10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2004
	or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 0-25871

Informatica Corporation

(Exact name of registrant as specified in its charter)

Delaware	77-0333710
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
100 Cardinal Way Redwood City, California	94063
(Address of principal executive offices)	(Zip Code)

(650) 385-5000

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.001 per share

Preferred Share Purchase Rights, par value $0.001 per share

          Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes þ          No o

          Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     þ

          Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).     Yes þ          No o

          As of June 30, 2004, there were 86,071,065 shares of the registrant’s Common Stock outstanding. The aggregate market value of the Common Stock held by non-affiliates of the registrant (based on the closing price for the Common Stock on the Nasdaq National Market on June 30, 2004) was $629,195,437. Shares of the registrant’s Common Stock held by each executive officer and director have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

          As of January 31, 2005, there were 87,230,163 shares of the registrant’s Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

      Portions of the registrant’s Proxy Statement for the registrant’s 2005 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K to the extent stated herein. The Proxy Statement will be filed within 120 days of registrant’s fiscal year ended December 31, 2004.

INFORMATICA CORPORATION

ANNUAL REPORT ON FORM 10-K

Year Ended December 31, 2004

		Page
PART I
Item 1.	Business		2
Item 2.	Properties		9
Item 3.	Legal Proceedings		10
Item 4.	Submission of Matters to a Vote of Security Holders		11
	Executive Officers of the Registrant		11
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		12
Item 6.	Selected Consolidated Financial Data		13
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
	Risk Factors		31
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		42
Item 8.	Financial Statements and Supplementary Data		43
	Report of Management on Internal Control over Financial Reporting		45
	Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting		46
	Report of Independent Registered Public Accounting Firm		47
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		80
Item 9A.	Controls and Procedures		80
Item 9B.	Other Information		81
PART III
Item 10.	Directors and Executive Officers of the Registrant		81
Item 11.	Executive Compensation		81
Item 12.	Security Ownership of Certain Beneficial Owners and Management		81
Item 13.	Certain Relationships and Related Transactions		81
Item 14.	Principal Accountant Fees and Services		81
PART IV
Item 15.	Exhibits, Financial Statement Schedules		82
SIGNATURES			84
EXHIBIT 10.28
EXHIBIT 10.29
EXHIBIT 10.30
EXHIBIT 21.1
EXHIBIT 23.2
EXHIBIT 31.1
EXHIBIT 31.2
EXHIBIT 32.1

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PART I

Item 1. Business

Overview

      Informatica Corporation is a leading provider of enterprise data integration software that handles a broad range of enterprise-wide integration initiatives including: data warehousing, data migration, data consolidation, “single-view” or master data management and data synchronization. The Informatica platform helps enable and accelerate broad data integration initiatives, allowing enterprises to reduce information technology (IT) costs and complexity, harness new technologies and ensure a single, enterprise-wide view of information. Using our products, a business user gains a holistic and consistent view of their enterprise information, IT management can be more responsive to the business demands for information — despite dramatically increasing data volumes — and IT developers benefit from reduced time to results.

      Over the last two decades, companies have made significant investments in process automation resulting in islands of data created by a variety of packaged transactional applications — such as Enterprise Resource Planning (ERP), Customer Relationship Management (CRM) and Supply Chain Management (SCM) software — and bespoke operational systems deployed in various departments. The ultimate goal of deploying these applications was to make businesses more efficient through automation. However, these applications have further increased data fragmentation throughout the enterprise because they generate massive volumes of data in disparate software systems that were not designed to share data.

      Organizations are now finding that the strategic value of information technology goes far beyond process automation. Organizations of all sizes require information to run their business and most information is derived from data. Operational activities generate a constant flow of data inside and outside the enterprise, but unless the various data streams can be integrated, the amount of real, useful business information derived from such data is limited. Companies are realizing that they must integrate data to support their business processes such as providing a single view of the customer, migrating away from legacy systems to new technology or consolidating multiple instances of an ERP system.

      With the robust enterprise data integration platform that Informatica offers, business and IT decision makers can facilitate sophisticated information delivery across the enterprise. We address this need with the Informatica enterprise data integration platform. Our products are designed to access, transform and integrate data from a large variety of enterprise systems and deliver this data to other operational systems, relational systems, real-time business processes, and to the business user for decision making.

      We have over 2,100 customers from a wide variety of industries ranging from high technology and financial services, to manufacturing and telecommunications. We market and sell our software and services through our global direct sales force in the United States, Canada, France, Germany, the Netherlands, Switzerland, the United Kingdom and Japan. We maintain relationships with a variety of strategic partners to jointly develop, market, sell, recommend and/or implement our solutions. We also have relationships with distributors in various regions, including Europe, Asia-Pacific, Australia, Japan and Latin America, who sublicense our products and provide service and support within their territories. More than 25 independent software vendors, including several of our strategic partners, have licensed our technology for inclusion in their products.

      We began selling our first products in 1996. Through December 31, 2004, substantially all of our revenues have been derived from our data integration products such as PowerCenter, PowerMart, PowerConnect and related services, and to a lesser extent, business intelligence products and related services. We have incurred significant net losses since our inception, including a net loss of $104.4 million in 2004. Although we were profitable in 2003, we may not consistently achieve profitability in the future. See “Risk Factors — We have a limited operating history and a history of losses, which makes it difficult to evaluate our operations, products and prospects for the future.” As of December 31, 2004, we had an accumulated deficit of $195.1 million.

      Our corporate headquarters are located at 100 Cardinal Way, Redwood City, California 94063, and our telephone number at that location is (650) 385-5000. We can be reached at our Web site at

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www.informatica.com; however, the information in, or that can be accessed through, our Web site is not part of this report. We were incorporated in California in February 1993 and reincorporated in Delaware in April 1999.

      A copy of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are available, free of charge, on our Web site as soon as reasonably practicable after such material is electronically filed with the Securities and Exchange Commission (SEC).

Our Products

      Our products are designed to help our customers simplify their (IT) infrastructure by providing a single platform for all enterprise data integration initiatives.

      Our data integration platform is designed to empower the business user with holistic information, reduces the cost and complexity of enterprise IT infrastructure for the IT manager, provide increased productivity to IT practitioners to improve their responsiveness to the business, and deliver those capabilities through a service-oriented architecture to enable the IT architect to maximize existing and future technical environments.

      For the business user, our products deliver complete, accurate and timely information. Our products provide near-universal data access delivering the unique ability to access batch and changed data from the mainframe, legacy and relational systems and deliver that data at the frequency demanded by the business. In addition, our products provide built-in data profiling and rich transformations to ensure accuracy of information with an end-to-end audit trail to ensure data integrity to the business.

      For the IT manager, our products reduce risk and cost by providing a highly secure, scalable and performant environment, with the flexibility to deploy on a wide variety of operating systems including Windows, Unix, Linux, 64-bit, and mainframe systems. With the latest releases of our software, we facilitate complete user authentication, granular privacy management and encryption in data transport. We deliver near-linear scalability, fully parallel processing, and a unique ability to deploy a set of business logic across a heterogeneous grid of operating platforms to accommodate the most demanding of large and growing global organizations. For the IT architect, our products are based on a service-oriented architecture that is metadata-driven for flexibility and web services enablement. Our products are fully extensible though open APIs and are designed to be interoperable to accommodate existing IT standards and future IT architectures.

      For the IT practitioner, our products provide a highly productive environment with complete version control and configuration management that enables individuals to work collaboratively across teams, multiple projects, and geographically disperse locations including on-shore/off-shore and in-source/out-source models. In addition, our metadata-driven environment accelerates initial design and evolution by providing data profiling, search, impact analysis, and high reuse of development assets via our patented global and local object management technology so that work can be “designed once, deployed anywhere” across a network of installations.

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      Products included in the Informatica platform as of December 31, 2004 are summarized in the table below:

Product	Description	Benefit
Informatica PowerCenter	PowerCenter is a leading enterprise data integration product for accessing, integrating and delivering data to systems, people or processes.	PowerCenter provides companies a single environment delivering cost-effective and broad support for all data integration initiatives.
Informatica PowerExchange	PowerExchange is scalable, non-invasive software for access to changed or bulk data — in real time or batch mode — from complex, legacy and mainframe systems.	PowerExchange helps companies cost- effectively and efficiently access the vast amounts of enterprise data on mainframes for mission-critical business processing.
Informatica SuperGlue	SuperGlue is software that provides the ability to catalog, view and analyze metadata assets.	SuperGlue helps companies manage the impact of changes and audit the accuracy of data in their data integration initiatives.
Informatica PowerAnalyzer	PowerAnalyzer is software designed to improve the performance and efficiency of data integration and data delivery processes through reporting capabilities.	PowerAnalyzer helps companies facilitate the development and management of data integration and data delivery initiatives to expedite the time to value.

      On February 22, 2005, we announced the release of PowerCenter Advanced Edition. This edition of PowerCenter includes two previously at-cost options, team-based development and server grid, as well as two previously separate products, PowerAnalyzer and SuperGlue. We also announced on this date that we are removing these two options and these two separate products from our price list. PowerCenter Advanced Edition is priced higher than the standard edition of PowerCenter but less than the aggregate price of all components previously sold separately.

Services

      We offer a comprehensive set of professional services, including product-related customer support, consulting services and education services. Through our technical support centers in the United States, the United Kingdom, the Netherlands and India, we offer 24x7 technical support on a global basis to customers and partners over the phone, via e-mail and online via Informatica’s Customer Portal “my.informatica.com’. Our consulting services range from designing and deploying our products to data transformation and performance tuning and implementing best practices for Integration Competency Centers. Our consulting strategy is to provide specialized expertise on our products to enable our end user customers and strategic partners to successfully implement our integration products. We also offer a comprehensive curriculum of product-related education services to help our customers and strategic partners build proficiency in using our products. In 2001, we established the Informatica Certification Program to create a database of expert professionals with verifiable skills in the design and administration of Informatica-based systems.

      As part of our comprehensive services offering, our professional services consultants use a standard methodology/framework — Informatica Velocity — for the implementation of our data integration projects.

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Informatica Velocity covers each of the major project phases, including manage, architect, design, build, deploy, and operate. Where applicable, Informatica Velocity includes best practices and techniques culled from our collective experience assisting our clients in thousands of implementations. Informatica Velocity represents our goal of using Informatica Professional Services field experience to ensure successful implementations of our products.

Our Strategic Partners

      Our strategic partners include industry leaders in enterprise software, computer hardware and systems integration. We offer a comprehensive strategic partner program for major companies in these areas so that they can provide sales and marketing leverage, have access to required technology and provide complementary products and services to our joint customers. Our systems integrator partners that generated over $1,000,000 each in license and services orders in 2004 were Accenture, BearingPoint, Capgemini, Core Integration Partners, EDS, IBM, IPI Grammtech, Northrop Grumman, Logan Britton and Wipro. Our current OEM Partners that generated over $500,000 each in license royalties for us in 2004 are DecisionPoint Applications, i2 Technologies and Siebel Systems.

Our Customers

      Our customers include leading companies from a wide range of industries and major governmental and educational institutions. A representative sampling of our customers who have each purchased at least $750,000 of our software and related services since January 2000 includes:

		Manufacturing/
Financial Services	Insurance	HighTech
Abbey National ABN AMRO American Express Bank Of America Barclays Canadian Imperial Bank of   Commerce Cendant Charles Schwab Credit Suisse First Boston Deutsche Bank Goldman Sachs JP Morgan Manulife Financial Mass Mutual Life Insurance Merrill Lynch Mitsubishi Tokyo Financial Group Morgan Stanley Northwestern Mutual Financial   Network Prudential Financial Royal Bank of Scotland Thomson Corporation UBS Washington Mutual	Aegon Anthem AXA Blue Cross/Blue Shield California Medi-CAL Canada Life Guardian Life Insurance   Company of America Hartford Financial Services ING MetLife Nationwide Mutual   Insurance Company State Farm Mutual Automobile   Insurance Company Thrivent Financial   for Lutherans	Agilent Technologies Avnet Boeing Brocade Communications Systems Cisco Systems ConAgra Foods DaimlerChrysler General Electric Hewlett-Packard Intuit Lockheed Martin Motorola R.R. Donnelley & Sons Philips Siemens Solectron STERIS Corporation Toyota Verisign Volkswagen

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	Pharmaceuticals/	Retail/Consumer
Communications	Chemicals	Packaged Goods
Alltel AT&T Bell South Cingular Wireless Deutsche Telekom Lucent Technologies MCI SBC Communications Vodafone Group Verizon Communications	Abbott Laboratories Amgen AstraZeneca Bristol-Meyers Squibb Eli Lilly GlaxoSmithKline Merck & Company Pfizer Roche	Best Buy CVS Deutsche Woolworth Gus HE Butt Grocery Nestlé Staples

Utilities/Energy	Government	Other
American Electric Power BP Enron Electricite de France Florida Power & Light Pacific Gas & Electric Public Service Enterprise Group Waste Management Williams Companies	Deutsche Post Federal Bureau of Investigation Government of Israel Internal Revenue Service La Poste National Institute of Health US Department of Homeland   Security US Customs Service US Postal Service US Army US National Security Agency	Carlson Holdings Cerner Corp. Dun & Bradstreet Federal Express First Data Gtech Holdings KPMG Marriot International PricewaterhouseCoopers Tribune Company University of California University of Illinois

Our Market Strategy

      Expand from Data Warehousing to Broad Enterprise Data Integration. Our goal is to be the market leader in the enterprise data integration market that includes data warehousing, data migration, consolidation, “single-view” or master data management and synchronization. Our strategy is to capitalize on this opportunity by leveraging our success, knowledge and the strength of our proven products that have helped our customers deploy thousands of large data warehouses and data integration initiatives. We address the growing enterprise data integration market with our mature products that we believe are well-suited to rapidly deliver value to our customers.

      Evolve Departmental Projects to Enterprise Standardization via Integration Competency Centers (ICCs). As customers undertake multiple data integration projects, they are increasingly moving from individual departmental projects to centralized ICCs managing enterprise integration initiatives. ICCs are a shared IT function that enable project teams to complete data integration efforts rapidly and efficiently by following best-practice processes, leveraging the expertise of staff with integration-specific roles, and utilizing standard technologies. Informatica has been chosen by many customers as standard technology for centralized ICCs and we will continue to promote the value of ICCs among our customers for broad adoption.

      Focus on Horizontal Data Integration Solutions: Migration and Consolidation. The data migration phase of an application implementation, upgrade, or instance consolidation project can extend up to multiple years, is often underestimated in complexity and cost, and requires rigorous project planning and significant manual effort. Detailed project planning is required because enterprises have traditionally underestimated the challenges involved in the data migration process, including the high cost of system maintenance, administra-

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tion and development. Organizations now recognize the need for an enterprise data integration platform to automate the data migration and consolidation of IT systems. We, along with our strategic system integrator partners, believe we can address this growing requirement by providing customers with a tailored solution including software and services to speed the deployment of migration and consolidation initiatives.

      Launch Vertical Solutions: Financial Services. We are increasing our focus on the financial services market. With 18 of the 20 world’s largest financial organizations as current customers, Informatica has already established a leadership position within this market. Informatica has increased its sales, marketing and alliances resources tailored to meet the needs of a growing market demand in this segment. In conjunction with our strategic partners, we offer business solutions such as risk management, compliance and “single view” of the customer for leading financial institutions.

      Leverage Significant Installed Customer Base and Community of Developers. We have an installed customer base that spans a wide range of industries. As of December 31, 2004, over 2,100 customers around the world and 82% of the Fortune 100 companies have licensed our products. The Informatica Developer Network, created in 2001, has grown to over 20,000 members in over 95 countries which use our products to build their own data warehouses and data integration solutions. Our success at each customer site serves to strengthen our brand awareness while providing an opportunity to up-sell and cross-sell additional products and services.

      Increase Strong Base of Strategic Partners. We have alliances and strategic partnerships with leading enterprise software providers, systems integrators and hardware vendors. These alliances provide sales and marketing leverage and access to required technology, while also providing complementary products and services to our joint customers. More than 25 companies now OEM our core products. In sum, more than 300 companies market and resell our products around the world.

Research and Development

      As of December 31, 2004, we employed 238 people in our research and development organization. This team is responsible for the design, development and release of our products. The group is organized into four disciplines: development, quality assurance, documentation and product management. Members from each discipline, along with a product-marketing manager from our marketing department, form focus teams that work closely with sales, marketing, services, customers and prospects to better understand market needs and user requirements. These teams utilize a well-defined software development methodology that we believe enables us to deliver products that satisfy real business needs for the global market while also meeting commercial quality expectations.

      When appropriate, we also utilize third parties to expand the capacity and technical expertise of our internal research and development team. On occasion, we have licensed third-party technology. We believe this approach shortens time-to-market without compromising competitive position or product quality, and we plan to continue to draw on third-party resources as needed in the future.

      In 2004, Informatica continued to make use of a small offshore development team based in the Netherlands for work on portions of our PowerAnalyzer technology. Also in 2004, we expanded our offshore development to India to do quality assurance and development on our products. This offshore development is intended to increase development productivity. Our research and development expenditures were $51.3 million in 2004, $47.7 million in 2003 and $45.8 million in 2002.

Sales, Marketing and Distribution

      We market and sell software and services through both our direct sales force and indirect channel partners in the United States as well as Canada, France, Germany, the Netherlands, Switzerland, the United Kingdom, Japan and other regions around the world. As of December 31, 2004, we employed 296 people in our sales and marketing organization worldwide.

      Marketing programs are focused on creating awareness as well as lead generation and customer references for our products. These programs are targeted at key executives such as chief information officers,

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vice presidents of information technology, enterprise architects and vice presidents of specific functional areas, such as marketing, sales, service, finance, human resources, manufacturing, distribution and procurement. Our marketing personnel engage in a variety of activities, including positioning our software products and services, conducting public relations programs, establishing and maintaining relationships with industry analysts, producing product collateral and generating qualified sales leads.

      Our global sales process consists of several phases: lead generation, opportunity qualification, needs assessment, product demonstration, proposal generation and contract negotiation. Although the typical sales cycle requires three to six months, some sales cycles have lasted substantially longer. In a number of instances, our relationships with systems integrators and other strategic partners have reduced sales cycles by generating qualified sales leads, making initial customer contacts, assessing needs prior to our introduction to the customer and endorsing our products to the customer prior to their product selection. Also, partners have assisted in the creation of presentations and demonstrations, which we believe enhances our overall value proposition and competitive position.

      In addition to our direct sales efforts, we distribute our products through systems integrators, resellers, distributors and OEM partners in the United States and internationally. Systems integrators typically have expertise in vertical or functional markets. They resell our products, bundling them, in most cases, with their broader service offerings. In other cases, they influence direct sales of our products. Distributors sublicense our products and provide service and support within their territories. OEMs embed portions of our technology in their product offerings.

Intellectual Property and Other Proprietary Rights

      Our success depends in part upon our proprietary technology. We rely on a combination of patent, copyright, trademark and trade secret rights, confidentiality procedures and licensing arrangements to establish and protect our proprietary rights. As part of our confidentiality procedures, we generally enter into non-disclosure agreements with our employees, distributors and corporate partners and into license agreements with respect to our software, documentation and other proprietary information. In addition, we have 11 patents granted in the U.S., nine patent applications pending in the U.S., and 19 corresponding international patent applications pending.

      Nonetheless, our intellectual property rights may not be successfully asserted in the future or may be invalidated, circumvented or challenged. In addition, the laws of various foreign countries where our products are distributed do not protect our intellectual property rights to the same extent as U.S. laws. Our inability to protect our proprietary information could harm our business.

Future Revenues (New Orders, Backlog and Deferred Revenue)

      Our future revenues are dependent upon (i) new orders received, shipped and recognized in a given quarter and (ii) our backlog and deferred revenues entering a given quarter. Our backlog is comprised of product license orders that have not shipped as of the end of a given quarter and orders to distributors, resellers and OEMs where revenue is recognized upon cash receipt. Our deferred revenues are primarily comprised of (i) maintenance revenue that we recognize over the term of the contract, typically one year, (ii) license product orders that have shipped but where the terms of the license agreement contain acceptance language or other terms that require that the license revenue be deferred until all revenue recognition criteria are met or recognized ratably over an extended period, and (iii) consulting and education services revenues that have been prepaid and services have not yet been performed. We typically ship products shortly after the receipt of an order, which is common in the software industry and typically do not have a substantial backlog of license orders awaiting shipment at the end of any given quarter. Aggregate backlog and deferred revenue at December 31, 2004 was approximately $82.3 million compared to $67.9 million at December 31, 2003. This increase at December 31, 2004 was primarily due to a substantial increase in deferred revenue. We do not believe that backlog and deferred revenue as of any particular date is indicative of future results.

