Document:

exv10w10

Exhibit 10.10

Lease Agreement

By and Between

Harbor Investment Partners,

a California general partnership

As Landlord 

and

Financial Engines, Inc.,

a California corporation

As Tenant 

Dated December 7, 1999

 

 

Table of Contents

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

i 

 

	 	 	 	 	 
	 	 	Page
	23. Condemnation
	 	 	23	 
	 
	 	 	 	 
	24. Assignment and Subletting
	 	 	24	 
	 
	 	 	 	 
	25. Tenant’s Default
	 	 	27	 
	 
	 	 	 	 
	26. Landlord’s Remedies
	 	 	29	 
	 
	 	 	 	 
	27. Landlord’s Right to Perform Tenant’s Obligations
	 	 	31	 
	 
	 	 	 	 
	28. Attorneys’ Fees
	 	 	32	 
	 
	 	 	 	 
	29. Taxes
	 	 	32	 
	 
	 	 	 	 
	30. Effect of Conveyance
	 	 	32	 
	 
	 	 	 	 
	31. Tenant’s Estoppel Certificate
	 	 	32	 
	 
	 	 	 	 
	32. Subordination
	 	 	33	 
	 
	 	 	 	 
	33. Environmental Covenants
	 	 	34	 
	 
	 	 	 	 
	34. Notices
	 	 	37	 
	 
	 	 	 	 
	35. Waiver
	 	 	37	 
	 
	 	 	 	 
	36. Holding Over
	 	 	37	 
	 
	 	 	 	 
	37. Successors and Assigns
	 	 	38	 
	 
	 	 	 	 
	38. Time
	 	 	38	 
	 
	 	 	 	 
	39. Brokers
	 	 	38	 
	 
	 	 	 	 
	40. Limitation of Liability
	 	 	38	 
	 
	 	 	 	 
	41. Financial Statements
	 	 	39	 
	 
	 	 	 	 
	42. Rules and Regulations
	 	 	39	 
	 
	 	 	 	 
	43. Mortgagee Protection
	 	 	39	 
	 
	 	 	 	 
	44. Entire Agreement
	 	 	40	 
	 
	 	 	 	 
	45. Interest
	 	 	40	 
	 
	 	 	 	 
	46. Construction
	 	 	40	 
	 
	 	 	 	 
	47. Representations and Warranties of Tenant
	 	 	40	 
	 
	 	 	 	 

ii 

 

	 	 	 	 	 
	 	 	Page
	48. Security
	 	 	41	 
	 
	 	 	 	 
	49. Jury Trial Waiver
	 	 	42	 
	 
	 	 	 	 
	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:
	 	December 7, 1999
	 
	 	 
	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

 Attention: Asset Manager, The
Harbor Business Park
	 
	 	 
	 
	 	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
	 
	 	     Attention: Property Manager, The Harbor Business Park
	 
	 	 
	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
 (650)
565-4900
	 
	 	 
	Premises Square Footage:
	 	Approximately Thirty Two Thousand Seven Hundred Forty Two (32,742) rentable square feet
	 
	 	 
	Premises Address:
	 	1830 Embarcadero Road 

Palo Alto, California
	 
	 	 
	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
	 
	 	 
	Building (if not the same as 

the Project):
	 	1830 Embarcadero Road 

Palo Alto, California

iv 

 

	 	 	 
	Tenant’s Proportionate Share
of Project:
	 	12.63% 
	 
	 	 
	Tenant’s Proportionate Share of Building:
	 	100% 
	 
	 	 
	Length of Term:
	 	Eighty-Four (84) months
	 
	 	 
	Estimated Commencement Date:
	 	May 1, 2000
	 
	 	 
	Estimated Expiration Date:
	 	April 30, 2007

	 	 	 	 	 	 
	Monthly Base Rent:
	    	Months	Monthly Base Rent

	 
	 	1–12	$	117,871.20	 
	 
	 	13–24	$	122,586.05	 
	 
	 	25–36	 	127,489.49	 
	 
	 	37–48	 	132,589.07	 
	 
	 	49–60	 	137,892.63	 
	 
	 	61–72	 	143,408.34	 
	 
	 	73–84	 	149,144.67	 

	 	 	 
	Prepaid Rent:
	 	One Hundred Seventeen
Thousand Eight Hundred
Seventy-One and 20/100
Dollars ($117,871.20)
	 
	 	 
	Prepaid Additional Rent:
	 	Thirteen Thousand Seven
Hundred Sixty-Two and 02/100
Dollars ($13,762,02)
	 
	 	 
	Month to which Prepaid Base Rent
and Additional
Rent will be Applied:
	 	First (1st) month of the Term
	 
	 	 
	Security Deposit:
	 	One Hundred Seventeen Thousand Eight Hundred Seventy-One and 20/100 Dollars ($117,871.20)
	 
	 	 
	Letter of Credit
	 	Seven Hundred Thousand Dollars ($700,000)
	 
	 	 
	Permitted Use:
	 	General office use for software development firm

v 

 

	 	 	 
	Unreserved Parking Spaces:

	 	One hundred thirty-one (131) nonexclusive and
undesignated parking spaces
	 
	 	 
	Brokers:

	 	Randy Arrillaga and Steve Bouret of BT Commercial (Landlord’s Broker)
	 
	 

	 	Ron Himes of BT Commercial (Tenant’s Broker)
	 
	 	 
	Alterations Allowance:

	 	Ninety Eight Thousand Two Hundred Twenty-Six Dollars
	 

	 	($98,226.00) (viz., $3.00 per rentable square foot)

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 arid 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; provided, however, that any statement of square footage
set forth in this Lease, or that may have been used in calculating any of the economic terms
hereof is an approximation which Landlord and Tenant agree is reasonable and, except as
expressly set forth in Paragraph 4(d)(iii) below, no economic terms based thereon shall be
subject to revision whether or not the actual square footage is more or less. 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 at no
additional charge to Tenant (the “Parking Areas”); provided, however, that Landlord shall not be
required to enforce Tenant’s right to use such parking spaces (but shall use commercially
reasonable efforts to resolve disputes relating to parking); 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.

