reasonable criteria including, but not limited to, the
following: (i) whether or not the proposed subtenant or assignee is engaged in a business which,
and the use of the Premises will be in an manner which, is in keeping with the then character and
nature of all other tenancies in the Project; (ii) whether the use to be made of the Premises by
the proposed subtenant or assignee will conflict with any so-called “exclusive” use then in favor
of any other tenant of the Building or the Project, and whether such use would be prohibited by any
other portion of this Lease, including, but not limited to, any rules and regulations then in
effect, or under applicable Laws, and whether such use imposes a greater load upon the Premises and
the Building and the Project services than imposed generally by other tenancies in the Project; and
(iii) the creditworthiness and financial stability of the proposed assignee or subtenant in light
of the responsibilities involved. In any event, Landlord may withhold its consent to any assignment
or sublease, if (A) the actual use proposed to be conducted in the Premises or portion thereof
conflicts with the provisions of Paragraphs 10(a) or (b) above or with any other lease which
restricts the use to which any space in the Building or the Project may be put; (B) the proposed
assignment or sublease requires alterations, improvements or additions to the Premises or portions
thereof; (C) the portion of the Premises proposed to be sublet is irregular in shape and/or does
not permit safe or otherwise appropriate means of ingress and egress, or does not comply with
governmental safety and other codes; or (D) the proposed sublessee or assignee is either a
governmental or quasi-governmental agency or instrumentality thereof.



     (d) If Landlord approves an assignment or subletting as herein provided, Tenant shall pay to
Landlord, as Additional Rent, fifty percent (50%) of the excess, if any, of (i) the rent and any
additional rent payable by the assignee or sublessee to Tenant, less reasonable and customary
marketing expenditures, brokerage commissions and attorneys’ fees incurred by Tenant in connection
with such assignment or sublease; minus (ii) Base Rent plus Additional Rent allocable to that part
of the Premises affected by such assignment or sublease pursuant to the provisions of this Lease,
which costs shall, for purposes of the aforesaid calculation, be amortized on a straight- line
basis over the term of such assignment or sublease. The assignment or sublease agreement, as the
case may be, after approval by Landlord, shall not be amended without Landlord’s prior written
consent, and shall contain a provision directing the assignee or subtenant to pay the rent and
other sums due thereunder directly to Landlord upon receiving written notice from Landlord that
Tenant is in default under this Lease with respect to the payment of Rent. In the event that,
notwithstanding the giving of such notice, Tenant collects any rent or other sums from the assignee
or subtenant, then Tenant shall hold such sums in trust for the benefit of Landlord and shall
immediately forward the same to Landlord. Landlord’s collection of



9









 




such rent and other sums shall not constitute an acceptance by Landlord of attornment by
such assignee or subtenant.




     (e) Notwithstanding any assignment or subletting, Tenant and any guarantor or surety of
Tenant’s obligations under this Lease shall at all times remain fully and primarily responsible and
liable for the payment of the Rent and for compliance with all of Tenant’s other obligations under
this Lease (regardless of whether Landlord’s approval has been obtained for any such assignment or
subletting).



     (f) Tenant shall reimburse Landlord for its out-of-pocket, reasonable costs (including,
without limitation, the reasonable fees of Landlord’s counsel), actually incurred in connection
with Landlord’s review and processing of documents regarding any proposed assignment or sublease.



     (g) A consent to one assignment, subletting, occupation or use shall not be deemed to be a
consent to any other or subsequent assignment, subletting, occupation or use, and consent to any
assignment or subletting shall in no way relieve Tenant of any liability under this Lease. Any
assignment or subletting without Landlord’s consent shall be void, and shall, at the option of
Landlord, constitute a Default under this Lease.



     (h) Tenant acknowledges and agrees that the restrictions, conditions and limitations imposed
by this Paragraph 24 on Tenant’s ability to assign or transfer this Lease or any interest herein,
to sublet the Premises or any part thereof, to transfer or assign any right or privilege
appurtenant to the Premises, or to allow any other person to occupy or use the Premises or any
portion thereof, are, for the purposes of California Civil Code Section 1951.4, as amended from
time to time, and for all other purposes, reasonable at the time that this Lease was entered into,
and shall be deemed to be reasonable at the time that Tenant seeks to assign or transfer this Lease
or any interest herein, to sublet the Premises or any part thereof, to transfer or assign any right
or privilege appurtenant to the Premises, or to allow any other person to occupy or use the
Premises or any portion thereof.