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Competition

      The market for our products is highly competitive, quickly evolving and subject to rapidly changing technology. Our competition consists of hand-coded, custom-built data integration solutions developed in-house by various companies in the industry segments that we target, as well as vendors of point integration solutions typically used for departmental deployment, including Ascential Software, Embarcadero Technologies, Group 1 Software, SAS Institute and certain privately-held companies. We have competed in the past with business intelligence vendors who offer data integration solutions for their combined data warehousing and business intelligence offerings such as Business Objects, Cognos, Hyperion Solutions, MicroStrategy and certain privately-held companies. We also compete against certain database and enterprise application vendors, which offer products that typically operate specifically with these competitors’ proprietary databases. Such potential competitors include IBM, Microsoft, Oracle, SAP and Siebel Systems.

      We currently compete on the basis of our products’ functionality as well as on the basis of price. Additionally, we compete on the basis of certain other factors, including:

•  product capabilities including openness, standards compliance, performance, scalability, ease of use and reliability;

•  low total cost of ownership encompassing performance, reusability, pricing, productivity gains and lower maintenance and training costs;

•  time to market;

•  services and support;

•  relationships with strategic partners that can help market and sell our products; and

•  proven success and experience.

      We believe that we currently compete favorably with respect to the above factors. For a further discussion of our competition, see “Risk Factors — If we do not compete effectively with companies selling data integration and business intelligence products, our revenues may not grow and could decline.”

Employees

      As of December 31, 2004, we had a total of 837 employees, including 238 people in research and development, 296 people in sales and marketing, 200 people in consulting, customer support and education services, and 103 people in general and administrative services. None of our employees is represented by a labor union. We have not experienced any work stoppages, and we consider employee relations to be good.

Item 2. Properties

      In December 2004, we relocated our corporate headquarters to a new location in Redwood City, California where we lease two buildings that comprise 159,350 square feet of office space and are leased through December 2007 (with a three-year renewal option). We also lease 6,500 square feet of office space for sales activities in New York, New York through February 2010 and 5,300 square feet of office space for sales, professional services and product development activities in Plano, Texas through October 2007 (with two five-year renewal options). We occupy approximately 10,000 square feet of office space in Maidenhead, United Kingdom for our European headquarters leased through May 2010; approximately 9,600 square feet of office space in Amsterdam, the Netherlands through October 2007 (with a five-year renewal option); and approximately 2,000 square feet in Puteaux, France through December 2007 (with two three-year renewal options). Additionally, we have operating leases for office space in Scotts Valley, California and Austin, Texas, which comprise approximately 6,700 square feet and 11,600 square feet, and expire in May 2008 (with a three-year renewal option) and January 2010 (with a five-year renewable option), respectively. We also lease other office space in the United States and other various countries under operating leases.

      In addition, we lease excess office space in Redwood City, Palo Alto, Scotts Valley and San Francisco, California; and Carrolton, Texas. We lease 290,300 square feet of office space at Pacific Shores Center in

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Redwood City, California under a lease through July 2013. In February 2005, we subleased approximately 187,000 square feet in Pacific Shores Center for the remainder of the lease term through July 2013 with a right of termination by the tenant which is exercisable in July 2009. We lease 30,000 square feet in Palo Alto, California under a lease that expires in July 2007, of which 28,000 square feet is subleased under two separate subleases that expire in September 2005 and May 2007. In March 2004, we subleased the entire 2,000 square feet in Scotts Valley, California for the remainder of the lease term through May 2008. We subleased the entire 29,000 square feet in Carrollton, Texas for the remainder of the lease term through January 2006. In San Francisco, California we lease approximately 19,200 square feet under a lease that expires in March 2007, which is entirely subleased through the remainder of the lease term. In Redwood City, California, 4,000 square feet is subleased from November 2003 to May 2005. We are actively attempting to sublease our excess office space for the remaining lease terms. See Notes 6, 7 and 19 of the notes to the consolidated financial statements in Item 8.

Item 3. Legal Proceedings

      On November 8, 2001, a purported securities class action complaint was filed in the United States District Court for the Southern District of New York. The case is entitled In re Informatica Corporation Initial Public Offering Securities Litigation, Civ. No. 01-9922 (SAS) (S.D.N.Y.), related to In re Initial Public Offering Securities Litigation, 21 MC 92 (SAS) (S.D.N.Y.). Plaintiffs’ amended complaint was brought purportedly on behalf of all persons who purchased our common stock from April 29, 1999 through December 6, 2000. It names as defendants Informatica Corporation, two of our former officers (the “Informatica defendants”), and several investment banking firms that served as underwriters of our April 29, 1999 initial public offering and September 28, 2000 follow-on public offering. The complaint alleges liability as to all defendants under Sections 11 and/or 15 of the Securities Act of 1933 and Sections 10(b) and/or 20(a) of the Securities Exchange Act of 1934, on the grounds that the registration statements for the offerings did not disclose that: (1) the underwriters had agreed to allow certain customers to purchase shares in the offerings in exchange for excess commissions paid to the underwriters; and (2) the underwriters had arranged for certain customers to purchase additional shares in the aftermarket at predetermined prices. The complaint also alleges that false analyst reports were issued. No specific damages are claimed.

      Similar allegations were made in other lawsuits challenging over 300 other initial public offerings and follow-on offerings conducted in 1999 and 2000. The cases were consolidated for pretrial purposes. On February 19, 2003, the Court ruled on all defendants’ motions to dismiss. The Court denied the motions to dismiss the claims under the Securities Act of 1933. The Court denied the motion to dismiss the Section 10(b) claim against Informatica and 184 other issuer defendants. The Court denied the motion to dismiss the Section 10(b) and 20(a) claims against the Informatica defendants and 62 other individual defendants.

      We accepted a settlement proposal presented to all issuer defendants. In this settlement, plaintiffs will dismiss and release all claims against the Informatica defendants, in exchange for a contingent payment by the insurance companies collectively responsible for insuring the issuers in all of the IPO cases, and for the assignment or surrender of control of certain claims we may have against the underwriters. The Informatica defendants will not be required to make any cash payments in the settlement, unless the pro rata amount paid by the insurers in the settlement exceeds the amount of the insurance coverage, a circumstance which we do not believe will occur. The settlement will require approval of the Court, which cannot be assured, after class members are given the opportunity to object to the settlement or opt out of the settlement.

      On July 15, 2002, we filed a patent infringement action in U.S. District Court in Northern California against Acta Technology, Inc. (“Acta”), now known as Business Objects Data Integration, Inc. (“BODI”), asserting that certain Acta products infringe on three of our patents: U.S. Patent No. 6,014,670, entitled “Apparatus and Method for Performing Data Transformations in Data Warehousing;” U.S. Patent No. 6,339,775, entitled “Apparatus and Method for Performing Data Transformations in Data Warehousing” (this patent is a continuation-in-part of and claims the benefit of U.S. Patent No. 6,014,670); and U.S. Patent No. 6,208,990, entitled “Method and Architecture for Automated Optimization of ETL Throughput in Data Warehousing Applications.” On July 17, 2002, we filed an amended complaint alleging that Acta products

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also infringe on one additional patent: U.S. Patent No. 6,044,374, entitled “Object References for Sharing Metadata in Data Marts.” In the suit, we are seeking an injunction against future sales of the infringing Acta/ BODI products, as well as damages for past sales of the infringing products. We have asserted that BODI’s infringement of our patents was willful and deliberate. On September 5, 2002, BODI answered the complaint and filed counterclaims against us seeking a declaration that each patent asserted is not infringed and is invalid and unenforceable. BODI did not make any claims for monetary relief against us. The parties presented their respective claim constructions to the Court on September 24, 2003 and are waiting for the Court’s ruling. The matter is currently in the discovery phase.

      We are also a party to various legal proceedings and claims arising from the normal course of business activities.

      Based on current available information, management does not expect that the ultimate outcome of these unresolved matters, individually or in the aggregate, will have a material adverse effect on our results of operations, cash flows or financial position. However, litigation is subject to inherent uncertainties and our view of these matters may change in the future. Were an unfavorable outcome to occur, there exists the possibility of a material adverse impact on our results of operations, cash flows and financial position for the period in which the unfavorable outcome occurs, and potentially in future periods.

Item 4. Submission of Matters to a Vote of Security Holders

      Not Applicable.

Executive Officers of the Registrant

      The following table sets forth certain information concerning our executive officers as of February 28, 2005:

Name	Age		Position(s)
Sohaib Abbasi		48	Chief Executive Officer, President and Director
Earl E. Fry		46	Chief Financial Officer, Executive Vice President and Secretary
Paul J. Hoffman		54	Executive Vice President, Worldwide Sales
Girish Pancha		40	Executive Vice President of Products
John Entenmann		42	Executive Vice President, Corporate Strategy and Marketing

      Our executive officers are appointed by, and serve at the discretion of, the Board of Directors. Each executive officer is a full-time employee. There is no family relationship between any of our executive officers or directors.

      Mr. Abbasi has been our President and Chief Executive Officer since July 2004 and a member of our Board of Directors since February 2004. From 2001 to 2003, Mr. Abbasi was Senior Vice President, Oracle Tools Division and Oracle Education at Oracle Corporation, which he joined in 1982. From 1994 to 2000, he was Senior Vice President Oracle Tools Product Division at Oracle Corporation. Mr. Abbasi graduated with honors from the University of Illinois at Urbana-Champaign in 1980, where he earned both a B.S. and an M.S. degree in computer science.

      Mr. Fry joined us as the Chief Financial Officer and Senior Vice President in December 1999. In July 2002, Mr. Fry became the Secretary. In August 2003, Mr. Fry was promoted to Executive Vice President. From November 1995 to December 1999, Mr. Fry was Vice President and Chief Financial Officer at Omnicell Technologies, Inc. From July 1994 to November 1995, he was Vice President and Chief Financial Officer at C*ATS Software, Inc. Mr. Fry holds a B.B.A. degree in accounting from the University of Hawaii and an M.B.A. degree in finance and marketing from Stanford University.

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      Mr. Hoffman joined us as Executive Vice President, Worldwide Sales in January 2005. Mr. Hoffman was Executive Vice President of Worldwide Sales at Cassatt Corporation from August 2003 to December 2004. From April 1999 to June 2003, Mr. Hoffman was Vice President of the Americas at SeeBeyond Technology Corporation. He served as Vice President Worldwide Sales for Documentum from September 1996 to April 1999. Mr. Hoffman holds a B.S. degree in finance from Fairfield University.

      Mr. Pancha was an early employee of Informatica, serving in engineering management roles from November 1996 to October 1998. Mr. Pancha left in 1998 to co-found Zimba, a developer of mobile applications providing real-time access to corporate information via voice, wireless, and Web technologies. Upon Informatica’s acquisition of Zimba in August 2000, Mr. Pancha rejoined us as Vice President and General Manager of the Platform Business Unit. In August 2002, he became Senior Vice President of Products, assuming responsibility for all products. In August 2003, Mr. Pancha was promoted to Executive Vice President. Prior to Informatica, Mr. Pancha spent eight years in various development and management positions at Oracle. Mr. Pancha holds a B.S. degree in electrical engineering from Stanford University and an M.S. degree in electrical engineering from the University of Pennsylvania.

      Mr. Entenmann joined us as Executive Vice President, Corporate Strategy and Marketing in October 2004. From June 1997 to March 2004, Mr. Entenmann was Vice President of Business Intelligence Products at Oracle Corporation. From September 1994 to June 1997 Mr. Entenmann served as Senior Director of Tools Technology and UI Design at Oracle Corporation. From 1988 to 1994 he was Manager, Solaris Operating Systems at Sun Microsystems. Mr. Entenmann holds a B.S. degree in computer science from the University of Illinois and an M.S. degree in computer science from Stanford University.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

      Our common stock is listed on the NASDAQ National Market under the symbol “INFA.” Our initial public offering was April 29, 1999 at $4.00 per share (adjusted for stock splits in the form of stock dividends in February 2000 and November 2000). The price range per share in the table below reflects the highest and lowest sale prices for our stock as reported by the NASDAQ National Market during the last two fiscal years.

	2004				2003
	High		Low		High		Low
First Quarter	$	12.58	$	8.20	$	8.00	$	5.76
Second Quarter	$	10.20	$	6.64	$	8.00	$	6.23
Third Quarter	$	7.65	$	5.36	$	9.43	$	6.54
Fourth Quarter	$	8.67	$	5.82	$	12.22	$	7.44

Holders of Common Stock

      As of December 31, 2004, there were approximately 178 stockholders of record of our common stock, and the closing price per share of our common stock was $8.12. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.

Dividends

      We have never declared or paid cash dividends on our common stock. Since we currently intend to retain all future earnings to finance future growth, we do not anticipate paying any cash dividends in the near future.

Recent Sales of Unregistered Securities

      None.

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Issuer Purchases of Equity Securities

      There were no repurchases of Informatica common stock by Informatica during the quarter ended December 31, 2004.

Item 6. Selected Consolidated Financial Data

				Year Ended December 31,
				2004			2003			2002			2001			2000
				(In thousands, except per share data)
Consolidated Statements of Operations Data:
	Revenues:
		License		$	97,941		$	94,590		$	99,943		$	119,937		$	101,649
		Service			121,740			110,943			95,498			80,208			54,953
			Total revenues		219,681			205,533			195,441			200,145			156,602
	Cost of revenues:
		License			3,778			3,139			6,185			4,500			2,034
		Service(1)			40,346			38,856			39,250			42,559			31,056
		Amortization of acquired technology			2,322			1,031			1,040			1,040			589
			Total cost of revenues		46,446			43,026			46,475			48,099			33,679
		Gross Profit			173,235			162,507			148,966			152,046			122,923
Operating expenses:
		Research and development(1)			51,322			47,730			45,836			46,714			27,274
		Sales and marketing(1)			94,900			86,810			86,770			99,898			75,697
		General and administrative(1)			20,755			20,921			20,286			19,638			11,749
		Amortization of goodwill and other intangible assets			197			147			100			26,336			13,574
		Purchased in-process research and development			—			4,524			—			—			8,648
		Restructuring charges			112,636			—			17,030			12,096			—
			Total operating expenses		279,810			160,132			170,022			204,682			136,942
		Income (loss) from operations			(106,575	)		2,375			(21,056	)		(52,636	)		(14,019	)
		Interest income and other, net			3,445			7,103			6,420			8,971			4,306
		Interest expense			(54	)		(44	)		(57	)		(11	)		(458	)
		Income (loss) before income taxes			(103,184	)		9,434			(14,693	)		(43,676	)		(10,171	)
		Income tax provision			1,220			2,124			921			1,304			3,345
		Net income (loss)		$	(104,404	)	$	7,310		$	(15,614	)	$	(44,980	)	$	(13,516	)
		Basic and diluted net income (loss) per share		$	(1.22	)	$	0.09		$	(0.20	)	$	(0.58	)	$	(0.19	)
		Shares used in calculation of basic net income (loss) per share			85,812			82,049			79,753			77,599			69,758
		Shares used in calculation of diluted net income (loss) per share			85,812			85,200			79,753			77,599			69,758

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		December 31,
		2004		2003		2002		2001		2000
		(In thousands)
Consolidated Balance Sheet Data(1):
	Cash and cash equivalents	$	88,941	$	82,903	$	105,590	$	119,664	$	217,713
	Restricted cash		12,166		12,166		12,166		12,166		20,282
	Investments		152,160		140,890		130,285		89,555		—
	Working capital		166,861		161,015		176,640		168,112		190,179
	Total assets		409,768		402,808		365,194		342,903		350,983
	Long-term obligations, less current portion		—		—		—		—		—
	Total stockholders’ equity		195,722		289,599		252,403		260,408		290,497

See Note 1 of notes to consolidated financial statements for an explanation of the determination of the number of shares used to compute basic and diluted net loss per share.

(1)  Amortization of stock-based compensation has been reclassified for periods prior to December 31, 2004 to cost of service revenues, research and development, sales and marketing, and general and administrative expenses. See Note 1 of notes to consolidated financial statements in Item 8.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

      This Annual Report on Form 10-K includes “forward-looking statements” within the meaning of the federal securities laws, particularly statements referencing our expectations relating to product offerings and performance, business strategies, marketing programs and our increased focus on the financial services market; license revenues, our increased utilization of services personnel in Europe, service revenues, cost of license revenues as a percentage of license revenues, cost of service revenues as a percentage of service revenues and operating expenses as a percentage of total revenues; the recording of amortization of stock-based compensation; international expansion beyond North America and Europe; the integration of our 2003 acquisition of Striva Corporation with the rest of our operations; the ability of our products to meet customer demand; expected savings from our 2004 Restructuring Plan; the extent to which we may generate revenues from the use or sale of elements of our analytic applications; the sufficiency of our cash balances and cash flows for the next 12 months; potential investments of cash or stock to acquire or invest in complementary businesses, products or technologies; the impact of recent changes in accounting standards; and assumptions underlying any of the foregoing. In some cases, forward-looking statements can be identified by the use of terminology such as “may,” “will,” “expects,” “intends,” “plans,” “anticipates,” “estimates,” “potential,” or “continue,” or the negative thereof or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, these expectations or any of the forward-looking statements could prove to be incorrect, and actual results could differ materially from those projected or assumed in the forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to risks and uncertainties, including but not limited to the factors set forth under the heading “Risk Factors”. All forward-looking statements and reasons why results may differ included in this report are made as of the date hereof, and we assume no obligation to update any such forward-looking statements or reasons why actual results may differ.

      The following discussion should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this report.

Overview

      We are a leading provider of enterprise data integration software. We generate revenues from sales of software licenses and services, which consist of maintenance, consulting and education services. Our license revenues are derived from our data integration software products. We receive software license revenues from licensing our products directly to end users and indirectly through resellers, distributors and OEMs. We

14

receive service revenues from maintenance contracts, consulting services and education services that we perform for customers that license our products either directly or indirectly.

      We license our software and provide services to many industry sectors, including, but not limited to, financial services, communications, pharmaceuticals, insurance, manufacturing, utilities, government and retail. We sell our products through both our own direct sales forces and indirect channel partners in the United States as well as Belgium, Canada, France, Germany, the Netherlands, Switzerland, the United Kingdom, Asia-Pacific, Australia, Japan and Latin America. Most of our international sales have been in Europe. Revenue outside of Europe and North America, which includes the United States and Canada, have been 4% or less of total consolidated revenues during the last three years, although we anticipate further expansion outside of these two regions in the future.

      During 2004, we released an updated version of PowerCenter, our core data integration product offering, and SuperGlue, our integrated metadata solution. In 2004, total revenues grew 7% to $219.7 million as we generated our highest annual total revenues since the inception of the Company. The increase in service revenues, primarily from increased maintenance revenues driven by strong renewals from our expanding customer base, coupled with contribution from the new releases of existing products offset the loss of revenue from our analytical application suites and data warehouse modules, products that we ceased selling in 2003.

      We incurred a significant net loss in 2004 of $104.4 million or $1.22 net loss per share. This was primarily due to restructuring charges of $112.6 million in 2004 associated with the relocation of our corporate headquarters in December 2004.

Critical Accounting Policies

      Our consolidated financial statements are prepared in accordance with generally accepted accounting principles (GAAP) in the United States. These accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the periods presented. To the extent there are material differences between these estimates, judgments or assumptions and actual results, our financial statements will be affected.

      Our senior management has reviewed these critical accounting policies and related disclosures with our Audit Committee. See Note 1 of notes to consolidated financial statements in Item 8, which contains additional information regarding our accounting policies and other disclosures required by GAAP. We believe our most critical accounting policies include the following:

Revenue Recognition

      We follow detailed revenue recognition guidelines, which are discussed below. We recognize revenue in accordance with GAAP guidance that has been prescribed for the software industry. The accounting rules related to revenue recognition are complex and are affected by interpretations of the rules and an understanding of industry practices, both of which are subject to change. Consequently, the revenue recognition accounting rules require management to make significant judgments, such as determining if collectibility is probable and if a customer is credit-worthy.

      We recognize revenue in accordance with AICPA Statement of Position (SOP) 97-2 “Software Revenue Recognition,” as amended and modified by SOP 98-9,“Modification of SOP 97-2, Software Revenue Recognition, With Respect to Certain Transactions.” We recognize license revenues when a noncancelable license agreement has been signed, the product has been shipped or we have provided the customer with the access codes that allow for immediate possession of the software (collectively “delivered”), the fees are fixed or determinable, collectibility is probable and vendor-specific objective evidence (VSOE) of fair value exists to allocate the fee to the undelivered elements of the arrangement. VSOE is based on the price charged when an element is sold separately. In the case of an element not yet sold separately, the price, which does not

15

change before the element is made generally available, is established by authorized management. If an acceptance period is required, we recognize revenue upon customer acceptance or the expiration of the acceptance period after all other revenue recognition criteria under SOP 97-2 have been met. Our standard agreements do not contain product return rights.