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     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; provided, however,
that
Landlord shall not unreasonably interfere with Tenant’s use of the Premises in connection with the making of such other changes.

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 
(the “Commencement Date”) Landlord delivers possession of
the Premises to Tenant. 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. Commencing on the Rent Commencement Date (as hereinafter defined),
Tenant shall pay to Landlord, in advance on the first day of each month, without further
notice or
demand and without offset, rebate, credit or deduction for any reason whatsoever, the monthly
installments of rent specified in the Basic Lease Information (the “Base Rent”). As used
herein,
“Rent Commencement Date” means the fifteenth (15th) day after Landlord delivers possession of
the Premises to Tenant.

     Upon execution of this Lease, Tenant shall pay to Landlord the Prepaid Rent and first monthly
installment of estimated Additional Rent (as hereinafter defined) specified in the Basic Lease
Information to be applied toward Base Rent and Additional Rent for the month of the Term specified
in the Basic Lease Information.

     (b) Additional Rent. This Lease is intended to be a triple-net Lease with respect to
Landlord; and subject to Paragraph 14(b) below, the Base Rent owing hereunder is (i) to be
paid
by Tenant absolutely net of all costs and expenses relating to Landlord’s ownership and
operation of the Project and the Building, and (ii) not to be reduced, offset or diminished,
directly
or indirectly, by any cost, charge or expense payable hereunder by Tenant or by others in
connection with the Premises, the Building and/or the Project or any part thereof. The
provisions
of this Paragraph 4(b) for the payment of Tenant’s Proportionate Share(s) of Expenses (as
hereinafter defined) are intended to pass on to Tenant its share of all such costs and
expenses. In
addition to the Base Rent, commencing on the Rent Commencement Date, Tenant shall pay to

2

 

Landlord, in accordance with this Paragraph 4, Tenant’s Proportionate Share(s) of 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
(collectively, the “Expenses”), including, without limitation, all the following items (the
“Additional Rent”):

          (i) 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 of 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 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.

          (ii) 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.

          (iii) Utilities. The cost of all Utilities (as hereinafter defined) serving the Premises,
the Building and the Project that are not separately metered to 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

3

 

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”).

          (iv) 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.

          (v) 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.

          (vi) 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”), and (iv) all costs and expenses incurred in causing the Project to
be Year 2000 Compliant (as defined below). “Year 2000 Compliant” shall mean that all Systems
containing or using computers or other information technology will function without material
error or interruption resulting from the date change from year 1999 to year 2000, to the extent
that information technology of third parties properly communicates date/time data with the
Systems.

          (vii) 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.

          (viii) 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

4

 

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 by Tenant as Additional Rent under this Paragraph 4(b) for the 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 replacement of which would be capitalized under Landlord’s commercial real estate
accounting practices, Tenant shall be required to pay only 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.

     (c) Exclusions from Additional Rent. Notwithstanding anything to the contrary contained
in Paragraph 4(b) above, 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 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);

5

 

          (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(c) 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.

     (d) Payment of Additional Rent

          (i) Upon commencement of this Lease, Landlord shall submit to Tenant an estimate of monthly
Additional Rent for the period between the Commencement Date and the following December 31 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. If at any time or times Landlord determines that the amounts payable under
Paragraph 4(b) for the current year will vary from Landlord’s estimate given to Tenant, Landlord,
by notice to Tenant, may revise the estimate for such year, and subsequent payments by Tenant for
such year shall be based upon such revised estimate. By April 1 of each calendar year, Landlord
shall endeavor to provide to Tenant a statement (“Expense Statement”) showing the actual Additional
Rent due to Landlord for the prior calendar year, to be prorated during the first year from the
Commencement Date. 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 Expense Statement from Landlord. Any overpayment by Tenant of Additional Rent for
the prior calendar year shall be credited towards the Additional Rent next due.

          (ii) 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.

          (iii) 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

6

 

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 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. If Tenant
disputes any such estimate or determination of Utility Expenses, then Tenant shall either pay the
estimated amount or cause the Premises to be separately metered at Tenant’s sole expense.

     (e) 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, El 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 aprorated amount of the Rent for a full calendar month based upon a
thirty (30) day month.

     (f) Tenant’s 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 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

7

 

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 4 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.

5. Utility Expenses

     (a) Tenant shall pay the cost of all water, sewer use, sewer discharge fees and permit costs
and sewer connection fees, gas, heat electricity, refuse pick-up, janitorial service,
telephone and
all materials and services or other utilities (collectively, “Utilities”) billed or metered
separately to the Premises and/or Tenant, together with all taxes, assessments, charges and
penalties added to or included within such cost. 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.

     (b) 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 five (5) days after their due date, then Tenant shall pay to Landlord a late charge
equal to five percent (5%) of such overdue amount, plus any costs and

8

 

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 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:
	 	CDS
 

Landlord
	 	JM
 

Tenant
	 	 

7. Security Deposit

     Concurrently with Tenant’s execution of the Lease, Tenant shall deposit with Landlord the
Security Deposit specified in the Basic Lease Information as security for 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 Tenant’s default in the payment of any Rent, (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, or (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.