     (i) If this Lease is assigned, whether or not in violation of the provisions of this Lease,
Landlord may collect Rent from the assignee. If the Premises or any part thereof is sublet or used
or occupied by anyone other than Tenant, whether or not in violation of this Lease, Landlord may,
after a Default by Tenant, collect Rent from the subtenant or occupant. In either event, Landlord
may apply the net amount collected to Rent, but no such assignment, subletting, occupancy or
collection shall be deemed a waiver of any of the provisions of this Paragraph 24, or the
acceptance of the assignee, subtenant or occupant as tenant, or a release of Tenant from the
further performance by Tenant of Tenant’s obligations under this Lease. The consent by Landlord to
an assignment, mortgaging, pledging, encumbering, transfer, use, occupancy or subletting pursuant
to any provision of this Lease



10









 




shall not, except as otherwise provided herein, in any way be considered
to relieve Tenant from obtaining the express consent of Landlord to any other
or further assignment, mortgaging, pledging, encumbering, transfer, use,
occupancy or subletting. References in this Lease to use or occupancy by anyone
other than Tenant shall not be construed as limited to subtenants and those
claiming under or through subtenants but as including also licensees or others
claiming under or through Tenant, immediately or remotely. The listing of any
name other than that of Tenant on any door of the Premises or on any directory
or in any elevator in the Building, or otherwise, shall not, except as
otherwise provided herein, operate to vest in the person so named any right or
interest in this Lease or in the Premises, or be deemed to constitute, or serve
as a substitute for, or any waiver of, any prior consent of Landlord required
under this Paragraph 24.




     (j) Each subletting and/or assignment pursuant to this Paragraph shall
be subject to all of the covenants, agreements, terms, provisions and
conditions contained in this Lease. If Landlord shall consent to, or reasonably
withhold its consent to, any proposed assignment or sublease, Tenant shall
indemnify, defend and hold harmless Landlord against and from any and all loss,
liability, damages, costs and expenses (including reasonable counsel fees)
resulting from any claims that may be made against Landlord by the proposed
assignee or sublessee or by any brokers or other persons claiming a commission
or similar fee in connection with the proposed assignment or sublease.



9. Option to Renew




     (a) All previous rights or options to renew contained in the Lease are null, void and of no
force or effect from and after the date hereof.



     (b) Tenant shall have one (1) option (the “Renewal Option”) to extend the Term for a period of
five (5) years beyond the Expiration Date (the “Renewal Term”). The Renewal Option is personal to
Financial Engines, Inc. and may not be exercised by any other sublessee or assignee, or by any
other successor or assign of Financial Engines, Inc. The Renewal Option shall be effective only if
Tenant is not in Default under the Lease, nor has any event occurred which with the giving of
notice or the passage of time, or both, would constitute a default hereunder, either at the time of
exercise of the Renewal Option or at the commencement of the Renewal Term. The Renewal Option must
be exercised, if at all, by written notice (“Election Notice”) from Tenant to Landlord given not
more than twelve (12) months nor less than nine (9) months prior to the expiration of the Term. Any
such notice given by Tenant to Landlord shall be irrevocable. If Tenant fails to exercise the
Renewal Option in a timely manner as provided for above, the Renewal Option shall be void. The
Renewal Term shall be upon the same terms and conditions as the initial Term, except that (i) no
further Renewal Option shall be available to Tenant at the expiration of the Renewal Term, and (ii)
the Base Rent during the Renewal Term (the “Renewal Rate”) shall be equal to one hundred percent
(100%) of the “prevailing market rate” for space in similarly situated buildings in the vicinity of
the Project comparable to the Building in location, condition, quality and type at the commencement
of the Renewal Term (the “Prevailing Rate”).



11









 




The term “prevailing market rate” shall mean the base rental for such comparable space,
taking into account any additional rental and all other payments and escalations payable hereunder
and by tenants under leases of such comparable space. The Prevailing Rate shall be determined in
accordance with Section 9(c) below.