      Credit-worthiness and collectibility are first assessed on a country level basis. Then, for those customers, including direct end users and our indirect channel partners (resellers, distributors and original equipment manufacturers (OEMs)) in countries deemed to have sufficient timely payment history, customers are assessed based on their payment history and credit profile.

      The country level assessment of credit-worthiness and collectibility has generally been performed annually with any changes in assessment effective on January 1st of the next fiscal year. We recently performed a country level assessment of credit-worthiness and determined 10 additional countries to be credit-worthy based on geopolitical and economic stability. These countries include France, where we have a direct sales channel and Japan, where we have both direct and indirect sales channels, as well as Spain, Italy, Norway, Sweden, Denmark, Finland, Australia and New Zealand, where we sell through distributors. In each of the nine countries, excluding France, we assessed the credit-worthiness and collectibility of our existing distributors and will continue to recognize revenue through these distributors upon cash receipt. However, effective January 1, 2005, in France, where the country level criteria have been met and individual customers are deemed credit-worthy, we will begin recognizing revenue upon shipment, rather than on cash receipt, after all other revenue recognition criteria under SOP 97-2 have been met, including, for resellers and distributors, evidence of sell-through to an identified end user. In the other nine countries where the individual distributors have not met the credit-worthiness and collectibility requirements, we will continue to reassess their status quarterly.

      In addition to selling directly to end users, we also enter into reseller and distributor arrangements that typically provide for sublicense or end user license fees based on a percentage of list prices. Revenue arrangements with resellers and distributors require evidence of sell-through, that is, persuasive evidence that the products have been sold to an identified end user. For data integration products, data warehouse modules and business intelligence platform sold indirectly through our resellers and distributors, we recognize revenue upon shipment and receipt of evidence of sell-through if the reseller or distributor has been deemed credit-worthy.

      We also enter into OEM arrangements that provide for license fees based on inclusion of our products in the OEM’s products. These arrangements provide for fixed, irrevocable royalty payments. For credit-worthy OEMs, royalty payments are recognized based on the activity in the royalty report we receive from the OEM, or in the case of OEMs with fixed royalty payments, revenue is recognized when the related payment is due. When OEMs are not deemed credit-worthy, revenue is recognized upon cash receipt. In both cases, revenue is recognized after all other revenue recognition criteria under SOP 97-2 have been met.

      The assessment of credit-worthiness for resellers, distributors and OEMs within countries which have been deemed to be credit-worthy generally takes place quarterly, with any changes effective at the beginning of the next fiscal quarter. Credit-worthiness for these partners is assessed based on established credit history consisting of sales of at least one million dollars and with timely payment history, generally for the last 12 months. In the third quarter of 2004, our assessment of three resellers and OEMs determined that these customers were credit-worthy and effective October 2004, we began recognizing revenue for these customers upon shipment, after all other revenue recognition criteria under SOP 97-2 have been met. We recognized incremental revenue of $0.1 million in the fourth quarter of 2004 from changing the revenue recognition related to these customers from a cash to accrual basis.

      For transactions to all customers, including direct end users, resellers, distributors and OEMs, where the customer is deemed credit-worthy, but where the stated payment terms of the transaction are greater than 45 days from the invoice date, we recognize revenue when the payments become due. In assessing this policy in light of our continuing international expansion where stated payment terms can be slightly longer, we determined, effective January 1, 2005, that extending the threshold to 60 days on a world-wide basis would be more appropriate. Therefore, effective January 1, 2005, we will begin recognizing revenue upon shipment for

16

transactions with credit-worthy customers in credit-worthy countries with stated payment terms up to and including 60 days, after all other revenue recognition criteria under SOP 97-2 have been met. We have analyzed the impact of this change as though it had been implemented during 2004 and determined that this change would not have been material to our quarterly or annual revenue or results of operations in 2004. Those transactions with stated terms of more than 60 days will continue to be recognized when payments become due.

      When a customer, including direct end-users, resellers, distributors and OEMs, is not deemed credit-worthy, revenue is recognized when cash is received, after all other revenue recognition criteria under SOP 97-2 have been met.

      We ceased selling data warehouse modules in July 2003. For our analytic application suites, which we also ceased selling directly in July 2003, we recognized both the license and maintenance revenue ratably over the initial maintenance period, generally one year, since we did not have VSOE of maintenance for our analytic application suites.

      We recognize maintenance revenues, which consist of fees for ongoing support and product updates and upgrades, ratably over the term of the contract, typically one year. Consulting revenues are primarily related to implementation services and product enhancements performed on a time-and-materials basis or, on a very infrequent basis, a fixed fee arrangement under separate service arrangements related to the installation and implementation of our software products. Education services revenues are generated from classes offered at our headquarters, sales offices and customer locations. Revenues from consulting and education services are recognized as the services are performed. When a contract includes both license and service elements, the license fee is recognized on delivery of the software or cash collections, provided services do not include significant customization or modification of the base product, and are not otherwise essential to the functionality of the software and the payment terms for licenses are not dependent on additional acceptance criteria.

      Deferred revenue includes deferred license, maintenance, consulting and education services revenues. Our practice is to net unpaid deferred items against the related receivables balances from those OEMs, specific resellers, distributors and specific international customers for which we defer revenue until payment is received.

Allowance for Sales Returns and Doubtful Accounts

      We maintain allowances for sales returns on revenue in the same period as the related revenues are recorded. These estimates require management judgment and are based on historical sales returns and other known factors. If these estimates do not adequately reflect future sales returns, revenue could be overstated.

      We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. In cases where we are aware of circumstances that may impair a specific customer’s ability to meet its financial obligations to us, we record a specific allowance against amounts due to us. For all other customers, we recognize allowances for doubtful accounts based on the length of time the receivables are past due, industry and geographic concentrations, the current business environment and our historical experience. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. For example, we recorded an additional bad debt expense in 2002 related to customers that filed for bankruptcy.

Impairment of Goodwill

      We assess goodwill for impairment in accordance with Statement of Financial Accounting Standards No. 142 (SFAS 142), which requires that goodwill be tested for impairment at the “reporting unit level” (“Reporting Unit”) at least annually and more frequently upon the occurrence of certain events, as defined by SFAS 142. Consistent with our determination that we have only one reporting segment, we have determined that there is only one Reporting Unit, specifically the license, implementation and support of our software products. Goodwill was tested for impairment in our annual impairment tests on October 31 in each of the

17

years in 2004, 2003 and 2002 using the two-step process required by SFAS 142. First, we reviewed the carrying amount of the Reporting Unit compared to the “fair value” of the Reporting Unit based on quoted market prices of our common stock and the discounted cash flows based on analyses prepared by management. Our cash flow forecasts are based on assumptions that are consistent with the plans and estimates being used to manage the business. An excess carrying value compared to fair value would indicate that goodwill may be impaired. Second, if we determine that goodwill may be impaired, then we compare the “implied fair value” of the goodwill, as defined by SFAS 142, to its carrying amount to determine the impairment loss, if any.

      Based on these estimates, we determined in our annual impairment tests as of October 31 of each year that the fair value of the Reporting Unit exceeded the carrying amount and accordingly, goodwill was not impaired. Assumptions and estimates about future values and remaining useful lives are complex and often subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our internal forecasts. Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, different assumptions and estimates could materially impact our reported financial results. Accordingly, future changes in market capitalization or estimates used in discounted cash flows analyses could result in significantly different fair values of the Reporting Unit, which may result in impairment of goodwill.

Restructuring Charges

      During the fourth quarter of 2004, we recorded significant charges (2004 Restructuring Plan) related to the relocation of our corporate headquarters to take advantage of more favorable lease terms and reduced operating expenses. In addition, we significantly increased the 2001 restructuring charges (2001 Restructuring Plan) in the third and fourth quarters of 2004 due to changes in our assumptions used to calculate the original charge as a result of our decision to relocate our corporate headquarters. The accrued restructuring charges represent gross lease obligations and estimated commissions and other costs (principally leasehold improvements and asset write-offs), offset by actual and estimated gross sublease income, which is net of estimated broker commissions and tenant improvement allowances, expected to be received over the remaining lease terms.

      These liabilities include management’s estimates pertaining to sublease activities. Inherent in the assessment of the costs related to our restructuring efforts are estimates related to the most likely expected outcome of the significant actions to accomplish the restructuring. We will continue to evaluate the commercial real estate market conditions periodically to determine if our estimates of the amount and timing of future sublease income are reasonable based on current and expected commercial real estate market conditions. Our estimates of sublease income may vary significantly depending, in part, on factors which may be beyond our control, such as the time periods required to locate and contract suitable subleases and the market rates at the time of such subleases.

      If we determine that there is further deterioration in the estimated sublease rates or in the expected time it will take us to sublease our vacant space, we may incur additional restructuring charges in the future and our cash position could be adversely affected. For example, we increased our 2001 Restructuring Plan charges in 2002 and 2004 based on the continued deterioration in the San Francisco Bay Area and Dallas, Texas real estate markets. See Note 7, Restructuring Charges, of notes to consolidated financial statements in Item 8. Future adjustments to the charges could result from a change in the time period that the buildings will be vacant, expected sublease rate, expected sublease terms and the expected time it will take to sublease. We will periodically assess the need to update the original restructuring charges based on current real estate market information and trend analysis and executed sublease agreements.

Deferred Taxes

      We recorded a full valuation allowance to reduce all of our deferred tax assets to the amount that is likely to be realized. We have considered future taxable income and ongoing tax planning strategies in assessing the need for a valuation allowance; however, if it were determined that we would be able to realize all or part of our deferred tax assets in the future, an adjustment to the deferred tax asset would decrease our tax rate and increase income in the period in which such determination was made. Likewise, if we determined that we

18

would not be able to realize all or part of our net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged to income in the period in which such determination was made.

Years Ended December 31, 2004, 2003 and 2002

      The following table presents certain financial data as a percentage of total revenues:

				Year Ended
				December 31,
				2004			2003			2002
Consolidated Statements of Operations Data:
	Revenues:
		License			45	%		46	%		51	%
		Service			55			54			49
			Total revenues		100			100			100
	Cost of revenues:
		License			2			2			3
		Service(1)			18			19			20
		Amortization of acquired technology			1			—			1
			Total cost of revenues		21			21			24
	Gross profit				79			79			76
	Operating expenses:
		Research and development(1)			23			23			23
		Sales and marketing(1)			43			42			45
		General and administrative(1)			10			10			10
		Purchased in-process research and development			—			2			—
		Restructuring charges			52			—			9
			Total operating expenses		128			77			87
	Income (loss) from operations				(49	)		2			(11	)
	Interest income and other, net				2			3			3
	Income (loss) before income taxes				(47	)		5			(8	)
	Income tax provision				1			1			—
	Net income (loss)				(48	)%		4	%		(8	)%
Cost of license revenues, as a percentage of license revenues					4	%		3	%		6	%
Cost of service revenues, as a percentage of service revenues					33	%		35	%		41	%

(1)  Amortization of stock-based compensation has been reclassified for the two years ended December 31, 2003 to cost of service revenues, research and development, sales and marketing, and general and administrative expenses. See Note 1 of notes to consolidated financial statements in Item 8.

Revenues

      Our total revenues were $219.7 million in 2004 compared to $205.5 million in 2003 and $195.4 million in 2002, representing growth of $14.2 million or 7% in 2004 from 2003 and $10.1 million or 5% in 2003 from 2002.

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      The following table and discussion compares our revenue by type for the three years ended December 31, 2004:

				Year Ended December 31,
				2004		2003		2002
				(In millions)
License revenues				$	97.9	$	94.6	$	99.9
	Service revenues:
		Maintenance revenues			87.5		75.7		53.9
		Consulting and education services revenues			34.3		35.2		41.6
		Total service revenues			121.8		110.9		95.5
			Total revenues	$	219.7	$	205.5	$	195.4

License Revenues

      Our license revenues were $97.9 million in 2004 compared to $94.6 million in 2003 and $99.9 million in 2002, representing an increase of $3.3 million or 4% in 2004 from 2003 and a decrease of $5.3 million or 5% in 2003 from 2002. The increase in license revenues in 2004 from 2003 was primarily due to $8.8 million of incremental sales of our data integration platform products, including PowerCenter and SuperGlue, partially offset by a $5.4 million decrease in license revenue attributable to our discontinued analytical applications in 2003. In 2004, we also experienced an increase in the average transaction amount for orders greater than $100,000, which increased to $299,000 in 2004 from $249,000 in 2003. In addition, the number of transactions greater than $1.0 million increased to 11 in 2004 from five in 2003. The $5.3 million decrease in license revenue in 2003 from 2002 was primarily due to the weak IT spending conditions in 2003 which negatively impacted license revenues. In 2003 we experienced a 15% decrease in the number of end-user transactions and a decrease in the average transaction amount for orders greater than $100,000, which decreased to $249,000 in 2003 from $265,000 in 2002. Additionally, a $3.4 million negative adjustment in 2003 to correct the overallocation of license revenues and underallocation of service revenues resulting from an error in our allocation of revenue resulted in a further decrease of license revenue.

Services Revenues

Maintenance Revenues

      Maintenance revenues increased to $87.5 million in 2004 from $75.7 million in 2003 and $53.9 million in 2002, representing growth of $11.8 million or 16% in 2004 from 2003 and $21.8 million or 40% in 2003 from 2002. These increases in maintenance revenues in 2004 and 2003 were primarily due to an increased customer base and strong renewals of maintenance contracts. Additionally, in 2003, we made a $2.5 million positive adjustment to increase maintenance revenues to correct the underallocation of maintenance revenues resulting from an error in the allocation of revenue. For 2005, based on our growing installed customer base, we expect maintenance revenues to increase from the 2004 levels.

Consulting and Education Services Revenues

      Consulting and education services revenues were $34.3 million in 2004, $35.2 million in 2003 and $41.6 million in 2002. The $0.9 million or 3% decrease in 2004 compared to 2003 and the $6.4 million or 15% decrease in 2003 from 2002 were primarily a result of underutilization of our consultants in Europe. For 2005, we expect to increase utilization in Europe and add overall consulting capacity, and thus expect revenues from consulting and education services to slightly increase from the 2004 levels.

International Revenues

      Our international revenues were $63.1 million in 2004, $55.8 million in 2003 and $50.3 million in 2002, representing an increase of $7.3 million, or 13%, in 2004 from 2003 and an increase of $5.5 million, or 11%, in

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2003 from 2002. The $7.3 million increase in 2004 from 2003 in international revenues was primarily due to a 15% increase in local currency license revenues, a 12% increase in local currency maintenance revenues, and a 12% increase in local currency education services revenues, offset by a 42% decline in local currency consulting revenues in Europe. The $5.5 million increase in 2003 from 2002 in international revenues was due primarily to a 52% increase in maintenance revenues in Europe due to a strong renewal base. International revenues as a percentage of total revenues were 29%, 27% and 26% for 2004, 2003 and 2002, respectively.

Key Factors Affecting Revenues

      Certain key factors will affect our ability to meet our forecasted revenue in 2005, including the following:

•  We typically experience a seasonal decrease in revenues in the first quarter of the year.

•  We experienced greater than usual sales force turnover during the first quarter of 2004, which we believe negatively impacted our ability to generate license revenues in the first three quarters of 2004. We experienced reduced sales force turnover during the remainder of 2004 and we continued to add new sales personnel throughout the year. Because we typically experience lower productivity from newly hired sales personnel for a period of six to 12 months, our ability to generate license revenues in the first quarter of 2005 may be adversely affected. See “Risk Factors — An increase in turnover rates of our sales force personnel may negatively impact our ability to generate license revenues.”

•  The recent general economic uncertainty caused customer purchases to be reduced in amount, deferred or cancelled, and therefore reduced the overall license pipeline conversion rates in much of 2003 and 2004. Any interruption or delay in the current gradual recovery in the infrastructure software industry could cause a reduction in the rate of conversion of the sales pipeline into license revenue for the first quarter of 2005 and beyond. See “Risk Factors — If we are unable to accurately forecast revenues, we may fail to meet stock analysts and investors’ expectations of our quarterly operating results, which could cause our stock price to decline” and “Risk Factors — We have experienced reduced sales pipeline and pipeline conversion rates in the past, which has adversely affected the growth of our company and the price of our common stock.”

•  In July 2003, we ceased direct sales of our analytic application suites and data warehouse modules, which remain available to our indirect channel partners to sell. We will not receive any future revenue from the distribution of our analytic application suites and data warehouse modules from our independent channel partners. However, we may further use or sell elements of this technology in the future, which may generate revenues. For example, in December 2003, we licensed elements of this software technology to one of our strategic partners.

•  On February 22, 2005, we announced the release of PowerCenter Advanced Edition. This edition of PowerCenter includes two previously at-cost options, team-based development and server grid, as well as two previously separate products, PowerAnalyzer and SuperGlue. We also announced on this date that we are removing these two options and these two separate products from our price list. PowerCenter Advanced Edition is priced higher than the standard edition of PowerCenter but less than the aggregate price of all components previously sold separately. Because this edition of PowerCenter and its pricing are new, we cannot predict its impact on PowerCenter and overall revenues.

•  License revenue for 2004 did not include the full amount related to two large software license agreements signed in Europe in the third quarter of 2004. We deferred the license revenues related to these software license agreements in September 2004 due to extended warranties that contain provisions for additional unspecified deliverables and began amortizing the deferred revenues balances to license revenues in September 2004 for a two to five-year period. While historically we have infrequently entered into software license agreements that require ratable recognition of license revenue, we may enter into software license agreements like these in the future.

      As a result of these trends and continued uncertainty in IT spending by our customers and prospects, our ability to meet our forecasted revenues for 2005 will continue to be highly dependent on our success in converting our sales pipeline into license revenues from orders received and shipped within the year. See “Risk

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Factors — We have experienced and could continue to experience fluctuations in our quarterly operating results, especially the amount of license revenue we recognize each quarter, and such fluctuations have caused and could continue to cause our stock price to decline.”

      Our quarterly operating results have fluctuated in the past and are likely to do so in the future. In particular, our license revenues are not predictable with any significant degree of certainty. Furthermore, we have historically recognized a substantial portion of our revenues in the last month of each quarter, and more recently, in the last few weeks of each quarter. Additionally, because the relocation of our corporate headquarters was accompanied by the shutdown of portions of our business in the last week of December 2004, we experienced a slight reduction in our capacity to process and fulfill orders. Consequently, some orders that would have otherwise been processed in the last week of the fourth quarter were delayed until the first quarter of 2005. These events are not indicative of a typical fourth quarter, and should not be considered as a future trend related to our first quarter of 2005, or for any other quarters in the future. See “Risk Factors — We have experienced and could continue to experience fluctuations in our quarterly operating results, especially the amount of license revenue we recognize each quarter, and such fluctuations have caused and could continue to cause our stock price to decline.”

Cost of Revenues

Cost of License Revenues

      Our cost of license revenues consists primarily of software royalties, product packaging, documentation and production costs. Cost of license revenues was $3.8 million in 2004, $3.1 million in 2003 and $6.2 million in 2002 representing approximately 4%, 3% and 6% of license revenues in 2004, 2003 and 2002, respectively. The $0.7 million increase was due primarily to increases in royalties due to changes in our percentage mix of royalty-bearing products. The $3.1 million or 50% decrease in 2003 from 2002 was primarily due to decreased royalty payments, including royalty payments to Striva, which we ceased making following our acquisition of Striva in September 2003. In addition, in 2003 we renegotiated a royalty-bearing contract with one of our partners to decrease the royalty fee. For 2005, we expect the cost of license revenues as a percentage of license revenues to remain relatively consistent with the 2004 levels.

Cost of Service Revenues

      Our cost of service revenues is a combination of costs of maintenance, consulting and education services revenues. Our cost of maintenance revenues consists primarily of costs associated with customer service personnel expenses and royalty fees for maintenance related to third-party software providers. Cost of consulting revenues consists primarily of personnel costs and expenses incurred in providing consulting services at customers’ facilities. Cost of education services revenues consists primarily of the costs of providing training classes and materials at our headquarters, sales and training offices and customer locations. Cost of service revenues was $40.3 million in 2004, $38.9 million in 2003 and $39.3 million in 2002, representing 33%, 35% and 41% of service revenues in 2004, 2003 and 2002, respectively. The $1.6 million or 4% increase in 2004 from 2003 was primarily due to increased personnel-related expenses from headcount growth in our customer support organization. Cost of service revenues in absolute dollars remained relatively flat in 2003 from 2002, but as a percentage of service revenues decreased 6% primarily due to the significant increase in the mix of maintenance revenues, which had less cost associated with it than other types of service revenues. For 2005, we expect our cost of service revenues as a percentage of service revenues to remain relatively constant, or increase slightly from the 2004 levels if the growth in our consulting services business, if any, is greater that experienced by our maintenance and education services business.

Amortization of Acquired Technology

      Amortization of acquired technology is the amortization of technologies acquired through business combinations. Amortization of acquired technology totaled $2.3 million, $1.0 million and $1.0 million in 2004, 2003 and 2002, respectively. For 2005, we expect amortization of acquired technology to be approximately $1.1 million.