8. 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 of Seven Hundred Thousand Dollars
($700,000.00) (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 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

9

 

entitled to retain under the terms of this Paragraph 8(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 (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 and not repaired
by Tenant in accordance with this Lease, (iii) to clean the Premises upon termination of this
Lease, (iv) to reimburse Landlord for the payment of any amount which Landlord may for any other
purpose spend or be required to spend by reason of Tenant’s Default, and (v) for any other
purpose for which Landlord is entitled to use the Security Deposit, 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. 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.

     (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 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

10

 

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 8(a) above.

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.

     (c) Tenant’s Right to Terminate Lease. Notwithstanding anything to the contrary contained in
Paragraph 9(b) above, if Landlord fails to deliver possession of the Premises to Tenant on or
before November 1, 2000 for reasons other than Force Majeure Events and Tenant Delays (as such
terms are hereinafter defined), then Tenant shall have the right, as its sole and absolute remedy
for such failure, to terminate this Lease by written notice to Landlord given not later than
November 5, 2000. If Tenant fails to deliver such notice to Landlord on or before such date, then
this Lease shall remain in full force and effect and Tenant’s rights under this Paragraph 9(c)
shall terminate. As used herein, “Force Majeure Events” means strikes, embargoes, governmental
regulations, acts of God, war, civil commotion or other strife, and other events beyond the
reasonable control of Landlord; and “Tenant Delays” means any delays caused by Tenant or Tenant’s
Agents (as hereinafter defined).

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 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

11

 

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 (i) 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; provided, however, that except as provided in Paragraph 10(c) below, Tenant shall not be required to make or, except as
provided in Paragraph 4 above, pay for, structural changes to the Premises or the Building
not related to Tenant’s specific use of the Premises unless the requirement for such
changes is imposed as a result of any Alterations made to the Premises by Tenant; (ii) all
recorded covenants, conditions and restrictions affecting the Project (“Private
Restrictions”) now in force or which may hereafter be in force; and (iii) 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 Alterations 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 Alterations. Tenant shall be solely responsible for conducting its own independent
investigation of this matter and for ensuring that the design of all Alterations strictly
comply 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

12

 

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 mdemnify 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) Notwithstanding the terms of Paragraph 11(a), Landlord shall cause the roof on the
Building to be in good condition and the HVAC, electrical and plumbing systems serving the
Premises to be in good working order on the Commencement Date. Any claims by Tenant under
the preceding sentence shall be made in writing not later than the fifteenth (15th) day
after the 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 11.

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, all non-working light
bulbs and ballasts replaced and all roll-up doors and plumbing fixtures in good condition and
working order, 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), and any damage or deterioration that would have been prevented by proper

13

 

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
(specifically excluding, however, any alterations or improvements made to the Premises by the
previous tenant prior to the Commencement Date) 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 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.

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 (collectively,
“Structural Alterations”). 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. Notwithstanding the
foregoing, Tenant shall have the right to make Alterations (specifically excluding, however,
Structural Alterations) to the Premises with prior notice to but without the consent of Landlord,
provided that such Alterations (i) are constructed and performed in full compliance with the
terms of Paragraphs 13(b) through (g) below, (ii) are not visible from the exterior of the
Premises or the Building, (iii) do not require work to be performed inside the walls or above the
ceiling of the Premises, and (iv) do not exceed one thousand five hundred dollars ($1,500) in
cost on an

14

 

individual basis or five thousand dollars ($5,000) in the aggregate over the Term of this Lease
(collectively, “Permitted Alterations”).

     (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, Landlord’s investment
advisor and agent, Allegis Realty Investors llc, 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
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. If requested by Landlord, Tenant will
pay, prior to the commencement of construction, an amount determined by Landlord necessary to
cover the costs of demolishing such Alterations and/or the cost of returning the Premises and the
Building to its condition prior to such Alterations.

     (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

15

 

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.

     (g) Landlord acknowledges that Tenant intends to paint and carpet the Premises following the
Commencement Date (the “Initial Alterations”). Tenant shall have the right to so perform the
Initial Alterations, subject to compliance with the terms and provisions of this Paragraph 13.
Landlord shall provide an allowance for the performance of the Initial Alterations in the amount
specified in the Basic Lease Information (the “Alterations Allowance”). The Alterations Allowance
shall be the maximum contribution by Landlord toward the cost of the Initial Alterations. Should
the actual cost of performing the Initial Alterations be less than the Alterations Allowance, the
Alterations Allowance shall be reduced to an amount equal to said actual cost. Landlord shall
disburse the Alterations Allowance to Tenant following the completion of the Initial Alterations,
the inspection of the same by Landlord and the review and approval by Landlord of invoices and
lien waivers to substantiate the cost of the Initial Alterations and the completion thereof in a
lien-free manner.

14. Maintenance and Repairs of Premises

     (a) Maintenance by Tenant. Throughout the Term, Tenant shall, at its sole expense, (i)
keep and maintain in good order and condition the Premises, and repair and replace every part
thereof, including glass, windows, window frames, window casements, skylights, interior and
exterior doors, door frames and door closers; interior lighting (including, without limitation,
light bulbs and ballasts), the plumbing and electrical systems located within and exclusively
serving the Premises, all communications systems serving the Premises, Tenant’s signage, interior
demising walls and partitions, equipment, interior painting and interior walls and floors, and
the roll-up doors, ramps and dock equipment, including, without limitation, dock bumpers, dock
plates, dock seals, dock levelers and dock lights located in or on the Premises (excepting only
those portions of the Building or the Project to be maintained by Landlord, as provided in
Paragraph 14(b) below), (ii) furnish all expendables, including light bulbs, paper goods and

16

 

soaps, used in the Premises, and (iii) keep and maintain in good order and condition, repair and
replace all of Tenant’s security systems in or about or serving the Premises and, except to the
extent that Landlord notifies Tenant in writing of its intention to arrange for such monitoring,
cause the fire alarm systems serving the Premises to be monitored by a monitoring or protective
services firm approved by Landlord in writing. 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.