     (c) Within thirty (30) days after Landlord’s receipt of the Election Notice or as soon
thereafter as is reasonably practicable, Landlord shall notify Tenant in writing (the “Renewal Rate
Notice”) of Landlord’s determination of the Renewal Rate for the Renewal Term. Tenant shall have
thirty (30) days (the “Response Period”) after receipt of the Renewal Rate Notice to advise
Landlord whether or not Tenant agrees with Landlord’s Renewal Rate. If Tenant does not respond to
Landlord in writing within the Response Period, then Tenant shall be deemed to have accepted the
Renewal Rate specified by Landlord in the Renewal Rate Notice. If Tenant agrees or is deemed to
have agreed with Landlord’s determination of the Renewal Rate, then such determination shall be
final and binding on the parties. If Tenant notifies Landlord in writing during the Response Period
that Tenant disagrees with Landlord’s determination of the Renewal Rate, then within twenty (20)
days after Landlord’s receipt of Tenant’s written notice, Landlord and Tenant shall each retain a
licensed commercial real estate broker with at least five (5) years’ experience negotiating lease
transactions for similar properties in the City of Palo Alto. If only one broker is appointed by
the parties during such twenty (20) day period, then such broker shall, within twenty (20) days
after his or her appointment, determine the Prevailing Rate, and the Renewal Rate shall be the
Prevailing Rate so determined by such broker. If Landlord and Tenant each appoint a broker during
such twenty (20) day period as contemplated hereunder, then the brokers shall meet at least two (2)
times during the thirty (30) day period commencing on the date on which the last of the brokers has
been appointed (the “Broker Negotiation Period”) to attempt to mutually agree upon the Prevailing
Rate. If the brokers agree upon the Prevailing Rate on or before the expiration of the Broker
Negotiation Period, then the Prevailing Rate so determined by the brokers shall be the “Renewal
Rate” for all purposes of the Lease. If the brokers cannot agree upon the Prevailing Rate at the
expiration of the Broker Negotiation Period, but if the determinations of such brokers differ by
less than five percent (5%) of the higher of the two, the Prevailing Rate shall be the average of
the two determinations. In the event such determinations differ by more than five percent (5%) of
the higher of the two, then such appraisers shall within twenty (20) days designate a third broker,
who shall have the same qualifications required for the initial two brokers. If the two brokers
fail to agree upon and appoint a third broker, then the third broker shall be appointed by
J.A.M.S./ENDISPUTE. The third broker shall, within twenty (20) days after his or her appointment,
make a determination of the Prevailing Rate. The determinations of Prevailing Rate prepared by all
three (3) brokers shall be compared and the Prevailing Rate shall be the average of the two closest
determinations. Such determination shall be final and binding upon the parties. The Renewal Rate
shall be the Prevailing Rate so determined in accordance with the foregoing sentence. Landlord and
Tenant shall each bear the expense of the broker selected by it and shall share equally the expense
of the third broker, if any. Promptly following the determination of the Renewal Rate pursuant to
this Section 9(c), the parties shall execute an amendment to the Lease memorializing such Renewal
Rate.



12









 





10. Right of First Offer




     (a) Subject to the terms of this Section 10, Tenant shall have a right of offer (the “Right of
First Offer”) during the Term to lease Suite 200 (containing approximately 11,145 rentable square
feet) or Suite 201 (containing approximately 5,985 rentable square feet) in the Building when,
subject to the last sentence of this Section 10(a), the first of such suites becomes available for
lease (the first such space becoming available after the date hereof being herein referred to as
the “First Offer Space”). The Right of First Offer is personal to Financial Engines, Inc. and may
not be exercised by any sublessee or assignee, or by any other successor or assign, of Financial
Engines, Inc. The Right of First Offer shall be effective only if neither a Default nor an event or
condition which, with the giving of notice or the passage of time, or both, would constitute a
Default, is occurring hereunder, either at the time of exercise of the Right of First Offer or on
the First Offer Commencement Date (as hereinafter defined). Tenant understands that Suite 200 is
currently leased to a third party and that Suite 201 is currently vacant. Notwithstanding anything
herein to the contrary, (i) Landlord shall have the right after the date hereof to enter into a
lease covering Suite 201 (a “Subsequent Suite 201 Lease”) without triggering Tenant’s Right of
First Offer, and the Right of First Offer shall only be effective, as to Suite 201, following the
expiration (subject to clause (ii) below) or sooner termination of the Subsequent Suite 201 Lease,
and (ii) the Right of First Offer is expressly made subject to the right of Landlord to renew or
extend the term of the subsequent Suite 201 Lease and of the lease of the existing tenant of Suite
200.



     (b) In the event that Landlord elects to market or offer to the public for lease the First
Offer Space, or if Landlord receives a proposal (other than a proposal from the existing tenant of
Suite 200 or from the tenant under the subsequent Suite 201 Lease) to lease the First Offer Space,
which proposal Landlord intends to accept (a “First Offer Proposal”), Landlord shall notify Tenant
in writing of the business and economic terms upon which Landlord would be willing to lease the
First Offer Space to Tenant (a “First Offer Space Availability Notice”). Tenant shall thereafter
have the right to lease the First Offer Space on the business and economic terms specified in the
First Offer Space Availability Notice, and otherwise on the terms and conditions contained in the
Lease, by written notice (a “First Offer Notice”) to Landlord given not later than five (5)
business days after Tenant’s receipt of the First Offer Space Availability Notice. If Tenant fails
to deliver a First Offer Notice to Landlord on a timely basis as provided in the preceding sentence
(time being of the essence), then Tenant shall be deemed to have elected not to exercise the Right
of First Offer.