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Operating Expenses

Research and Development

      Our research and development expenses consist primarily of salaries and other personnel-related expenses and consulting services associated with the development of new products, the enhancement and localization of existing products, quality assurance and development of documentation for our products. Research and development expenses increased to $51.3 million in 2004 from $47.7 million in 2003. The $3.6 million or 8% increase in 2004 from 2003 was primarily due to a $5.3 million increase from a full year of costs in 2004 compared to approximately three months of costs in 2003 coupled with a $2.2 million increase in stock-based compensation both related to the Striva acquisition, offset by a $3.2 million decrease in personnel-related expenses related to the expansion of our offshore development center in Bangalore, India and a $0.9 million decrease in legal expenses related to patent litigation. Research and development expenses increased to $47.7 million in 2003 from $45.8 million in 2002. The $1.9 million or 4% increase in 2003 from 2002 was due primarily to increases in outside consulting services totaling $0.8 million and personnel related costs of $0.4 million. Research and development expenses represented 23% of total revenues in each of 2004, 2003 and 2002. To date, all software and development costs have been expensed in the period incurred because costs incurred subsequent to the establishment of technological feasibility have not been significant. For 2005, we expect research and development expenses as a percentage of total revenues to decrease from the 2004 levels.

Sales and Marketing

      Our sales and marketing expenses consist primarily of personnel costs, including commissions, as well as costs of public relations, seminars, marketing programs, lead generation, travel and trade shows. Sales and marketing expenses increased $8.1 million or 9% in 2004 from 2003 and due primarily to increased personnel-related costs from headcount growth of $2.8 million, higher commission expense totaling $3.5 million, travel-related expenses of $1.1 million, sales incentive events of $1.1 million, stock-based compensation of $0.6 million offset by a decrease in marketing expenses of $1.0 million. Sales and marketing expenses were consistent at $86.8 million in 2003 and 2002. While sales and marketing expenses remained effectively flat from 2002 to 2003, a few components of the expense fluctuated, including lower outside consulting service fees of $0.6 million, offset by higher marketing and advertising related expenses of $0.6 million. Sales and marketing expenses represented 43%, 42% and 45% of total revenues in 2004, 2003 and 2002, respectively. For 2005, we expect sales and marketing expenses as a percentage of total revenues to remain relatively consistent with the 2004 levels.

General and Administrative

      Our general and administrative expenses consist primarily of personnel costs for finance, human resources, legal and general management, as well as professional services expense associated with recruiting, legal and accounting. General and administrative expenses were $20.8 million in 2004 and $20.9 million in 2003. General and administrative expenses increased slightly to $20.9 million in 2003 from $20.3 million in 2002. The $0.6 million or 2% increase in expenses in 2003 from 2002 was primarily due to a $0.8 million increase in personnel costs and $0.8 million in fees paid to outside professional service providers, primarily for Sarbanes-Oxley compliance, and other administrative fees, partially offset by a decrease in bad debt expense totaling $1.0 million. The decrease in the bad debt expense was a result of a significantly decreased customer bankruptcy rate. General and administrative expenses represented 10%, 10% and 10% of our total revenues in 2004, 2003 and 2002, respectively. We expect that for 2005, our general and administrative expenses as a percentage of total revenues to remain relatively consistent with or slightly below the 2004 levels.

Amortization of Stock-Based Compensation

      Included in our costs and expenses are non-cash charges for stock-based compensation expense. Amortization of stock-based compensation has been reclassified to cost of service revenues and research and development, sales and marketing, and general and administrative expenses in the consolidated statement of operations for the two years ended December 31, 2003 to conform with the 2004

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presentation. See Note 1, Description of the Company and a Summary of Significant Accounting Policies, of notes to consolidated financial statements. Total stock-based compensation expense was as follows:

		Year Ended December 31
		2004			2003		2002
		(In thousands)
Cost of service revenues		$	48		$	12	$	4
Research and development			2,216			468		333
Sales and marketing			1,172			252		62
General and administrative			(78	)		208		12
	Total stock-based compensation	$	3,358		$	940	$	411

      Stock-based compensation expense amounted to $3.4 million in 2004, $0.9 million in 2003 and $0.4 million in 2002. The increase in 2003 was primarily related to the stock-based compensation expense related to the Striva acquisition. We expect to record $0.8 million in 2005 for amortization of stock-based compensation related to the Striva acquisition.

      In 2003 through July 2004, we recorded stock-based compensation related to an outstanding stock option granted to our former CEO that was based on our future performance. The variable term of the option was such that it required us to periodically remeasure the value of the grant based on the fair value of the stock and record related stock-based compensation. The stock-based compensation related to this grant for 2003 was $84,000. In 2004, we recorded a benefit of $84,000 for the deferred stock-based compensation due to the decline the fair value of our common stock. The stock option was cancelled in July 2004.

Purchased In-Process Research and Development

      Based on our valuation of identified intangible assets held by Striva when we acquired it in September 2003, $4.5 million of the total purchase price was allocated to purchased in-process research and development, which was expensed in 2003, in accordance with FIN 4. See Note 2, Business Combinations, of notes to consolidated financial statements.

Restructuring Charges

2004 Restructuring Plan

      In October 2004, we announced a restructuring plan (2004 Restructuring Plan) related to the relocation of our corporate headquarters within Redwood City, California. In February 2005, we successfully subleased 187,000 square feet of our previous corporate headquarters at Pacific Shores Center for the remainder of the lease term through July 2013 with a right of termination by the tenant which is exercisable in July 2009. As a result, we recorded restructuring charges of approximately $103.6 million, consisting of $82.0 million in estimated facility lease losses, comprised of the present value of lease payment obligations for the remaining nine year lease term at the previous corporate headquarters, net of actual and estimated sublease income, and $21.6 million of leasehold improvement and asset write-offs. We have sublease income and estimated sublease income, including the reimbursement of certain property costs such as common area maintenance, insurance and property tax net of estimated broker commissions, of $1.0 million in 2005, $3.5 million in 2006, $3.5 million in 2007, $4.2 million in 2008, $2.7 million in 2009, $0.8 million in 2010, $3.1 million in 2011, $3.7 million in 2012 and $2.1 million in 2013. If the subtenant exercises the right of termination in 2009 and we are unable to sublease any of the related Pacific Shores facilities during the remaining lease terms through 2013, restructuring charges related to the 2004 Restructuring Plan could increase by approximately $9.8 million.

      In future periods, we will record accretion on cash obligations related to the 2004 Restructuring Plan. Accretion represents imputed interest and is the difference between our non-discounted future cash obligations and the discounted present value of these cash obligations. We will recognize approximately $25.1 million of accretion as a restructuring charge over the remaining term of the lease, or approximately nine

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years as follows: $4.8 million in 2005; $4.4 million in 2006; $4.0 million in 2007; $3.6 million in 2008; $3.1 million in 2009; $2.4 million in 2010; $1.7 million in 2011; $0.9 million in 2012; and $0.2 million in 2013.

      Going forward, our results of operations should be positively affected by a significant decrease in rent expense and decreases to non-cash depreciation and amortization expense for the leasehold improvements and equipment written-off. We estimate that these combined savings will be approximately $10 to $11 million annually, after accretion charges.

2001 Restructuring Plan

      In September 2001, we announced a restructuring plan (2001 Restructuring Plan) and recorded restructuring charges of approximately $12.1 million, consisting of $10.6 million related to estimated facility lease losses and $1.5 million in leasehold improvement and asset write-offs related to the consolidation of excess leased facilities in the San Francisco Bay Area and Texas.

      In September 2002, we recorded additional restructuring charges of approximately $17.0 million, consisting of $15.1 million related to estimated facility lease losses and $1.9 million in leasehold improvement and asset write-offs. The timing of the restructuring accrual adjustment was a result of negotiated and executed subleases for our excess facilities in Dallas, Texas and Palo Alto, California during the third quarter of 2002. These subleases included terms that provided a lower level of sublease rates than the initial assumptions. The terms of these new subleases were consistent with the continued deterioration of the commercial real estate market in these areas. In addition, cost containment measures initiated in the same quarter, such as delayed hiring and salary reductions, resulted in an adjustment to our estimate of occupancy of available vacant facilities. These charges represent adjustments to the original assumptions in the 2001 Restructuring Plan including, the time period that the buildings will be vacant, expected sublease rates, expected sublease terms and the estimated time to sublease. We calculated the estimated costs for the additional restructuring charges based on current market information and trend analysis of the real estate market in the respective area.

      During 2004, we recorded additional restructuring charges of $9.0 million related to estimated facility lease losses. The restructuring accrual adjustments recorded in the third and fourth quarters of 2004 were the result of our decision in October 2004 to relocate our corporate headquarters within Redwood City, California in December 2004; an executed sublease for our excess facilities in Palo Alto, California during the third quarter of 2004; and an adjustment to management’s estimate of available vacant facilities. These charges represent adjustments to the original assumptions in the 2001 Restructuring Plan including, the time period that the buildings will be vacant; expected sublease rates; expected sublease terms; and the estimated time to sublease. We calculated the estimated costs for the additional restructuring charges based on current market information and trend analysis of the real estate market in the respective area. If we are unable to sublease any of the available vacant Pacific Shores facilities included in our 2001 Restructuring Plan during the remaining lease term through 2013, restructuring charges could increase by approximately $3.3 million.

      Net cash payments for 2004, 2003 and 2002 for facilities included in the 2001 Restructuring Plan amounted to $4.5 million, $4.5 million and $4.8 million, respectively. Actual future cash requirements may differ from the restructuring liability balances as of December 31, 2004 if there are changes to the time period that facilities are vacant or the actual sublease income is different from current estimates.

      Our results of operations were positively affected by the decrease in rent expense, which approximates the cash payments, and decreases to non-cash depreciation and amortization expense for the property and equipment written-off, totaling $0.4 million, $0.7 million and $1.0 million for 2004, 2003 and 2002, respectively.

      As of December 31, 2004, $109.3 million of total lease termination costs, net of actual and expected sublease income, (less broker commissions and tenant improvement costs) related to facilities to be subleased is included in accrued restructuring charges and is expected to be paid by 2013.

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Interest Income, Interest Expense and Other Income (Expense), Net

      Interest income is primarily interest income earned on our cash, cash equivalents, investments and restricted cash. Interest income and other, net was $3.4 million in 2004, $7.1 million in 2003 and $6.4 million in 2002. The decrease of $3.7 million or 52% in 2004 from 2003 was primarily due to a decrease of $1.1 million in foreign currency gains in 2004 and an investment impairment charge of $0.5 million related to an investment in equity securities of another company. In addition, 2003 included the receipt of a $1.6 million settlement from Ascential Software for misappropriation of trade secrets. The $0.7 million or 11% increase in 2003 from 2002 was primarily a result of the Ascential settlement of $1.6 million in 2003 and a $0.3 million decrease in losses on property and equipment, partially offset by $1.2 million in lower interest earned on our cash, cash equivalents, short-term investments and restricted stock. We currently do not engage in any foreign currency hedging activities and, therefore, are susceptible to fluctuations in foreign exchange gains or losses in our results of operations in future reporting periods.

Income Tax Provision

      We recorded an income tax provision of $1.2 million in 2004, $2.1 million in 2003 and $0.9 million in 2002. The expected tax provision derived by applying the federal statutory rate to our pre-tax loss in 2004 differed from the income tax provision recorded primarily due to restructuring charges not currently deductible for tax purposes, amortization of deferred stock compensation and intangibles, foreign withholding and income taxes, and federal alternative minimum taxes partially offset by a decrease in our valuation allowance for deferred tax assets to the extent of tax attributes utilized and the benefit from a provision to return adjustment recorded as a discrete event in the third quarter. The expected tax provision derived by applying the federal statutory rate to our pre-tax income in 2003 differed from the income tax provision recorded primarily due to a decrease in our valuation allowance for deferred tax assets to the extent of tax attributes utilized, offset by foreign taxes, alternative minimum taxes and non-deductible amortization of deferred stock-based compensation and intangibles. The expected tax benefit derived by applying the federal statutory rate to our pre-tax loss in 2002 differed from the income tax provision recorded primarily due to an increase in our valuation allowance for deferred tax assets and non-deductible amortization of deferred stock compensation.

Recent Accounting Pronouncements

      In March 2004, the Financial Accounting Standards Board (FASB) approved the consensus reached on the Emerging Issues Task Force (EITF) Issue No. 03-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments.” The Issue’s objective is to provide guidance for identifying other-than-temporarily impaired investments. EITF 03-1 also provides new disclosure requirements for investments that are deemed to be temporarily impaired. In September 2004, the FASB issued a FASB Staff Position (FSP) EITF 03-1-1 that delays the effective date of the measurement and recognition guidance in EITF 03-1 until after further deliberations by the FASB. The disclosure requirements of EITF 03-1 are effective beginning with Informatica’s fiscal 2004 annual report. Once the FASB reaches a final decision on the measurement and recognition provisions, we will evaluate the impact of the adoption of EITF 03-1.

      In December 2004, the FASB issued FASB Statement No. 123 (revised 2004), (SFAS 123(R)) “Share-Based Payment,” which is a revision of FASB Statement No. 123, (SFAS 123) “Accounting for Stock-Based Compensation”. SFAS 123(R) supersedes APB Opinion No. 25 (APB 25), “Accounting for Stock Issued to Employees”, and amends FASB Statement No. 95, “Statement of Cash Flows.” Generally, the approach in SFAS 123(R) is similar to the approach described in SFAS 123. However, SFAS 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative SFAS 123(R) permits public companies to adopt its requirements using one of two methods:

•  A “modified prospective” method in which compensation cost is recognized beginning with the effective date (a) based on the requirements of SFAS 123(R) for all share-based payments granted

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	after the effective date and (b) based on the requirements of SFAS 123(R) for all awards granted to employees prior to the effective date of SFAS 123(R) that remain unvested on the effective date.
•	A “prospective” method which includes the requirements of the modified prospective method described above, but also permits entities to restate based on the amounts previously recognized under SFAS 123(R) for purposes of pro forma disclosures either (a) all prior periods presented or (b) prior interim periods of the year of adoption.

      SFAS 123(R) must be adopted no later than in periods in which financial statements have not yet been issued. We expect to adopt SFAS 123(R) in the first interim period beginning after June 15, 2005. Although we have not completed our evaluation of the impact of this accounting pronouncement, the adoption of SFAS 123(R) is expected to have a material adverse effect on our consolidated financial position and results of operations.

      As permitted by SFAS 123, the company currently accounts for share-based payments to employees using APB 25’s intrinsic value method and, as such, generally recognizes no compensation cost for employee stock options. Accordingly, the adoption of SFAS 123(R)’s fair value method will have a significant impact on our result of operations, although it will have no impact on our overall cash position. Although we have not completed our evaluation of the impact of this accounting pronouncement, had we adopted SFAS 123(R) in prior periods, the impact of that standard would have approximated the impact of SFAS 123 as described in the disclosure of pro forma net income and earnings per share in Note 1 to our consolidated financial statements. SFAS 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature. This requirement will reduce net operating cash flows and increase net financing cash flows in periods after adoption. We cannot estimate what those amounts will be in the future (because they depend on, among other things, when employees exercise stock options); however, there were no amounts recognized in prior periods for such excess tax deductions in our reported operating cash flows.

      On December 21, 2004, the FASB issued FASB Staff Position No. 109-2 (FSP 109-2), “Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provisions within the American Jobs Creation Act of 2004” (the Jobs Act). FSP 109-2 provides guidance with respect to reporting the potential impact of the repatriation provisions of the Jobs Act on an enterprise’s income tax expense and deferred tax liability. The Jobs Act was enacted on October 22, 2004, and provides for a temporary 85% dividends received deduction on certain foreign earnings repatriated during a one-year period. The deduction would result in an approximate 5.25% federal tax rate on the repatriated earnings. To qualify for the deduction, the earnings must be reinvested in the United States pursuant to a domestic reinvestment plan established by a company’s chief executive officer and approved by a company’s board of directors. Certain other criteria in the Jobs Act must be satisfied as well. FSP 109-2 states that an enterprise is allowed time beyond the financial reporting period to evaluate the effect of the Jobs Act on its plan for reinvestment or repatriation of foreign earnings. Although we have not yet completed our evaluation of the impact of the repatriation provisions of the Jobs Act, the company does not expect that these provisions will have a material impact on its consolidated financial position, consolidated results of operations, or liquidity. Accordingly, as provided for in FSP 109-2, we have not adjusted our tax expense or deferred tax liability to reflect the repatriation provisions of the Jobs Act

      In December 2004, the FASB issued SFAS No. 153 (SFAS 153), “Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29, Accounting for Nonmonetary Transactions.” SFAS 153 eliminates the exception from fair value measurement for nonmonetary exchanges of similar productive assets in paragraph 21 (b) of APB Opinion No. 29, “Accounting for Nonmonetary Transactions,” and replaces it with an exception for exchanges that do not have commercial substance. SFAS 153 specifies that a nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS 153 is effective for periods beginning after June 15, 2005. We do not expect that adoption of SFAS 153 will have a material effect on our consolidated financial position, consolidated results of operations, or liquidity.

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Liquidity and Capital Resources

      We have funded our operations primarily through cash flows from operations and public offerings of our common stock. As of December 31, 2004, we had $241.1 million in available cash and cash equivalents and short-term investments and $12.2 million of restricted cash under the terms of our Pacific Shores property leases.

      Operating activities: Operating activities provided cash of $22.5 million in 2004, $20.5 million in 2003 and $26.2 million in 2002. Net cash provided by operating activities in 2004 was primarily due to the net loss of $104.4 million, adjusted for $38.2 million of non-cash charges for deprecation and amortization; restructuring charges; and amortization of stock-based compensation, intangible assets and acquired technology. A significant amount of cash received from deferred revenues, which typically is recognized within the next twelve months, increased net cash provided by operating activities. The $11.1 million increase in deferred revenues was offset by payments of our accrued liabilities of $9.6 million, accrued restructuring charges of $94.1 million and an increase in accounts receivable of $8.2 million in 2004. The operating cash inflows in 2003 were primarily due to the net income of $7.3 million, the benefit of non-cash charges for depreciation and amortization, purchased in-process research and development, and amortization of intangible assets totaling $16.9 million, a decrease in prepaids and other assets of $4.1 million and an increase in accounts payable of $2.0 million. The uses of cash were primarily due to an increase in accounts receivable of $3.1 million and decreases in accrued restructuring charges and deferred revenue totaling $5.9 million. The operating cash inflows in 2002 were primarily due to an increase in deferred revenue of $15.1 million and increases in accrued liabilities, net of accrued compensation, and restructuring charges totaling $16.6 million. The uses of cash were primarily due to the net loss of $15.6 million (offset by non-cash charges for depreciation and amortization, restructuring charges, provision for doubtful accounts and amortization of other intangible assets totaling $14.7 million) and increases in accounts receivable and prepaid expenses and other current assets totaling $4.1 million.

      Investing activities: Investing activities used cash of $24.6 million in 2004, $43.9 million in 2003 and $47.2 million in 2002. In 2004, $217.8 million was associated with the purchases of short-term investments and $12.5 million was associated with the purchase of property and equipment, offset by $205.8 generated from the sale and maturities of short-term investments. Short-term investments represent investments in high credit quality corporate notes and bonds, municipals and U.S. Government bonds with durations of up to two years in accordance with our investment policy. In 2003, $193.0 million was associated with the purchases of short-term investments, $30.3 million was used for the acquisition of Striva and $2.6 million was associated with the purchase of property and equipment, offset by $182.0 million generated from the sale and maturities of short-term investments. Of the $47.2 million used in investing activities in 2002, $240.2 million was associated with purchases of short-term investments and $6.9 million associated with the purchase of property and equipment, partially offset by $199.9 million generated from the sale and maturities of investments.

      Financing activities: Financing activities provided cash of $7.2 million in 2004, $0.2 million in 2003 and $6.1 million in 2002 . In 2004, our financing activities consisted of proceeds from the exercise of stock options and sales of our common stock to our employees totaling $13.3 million, offset by repurchases and retirement of our common stock of $6.1 million. In 2003, our financing activities consisted of proceeds from the exercise of stock options and sales of our common stock to our employees totaling $11.6 million, offset by repurchases and retirement of our common stock of $11.4 million. In 2002, financing activities provided cash of $6.1 million, consisting of proceeds from the exercise of stock options and sales of common stock of $7.9 million, offset by the repurchase and retirement of common stock of $1.8 million.

      We believe that our cash balances and the cash flows generated by operations will be sufficient to satisfy our anticipated cash needs for working capital and capital expenditures for at least the next 12 months. However, because our operating results may fluctuate significantly as a result of a decrease in customer demand or the acceptance of our products, we may not in the future be able to generate positive cash flows from operations. If this occurred, we would require additional funds to support our working capital requirements, or for other purposes, and may seek to raise such additional funds through public or private

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equity financings or from other sources. We may not be able to obtain adequate or favorable financing at that time. Any financing we obtain may dilute our shareholders’ ownership interests.