     (b) Maintenance by Landlord. Subject to the provisions of Paragraphs 14(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, excluding the
plumbing and electrical systems located within and exclusively serving the Premises; 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 or other condition actually known to it which Landlord is required to repair, and
failure to so report such defects shall make Tenant responsible to Landlord for the costs and
expenses of repairing any additional damage or deterioration occurring after the date Tenant
obtains knowledge of such defective condition and any liability incurred by Landlord by reason
of Tenant’s failure to notify Landlord of such defective condition in a timely manner as
provided herein.

     (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.

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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 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, Landlord’s investment advisors and
agents from time to time, including, without limitation, Allegis Realty Investors llc, and
Landlord’s 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 equipment so insured.

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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 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
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.

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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. 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.

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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 gross
negligence or willful misconduct of Landlord), provided, however, that Landlord shall take
reasonable measures to the extent reasonably practical to minimize interruption of Tenant’s
business operations; 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:

          (i) 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 and the estimated time to complete such work 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.

          (ii) 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

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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 and the
estimated time to complete such work 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.

          (iii) 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 and
Tenant shall each have the right to terminate this Lease by written notice of such election given
to the other party within thirty (30) days after the Casualty Discovery Date, provided, however,
that Tenant shall have the right to terminate this Lease pursuant to this Paragraph 22(a)(iii) only
if Tenant’s use and occupancy of the Premises are materially interfered with as a result of such
damage.

     (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 and the estimated time to complete such work 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 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:

          (i) 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.

          (ii) 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.

          (iii) 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.

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

     (d) 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

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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.

     (e) In the event of repair and restoration as herein provided, the monthly installments of
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; 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 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.

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

     (g) 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

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such Condemnation, and a proportionate abatement shall be made to the 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 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 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 institute and pursue an
independent action against the condemning authority and 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 unreasonably withheld, 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) the proposed transfer is not an assignment
or a sublease under a previous assignment or an existing sublease. 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 (A) a fully completed Hazardous Materials
Disclosure Certificate for such assignee or subtenant in the form of Exhibit D hereto, and (B)
current and prior financial statements for the proposed assignee or subtenant, which financial
statements shall be audited to the extent available and shall in any

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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
thirty (30) days of receipt of the foregoing, to (1) terminate this Lease and release Tenant of all
further obligations under this Lease as of the commencement date stated in the proposed sublease or
assignment, (2) sublease or take an assignment, as the case may be, from Tenant of the interest, or
any portion thereof, in this Lease and/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 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 recapture the Premises, Tenant may, if it so
elects, by written notice to Landlord within ten (10) days after receipt of Landlord’s termination
or recapture notice, revoke its request for Landlord’s consent and, in such event, this Lease shall
continue in full force and effect as if Tenant had not requested Landlord’s consent. 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 to the Premises or portions
thereof other than Alterations permitted by Landlord in accordance with Paragraph 13 above.

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     (c) If Landlord approves an assignment or subletting as herein provided, Tenant shall pay to
Landlord, as Additional Rent, the net difference, if any received by Tenant, 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 ($5,000.00)) and reasonable and customary market- based leasing commissions, if
any, incurred by Tenant in connection with such assignment or sublease, which fees and commissions
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 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 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 of 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

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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 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.

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 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 43, and/or failure by Tenant to deliver to Landlord any financial statement
within the time period and in the manner required by Paragraph 41;

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     (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 Security Deposit or the Letter of Credit to the amounts
and within the time periods provided in Paragraphs 7 and 8 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 option, Landlord shall have the
right to require that Rent be paid by Tenant quarterly, in advance;

     (l) 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 (1)
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.

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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:

          (i) 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

          .(ii) 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

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

          (iv) 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 unamortized portion of the
Alterations Allowance (such Alterations Allowance to be amortized over the Term in the manner
reasonably determined by Landlord); plus

          (v) 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

          (vi) 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 (i) and (ii) 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 (iii) above, the “worth at the time of
award” is computed by discounting such amount at the discount rate of the Federal Reserve Bank

29

 

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.

     (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:

          (i) 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

          (ii) 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
tune, 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 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

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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.

     (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

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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.	 	Attorneys’ 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 28(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 or any of Tenant’s Property is assessed
and taxed with the Project or 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

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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, 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 and
nondisturbance. 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.

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	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 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

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(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 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 shall not
create a duty on Landlord’s part to inspect the Premises, or liability on the part of Landlord
for

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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 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 attorneys’ 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.

36

 

     (j) Notwithstanding anything in this Paragraph 33 to the contrary, Tenant shall not be
responsible for the clean up or remediation of, and shall not be required to indemnify Landlord
against any costs or liabilities attributable to, any Hazardous Materials placed on or about the
Premises (i) prior to the Commencement Date by third parties not related to Tenant or Tenant’s
Agents, or (ii) by Landlord at any time, except in either case to the extent that Tenant or
Tenant’s Agents have contributed to or exacerbated the presence of or conditions caused by such
Hazardous Materials or have failed to take reasonable actions to prevent such Hazardous Material
from becoming placed on or about the Premises.

     (k) 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.

	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 equal
to the greater of one hundred fifty percent (150%) of the fair market rental value for the Premises
as

37

 

determined by Landlord or two hundred percent (200%) 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 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,

38

 

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; provided that
the rules and regulations shall not be changed or revised or enforced in any discriminatory way by
Landlord, nor changed by Landlord in such a way as to unreasonably interfere with Tenant’s use of
the Premises. Such rules may include hut 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; provided; however, that in the event any other
tenant or occupant of the Building or the Project fails to comply with the rules and regulations,
and such non-compliance unreasonably interferes with Tenant’s use of the Premises, Landlord shall
use reasonable efforts to make such other tenants and/or occupants comply with the rules and
regulations. Landlord’s current rules and regulations are attached to this Lease as Exhibit C. 