     (c) In the event Tenant fails to exercise its Right of First Offer in a timely manner as
provided herein, the Right of First Offer shall lapse and Landlord shall thereafter have the right
to lease the First Offer Space to any party or parties on terms deemed acceptable to Landlord in
its sole and absolute discretion. If Tenant validly exercises the Right of First Offer, then
(1) Landlord and Tenant shall promptly execute and amendment to the Lease adding the First Offer
Space to the Premises, (2) Tenant’s lease of the First Offer Space shall commence on a date (the
 “First Offer Commencement Date”) specified in the First Offer Space Availability Notice, (3) the
First Offer Space shall be leased to Tenant upon the economic terms set forth in the First Offer
Space Availability Notice and otherwise on the terms set forth in the Lease, (4) Tenant’s
Proportionate Share of the Building and the Project shall be increased to reflect the First Offer
Space, and (5) except to the extent that the First Offer Space Availability Notice provides a



13









 




tenant improvement allowance or a tenant improvement loan to Tenant, the First Offer Space
shall be delivered to Tenant in its “as-is” condition on the First Offer Commencement Date, Tenant
acknowledging and agreeing that Landlord shall have no obligation to improve, remodel or otherwise
alter such First Offer Space prior to or after the First Offer Commencement Date, except to the
extent expressly provided in the First Offer Space Availability Notice.




11. General Provisions




     (a) Ratification and Entire Agreement. Except as expressly amended by this Amendment, the
Lease shall remain unmodified and in full force and effect. As modified by this Amendment, the
Lease is hereby ratified and confirmed in all respects. In the event of any inconsistencies between
the terms of this Amendment and the Lease, the terms of this Amendment shall prevail. The Lease as
amended by this Amendment constitutes the entire understanding and agreement of Landlord and Tenant
with respect to the subject matter hereof, and all prior agreements, representations, and
understandings between Landlord and Tenant with respect to the subject matter hereof, whether oral
or written, are or should be deemed to be null and void, all of the foregoing having been merged
into this Amendment. Landlord and Tenant do each hereby acknowledge that it and/or its counsel have
reviewed and revised this Amendment, and agree that no rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall be employed in the interpretation
of this Amendment. This Amendment may be amended or modified only by an instrument in writing
signed by each of Landlord and Tenant.



     (b) Brokerage. Landlord and Tenant each represents and warrants to the other that neither it
nor its officers or agents nor anyone acting on its behalf has dealt with any real estate broker
except Newmark Knight Frank (“Tenant’s Broker”) and NAIBT Commercial (“Landlord’s Broker”) in the
negotiating or making of this Amendment, and each party agrees to indemnify and hold harmless the
other from any claim or claims, and costs and expenses, including attorneys’ fees, incurred by the
indemnified party in conjunction with any such claim or claims of any other broker or brokers to a
commission in connection with the Lease as a result of the actions of the indemnifying party.
Provided that this Amendment is fully executed by the parties hereto, then Landlord shall pay a
commission to Landlord’s Broker pursuant to a separate written agreement between Landlord and
Landlord’s Broker, and  Landlord’s Broker shall be responsible for any portion of such commission
payable to Tenant’s Broker.



     (c) Authority; Applicable Law; Successors Bound. Landlord and Tenant do each hereby represent
and warrant to the other that this Amendment has been duly authorized by all necessary action on
the part of such party and that such party has full power and authority to execute, deliver and
perform its obligations under this Amendment, without consent of any other party. This Amendment
shall be governed by and construed under the laws of the State of California, without giving effect
to any principles of conflicts of law that would result in the application of the laws of any other
jurisdiction. This Amendment shall inure to the benefit of and be binding upon Landlord and Tenant
and their respective successors and permitted assigns with respect to the Lease.



14









 






     (d) Counterparts. This Amendment may be executed in counterparts each of which
shall be deemed an original but all of which taken together shall constitute one and the same
instrument.



     In Witness Whereof, Landlord and Tenant have executed this Amendment as of the date
first above written.



	 	 	 	 	 	 	 	 	 
	 	 	Landlord:	 	Harbor Investment Partners,
	 	 	 	 	a California general partnership
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Embarcadero Road Investors llc,
	 	 	 	 	 	 	a Delaware limited liability company, 
	 	 	 	 	 	 	its General Partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	UBS Realty Investors llc,

a Massachusetts limited liability company,

its Manager





	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Timothy J. Cahill
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	Timothy J. Cahill
	 

	 	 	 	 	 	Title:
	 	Director — Asset Management





	 	 	 	 	 	 	 	 	 
	 	 	Tenant:	 	Financial Engines, Inc.,
	 	 	 	 	a California corporation
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	/s/ Raymond J. Sims
	 	 	 	 	 	 	 
	 	 	 	 	Name:	 	Raymond J. Sims
	 	 	 	 	Title:	 	EVP & CFO







15