Contractual Obligations and Operating Leases

      The following table summarizes our significant contractual obligations at December 31, 2004, and the effect such obligations are expected to have on our liquidity and cash flows in future periods:

     Contractual Obligations

		Payment Due by Period
								2006 and			2008 and			2010 and
		Total			2005			2007			2009			Thereafter
		(In thousands)
Operating lease obligations:
	Operating lease payments	$	156,955		$	20,640		$	40,912		$	34,008		$	61,395
	Sublease income		(10,307	)		(2,108	)		(4,941	)		(3,258	)		—
	Net operating lease obligations		146,648			18,532			35,971			30,750			61,395
Other obligations(1)			200			200			—			—			—
Total		$	146,848		$	18,732		$	35,971		$	30,750		$	61,395

(1)  Other purchase obligations and commitments include minimum royalty payments under license agreements and do not include purchase obligations discussed below.

      Purchase orders or contracts for the purchase of certain goods and services are not included in the table above. We are not able to determine the aggregate amount of such purchase orders that represent contractual obligations, as purchase orders may represent authorizations to purchase rather than binding agreements. For the purposes of this table, contractual obligations for purchase of goods or services are defined as agreements that are enforceable and legally binding and that specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Our purchase orders are based on our current needs and are fulfilled by our vendors within short time horizons. We also enter into contracts for outsourced services; however, the obligations under these contracts were not significant and the contracts generally contain clauses allowing for cancellation without significant penalty. Contractual obligations that are contingent upon the achievement of certain milestones are not included in the table above.

      The expected timing of payment of the obligations discussed above is estimated based on current information. Timing of payments and actual amounts paid may be different depending on the time of receipt of goods or services or changes to agreed-upon amounts for some obligations.

Operating Leases

      We lease certain office facilities and equipment under noncancelable operating leases. During 2004, 2002 and 2001, we recorded restructuring charges related to the consolidation of excess leased facilities in the San Francisco Bay Area and Texas. Operating lease payments in the table above include approximately $131.5 million, net of actual sublease income, for operating lease commitments for those facilities that are included in restructuring charges. See Note 6, Lease Obligations, and Note 7, Restructuring Charges, in notes to the consolidated financial statements in Item 8.

      We have sublease agreements for leased office space in Palo Alto, San Francisco, Scotts Valley and Redwood City, California and Carrollton, Texas. In the event the sublessees are unable to fulfill their obligations, we would be responsible for rent due under the leases. However, we expect the sublessees will fulfill their obligations under these leases.

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      In February 2000, we entered into two lease agreements for two buildings in Redwood City, California (our former corporate headquarters), which we occupied from August 2001 through December 2004. The lease expires in July 2013. As part of these agreements, we have purchased certificates of deposit totaling $12.2 million as a security deposit for lease payments until certain financial milestones are met. The letter of credit may be reduced to an amount not less than three months of the base rent at the then current rate if our annual revenues reach $750 million and we have quarterly operating profits of at least $100 million for no less than four consecutive calendar quarters. These certificates of deposit are classified as long-term restricted cash on the consolidated balance sheet.

Other Uses of Cash

      In July 2004, our Board of Directors authorized a one-year stock repurchase program for up to five million shares of our common stock. Purchases may be made from time to time in the open market and will be funded from available working capital. The number of shares to be purchased and the timing of purchases will be based on the level of our cash balances and general business and market conditions. In 2004, we purchased 1,055,000 shares at a cost of $6.1 million under this program. These shares were retired and reclassified as authorized and unissued shares of common stock. From January 1, 2005 through February 18, 2005, we repurchased 420,000 shares of our common stock in the open market at a cost of approximately $3.4 million under this program. Purchases may be made from time to time in the open market and will be funded from available working capital.

      In September 2002, our Board of Directors authorized a one-year stock repurchase program for up to five million shares of our common stock. Purchases were made from time to time in the open market and were funded from available working capital. The number and timing of shares purchased were based on the level of our cash balances, general business and market conditions, and other factors, including alternative investment opportunities. Under this program, we repurchased 1,642,498 and 352,234 shares of our common stock for $11.4 million and $1.8 million in 2003 and 2002, respectively. These shares were retired and reclassified as authorized and unissued shares of common stock. On September 30, 2003, this one-year stock repurchase program expired.

      We may continue to execute share repurchases from time to time in order to take advantage of attractive share price levels, as determined by management and approved by the Board of Directors. The timing and terms of the transactions will depend on market conditions, our liquidity and other considerations.

      A portion of our cash may be used to acquire or invest in complementary businesses or products or to obtain the right to use complementary technologies. From time to time, in the ordinary course of business, we may evaluate potential acquisitions of such businesses, products or technologies.

Off-Balance Sheet Arrangements

      We do not have any off-balance sheet financing arrangements or transactions, arrangements or relationships with “special purpose entities.”

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RISK FACTORS

      In addition to the other information contained in this Form 10-K, we have identified the following risks and uncertainties that may have a material adverse effect on our business, financial condition or results of operation. Investors should carefully consider the risks described below before making an investment decision.

We have experienced and could continue to experience fluctuations in our quarterly operating results, especially the amount of license revenue we recognize each quarter, and such fluctuations have caused and could continue to cause our stock price to decline.

      Our quarterly operating results have fluctuated in the past and are likely to do so in the future. These fluctuations have caused our stock price to experience declines in the past and could cause our stock price to significantly fluctuate or experience declines in the future. One of the reasons why our operating results have fluctuated is that our license revenues are not predictable with any significant degree of certainty and are vulnerable to short-term shifts in customer demand. For example, we have experienced customer order deferrals in anticipation of future new product introductions or product enhancements, as well as the particular budgeting and purchase cycles of our customers. By comparison, our short-term expenses are relatively fixed and based in part on our expectations of future revenues.

      Moreover, we typically do not have a substantial backlog of license orders at the end of a fiscal period. Historically, this has particularly been the case at the end of the first and third fiscal quarters. For example, in the three months ended March 31, 2004, we experienced greater seasonal reduction in license orders than we expected. Because we typically do not have a substantial backlog of license orders, our license revenues generally reflect orders shipped in the same quarter they are received, and as a result, we do not have significant visibility of expected results for future quarters.

      Furthermore, we recognize a substantial portion of our license revenues in the last month of each quarter, and more recently, in the last few weeks of each quarter. As a result, we cannot predict the adverse impact caused by cancellations or delays in orders until the end of each quarter. Additionally, because the relocation of our corporate headquarters was accompanied by the shutdown of portions of our business in the last week of December 2004, we experienced a slight reduction in our capacity to process and fulfill orders. Consequently, some orders that would have otherwise been processed in the last week of the fourth quarter of 2004 were delayed until the first quarter of 2005. These events are not indicative of a typical fourth quarter or first quarter, and should not be considered as a future trend.

      Due to the difficulty we experience in predicting our quarterly license revenues, we believe that quarter-to-quarter comparisons of our operating results are not a good indication of our future performance. Furthermore, our future operating results could fail to meet the expectations of stock analysts and investors. If this happens, the price of our common stock could fall.

If we are unable to accurately forecast revenues, we may fail to meet stock analysts and investors’ expectations of our quarterly operating results, which could cause our stock price to decline.

      We use a “pipeline” system, a common industry practice, to forecast sales and trends in our business. Our sales personnel monitor the status of all proposals, including the date when they estimate that a customer will make a purchase decision and the potential dollar amount of the sale. We aggregate these estimates periodically in order to generate a sales pipeline. We compare the pipeline at various points in time to look for trends in our business. While this pipeline analysis may provide us with some guidance in business planning and budgeting, these pipeline estimates are necessarily speculative and may not consistently correlate to revenues in a particular quarter or over a longer period of time. Additionally, because we have historically recognized a substantial portion of our license revenues in the last month of each quarter, and more recently, in the last few weeks of each quarter, we may not be able to adjust our cost structure in a timely manner in response to variations in the conversion of the sales pipeline into license revenues. Any change in the conversion of the pipeline into customer sales or in the pipeline itself could cause us to improperly budget for future expenses that are in line with our expected future revenues, which would adversely affect our operating margins and results of operations and could cause the price of our common stock to decline.

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We have experienced reduced sales pipeline and pipeline conversion rates in the past, which have adversely affected the growth of our company and the price of our common stock.

      In 2002, we experienced a reduced conversion rate of our overall license pipeline, primarily as a result of the general economic slowdown which caused the amount of customer purchases to be reduced, deferred or cancelled. In the first half of 2003, we continued to experience a decrease in our sales pipeline as well as our pipeline conversion rate, primarily as a result of the negative impact of the war in Iraq on the capital spending budgets of our customers, as well as the continued general economic slowdown. While the U.S. economy improved in the second half of 2003 and in 2004, we experienced, and continue to experience, uncertainty regarding our sales pipeline and our ability to convert potential sales of our products into revenue. If we are unable to increase the size of our sales pipeline and our pipeline conversion rate, our results of operations could fail to meet the expectations of stock analysts and investors, which could cause the price of our common stock to decline.

While we believe we currently have adequate internal control over financial reporting, we are required to assess our internal control over financial reporting on an annual basis and any future adverse results from such assessment could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price.

      Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, (“Section 404”) and the rules and regulations promulgated by the SEC to implement Section 404, we are required to furnish a report to include in our Form 10-K an annual report by our management regarding the effectiveness of our internal control over financial reporting. The report includes, among other things, an assessment of the effectiveness of our internal control over financial reporting as of the end of our fiscal year, including a statement as to whether or not our internal control over financial reporting is effective. This assessment must include disclosure of any material weaknesses in our internal control over financial reporting identified by management.

      Management’s assessment of internal control over financial reporting requires management to make subjective judgments and, because this requirement to provide a management report is newly effective, some of our judgments will be in areas that may be open to interpretation. Therefore our management report may be uniquely difficult to prepare and our auditors, who are required to issue an attestation report along with our management’s report, may not agree with management’s assessments. While we currently believe our internal control over financial reporting is effective, the effectiveness of our internal controls to future periods is subject to the risk that our controls may become inadequate because of changes in conditions, and, as a result, the degree of compliance of our internal control over financial reporting with the policies or procedures may deteriorate.

      If we are unable to assert that our internal control over financial reporting is effective in any future period (or if our auditors are unable to express an opinion on the effectiveness of our internal controls), we could lose investor confidence in the accuracy and completeness of our financial reports, which would have an adverse effect on our stock price.

      Additionally, we continue to experience turnover in our finance and accounting personnel and shifts in responsibilities at the management level. These personnel and responsibility changes adversely affected our ability to effectively follow our internal controls and contributed to a significant deficiency regarding our controls over license revenue recognition in the third quarter of 2004. We corrected this deficiency in the fourth quarter of 2004 by establishing additional controls to review revenue transactions. We will continue to enhance our internal control over financial reporting by adding resources and procedures, as necessary.

An increase in the turnover rate of our sales force personnel may negatively impact our ability to generate license revenues.

      We experienced an increased level of turnover in our direct sales force in the fourth quarter of 2003 and the first quarter of 2004. This increase in the turnover rate impacted our ability to generate license revenues in the first nine months of 2004. Although we have hired replacements in our sales force, we typically experience lower productivity from newly hired sales personnel for a period of six to 12 months. If we are unable to

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effectively train such new personnel, or if we continue to experience a heightened level of sales force turnover, our ability to generate license revenues may be negatively impacted.

The loss of our key personnel or the inability to attract and retain additional personnel could adversely affect our ability to grow our company successfully.

      We believe our success depends upon our ability to attract and retain highly skilled personnel and key members of our management team. We continue to experience changes in members of our senior management team. For example, we recently hired John Entenmann as our Executive Vice President, Corporate Strategy and Marketing and Paul Hoffman as our Executive Vice President, Worldwide Sales. Accordingly, until such new senior personnel become familiar with our business strategy and systems, their integration could result in some disruption to our ongoing operations.

      In July 2004, Gaurav S. Dhillon, one of our founders and former president and chief executive officer, resigned. We are uncertain about the potential impact of his departure, and there exists the possibility of the loss of key personnel and significant employee turnover.

      We currently do not have any key-man life insurance relating to our key personnel, and their employment is at-will and not subject to employment contracts. We have relied on our ability to grant stock options as one mechanism for recruiting and retaining highly skilled talent. Potential accounting regulations requiring the expensing of stock options may impair our future ability to provide these incentives without incurring significant compensation costs. There can be no assurance that we will continue to successfully attract and retain key personnel.

If we do not compete effectively with companies selling data integration products, our revenues may not grow and could decline.

      The market for our products is highly competitive, quickly evolving and subject to rapidly changing technology. Our competition consists of hand-coded, custom-built data integration solutions developed in-house by various companies in the industry segments that we target, as well as other vendors of integration software products, including Ascential Software, Embarcadero Technologies, Group 1 Software, SAS Institute and certain privately-held companies. In the past, we have competed with business intelligence vendors that currently offer, or may develop, products with functionalities that compete with our products, such as Business Objects, Cognos, Hyperion Solutions, MicroStrategy and certain privately-held companies. We also compete against certain database and enterprise application vendors, which offer products that typically operate specifically with these competitors’ proprietary databases. Such potential competitors include IBM, Microsoft, Oracle, SAP and Siebel Systems. Many of these competitors have longer operating histories, substantially greater financial, technical, marketing or other resources, or greater name recognition than we do. Our competitors may be able to respond more quickly than we can to new or emerging technologies and changes in customer requirements. Competition could seriously impede our ability to sell additional products and services on terms favorable to us. Our current and potential competitors may develop and market new technologies that render our existing or future products obsolete, unmarketable or less competitive. We believe we currently compete more on the basis of our products’ functionality than on the basis of price. If our competitors develop products with similar or superior functionality, we may have difficulty competing on the basis of price.

      Our current and potential competitors may make strategic acquisitions, consolidate their operations or establish cooperative relationships among themselves or with other solution providers, thereby increasing their ability to provide a broader suite of software products or solutions and more effectively address the needs of our prospective customers. Our current and potential competitors may establish or strengthen cooperative relationships with our current or future strategic partners, thereby limiting our ability to sell products through these channels. If any of this were to occur, our ability to market and sell our software products would be impaired. In addition, competitive pressures could reduce our market share or require us to reduce our prices, either of which could harm our business, results of operations and financial condition.

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We may not successfully integrate Striva’s technology, employees or business operations with our own. As a result, we may not achieve the anticipated benefits of our acquisition, which could adversely affect our operating results and cause the price of our common stock to decline.

      In September 2003, we acquired Striva Corporation, a provider of mainframe data integration solutions. The successful integration of Striva’s technology, employees and business operations will place an additional burden on our management and infrastructure. This acquisition, and any others we may make in the future, will subject us to a number of risks, including:

•  the failure to capture the value of the business we acquired, including the loss of any key personnel, customers and business relationships;

•  an inability to generate revenue from the combined products that offsets the associated acquisition and maintenance costs;

•  the assumption of any contracts or agreements from Striva that contain terms or conditions that are unfavorable to us;

•  the loss of key personnel due to the relocation of Striva’s European headquarters; and

•  unsettled legal or tax liabilities incurred by Striva prior to the acquisition.

      There can be no assurance that we will be successful in overcoming these risks or any other problems encountered in connection with our Striva acquisition or any future acquisitions. To the extent that we are unable to successfully manage these risks, our business, operating results or financial condition could be adversely affected, and the price of our common stock could decline.

We rely on our relationships with our strategic partners. If we do not maintain and strengthen these relationships, our ability to generate revenue and control expenses could be adversely affected, which could cause a decline in the price of our common stock.

      We believe that our ability to increase the sales of our products depends in part upon maintaining and strengthening relationships with our strategic partners and any future strategic partners. In addition to our direct sales force, we rely on established relationships with a variety of strategic partners, such as systems integrators, resellers and distributors, for marketing, licensing, implementing and supporting our products in the United States and internationally. We also rely on relationships with strategic technology partners, such as enterprise application providers, database vendors, data quality vendors and enterprise integrator vendors, for the promotion and implementation of our products.

      Our strategic partners offer products from several different companies, including, in some cases, products that compete with our products. We have limited control, if any, as to whether these strategic partners devote adequate resources to promoting, selling and implementing our products as compared to our competitors’ products.

      We may not be able to maintain our strategic partnerships or attract sufficient additional strategic partners who have the ability to market our products effectively, are qualified to provide timely and cost-effective customer support and service or have the technical expertise and personnel resources necessary to implement our products for our customers. In particular, if our strategic partners do not devote sufficient resources to implement our products, we may incur substantial additional costs associated with hiring and training additional qualified technical personnel to implement solutions for our customers in a timely manner. Furthermore, our relationships with our strategic partners may not generate enough revenue to offset the significant resources used to develop these relationships. If we are unable to leverage the strength of our strategic partnerships to generate additional revenue, our revenues and the price of our common stock could decline.

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If the current improvement in the U.S. economy does not result in increased sales of our products and services, our operating results would be harmed, and the price of our common stock could decline.

      As our business has grown, we have become increasingly subject to the risks arising from adverse changes in the domestic and global economy. We experienced the adverse effect of the economic slowdown in 2002 and the first six months of 2003, which resulted in a significant reduction in capital spending by our customers, as well as longer sales cycles, and the deferral or delay of purchases of our products. In addition, terrorist actions and the military actions in Afghanistan and Iraq magnified and prolonged the adverse effects of the economic slowdown. Although the U.S. economy improved beginning in the third quarter of 2003, and we have experienced some improvement in our pipeline conversion rate, we may not experience any significant improvement in our pipeline conversion rate in the future. In particular, our ability to forecast and rely on U.S. federal government orders, especially potential orders from the U.S. Department of Defense, is uncertain due to congressional budget constraints and changes in spending priorities.

      If the current improvement in the U.S. economy does not result in increased sales of our products and services, our results of operations could fail to meet the expectations of stock analysts and investors, which could cause the price of our common stock to decline. Moreover, if the current economic conditions in Europe and Asia do not improve or if there is an escalation in regional or global conflicts, we may fall short of our revenue expectations for 2005. Although we have seen improvement in our European revenues, we may experience difficulties in our pipeline conversion rate or be negatively impacted by the effects of an economic slowdown in Europe in the future, which may impact our ability to meet our revenue expectations for 2005. Although we are investing in Asia, there are significant risks with overseas investments and our growth prospects in Asia are uncertain. In addition, we could experience delays in the payment obligations of our world-wide reseller customers if they experience weakness in the end-user market, which would increase our credit risk exposure and harm our financial condition.

As a result of our products’ lengthy sales cycles, our expected revenues are susceptible to fluctuations, which could cause us to fail to meet stock analysts and investors’ expectations, resulting in a decline in the price of our common stock.

      Due to the expense, broad functionality and company-wide deployment of our products, our customers’ decision to purchase our products typically requires the approval of their executive decision-makers. In addition, we frequently must educate our potential customers about the full benefits of our products, which also can require significant time. Further, our sales cycle may lengthen as we continue to focus our sales efforts on large corporations. As a result of these factors, the length of time from our initial contact with a customer to the customer’s decision to purchase our products typically ranges from three to nine months. We are subject to a number of significant risks as a result of our lengthy sales cycle, including:

•  our customers’ budgetary constraints and internal acceptance review procedures;

•  the timing of our customers’ budget cycles;

•  the seasonality of technology purchases, which historically has resulted in stronger sales of our products in the fourth quarter of the year, especially when compared to lighter sales in the first quarter of the year;

•  our customers’ concerns about the introduction of our products or new products from our competitors; or

•  potential downturns in general economic or political conditions that could occur during the sales cycle.

      If our sales cycle lengthens unexpectedly, it could adversely affect the timing of our revenues or increase costs, which may independently cause fluctuations in our revenue and results of operations. Finally, if we are unsuccessful in closing sales of our products after spending significant funds and management resources, our operating margins and results of operations could be adversely impacted, and the price of our common stock could decline.

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If the market in which we sell our products and services does not grow as we anticipate, we may not be able to increase our revenues at an acceptable rate of growth, and the price of our common stock could decline.

      The market for software products that enable more effective business decision-making by helping companies aggregate and utilize data stored throughout an organization, is relatively new and still emerging. Substantially all of our revenues are attributable to the sale of products and services in this market. Our potential customers may:

•  not fully value the benefits of using our products;

•  not achieve favorable results using our products;

•  experience technical difficulties in implementing our products; or

•  use alternative methods to solve the problems addressed by our products.

      If this market does not grow as we anticipate, we would not be able to sell as much of our software products and services as we currently expect, which could result in a decline in the price of our common stock.

We rely on the sale of a limited number of products, and if these products do not achieve broad market acceptance, our revenues would be adversely affected.