	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

39

 

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.

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

40

 

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 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.

41

 

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.

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

	 	 	 	 	 	 	 	 	 	 	 
	Landlord: 	 	Harbor Investment Partners,  
	 	 	a California general partnership
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Aetna Life Insurance Company,
	 	 	 	 	a Connecticut corporation,
	 	 	 	 	its 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
	 	 
	 	 	 	 	 	 	 
	 	 	Name:	 	 Jeff Maggioncalda	 	 
	 	 	 	 	 	 	 	 	 
	 	 	Title:	 	President & CEO 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	Name:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

42

 

Exhibit A

Diagram of the Premises

 

 

Exhibit B

Commencement
and Expiration Date Memorandum

	 	 	 
	Landlord:

	 	Aetna Life Insurance Company
	 
	 	 
	Tenant:

	 	Financial Engines, Inc.
	 
	 	 
	Lease Date:

	 	December 7, 1999
	 
	 	 
	Premises:

	 	Located at 1830 Embarcadero Road, Palo Alto, California

     Tenant hereby accepts the Premises as being in the condition required under the Lease.

     The Commencement Date of the Lease is hereby established as                                         , 199       
             
and the Expiration Date is                                         ,                     .

	 	 	 	 	 	 	 
	Tenant:	 	Financial Engines, Inc.,  
	 	 	a California corporation
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

Approved and Agreed:

Landlord:

Harbor Investment Partners,

a California general partnership

	 	 	 	 	 	 	 	 	 
	By:	 	Aetna Life Insurance Company,	 	 
	 	 	a Connecticut corporation,	 	 
	 	 	its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Allegis Realty Investors llc,
	 	 	 	 	its Investment Advisor and Agent
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

Cynthia Stevenin
	 	 
	 

	 	 	 	 	 	Vice President	 	 

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 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.

C-1

 

     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.

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 Street,
Suite 1540
 San Francisco,
California 94105
 Attention:
Cynthia Stevenin
 Phone: (415)
538-4800

     Name of (Prospective) Tenant:      
     
                   
                      
                      
                      
                      
                      
                      
    

     Mailing Address:        
                      
                        
       
                      
                      
                      
                      
                      
                

 

     Contact Person, Title and Telephone Number(s):
                        
                
                          
                
                
                
                
         

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

      

     Address of (Prospective) Premises:     
                        
            
                        
                        
                        
                        
                        

     Length of (Prospective) initial Term:     
                        
            
                        
                        
                        
                        
                     

      

	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.

      

      

D-1

 

	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 o
	 
	 	 	 	 	 	 
	 

	 	Chemical Products
	 	Yes o
	 	No o
	 
	 	 	 	 	 	 
	 

	 	Other
	 	Yes o
	 	No o
	 
	 	 	 	 	 	 
	 

	 	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.

	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 o
	 
	 	 	 	 
	 

	 	If yes, please explain:	 	 
	 

	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 

D-2

 

	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 o

	 	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 o
	 
	 	 	 	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:
	 
	 	 	 	                  
   storm drain?                 
                sewer?
	 
	 	 	 	                  
   surface water?             
               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).

 

 

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

 

 

D-3

 

	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 o
	 	 
	 
	 	 	 	 
	 

	 	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.

	 	 	 	 	 
	 

	 	                  
   Spray booth(s)
	 	                
     Incinerator(s)
	 
	 	 	 	 
	 

	 	                     Dip tank(s)
	 	                     Other (Please describe)
	 
	 	 	 	 
	 

	 	                     Drying oven(s)
	 	                     No Equipment Requiring Air Permits
	 
	 	 	 	 
	 

	 	If yes, please describe:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 

	 	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.

D-4

 

	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 o
	 
	 	 	 	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 o
	 	 
	 
	 	 	 	 
	 

	 	If yes, please explain:	 	 
	 

	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 

	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 o
	 
	 	 	 	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.

 

 

 

D-5

 

	 	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 o
	 
	 	 	 	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:

 

 

 

	 	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 o
	 
	 	 	 	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,

D-6

 

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 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]                     , 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.

(Prospective) Tenant:

Financial Engines, Inc., 

a California corporation

	 	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:

	 	 

	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 

	 	 

D-7

 

First Amendment to Lease

     This First 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 December 7, 1999 (the
“Lease”), which covers certain premises consisting of approximately thirty-two thousand seven
hundred forty-two (32,742) rentable square feet (the “Premises”) in the building located at 1830
Embarcadero Road, Palo Alto, California. 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
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 “1804
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 “1804 Premises”).

     C. The Lease and the 1804 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.

1

 

2. Base Rent

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

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Monthly	 	Monthly
	Period	 	Sq. Ft.	 	Base Rate	 	Base Rent
	September 1, 2006 – August 31, 2007

	 	 	32,742	 	 	x$1.55
	 	= $50,750.10
	September 1, 2007 – August 31, 2008

	 	 	32,742	 	 	x$1.60
	 	= $52,387.20
	September 1, 2008 – August 31, 2009

	 	 	32,742	 	 	x$1.65
	 	= $54,024.30
	September 1, 2009 – August 31, 2010

	 	 	32,742	 	 	x$1.70
	 	= $55,661.40
	September 1, 2010 – August 31, 2011

	 	 	32,742	 	 	x$1.75
	 	= $57,298.50
	September 1, 2011 – August 31, 2012

	 	 	32,742	 	 	x$1.80
	 	= $58,935.60

     (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.

3. Additional Rent.

     Tenant shall continue to pay Additional Rent to Landlord in accordance with Paragraph 4(b) of
the Lease. Nothing contained herein shall be deemed to modify Tenant’s obligations under Paragraph
4(b).

4. Improvements to Premises and 1804 Premises

     (a) Tenant has notified Landlord of Tenant’s desire to make Alterations to the Premises and
the 1804 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 Premises (the “Server Room”) shall be replaced
with a wall;

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

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

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

2

 

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

          (viii) Such additional improvements as may be requested by Tenant and approved by Landlord in
accordance with the first sentence of 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.

5. Maintenance and Repair of Roof

     Promptly following the execution of this Amendment, Landlord shall cause Landlord’s roofing
consultant (the “Consultant”) to perform an inspection of the roof and to provide Landlord with its
recommendations for necessary repairs to remedy the past leaks experienced by Tenant.
Notwithstanding the foregoing, if the Consultant has performed an inspection of the roof within the
one hundred eighty (180) day period prior to the Effective Date, then Landlord may rely on the
results of that inspection and the Consultant shall not be required to perform a new inspection at
this time. Landlord shall perform the repairs recommended by the Consultant as soon as reasonably
practicable following the Effective Date.

6. 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

3

 

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.

7. 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
1804 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 1804 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 1804 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 Lease and the 1804 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 1804
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
1804 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 1804 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 1804 Lease. In the event Landlord transfers its
interest in the Lease and the 1804 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

4

 

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 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 1804 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 7(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 7(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 1804 Lease shall be of no
further force and effect.

5

 

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.

     (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

6

 

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 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

7

 

(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 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

8

 

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”). 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

9

 

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.

10. 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

10

 

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 NAI BT 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.

     (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.

11

 

     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 Sims
 	 
	 	 	Name:  	RAYMOND J. SIMS 	 
	 	 	Title:  	EVP & CFO 	 
	 

12exv10w1

EXHIBIT 10.1

InterDigital

Annual Employee Bonus Plan

Purpose

This Annual Employee Bonus Plan (“Plan”) is designed to provide an effective means to motivate and
compensate eligible employees, on an annual basis, through cash and/or stock award bonuses based on
the achievement of business and individual performance objectives during each calendar year (“Plan
Year”). The Plan is intended to be the Company’s primary vehicle for the granting of bonuses.
However, the Company may, in certain limited circumstances, grant bonuses outside of this Plan, in
the sole discretion of the Company.

The compensation contemplated under this Plan is considered “pay for performance,” in that any
payout under the Plan is subject to the achievement of specific performance goals by the Company
and by each individual during the Plan Year. The Company believes that such compensation can be a
highly effective form of compensation that can enhance the employer-employee “stakeholder”
relationship. In addition, the Company hopes that by providing short-term incentive compensation,
the Company will motivate and increase the retention rate among its employees, which, in turn, will
enhance the Company’s long-term value.

Who Is Eligible?

All regular full-time or part-time employees 1 will be eligible to receive a bonus under
the Plan, unless an employee: (i) is not working actively at the time of the payout of the bonus or
at least as of March 15th of the year following the end of the Plan Year (unless such person was
involuntarily terminated other than for intentional wrongdoing after the end of the Plan Year, but
before the bonus was paid), (ii) was working actively for the Company for less than ninety (90)
days during the Plan Year, (iii) received an individual performance appraisal rating of less than
“2.75” (Meets Job Requirements) for the Plan Year, or (iv) was involuntarily terminated for
unsatisfactory performance or misconduct, such determination to be made in the C.E.O.’s sole
discretion (or the Compensation Committee in the case of Section 16 Officers) based upon documented
or other objective substantiation.

The Compensation Committee may grant exceptions to the above eligibility criteria in its sole
discretion. The Chief Administrative Officer may grant exceptions to the above eligibility criteria
for non-executive employees who have worked through the end of the third quarter of a Plan Year,
provided, however, that any bonus so awarded may not exceed $25,000. In addition, employees who
meet the eligibility requirements set out above but were not regular full-time or part-time
employees for the full Plan Year will be paid any bonus on a pro rata basis. The pro rata amount
will be calculated based on the employee’s income, i.e., base salary / regular pay and other
eligible earned income, if applicable, paid during the Plan Year.

How Does the Plan Work?

Each employee is assigned a target bonus. The target bonus is a percentage of the employee’s annual
base salary in effect as of the end of the Plan Year. If the Company or Department achieves certain
business performance results and the employee achieves certain individual goals, then the employee
will receive the target bonus. Company or Department business performance results will be measured
based on either the Company’s Annual Goals, as

 

			
	1	 	“Regular full-time” and “regular part-time” employees
are defined in the Company’s employee handbook and
specifically exclude “seasonal/casual employees” (which
are also defined in the Company’s employee handbook).
	 
	2	 	Employees who do not work a full Plan Year because they
were out of work on an approved leave of absence for
part of the plan year will be paid any bonus on a pro
rata basis by calculating the bonus based on the actual
amount of eligible base income earned during the Plan
Year. If the Employee is paid for part of the leave
through PTO or other eligible accrued form of income
(not including STD or worker’s compensation payments),
this income will be included in the base salary
calculation.

 

 

approved by the Compensation Committee, for the C.E.O., C.F.O, President of the Company’s
patent holding subsidiaries and other Sr. Officers or based on Departmental Goals, as approved by
the Department Head and the C.E.O, for all other levels of employees. If the actual results of the
Company or Department business performance for the year exceed or fall short of the targets, then
the target bonus will be adjusted up or down, depending upon the level of business and individual
achievement. The specific adjustments and an example of how the bonus is calculated are described
below.