      To date, substantially all of our revenues have been derived from our data integration products such as PowerCenter, PowerMart, PowerConnect and related services, and to a lesser extent, our analytic application suites, data warehouse modules, business intelligence products and related services. Because we ceased direct sales of our analytic application suites and data warehouse modules in July 2003, we expect sales of our data integration software and related services to comprise substantially all of our revenues for the foreseeable future. If any of our products do not achieve market acceptance, our revenues and stock price could decrease. In particular, with the completion of our Striva acquisition, we began selling and marketing PowerExchange as part of our complete product offering. Market acceptance for PowerExchange, as well as our current products, could be affected if, among other things, competition substantially increases in the enterprise analytic software marketplace or transactional applications suppliers integrate their products to such a degree that the utility of the data integration functionality that our products provide is minimized or rendered unnecessary.

We may not be able to successfully manage the growth of our business if we are unable to improve our internal systems, processes and controls.

      We need to continue to improve our internal systems, processes and controls to effectively manage our operations and growth. We may not be able to successfully implement improvements to these systems, processes and controls in an efficient or timely manner, and we may discover deficiencies in existing systems, processes and controls. We have licensed technology from third parties to help us accomplish this objective. The support services available for such third-party technology may be negatively affected by mergers and consolidation in the software industry, and support services for such technology may not be available to us in the future. We may experience difficulties in managing improvements to our systems, processes and controls or in connection with third-party software, which could disrupt existing customer relationships, causing us to lose customers, limit us to smaller deployments of our products or increase our technical support costs.

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The price of our common stock fluctuates as a result of factors other than our operating results, such as the actions of our competitors and securities analysts, as well as developments in our industry and changes in accounting rules.

      The market price for our common stock has experienced significant fluctuations and may continue to fluctuate significantly. The market price for our common stock may be affected by a number of factors other than our operating results, including:

•  the announcement of new products or product enhancements by our competitors;

•  quarterly variations in our competitors’ results of operations;

•  changes in earnings estimates and recommendations by securities analysts;

•  developments in our industry; and

•  changes in accounting rules.

      After periods of volatility in the market price of a particular company’s securities, securities class action litigation has often been brought against that company. We and certain of our former officers and our directors have been named as defendants in a purported class action complaint, which was filed on behalf of certain persons who purchased our common stock between April 29, 1999 and December 6, 2000. Such actions could cause the price of our common stock to decline.

The price of our common stock may fluctuate when we account for employee stock option and employee stock purchase plans using the fair value method, which could significantly reduce our net income and earnings per share.

      In December 2004, the FASB issued SFAS 123(R), “Share-Based Payment,” which will require us to measure compensation cost for all share-based payments (including employee stock options) at fair value at the date of grant and record such expense in our consolidated financial statements. SFAS 123(R) is effective for first interim periods beginning after June 15, 2005. Although we have not completed our evaluation of the impact of this accounting pronouncement, the adoption of SFAS 123(R) is expected to have a material adverse impact on our consolidated financial position and results of operations, as we expect the adoption of SFAS 123(R) will result in an increase in our operating expenses and a reduction in our net income and earnings per share, all of which could result in a decline in the price of our common stock.

If our products are unable to interoperate with hardware and software technologies that are developed and maintained by third parties that are not within our control, our ability to develop and sell our products to our customers could be adversely affected which would result in harm to our business and operating results.

      Our products are designed to interoperate with and provide access to a wide range of third-party developed and maintained hardware and software technologies, which are used by our customers. The future design and development plans of the third parties that maintain these technologies are not within our control and may not be in line with our future product development plans. We may also rely on such third parties to provide us with access to these technologies so that we can properly test and develop our products to interoperate with the third-party technologies. These third parties may in the future refuse or otherwise be unable to provide us with the necessary access to their technologies. In addition, these third parties may decide to design or develop their technologies in a manner that would not be interoperable with our own. If either of these situations occur, we would not be able to continue to market our products as interoperable with such third party hardware and software, which could adversely affect our ability to successfully sell our products to our customers.

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We rely on a number of different distribution channels to sell and market our products. Any conflicts that we may experience within these various distribution channels could result in confusion for our customers and a decrease in revenue and operating margins.

      We have a number of relationships with resellers, systems integrators and distributors that assist us in obtaining broad market coverage for our products and services. Although our discount policies, sales commission structure and reseller licensing programs are intended to support each distribution channel with a minimum level of channel conflicts, we may not be able to minimize these channel conflicts in the future. Any channel conflicts that we may experience could result in confusion for our customers and a decrease in revenue and operating margins.

Any significant defect in our products could cause us to lose revenue and expose us to product liability claims.

      The software products we offer are inherently complex and, despite extensive testing and quality control, have in the past and may in the future contain errors or defects, especially when first introduced. These defects and errors could cause damage to our reputation, loss of revenue, product returns, order cancellations or lack of market acceptance of our products. We have in the past and may in the future need to issue corrective releases of our software products to fix these defects or errors. For example, we issued corrective releases to fix problems with the version of our PowerMart released in the first quarter of 1998. As a result, we had to allocate significant customer support resources to address these problems.

      Our license agreements with our customers typically contain provisions designed to limit our exposure to potential product liability claims. However, the limitation of liability provisions contained in our license agreements may not be effective as a result of existing or future national, federal, state or local laws or ordinances or unfavorable judicial decisions. Although we have not experienced any product liability claims to date, the sale and support of our products entails the risk of such claims, which could be substantial in light of the use of our products in enterprise-wide environments. In addition, our insurance against product liability may not be adequate to cover a potential claim.

If we are unable to successfully respond to technological advances and evolving industry standards, we could experience a reduction in our future product sales, which would cause our revenues to decline.

      The market for our products is characterized by continuing technological development, evolving industry standards, changing customer needs and frequent new product introductions and enhancements. The introduction of products by our direct competitors or others embodying new technologies, the emergence of new industry standards or changes in customer requirements could render our existing products obsolete, unmarketable or less competitive. In particular, an industry-wide adoption of uniform open standards across heterogeneous applications could minimize the importance of the integration functionality of our products and materially adversely affect the competitiveness and market acceptance of our products. Our success depends upon our ability to enhance existing products, to respond to changing customer requirements and to develop and introduce in a timely manner new products that keep pace with technological and competitive developments and emerging industry standards. We have in the past experienced delays in releasing new products and product enhancements and may experience similar delays in the future. As a result, in the past, some of our customers deferred purchasing our products until the next upgrade was released. Future delays or problems in the installation or implementation of our new releases may cause customers to forego purchases of our products and purchase those of our competitors instead. Additionally, even if we are able to develop new products and product enhancements, we cannot ensure that they will achieve market acceptance.

We recognize revenue from specific customers at the time we receive payment for our products, and if these customers do not make timely payment, our revenues could decrease.

      Based on limited credit history, we recognize revenue from direct end users, resellers, distributors and OEMs, which have not been deemed credit-worthy, at the time we receive payment for our products, rather

38

than at the time of sale. If these customers do not make timely payment for our products, our revenues could decrease. If our revenues decrease, the price of our common stock may fall.

We have a limited operating history and a cumulative net loss, which makes it difficult to evaluate our operations, products and prospects for the future.

      We were incorporated in 1993 and began selling our products in 1996; therefore, we have a limited operating history upon which investors can evaluate our operations, products and prospects. With the exception of 2003, when we had net income of $7.3 million, since our inception we have incurred significant annual net losses, resulting in an accumulated deficit of $195.1 million as of December 31, 2004. We cannot ensure that we will be able to sustain profitability in the future. If we are unable to sustain profitability, we may fail to meet the expectations of stock analysts and investors, and the price of our common stock may fall.

Our international operations expose us to greater intellectual property, collections, exchange rate fluctuations, regulatory and other risks, which could limit our future growth.

      We have significant operations outside the United States, including software development centers in India, the Netherlands and the United Kingdom, sales offices in Belgium, Canada, France, Germany, the Netherlands, Switzerland and the United Kingdom, and customer support centers in the Netherlands, India and the United Kingdom. Our international operations face numerous risks. For example, in order to sell our products in certain foreign countries, our products must be localized, that is, customized to meet local user needs. Developing local versions of our products for foreign markets is difficult, requires us to incur additional expenses and can take longer than we anticipate. We currently have limited experience in localizing products and in testing whether these localized products will be accepted in the targeted countries. We cannot assure you that our localization efforts will be successful.

      In addition, we have only a limited history of marketing, selling and supporting our products and services internationally. As a result, we must hire and train experienced personnel to staff and manage our foreign operations. However, we have experienced difficulties in recruiting, training and managing an international staff, and we may continue to experience such difficulties in the future.

      We must also be able to enter into strategic distributor relationships with companies in certain international markets where we do not have a local presence. If we are not able to maintain successful strategic distributor relationships internationally or recruit additional companies to enter into strategic distributor relationships, our future success in these international markets could be limited.

      Our software development centers in India, the Netherlands and the United Kingdom also subject our business to certain risks, including:

•  greater difficulty in protecting our ownership rights to intellectual property developed in foreign countries, which may have laws that materially differ from those in the United States;

•  communication delays between our main development center in Redwood Shores, California and our development centers in India, the Netherlands and the United Kingdom as a result of time zone differences, which may delay the development, testing or release of new products;

•  greater difficulty in relocating existing trained development personnel and recruiting local experienced personnel, and the costs and expenses associated with such activities; and

•  increased expenses incurred in establishing and maintaining office space and equipment for the development centers.

      Additionally, our international operations as a whole are subject to a number of risks, including the following:

•  greater risk of uncollectible accounts and longer collection cycles;

•  greater risk of unexpected changes in regulatory practices, tariffs, and tax laws and treaties;

39

•  greater risk of a failure of our for foreign employees to comply with both U.S. and foreign laws, including antitrust regulations, the Foreign Corrupt Practices Act, and unfair trade regulations;

•  business practices with European and other foreign governments and entities may differ from those in North America and may require us to include terms in our software license agreements, such as extended warranty terms, that will require us to defer license revenue and recognize it ratably over the warranty term or other performance obligation included within the agreement;

•  potential conflicts with our established distributors in countries in which we elect to establish a direct sales presence;

•  our limited experience in establishing a sales and marketing presence in Asia, especially China and Korea;

•  fluctuations in exchange rates between the U.S. dollar and foreign currencies in markets where we do business because we do not engage in any hedging activities; and

•  general economic and political conditions in these foreign markets.

      These factors and other factors could harm our ability to gain future international revenues and, consequently, materially impact our business, results of operations and financial condition. Our failure to manage our international operations and the associated risks effectively could limit the future growth of our business. The expansion of our existing international operations and entry into additional international markets will require significant management attention and financial resources.

If we are not able to adequately protect our proprietary rights, third parties could develop and market products that are equivalent to our own, which would harm our sales efforts.

      Our success depends upon our proprietary technology. We believe that our product developments, product enhancements, name recognition and the technological and innovative skills of our personnel are essential to establishing and maintaining a technology leadership position. We rely on a combination of patent, copyright, trademark and trade secret rights, confidentiality procedures and licensing arrangements to establish and protect our proprietary rights.

      However, these legal rights and contractual agreements may provide only limited protection. Our pending patent applications may not be allowed or our competitors may successfully challenge the validity or scope of any of our nine issued patents or any future issued patents. Our patents alone may not provide us with any significant competitive advantage, and third parties may develop technologies that are similar or superior to our technology or design around our patents. Third parties could copy or otherwise obtain and use our products or technology without authorization, or develop similar technology independently. We cannot easily monitor any unauthorized use of our products, and, although we are unable to determine the extent to which piracy of our software products exists, software piracy is a prevalent problem in our industry in general.

      The risk of not adequately protecting our proprietary technology and our exposure to competitive pressures may be increased if a competitor should resort to unlawful means in competing against us. For example, in July 2003 we settled a complaint against Ascential Software Corporation in which a number of former Informatica employees recruited and hired by Ascential, misappropriated our trade secrets, including sensitive product and marketing information and detailed sales information regarding existing and potential customers and unlawfully used that information to benefit Ascential in gaining a competitive advantage against us. Although we were ultimately successful in this lawsuit, there are no assurances that we will be successful in protecting our proprietary technology from competitors in the future.

      We have entered into agreements with many of our customers and partners that require us to place the source code of our products into escrow. Such agreements generally provide that such parties will have a limited, non-exclusive right to use such code if: (1) there is a bankruptcy proceeding by or against us; (2) we cease to do business; or (3) we fail to meet our support obligations. Although our agreements with these third parties limit the scope of rights to use of the source code, we may be unable to effectively control such third-party’s actions.

40

      Furthermore, effective protection of intellectual property rights is unavailable or limited in various foreign countries. The protection of our proprietary rights may be inadequate and our competitors could independently develop similar technology, duplicate our products or design around any patents or other intellectual property rights we hold.

      We may be forced to initiate litigation in order to protect our proprietary rights. For example, on July 15, 2002, we filed a patent infringement lawsuit against Acta Technology, Inc. Although this lawsuit is in the discovery stage, litigating claims related to the enforcement of proprietary rights can be very expensive and can be burdensome in terms of management time and resources, which could adversely affect our business and operating results.

We may face intellectual property infringement claims that could be costly to defend and result in our loss of significant rights.

      As is common in the software industry, we have received and may continue from time to time to receive notices from third parties claiming infringement by our products of third-party patent and other proprietary rights. As the number of software products in our target markets increases and the functionality of these products further overlaps, we may become increasingly subject to claims by a third party that our technology infringes such party’s proprietary rights. Any claims, with or without merit, could be time-consuming, result in costly litigation, cause product shipment delays or require us to enter into royalty or licensing agreements, any of which could adversely affect our business, financial condition and operating results. Although we do not believe that we are currently infringing any proprietary rights of others, legal action claiming patent infringement could be commenced against us, and we may not prevail in such litigation given the complex technical issues and inherent uncertainties in patent litigation. The potential effects on our business that may result from a third-party infringement claim include the following:

•  we may be forced to enter into royalty or licensing agreements, which may not be available on terms favorable to us, or at all;

•  we may be required to indemnify our customers or obtain replacement products or functionality for our customers;

•  we may be forced to significantly increase our development efforts and resources to redesign our products as a result of these claims; and

•  we may be forced to discontinue the sale of some or all of our products.

We may engage in future acquisitions or investments that could dilute our existing stockholders, or cause us to incur contingent liabilities, debt or significant expense.

      From time to time, in the ordinary course of business, we may evaluate potential acquisitions of, or investments in, related businesses, products or technologies. Future acquisitions and investments like these could result in the issuance of dilutive equity securities, the incurrence of debt or contingent liabilities, or the payment of cash to purchase equity securities from third parties. There can be no assurance that any strategic acquisition or investment will succeed.

Delaware law, as well as our certificate of incorporation and bylaws, contains provisions that could deter potential acquisition bids, which may adversely affect the market price of our common stock, discourage merger offers and prevent changes in our management or Board of Directors.

      Our basic corporate documents and Delaware law contain provisions that might discourage, delay or prevent a change in the control of Informatica or a change in our management. Our bylaws provide that we have a classified Board of Directors, with each class of directors subject to re-election every three years. This classified board has the effect of making it more difficult for third parties to insert their representatives on our Board of Directors and gain control of Informatica. These provisions could also discourage proxy contests and make it more difficult for our stockholders to elect directors and take other corporate actions. The existence of

41

these provisions could limit the price that investors might be willing to pay in the future for shares of our common stock.

      In addition, we have adopted a stockholder rights plan. Under the plan, we issued a dividend of one right for each outstanding share of common stock to stockholders of record as of November 12, 2001, and such rights will become exercisable only upon the occurrence of certain events. Because the rights may substantially dilute the stock ownership of a person or group attempting to take us over without the approval of our Board of Directors, the plan could make it more difficult for a third party to acquire us — or a significant percentage of our outstanding capital stock — without first negotiating with our Board of Directors regarding such acquisition.

We may need to raise additional capital in the future, which may not be available on reasonable terms to us, if at all.

      We may not generate sufficient revenue from operations to offset our operating or other expenses. As a result, in the future, we may need to raise additional funds through public or private debt or equity financings. We may not be able to borrow money or sell more of our equity securities to meet our cash needs. Even if we are able to do so, it may not be on terms that are favorable or reasonable to us. If we are not able to raise additional capital when we need it in the future, our business could be seriously harmed.

Business interruptions could adversely affect our business.

      Our operations are vulnerable to interruption by fire, earthquake, power loss, telecommunications or network failure and other events beyond our control. We do not have a detailed disaster recovery plan. Our facilities in the State of California are currently subject to electrical blackouts as a consequence of a shortage of available electrical power, which occurred during 2001. In the event these blackouts are reinstated, they could disrupt the operations of our affected facilities. In connection with the shortage of available power, prices for electricity may continue to increase in the foreseeable future. Such price changes will increase our operating costs, which could negatively impact our profitability. In addition, we do not carry sufficient business interruption insurance to compensate us for losses that may occur, and any losses or damages incurred by us could have a material adverse effect on our business

Item 7A. Quantitative and Qualitative Disclosure About Market Risk

Interest Rate Risk

      Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio. We do not use derivative financial instruments in our investment portfolio. The primary objective of our investment activities is to preserve principal while maximizing yields without significantly increasing risk. Our investment policy specifies credit quality standards for our investments and limits the amount of credit exposure to any single issue, issuer or type of investment. Our investments consist primarily of commercial paper, U.S. government notes and bonds, corporate bonds and municipal securities. All investments are carried at market value, which approximates cost.

      As of December 31, 2004, the average rate of return on our investments was 1.6%. If market interest rates were to increase immediately and uniformly by 100 basis points from levels as of December 31, 2004, the fair market value of the portfolio would decline by less than $0.9 million. Declines in interest rates could, over time, reduce our interest income.

Foreign Currency Risk

      We market and sell our software and services through our direct sales force and indirect channel partners in the United States as well as Belgium, Canada, France, Germany, the Netherlands, Switzerland and the United Kingdom and Japan. We also have relationships with indirect channel partners in other regions including Europe, Asia-Pacific, Australia, Japan and Latin America. As a result, our financial results could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in foreign

42

markets. As an example, the strengthening of the U.S. dollar compared to any of the local currencies in the markets in which we do business could make our products less competitive in these markets. As our sales are primarily in U.S. dollars, a strengthening of the dollar could make our products less competitive in foreign markets. Because we translate foreign currencies into U.S. dollars for reporting purposes, currency fluctuations, especially between the U.S. dollar and the Euro and Great Britain pound, may have an impact on our quarterly financial results. To date, we have not engaged in any foreign currency hedging activities.

Item 8. Financial Statements and Supplementary Data

      The following consolidated financial statements, and the related notes thereto, of Informatica Corporation and the Report of Independent Auditors are filed as a part of this Form 10-K.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Management on Internal Control Over Financial Reporting		45
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting		46
Report of Independent Registered Public Accounting Firm		47
Consolidated Balance Sheets		48
Consolidated Statements of Operations		49
Consolidated Statements of Stockholders’ Equity		50
Consolidated Statements of Cash Flows		51
Notes to Consolidated Financial Statements		52

44

REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

      Management of Informatica is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Informatica’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that:

•  pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

•  provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

•  provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

      Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements due to human error, or the improper circumvention or overriding of internal controls. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may change over time.

      Management assessed the effectiveness of Informatica’s internal control over financial reporting as of December 31, 2004. In making this assessment, management used the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

      Based on its assessment of internal control over financial reporting, management has concluded that, as of December 31, 2004, Informatica’s internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

      Informatica’s independent registered public accounting firm, Ernst & Young LLP, have issued an attestation report on our assessment of Informatica’s internal control over financial reporting. Their report appears immediately after this report.

/s/ SOHAIB ABBASI

Sohaib Abbasi

Chief Executive Officer

March 7, 2005

/s/ EARL. E. FRY

Earl. E. Fry

Chief Financial Officer

March 7, 2005

45

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON

INTERNAL CONTROL OVER FINANCIAL REPORTING

The Board of Directors and Stockholders of Informatica Corporation

      We have audited management’s assessment, included in the accompanying Report of Management on Internal Control Over Financial Reporting, that Informatica Corporation maintained effective internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Informatica Corporation’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the company’s internal control over financial reporting based on our audit.

      We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

      A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

      Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

      In our opinion, management’s assessment that Informatica Corporation maintained effective internal control over financial reporting as of December 31, 2004, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, Informatica Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2004, based on the COSO criteria.