The business performance goals will be determined by the Compensation Committee for the C.E.O.,
C.F.O, President of the Company’s patent holding subsidiaries and other Sr. Officer levels, and the
business performance goals for each Department will be determined by the Department Head and C.E.O
and will be communicated to the employees, normally in the first quarter of each Plan Year. The
assessment of individual performance goals will be accomplished through the employee’s annual
performance rating. The business and individual performance goals are intended to be reasonable
“stretch” goals.

The impact of actual business/departmental or individual performance during the Plan Year on the
bonus paid varies between positions, with the bonus for the Company officers and senior level
management employees being more dependent upon overall Company/Department performance, while the
bonuses for lower level management and non-management employees being more dependent upon
individual performance. The relative weighting of the business/departmental and individual
performance goals in the calculation of the total bonus payout is based on the employee’s position
within the Company and their ability to directly impact and be held accountable for the
Company’s/Department’s overall performance.

The Annual Target Bonus for each band, and the associated weighting factors, are as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Percentage of	 	 
	Band	 	 	 	 	 	Bonus	 	Percentage of
	(In the event a Participant changes	 	 	 	 	 	Related to	 	Annual
	bands during the Plan Year, the	 	 	 	 	 	Business	 	Target Bonus
	Annual Target Bonus will be	 	Annual Target	 	Performance	 	Related to
	calculated based on the Participant's	 	Bonus	 	(either Company	 	Individual
	actual band at year-end)	 	(% of base salary)	 	or Departmental)	 	Performance
	C.E.O.
	 	 	75	%	 	 	75	%	 	 	25	%
	C.F.O. / President of patent holding subsidiaries
	 	 	50	%	 	 	75	%	 	 	25	%
	Other Sr. Officer
	 	 	40	%	 	 	75	%	 	 	25	%
	Functional VP
	 	 	35	%	 	 	75	%	 	 	25	%
	Senior Director
	 	 	25	%	 	 	60	%	 	 	40	%
	Director / Functional Equivalent
	 	 	20	%	 	 	60	%	 	 	40	%
	Senior Manager / Functional Equivalent
	 	 	15	%	 	 	40	%	 	 	60	%
	Manager / Functional Equivalent
	 	 	10	%	 	 	40	%	 	 	60	%
	Non-Management
	 	 	4%/6%/8	%	 	 	 	 	 	 	 	 
	 
	 	(based on grade level)	 	 	25	%	 	 	75	%

In each Plan Year, the portion of the Annual Target Bonus related to business performance may
be allocated among a number of business goals.

How Do Actual Business and Individual Performance Affect the Bonus to be Paid?

As described above, the bonus consists of two components: the bonus attributable to business
/departmental performance and the bonus attributable to individual performance. The impact of
actual results as compared to business/departmental and individual goals on any bonus to be paid is
described below.

Business Goals . The calculation of the bonus payout for the business performance will be
based upon either the Company’s actual business results measured against the goals set by the
Compensation Committee (for the C.E.O., C.F.O, President of the Company’s patent holding
subsidiaries and other Sr. Officers) or the Department’s actual business results measured against
the goals set by the Department (for all other bands). If the Company or Department achieves a
specified goal, then 100% of the bonus related to that business goal will be awarded. If actual
results deviate from established business goals, then the bonus payout amounts will be determined
as follows.

Results above the goal : If the Company/Department performance exceeds the established
business goals by a certain percentage (e.g., actual Company earnings exceed an established goal by
ten percent), then the payout of that portion of the annual target bonus related to that business
goal will be increased by that percentage amount above the goal,

 

 

up to a maximum of a 100% increase over the bonus associated with that goal. Thus, if actual
Company/Department performance on a particular goal exceeds the goal by 10%, then the target bonus
associated with that goal will be increased by 10% (see below):

	 	 	 	 	 
	 	 	Percentage
	Results	 	Payout
	101%
	 	 	101	%
	ò
	 	 	ò	 
	200%
	 	 	200	%

 Results below the goal : If the actual business performance falls short of an
established goal by a certain percentage (e.g., actual Company earnings are 10% less than the
earnings goal), then the bonus associated with that business goal will be decreased by that
percentage of the shortfall, with no bonus being payable for a goal if the goal is missed by more
than 20%. The scale for results below the target is below:

	 	 	 	 	 
	 	 	Percentage
	Results	 	Payout
	100%
	 	 	100	%
	90%
	 	 	90	%
	80%
	 	 	80	%
	79%
	 	 	0	%

The Compensation Committee, in its sole discretion, may determine that a business goal has
been substantially met or has been met to a degree warranting a higher payout than would otherwise
be calculable under this Plan. For example, the Compensation Committee may determine that one-time
charges should be disregarded in determining the payout under an earnings performance goal.

Individual Performance . The evaluation of the individual performance is the responsibility
of the employee’s supervisor using the Company’s performance evaluation system. The payout of the
bonus related to individual performance will be based on the employee’s individual appraisal rating
given pursuant to the performance evaluation, as follows:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Percentage
	 	 	 	 	 	 	Payout of
	 	 	 	 	 	 	Bonus Related
	 	 	 	 	 	 	to
	 	 	 	 	 	 	Individual
	Appraisal Rating	 	 	 	 	 	Performance
	4.85 — 5.0
	 	(Outstanding)	 	 	150	%
	4.70 — 4.84
	 	 	( ” 	)	 	 	145	%
	4.55 — 4.69
	 	(Exceeds Job Requirements)	 	 	140	%
	4.40 — 4.54
	 	 	( ” 	)	 	 	135	%
	4.25 — 4.39
	 	 	( ” 	)	 	 	130	%
	4.10 — 4.24
	 	 	( ” 	)	 	 	125	%
	3.95 — 4.09
	 	 	( ” 	)	 	 	120	%
	3.80 — 3.94
	 	 	( ” 	)	 	 	115	%
	3.65 — 3.79
	 	(Meets Job Requirements)	 	 	110	%
	3.50 — 3.64
	 	 	( ” 	)	 	 	105	%
	3.35 — 3.49
	 	 	( ” 	)	 	 	100	%
	3.20 — 3.34
	 	 	( ” 	)	 	 	95	%
	3.05 — 3.19
	 	 	( ” 	)	 	 	90	%
	2.90 — 3.04
	 	 	( ” 	)	 	 	85	%
	2.75 — 2.89
	 	 	( ” 	)	 	 	80	%
	2.74 ò
	 	(Needs Improvement/Unsatisfactory)	 	 	0	%

When Will the Bonus Be Paid?

Bonuses will normally be paid under the Plan between February 15 and March 31 of the year following
each Plan Year.

 

 

An Example of How the Bonus Is Calculated

     Assume an entry-level management employee is earning a base salary of $50,000 and is employed
for the full Plan Year. The employee has an annual target bonus of 10% of base salary ($5,000). The
Department previously established two business targets of equal weight for the Plan Year. The
actual results for the first goal were 4% below the goal; the actual results for the second goal
were 2% above the goal. The employee achieves an individual performance appraisal of “3.3”. The
employee’s bonus would be calculated as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	A	 	 	 	 	 	 
	 	 	Percentage of	 	 	 	 	 	 
	 	 	Bonus Relating	 	B	 	 	 	 
	 	 	to	 	Result as a	 	C	 	 
	 	 	Performance	 	Percentage	 	Percentage	 	A x C
	Performance Factor	 	Factor	 	of Goal	 	Payout	 	Weighted Result
	Goal One
	 	 	 	 	 	 	 	 	 	 	96	%	 	 	19.00	%
	 
	 	 	20	%	 	 	96	%	 	(1 to 1 ratio)	 	 	(96% x 20	%)
	Goal Two
	 	 	 	 	 	 	 	 	 	 	102	%	 	 	20.40	%
	 
	 	 	20	%	 	 	102	%	 	(1 to 1 ratio)	 	 	(102% x 20	%)
	Individual Performance
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	57	%
	 
	 	 	60	%	 	 	95	%	 	 	95	%	 	 	(60% x 95	%)
	Total
	 	 	100	%	 	 	N/A	 	 	 	N/A	 	 	 	96.40	%
	Bonus Calculation	 	Base Salary x Weighted Result x Annual Target

Bonus = Bonus to be paid

$50,000 x 96.40% x 10% = $4,820	 	 	 	 

 Who Will Receive Bonus Payments in Common Stock?

For the C.E.O., C.F.O, President of the Company’s patent holding subsidiaries, other Sr. Officer
and Functional Vice President bands or technical equivalent positions (i.e., “Fellow”), the
Compensation Committee may, in its discretion, pay up to 30% of the bonus in restricted common
stock pursuant to the 2009 Stock Incentive Plan, as amended. If restricted common stock is to be
paid in lieu of cash, the number of shares to be granted will be calculated as follows:

	 	 	 	 	 
	 

	 	Number of Shares =
	 	Up to 30% of Bonus

Closing Common Stock Price on the Date Prior to the
Grant as Reported in the Wall Street Journal

The Company will reimburse the employee, on a grossed-up basis, for any tax liability
(including, in the event of a Change of Control, any excise tax liability under Section 4999 of the
Internal Revenue Code, as amended, or any successor provision that may apply to such restricted
stock payment) associated with the grant of restricted stock. Tax liability will be calculated
using maximum tax rates. The stock will be registered but will be subject to a two-year holding
period. The Company will not impose any other material restrictions (other than those set out in
the 2009 Stock Incentive Plan or required by law) or forfeiture provisions, including no forfeiture
provisions applicable to termination of employment except in the case of termination during the
two-year holding period for intentional wrongdoing.

Miscellaneous

The establishment of this Plan, any provisions of this Plan, and/or any action of the Compensation
Committee or any Company officer with respect to this Plan, does not confer upon any employee the
right to continued employment with the Company. The Company reserves the right to dismiss any
employee at will (at any time, with or without prior notice, with or without cause), or otherwise
deal with an employee to the same extent as though the Plan had not been adopted.

The Company may, at its discretion, provide for any federal, state or local income tax withholding
requirements and Social Security or other tax requirements applicable to the accrual of payment of
benefits under the Plan, and all such determinations shall be final and conclusive.

Payment of bonuses awarded under this Plan shall be made no later than March 15 of the year
following the Plan Year in which the services relating to such bonus award were rendered. The
resolution of any questions with respect

 

 

to payments and entitlements pursuant to the provisions of this Plan shall be determined by
the Compensation Committee, in its sole discretion, and all such determinations shall be final and
conclusive.

This Plan may be terminated or revoked by the Compensation Committee, at its sole discretion, at
any time and amended by the Compensation Committee, at its sole discretion, from time to time
without the approval of any employee, provided that such action does not reduce the amount of any
Bonus payment below an amount equal to the amount that would have been payable to the eligible
employee with respect to the Plan Year in which the termination, revocation or amendment of the
Plan occurs under the terms of the Plan as in effect immediately prior to such termination,
revocation or amendment, applied on a pro rata basis. The Compensation Committee may delegate the
authority to amend this Plan to one or more officers of the Company, provided, however, that any
amendment of this Plan that is a “material amendment” (as determined pursuant to NASDAQ Stock
Market Rule 5635(c) and the interpretive material thereunder) must be approved by the Compensation
Committee or by a majority of the Company’s independent directors, as defined for purposes of such
rule.

September 2009

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