      We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Informatica Corporation as of December 31, 2004 and 2003, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2004 of Informatica Corporation and our report dated March 3, 2005 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Palo Alto, California

March 3, 2005

46

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of Informatica Corporation

      We have audited the accompanying consolidated balance sheets of Informatica Corporation as of December 31, 2004 and 2003, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2004. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These consolidated financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

      We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Informatica Corporation at December 31, 2004 and 2003, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2004, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

      We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Informatica Corporation’s internal control over financial reporting as of December 31, 2004, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 3, 2005 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Palo Alto, California

March 3, 2005

47

INFORMATICA CORPORATION

CONSOLIDATED BALANCE SHEETS

			December 31,
			2004			2003
			(In thousands,
			except share data)
ASSETS
Current assets:
	Cash and cash equivalents		$	88,941		$	82,903
	Short-term investments			152,160			140,890
	Accounts receivable, net of allowances of $849 and $1,269 in 2004 and 2003, respectively			42,535			34,375
	Prepaid expenses and other current assets			7,837			5,124
		Total current assets		291,473			263,292
Restricted cash				12,166			12,166
Property and equipment, net				20,063			38,734
Goodwill				82,245			82,186
Intangible assets, net				2,880			5,325
Other assets				941			1,105
		Total assets	$	409,768		$	402,808
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable		$	7,476		$	4,458
	Accrued liabilities			15,581			25,136
	Accrued compensation and related expenses			15,681			14,251
	Income taxes payable			3,142			1,983
	Accrued restructuring charges			20,080			4,624
	Accrued merger costs			209			543
	Deferred revenue			62,443			51,282
		Total current liabilities		124,612			102,277
Accrued restructuring charges, less current portion				89,171			10,543
Accrued merger costs, less current portion				263			389
Commitments and contingencies
Stockholders’ equity:
	Preferred stock, $0.001 par value; 2,000,000 shares authorized of which 200,000 shares have been designated as Series A preferred stock, $0.001 par value, none issued and outstanding			—			—
	Common stock, $0.001 par value; 200,000,000 shares authorized; 86,771,442 and 84,628,679 shares issued and outstanding at December 31, 2004 and 2003, respectively			390,035			382,555
	Deferred stock-based compensation			(1,000	)		(4,058	)
	Accumulated deficit			(195,088	)		(90,684	)
	Accumulated other comprehensive income			1,775			1,786
		Total stockholders’ equity		195,722			289,599
		Total liabilities and stockholders’ equity	$	409,768		$	402,808

See accompanying notes to consolidated financial statements.

48

INFORMATICA CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

			Year Ended December 31,
			2004			2003			2002
			(In thousands, except per share data)
Revenues:
	License		$	97,941		$	94,590		$	99,943
	Service			121,740			110,943			95,498
		Total revenues		219,681			205,533			195,441
Cost of revenues:
	License			3,778			3,139			6,185
	Service			40,346			38,856			39,250
	Amortization of acquired technology			2,322			1,031			1,040
		Total cost of revenues		46,446			43,026			46,475
Gross profit				173,235			162,507			148,966
Operating expenses:
	Research and development			51,322			47,730			45,836
	Sales and marketing			94,900			86,810			86,770
	General and administrative			20,755			20,921			20,286
	Amortization of intangible assets			197			147			100
	Purchased in-process research and development			—			4,524			—
	Restructuring charges			112,636			—			17,030
		Total operating expenses		279,810			160,132			170,022
Income (loss) from operations				(106,575	)		2,375			(21,056	)
Interest income				4,499			3,851			5,100
Other income (expense), net				(1,054	)		3,252			1,320
Interest expense				(54	)		(44	)		(57	)
Income (loss) before income taxes				(103,184	)		9,434			(14,693	)
Income tax provision				1,220			2,124			921
Net income (loss)			$	(104,404	)	$	7,310		$	(15,614	)
Net income (loss) per share:
		Basic and diluted	$	(1.22	)	$	0.09		$	(0.20	)
Shares used in calculation of basic net income (loss) per share				85,812			82,049			79,753
Shares used in calculation of diluted net income (loss) per share				85,812			85,200			79,753

See accompanying notes to consolidated financial statements.

49

INFORMATICA CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

															Accumulated
															Other
			Common Stock						Deferred						Comprehensive			Total
									Stock-Based			Accumulated			Income			Stockholders’
			Shares			Amount			Compensation			Deficit			(Loss)			Equity
			(In thousands, except share data)
Balances at December 31, 2001				78,563,288			342,335			(299	)		(82,380	)		752			260,408
Components of comprehensive loss:
	Net loss			—			—			—			(15,614	)		—			(15,614	)
	Foreign currency translation adjustment			—			—			—			—			783			783
	Unrealized gains on investments			—			—			—			—			305			305
Comprehensive loss																			(14,526	)
Common stock options exercised				1,591,321			2,130			—			—			—			2,130
Common stock issued under employee stock purchase plan				947,173			5,730			—			—			—			5,730
Compensation expense related to stock options				—			190			—			—			—			190
Repurchase and retirement of common stock				(352,234	)		(1,750	)		—			—			—			(1,750	)
Deferred stock-based compensation adjustments				—			(4	)		4			—			—			—
Amortization of stock-based compensation				—			—			221			—			—			221
Balances at December 31, 2002				80,749,548			348,631			(74	)		(97,994	)		1,840			252,403
Components of comprehensive income:
	Net income			—			—			—			7,310			—			7,310
	Foreign currency translation adjustment			—			—			—			—			517			517
	Unrealized losses on investments			—			—			—			—			(571	)		(571	)
Comprehensive income																			7,256
Common stock options exercised				1,532,320			6,988			—			—			—			6,988
Common stock issued under employee stock purchase plan				788,470			4,636			—			—			—			4,636
Compensation expense related to stock options				—			47			—			—			—			47
Issuance of common stock and assumption of stock options in conjunction with Striva acquisition				3,189,839			33,543			(4,719	)		—			—			28,824
Common stock issued for services rendered				11,000			76			—			—			—			76
Repurchase and retirement of common stock				(1,642,498	)		(11,448	)		—			—			—			(11,448	)
Deferred stock-based compensation adjustments and other				—			82			(82	)		—			—			—
Amortization of stock-based compensation				—			—			817			—			—			817
Balances at December 31, 2003				84,628,679		$	382,555		$	(4,058	)	$	(90,684	)	$	1,786		$	289,599
Components of comprehensive loss:
		Net loss		—			—			—			(104,404	)		—			(104,404	)
		Foreign currency translation adjustment		—			—			—			—			786			786
		Unrealized losses on investments		—			—			—			—			(797	)		(797	)
Comprehensive loss																			(104,415	)
Common stock options exercised				2,392,359			8,850			—			—			—			8,850
Common stock issued under employee stock purchase plan				805,404			4,448			—			—			—			4,448
Compensation expense related to stock options				—			1,341			—			—			—			1,341
Repurchase and retirement of common stock				(1,055,000	)		(6,118	)		—			—			—			(6,118	)
Deferred stock-based compensation adjustments				—			(1,041	)		1,041			—			—			—
Amortization of stock-based compensation				—			—			2,017			—			—			2,017
Balances at December 31, 2004				86,771,442		$	390,035		$	(1,000	)	$	(195,088	)	$	1,775		$	195,722

See accompanying notes to consolidated financial statements.

50

INFORMATICA CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

				Year Ended December 31,
				2004			2003			2002
				(In thousands)
Operating activities
Net income (loss)				$	(104,404	)	$	7,310		$	(15,614	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
	Depreciation and amortization				9,229			11,181			10,477
	Sales and returns allowances				(356	)		—			425
	Provision for doubtful accounts				361			145			1,181
	Amortization and compensation expense related to stock options				3,358			940			411
	Amortization of intangible assets				2,519			1,178			1,140
	Purchased in-process research and development				—			4,524			—
	Non-cash restructuring charges				21,556			—			1,887
	Gain on the sale of investments				—			(121	)		(154	)
	Loss on disposal of property and equipment				32			43			357
	Investment impairment charge				500			—			—
	Adjustment to acquisition allocation				—			—			(710	)
	Changes in operating assets and liabilities:
		Accounts receivable			(8,165	)		(3,108	)		(2,457	)
		Prepaid expenses and other current assets			(2,540	)		4,068			(1,619	)
		Other assets			(336	)		(768	)		595
		Accounts payable			3,018			1,986			(665	)
		Accrued liabilities			(9,555	)		(1,513	)		9,431
		Accrued compensation and related expenses			1,430			1,558			(3,182	)
		Income taxes payable			917			(81	)		(810	)
		Accrued restructuring charges			94,084			(4,539	)		10,374
		Accrued merger costs			(247	)		(955	)		—
		Deferred revenue			11,131			(1,349	)		15,148
			Net cash provided by operating activities		22,532			20,499			26,215
Investing activities
Purchase of property and equipment					(12,515	)		(2,569	)		(6,911	)
Purchases of investments					(217,849	)		(193,019	)		(240,184	)
Proceeds from the sale and maturities of investments					205,782			181,964			199,913
Acquisitions, net of cash acquired					—			(30,279	)		—
			Net cash used in investing activities		(24,582	)		(43,903	)		(47,182	)
Financing activities
Proceeds from issuance of common stock					13,298			11,624			7,860
Repurchase and retirement of common stock					(6,118	)		(11,448	)		(1,750	)
			Net cash provided by financing activities		7,180			176			6,110
Effect of foreign exchange rate changes on cash and cash equivalents					908			541			783
Increase (decrease) in cash and cash equivalents					6,038			(22,687	)		(14,074	)
Cash and cash equivalents at beginning of year					82,903			105,590			119,664
Cash and cash equivalents at end of year				$	88,941		$	82,903		$	105,590
Supplemental disclosures:
	Interest paid			$	—		$	6		$	9
	Income taxes paid			$	304		$	2,126		$	1,943
Supplemental disclosures of non-cash investing and financing activities:
	Deferred stock-based compensation related to options granted and restricted stock issued			$	(1,041	)	$	4,801		$	(4	)
	Common stock issued for acquisitions			$	—		$	27,796		$	—
	Unrealized gain (loss) on available-for-sale securities			$	(797	)	$	(571	)	$	305

See accompanying notes to consolidated financial statements.

51

INFORMATICA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Description of the Company and a Summary of its Significant Accounting Policies

Description of the Company

      Informatica Corporation (the Company) was incorporated in California in February 1993 and reincorporated in Delaware in April 1999. The Company is a leading provider of enterprise data integration software that helps customers to integrate, migrate and consolidate enterprise data across systems, processes and people to reduce complexity, ensure consistency and empower the business.

Basis of Presentation

      The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.

      The functional currency of the Company’s foreign subsidiaries is the local currency. The Company translates all assets and liabilities of foreign subsidiaries to U.S. dollars at the current exchange rates as of the applicable balance sheet date. Revenue and expenses are translated at the average exchange rate prevailing during the period. Gains and losses resulting from the translation of the foreign subsidiaries’ financial statements are reported as a separate component of stockholders’ equity. Net gains and losses resulting from foreign exchange transactions, amounting to a gain of approximately $0.5 million, $1.6 million and $1.4 million for the years ended December 31, 2004, 2003 and 2002, respectively, are included in other income (expense), net in the accompanying consolidated statements of operations.

      Amortization of stock-based compensation has been reclassified to cost of service revenues and research and development, sales and marketing, and general and administrative expenses for each of the two years in the period ended December 31, 2003 to conform with the current period presentation as follows:

		Year Ended
		December 31
		2003		2002
		(In thousands)
Cost of service revenues		$	12	$	4
Research and development			468		205
Sales and marketing			252		10
General and administrative			85		2
	Total stock-based compensation	$	817	$	221

Use of Estimates

      The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). These accounting principles require us to make certain estimates, judgments and assumptions. The Company believes that the estimates, judgments and assumptions upon which it relies are reasonable based upon information available to it at the time that these estimates, judgments and assumptions are made. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. To the extent there are material differences between these estimates and actual results, the Company’s financial statements would have been affected. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result.

52

INFORMATICA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Cash and Cash Equivalents and Restricted Cash

      The Company considers highly liquid investment securities with maturities, at date of purchase, of 90 days or less to be cash equivalents. Cash and cash equivalents, which primarily consist of money market funds and government securities with insignificant interest rate risk, are stated at cost, which approximates fair value. Restricted cash consists of amounts held in deposits that are required as collateral under facilities lease agreements.

Investments

      Investments are comprised of marketable securities, which consist primarily of commercial paper, government notes and bonds, corporate bonds and municipal securities with original maturities beyond 90 days. All marketable securities are held in the Company’s name and maintained with three major financial institutions. The Company’s marketable securities are classified as available-for-sale and are reported at fair value, with unrealized gains and losses, net of tax, recorded in stockholders’ equity. The Company classifies all available-for-sale marketable securities, including those with original maturity dates greater than one year, as short-term investments. Realized gains or losses and permanent declines in value, if any, on available-for-sale securities will be reported in other income or expense as incurred.

Property and Equipment

      Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful lives of the related assets, generally three to five years. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful life of the related asset.

Software Development Costs

      The Company accounts for software development costs in accordance with Statement of Financial Accounting Standard (SFAS) No. 86, “Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed,” under which certain software development costs incurred subsequent to the establishment of technological feasibility are capitalized and amortized over the estimated lives of the related products. Technological feasibility is established upon completion of a working model. Through December 31, 2004, costs incurred subsequent to the establishment of technological feasibility have not been significant and all software development costs have been charged to research and development expense in the accompanying consolidated statements of operations.

      Pursuant to AICPA Statement of Position (SOP) No. 98-1 (SOP 98-1), “Accounting for Costs of Computer Software Developed or Obtained for Internal Use,” the Company capitalizes certain costs relating to software acquired, developed or modified solely to meet the Company’s internal requirements and for which there are no substantive plans to market the software. Costs capitalized relating to software developed to meet internal requirements were $0.3 million and $0.1 million for the years ended December 31, 2004 and 2003, respectively, and are included in property and equipment.

Goodwill

      The Company assessed goodwill for impairment in accordance with SFAS No. 142, (SFAS 142) “Goodwill and Other Intangible Assets”, which requires that goodwill be tested for impairment at the “reporting unit level” (“Reporting Unit”) at least annually and more frequently upon the occurrence of certain events, as defined by SFAS 142. Consistent with the Company’s determination that it has only one reporting segment, the Company has determined that it has only one Reporting Unit, specifically the license, implementation and support of its software applications. Goodwill was tested for impairment in the annual

53

INFORMATICA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

impairment tests on October 31 in each of the years in 2004, 2003 and 2002 using the two-step process required by SFAS 142. First, the Company reviewed the carrying amount of its Reporting Unit compared to the “fair value” of the Reporting Unit based on quoted market prices of the Company’s common stock and the discounted cash flows based on analyses prepared by the Company and with the assistance of third-party analysts. The Company’s cash flow forecasts are based on assumptions that are consistent with the plans and estimates being used to manage the business. An excess carrying value compared to fair value would indicate that goodwill may be impaired. Second, if the Company determines that goodwill may be impaired, the Company compares the “implied fair value” of the goodwill, as defined by SFAS 142, to its carrying amount to determine the impairment loss, if any. The Company has completed the annual impairment tests as of October 31 of each year, which did not result in any impairment charges.

Impairment of Long-Lived Assets

      In accordance with SFAS 144, the Company evaluates long-lived assets, other than goodwill, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable based on expected undiscounted cash flows attributable to that asset. The amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. The Company has recorded impairment of certain assets in 2004 and 2002. See Note 7, Restructuring Charges.

Fair Value of Financial Instruments, Concentrations of Credit Risk and Credit Evaluations

      The fair value of the Company’s cash, cash equivalents, short-term investments, accounts receivable and accounts payable approximates their respective carrying amounts.

      Financial instruments, which subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents, investments in marketable securities and trade accounts receivable. The Company maintains its cash and cash equivalents and investments with high quality financial institutions. The Company performs ongoing credit evaluations of its customers, which are primarily located in the United States, Canada and Europe and generally does not require collateral. The Company makes judgments as to its ability to collect outstanding receivables and provide allowances for the portion of receivables when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices. For those invoices not specifically reviewed, provisions are provided at differing rates, based upon the age of the receivable. In determining these percentages, the Company analyzes its historical collection experience and current economic trends. If the historical data it uses to calculate the allowance for doubtful accounts does not reflect the future ability to collect outstanding receivables, additional provisions for doubtful accounts may be needed and the future results of operations could be materially affected.

Revenue Recognition

      The Company follows detailed revenue recognition guidelines, which are discussed below. The Company recognizes revenue in accordance with GAAP guidance that has been prescribed for the software industry. The accounting rules related to revenue recognition are complex and are affected by interpretations of the rules and an understanding of industry practices, both of which are subject to change. Consequently, the revenue recognition accounting rules require management to make significant judgments, such as determining if collectibility is probable and if a customer is credit-worthy.

      The Company recognizes revenue in accordance with AICPA Statement of Position (SOP) 97-2 “Software Revenue Recognition,” as amended and modified by SOP 98-9,“Modification of SOP 97-2, Software Revenue Recognition, With Respect to Certain Transactions.” The Company recognizes license revenues when a noncancelable license agreement has been signed, the product has been shipped or we have provided the customer with the access codes that allow for immediate possession of the software (collectively

54

INFORMATICA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

“delivered”), the fees are fixed or determinable, collectibility is probable and vendor-specific objective evidence (VSOE) of fair value exists to allocate the fee to the undelivered elements of the arrangement. VSOE is based on the price charged when an element is sold separately. In the case of an element not yet sold separately, the price, which does not change before the element is made generally available, is established by authorized management. If an acceptance period is required, the Company recognizes revenue upon customer acceptance or the expiration of the acceptance period after all other revenue recognition criteria under SOP 97-2 have been met. The Company’s standard agreements do not contain product return rights.

      Credit-worthiness and collectibility are first assessed on a country level basis. Then, for those customers, including direct end users and the Company’s indirect channel partners (resellers, distributors and original equipment manufacturers (OEMs)) in countries deemed to have sufficient timely payment history, customers are assessed based on their payment history and credit profile.

      The country level assessment of credit-worthiness and collectibility has generally been performed annually with any changes in assessment effective on January 1st of the next fiscal year. The Company recently performed a country level assessment of credit-worthiness and determined 10 additional countries to be credit-worthy based on geopolitical and economic stability. These countries include France, where the Company has a direct sales channel and Japan, where the Company has both direct and indirect sales channels, as well as Spain, Italy, Norway, Sweden, Denmark, Finland, Australia and New Zealand, where the Company sell-through distributors. In each of the nine countries excluding France, the Company assessed the credit-worthiness and collectibility of our existing distributors and will continue to recognize revenue through these distributors upon cash receipt. However, effective January 1, 2005, in France, where the country level criteria have been met and individual customers are deemed credit-worthy, the Company will begin recognizing revenue upon shipment, rather than on cash receipt, after all other revenue recognition criteria under SOP 97-2 have been met, including, for resellers and distributors, evidence of sell-through to an identified end user. In the other nine countries where the individual distributors have not met the credit-worthiness and collectibility requirements, the Company will continue to reassess their status quarterly.

      In addition to selling directly to end users, the Company also enters into reseller and distributor arrangements that typically provide for sublicense or end user license fees based on a percentage of list prices. Revenue arrangements with resellers and distributors require evidence of sell-through, that is, persuasive evidence that the products have been sold to an identified end user. For data integration products, data warehouse modules and business intelligence platform sold indirectly through our resellers and distributors, the Company recognizes revenue upon shipment and receipt of evidence of sell-through if the reseller or distributor has been deemed credit-worthy.

      The Company also enters into OEM arrangements that provide for license fees based on inclusion of our products in the OEM’s products. These arrangements provide for fixed, irrevocable royalty payments. For credit-worthy OEMs, royalty payments are recognized based on the activity in the royalty report the Company receives from the OEM, or in the case of OEMs with fixed royalty payments, revenue is recognized when the related payment is due. When OEMs are not deemed credit-worthy, revenue is recognized upon cash receipt. In both cases, revenue is recognized after all other revenue recognition criteria under SOP 97-2 have been met.

      The assessment of credit-worthiness for resellers, distributors and OEMs within countries which have been deemed to be credit-worthy generally takes place quarterly, with any changes effective at the beginning of the next fiscal quarter. Credit-worthiness for these partners is assessed based on established credit history consisting of sales of at least one million dollars and with timely payment history, generally for the last 12 months. In the third quarter of 2004, our assessment of three resellers and OEMs determined that these customers were credit-worthy and effective October 2004, the Company began recognizing revenue for these customers upon shipment, after all other revenue recognition criteria under SOP 97-2 have been met. The

55

INFORMATICA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Company recognized incremental revenue of $0.1 million in the fourth quarter of 2004 from changing the revenue recognition related to these customers from a cash to accrual basis.

      For transactions to all customers, including direct end users, resellers, distributors and OEMs, where and the customer is deemed credit-worthy, but where the stated payment terms of the transaction are greater than 45 days from the invoice date, the Company recognizes revenue when the payments become due. In assessing this policy in light of our continuing international expansion where stated payment terms can be slightly longer, the Company determined, effective January 1, 2005, that extending the threshold to 60 days on a world-wide basis would be more appropriate. Therefore, effective January 1, 2005, the Company will begin recognizing revenue upon shipment for transactions with credit-worthy customers in credit-worthy countries with stated payment terms up to and including 60 days, after all other revenue recognition criteria under SOP 97-2 have been met. The Company has analyzed the impact of this change as though it had been implemented during 2004 and determined that this change would not have been material to its quarterly or annual revenue or results of operations in 2004. Those transactions with stated terms of more than 60 days will continue to be recognized when payments become due.

      When a customer, including direct end users, resellers, distributors and OEMs, is not deemed credit-worthy, revenue is recognized when cash is received, after all other revenue recognition criteria under SOP 97-2 have been met.

      The Company ceased selling data warehouse modules in July 2003. For our analytic application suites, which we also ceased selling directly in July 2003, the Company recognized both the license and maintenance revenue ratably over the initial maintenance period, generally one year, since we did not have VSOE of maintenance for our analytic application suites.

      The Company recognizes maintenance revenues, which consist of fees for ongoing support and product updates, ratably over the term of the contract, typically one year. Consulting revenues are primarily related to implementation services and product enhancements performed on a time-and-materials basis or, on a very infrequent basis, a fixed fee arrangement under separate service arrangements related to the installation and implementation of our software products. Education services revenues are generated from classes offered at the Company’s headquarters, sales offices and customer locations. Revenues from consulting and education services are recognized as the services are performed. When a contract includes both license and service elements, the license fee is recognized on delivery of the software or cash collections, provided services do not include significant customization or modification of the base product, and are not otherwise essential to the functionality of the software and the payment terms for licenses are not dependent on additional acceptance criteria.

      Deferred revenue includes deferred license, maintenance, consulting and education services revenue The Company’s practice is to net unpaid deferred items against the related receivables balances from those OEMs, specific resellers, distributors and specific international customers for which we defer revenue until payment is received.

Shipping and Handling Costs

      Shipping and handling costs in connection with our packaged software products are not material and are expensed as incurred and included in cost of license revenues in the Company’s results of operations.

Advertising Expense

      Advertising costs are expensed as incurred. Advertising expense was $0.4 million, $1.4 million and $0.3 million for the years ended December 31, 2004, 2003 and 2002, respectively.

56

INFORMATICA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Net Income (Loss) Per Share

      Under the provisions of SFAS No. 128, “Earnings per Share,” basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share reflects the potential dilution of securities by adding other common stock equivalents, primarily stock options, to the weighted-average number of common shares outstanding during the period, if dilutive. Potentially dilutive securities have been excluded from the computation of diluted net income (loss) per share if their inclusion is antidilutive.

      The calculation of basic and diluted net income (loss) per share is as follows:

	Year Ended December 31,
	2004			2003			2002
	(In thousands, except per share data)
Net income (loss)	$	(104,404	)	$	7,310		$	(15,614	)
Weighted-average shares outstanding		85,919			82,158			79,753
Weighted-average unvested common shares subject to repurchase		(107	)		(109	)		—
Weighted-average basic common shares		85,812			82,049			79,753
Effect of dilutive securities (stock options)		—			3,151			—
Weighted-average diluted common shares		85,812			85,200			79,753
Net income (loss) per common share — basic and diluted	$	(1.22	)	$	0.09		$	(0.20	)

      If the Company had reported net income in the year ended December 31, 2004 and 2002, the calculation of diluted earnings per share would have included the shares used in the computation of basic net loss per share as well as an additional 2,771,000 and 3,245,000 common equivalent shares, respectively, related to outstanding stock options not included in the calculations above (determined using the treasury stock method).

Stock-Based Compensation

      The Company accounts for stock issued to employees using the intrinsic value method in accordance with Accounting Principles Board Opinion No. 25 (APB 25), “Accounting for Stock Issued to Employees,” and complies with the disclosure provisions of SFAS No. 123 (SFAS 123), “Accounting for Stock-Based Compensation” and SFAS No. 148 (SFAS 148), “Accounting for Stock-Based Compensation — Transition and Disclosure.” Under APB 25, compensation expense of fixed stock options is based on the difference, if any, on the date of the grant between the fair value of the Company’s stock and the exercise price of the option. The Company amortizes its stock-based compensation under APB 25 using a straight-line basis over the remaining vesting term of the related options. The Company accounts for stock issued to non-employees in accordance with the provisions of SFAS 123 and EITF No. 96-18, “Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services.”

      Pro forma information regarding net income and net income per share is required by SFAS 148 as if the Company had accounted for its employee stock options and shares issued under the Employee Stock Purchase Plan under the fair value method of SFAS 123. The fair value of the Company’s stock-based awards to employees was estimated using the multiple option approach of the Black-Scholes option-pricing model. The related expense is amortized using an accelerated method over the vesting terms of the option as required by SFAS Interpretation 28, “Accounting for Stock Appreciation Rights and Other Variable Option or Award Plans (an interpretation of APB Opinions No. 15 and 25)”.

57

INFORMATICA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

      The fair value of the Company’s stock-based awards was estimated after no expected dividends with the following weighted-average assumptions:

	Options									ESPP
	2004			2003			2002			2004			2003			2002
Expected life (years)		4.4			3.1			2.4			0.5			0.5			0.5
Expected volatility		80	%		80	%		97	%		56	%		84	%		97	%
Risk-free interest rate		3.0	%		1.7	%		3.8	%		1.4	%		2.0	%		3.8	%

      The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. The Black-Scholes model requires the input of highly subjective assumptions. Because the Company’s stock-based awards have characteristics significantly different from those in traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its stock-based awards.

      Had compensation cost for the Company’s stock-based compensation plans been determined using the fair value at the grant dates for awards under those plans calculated using the Black-Scholes method of SFAS 123, the Company’s net income (loss) and basic and diluted net income (loss) per share would have been changed to the pro forma amounts indicated below:

		Year Ended December 31,
		2004			2003			2002
		(In thousands, except per share data)
Net income (loss), as reported		$	(104,404	)	$	7,310		$	(15,614	)
Add:
	Stock-based compensation expense included in reported net income (loss), net of related tax effects		3,358			940			411
Deduct:
	Total stock-based compensation expense determined under fair value method for all awards, net of related tax effects		(17,068	)		(24,547	)		(47,442	)
Net loss, pro forma		$	(118,114	)	$	(16,297	)	$	(62,645	)
Basic and diluted net income (loss) per share, as reported		$	(1.22	)	$	0.09		$	(0.20	)
Basic and diluted net loss per share, pro forma		$	(1.38	)	$	(0.20	)	$	(0.79	)

      These pro forma amounts may not be representative of the effects on reported income (loss) for future years as options vest over several years and additional awards are generally made each year. The weighted average fair value of options granted, which is the value assigned to the options under SFAS 123, was $4.30, $3.43 and $9.29 for options granted during 2004, 2003 and 2002, respectively. The weighted-average fair value of shares issued under the Employee Stock Purchase Plan was $2.32, $2.72 and $3.35 for 2004, 2003 and 2002, respectively.

      See Note 8, Stockholders’ Equity, for a complete description of the Company’s stock-based plans.

Comprehensive Income (Loss)

      The Company reports comprehensive income or loss in accordance with the provisions of SFAS No. 130, “Reporting Comprehensive Income,” which establishes standards for reporting comprehensive income and its components in the financial statements. The components of other comprehensive income (loss) consist of

58

INFORMATICA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

unrealized gains and losses on available-for-sale securities and foreign currency translation adjustments. Total comprehensive income (loss) and the components of accumulated other comprehensive income are presented in the accompanying consolidated statements of stockholders’ equity. The tax effects of other comprehensive income (loss) are not material for any period presented.

Income Taxes

      The Company accounts for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes,” which requires the use of the liability method in accounting for income taxes. Under this method, deferred tax assets and liabilities are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce the deferred tax assets to the amounts expected to be realized.

Recent Accounting Pronouncements

      In March 2004, the Financial Accounting Standards Board (FASB) approved the consensus reached on the Emerging Issues Task Force (EITF) Issue No. 03-1 (EITF 03-1), “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments.” The objective of EITF 03-1 is to provide guidance for identifying other-than-temporarily impaired investments. EITF 03-1 also provides new disclosure requirements for investments that are deemed to be temporarily impaired. In September 2004, the FASB issued a FASB Staff Position (FSP) EITF 03-1-1 that delays the effective date of the measurement and recognition guidance in EITF 03-1 until after further deliberations by the FASB. The disclosure requirements of EITF 03-1 are effective beginning with Informatica’s fiscal 2004 annual report. Once the FASB reaches a final decision on the measurement and recognition provisions, the Company will evaluate the impact of the adoption of EITF 03-1.

      In December 2004, the FASB issued FASB Statement No. 123 (revised 2004) (SFAS 123(R)), “Share-Based Payment,” which is a revision of FASB Statement No. 123 (SFAS 123), “Accounting for Stock-Based Compensation.” SFAS 123(R) supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and amends FASB SFAS No. 95, “Statement of Cash Flows.” Generally, the approach in SFAS 123(R) is similar to the approach described in SFAS 123. However, SFAS 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative SFAS 123(R) permits public companies to adopt its requirements using one of two methods:

•  A “modified prospective” method in which compensation cost is recognized beginning with the effective date (a) based on the requirements of SFAS 123(R) for all share-based payments granted after the effective date and (b) based on the requirements of SFAS 123(R) for all awards granted to employees prior to the effective date of SFAS 123(R) that remain unvested on the effective date.

•  A “prospective” method which includes the requirements of the modified prospective method described above, but also permits entities to restate based on the amounts previously recognized under SFAS 123(R) for purposed of pro forma disclosures either (a) all prior periods presented or (b) prior interim periods of the year of adoption.

      SFAS 123(R) must be adopted no later than the first interim period after June 15, 2005. Early adoption will be permitted in periods in which financial statements have not yet been issued. The Company expects to adopt SFAS 123(R) beginning with the first interim period after June 15, 2005. Although we have not completed our evaluation of the impact of this accounting pronouncement, the adoption of SFAS 123(R) is expected to have a material adverse effect on the Company’s consolidated financial position and results of operations.

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      As permitted by SFAS 123, the Company currently accounts for share-based payments to employees using APB 25’s intrinsic value method and, as such, generally recognizes no compensation cost for employee stock options. Accordingly, the adoption of SFAS 123(R)’s fair value method will have a significant impact on our result of operations, although it will have no impact on our overall cash position. Although we have not completed our evaluation of the impact of this accounting pronouncement, , had we adopted SFAS 123(R) in prior periods, the impact of that standard would have approximated the impact of SFAS 123 as described in the disclosure of pro forma net income and earnings per share in Note 1 to our consolidated financial statements. SFAS 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature. This requirement will reduce net operating cash flows and increase net financing cash flows in periods after adoption. While the company cannot estimate what those amounts will be in the future (because they depend on, among other things, when employees exercise stock options), there were no amounts recognized in prior periods for such excess tax deductions in the Company’s reported operating cash flows.

      On December 21, 2004, the FASB issued FASB Staff Position No. 109-2 (FSP 109-2), “Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provisions within the American Jobs Creation Act of 2004” (the Jobs Act). FSP 109-2 provides guidance with respect to reporting the potential impact of the repatriation provisions of the Jobs Act on an enterprise’s income tax expense and deferred tax liability. The Jobs Act was enacted on October 22, 2004, and provides for a temporary 85% dividends received deduction on certain foreign earnings repatriated during a one-year period. The deduction would result in an approximate 5.25% federal tax rate on the repatriated earnings. To qualify for the deduction, the earnings must be reinvested in the United States pursuant to a domestic reinvestment plan established by a company’s chief executive officer and approved by a company’s board of directors. Certain other criteria in the Jobs Act must be satisfied as well. FSP 109-2 states that an enterprise is allowed time beyond the financial reporting period to evaluate the effect of the Jobs Act on its plan for reinvestment or repatriation of foreign earnings. Although the Company has not yet completed its evaluation of the impact of the repatriation provisions of the Jobs Act, the company does not expect that these provisions will have a material impact on its consolidated financial position, consolidated results of operations, or liquidity. Accordingly, as provided for in FSP 109-2, the Company has not adjusted its tax expense or deferred tax liability to reflect the repatriation provisions of the Jobs Act

      In December 2004, the FASB issued SFAS No. 153 (SFAS No. 153), “Exchanges of Nonmonetary Assets,” an amendment of APB Opinion No. 29 (APB 29), “Accounting for Nonmonetary Transactions”. SFAS 153 eliminates the exception from fair value measurement for nonmonetary exchanges of similar productive assets in paragraph 21 (b) of APB 29, and replaces it with an exception for exchanges that do not have commercial substance. SFAS 153 specifies that a nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS 153 is effective for periods beginning after June 15, 2005. The company does not expect that adoption of SFAS 153 will have a material effect on its consolidated financial position, consolidated results of operations, or liquidity.

2. Business Combinations

Striva Corporation

      On September 29, 2003, the Company acquired Striva Corporation (Striva), a privately held mainframe data integration software vendor. The acquisition extended Informatica’s data integration and business intelligence software to include Striva’s mainframe technology for high-speed bulk data movement and solution for real-time change data capture in legacy and non-legacy environments. Management believes that it is the investment value of this synergy related to future product offerings that principally contributed to a purchase price that resulted in the recognition of goodwill. The Company paid $58.5 million, consisting of $30.7 million of cash and 3,189,839 shares of the Company’s common stock valued at $27.8 million, to acquire

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all of the outstanding common and preferred shares of Striva, including the assumption by the Company of all of the outstanding stock options issued pursuant to Striva’s stock option plan, which became options to purchase 345,220 shares of the Company’s common stock. The acquisition was accounted for using the purchase method of accounting, and a summary of the purchase price for the acquisition is as follows (in millions):

Cash paid and common stock issued		$	58.5
Accrued merger costs			1.9
Fair value of options assumed, net of deferred stock-based compensation			1.0
Liabilities assumed			3.4
	Total	$	64.8

      The purchase price was allocated as follows:

Tangible assets acquired (including cash received of $0.4 million)			$	2.5
Intangible assets:
	Developed technology			1.8
	Core technology			3.2
	Customer relationships			0.9
	Purchased in-process research and development			4.5
	Goodwill			51.9
		Total	$	64.8

      The amount of the total purchase price allocated to the net tangible assets acquired of $2.5 million was assigned based on the fair values as of the date of acquisition. The identified intangible assets acquired were assigned fair values in accordance with the guidelines established in SFAS No. 141 (SFAS 141), “Business Combinations,” FIN No. 4, “Applicability of FASB Statement No. 2 to Business Combinations Accounted for by the Purchase Method” (FIN 4) and other relevant guidance. The Company believes that these identified intangible assets have no residual value. The fair values of these intangible assets were assigned, using the discounted cash flow method, using discount rates of 15% for developed technology and customer relationships, 20% for core technology and 25% for purchased in-process research and development (IPR&D). The amortization periods were determined using the estimated economic useful life of the asset. The developed technology is being amortized on a straight-line basis over fifteen months, the core technology from three to four years and the customer relationships over five years. Of the developed technology, core technology and customer relationships intangibles totaling $5.9 million, the Company recorded amortization expense of $2.5 million in 2004 and $0.6 million in 2003, and expects to record approximately $1.1 million, $1.1 million, $0.5 million and $0.1 million in 2005, 2006, 2007 and 2008, respectively.

      The fair value assigned to IPR&D represented projects that had not reached technological feasibility and had no alternative uses. These were classified as IPR&D and expensed in the quarter ended September 30, 2003, which was the quarter of acquisition, in accordance with FIN 4.

      The excess of the purchase price over the identified tangible and intangible assets was recorded as goodwill. The Company increased the amount allocated to goodwill by $0.4 million from $51.5 million in 2003 to $51.9 million. The increases in goodwill was primarily a result of net adjustments to the Striva liabilities assumed and the merger accrual. The Company anticipates that none of the $62.3 million of the goodwill and intangible assets recorded in connection with the Striva acquisition will be deductible for income tax purposes.

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      The accrued merger costs include transaction costs and an accrual for excess leased facilities formerly occupied by Striva. In accordance with EITF No. 95-3, “Recognition of Liabilities in Connection with a Business Combination,” the liability associated with this restructuring is considered a liability assumed in the purchase price allocation. The $2.1 million merger accrual was adjusted by $0.2 million in each year of 2004 and 2003 to $1.7 million. Of the $1.7 million accrued merger costs included in the purchase price, $0.2 million and $1.0 million was paid during the years ended December 31, 2004 and 2003, respectively. As of December 31, 2004, $0.2 million was classified as current liabilities and $0.3 million was classified as noncurrent liabilities.

      The total fair value of the options assumed was $2.3 million, of which $1.0 million was included in purchase price. The remaining $1.3 million was classified as deferred compensation and is being amortized over the remaining vesting period of the underlying awards. As a result of the acquisition, three employees of Striva granted the Company a right to repurchase, subject to continued employment, a certain number of shares of the Company’s common stock at a price of $0.001 per share. As a result, an additional $3.4 million (representing the closing stock price on the effective date of acquisition multiplied by the number of shares) was recorded as deferred stock-based compensation and is being amortized as the right to repurchase lapses. The Company recorded amortization expense of $2.0 million and $0.7 million for the years ended December 31, 2004 and 2003, respectively, related to this deferred compensation. The Company expects to amortize stock-based compensation of approximately $0.8 million, $0.2 million and $11,000 in 2005, 2006 and 2007, respectively.

      The results of Striva’s operations have been included in the condensed consolidated financial statements since the acquisition date.

      The following unaudited pro forma adjusted summary reflects the Company’s condensed consolidated results of operations for the years ended December 31, 2003 and 2002, assuming Striva had been acquired on January 1, 2002 and is not intended to be indicative of future results:

	Year Ended December 31,
	2003			2002
	(In thousands, except per
	share data)
Pro forma adjusted total revenue	$	211,604		$	199,233
Pro forma adjusted net loss	$	(1,247	)	$	(17,906	)
Pro forma adjusted net loss per share — basic and diluted	$	(0.01	)	$	(0.22	)
Pro forma weighted average shares — basic and diluted		84,809			82,630

3. Investments

      The Company’s marketable securities are classified as available-for-sale as of the balance sheet date and are reported at fair value with unrealized gains and losses reported as a separate component of accumulated other comprehensive income in stockholders’ equity, net of tax. Realized gains and losses and permanent declines in value, if any, on available-for-sale securities are reported in other income or expense as incurred. The Company recognized realized gains of $0.1 million and $0.2 million for the years ended December 31, 2003 and 2002, respectively. No realized gains were recognized for the year ended December 31, 2004. The realized gains are included in other income of the consolidated results of operations for the respective years. The cost of securities sold was determined based on the specific identification method.

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      The available-for-sale securities consist of the following as of December 31, 2004:

			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
	(In thousands)
Money market funds	$	1,576	$	—	$	—		$	1,576
Corporate notes and bonds		19,446		—		(146	)		19,300
Municipal securities		40,326		—		(9	)		40,317
U.S. Government notes and bonds		79,782				(490	)		79,292
Auction rate securities		12,800		—					12,800
	$	153,930	$		$	(645	)	$	153,285

      As of December 31, 2004, investments of $1.1 million are due within 90 days, $92.3 million are due within one year and $59.9 million are due within two years.

      The available-for-sale securities consist of the following as of December 31, 2003:

			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
Money market funds	$	9,251	$	—	$	—	$	9,251
Corporate notes and bonds		25,420		51		—		25,471
Municipal securities		53,230		—		—		53,230
U.S. Government notes and bonds		61,637		101		—		61,738
Commercial paper		4,162		—		—		4,162
	$	153,700	$	152	$	—	$	153,852

      As of December 31, 2003, investments of $13.0 million are due within 90 days, $77.7 million are due within one year and $63.2 million are due within two years.

4. Property and Equipment

      Property and equipment consists of the following:

	December 31,
	2004			2003
	(In thousands)
Computer and office equipment	$	27,436		$	26,103
Furniture and fixtures		516			6,718
Leasehold improvements		4,216			33,391
Capital work-in-progress (other)		8,708			—
Capital work-in-progress (software)		—			348
		40,876			66,560
Less: accumulated depreciation and amortization		(20,813	)		(27,826	)
	$	20,063		$	38,734

      The Company recorded charges of $21.6 million and $1.9 million related to the write-off of leasehold improvements and furniture and fixtures at excess facilities during the year ended December 31, 2004 and

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2002, respectively. See Note 7, Restructuring Charges. Capital work-in-progress (software) consists of capitalized costs relating to software acquired, developed or modified solely to meet the Company’s internal requirements, pursuant to SOP No. 98-1. For the year ended December 31, 2004, the Company placed in service $0.3 million from capital work-in-progress as of December 31, 2003 to computer and office equipment and began amortization. Capital work-in-progress (other) consists of leasehold improvements, furniture and fixtures and computer and office equipment, associated with the relocation of the Company’s headquarters, that has not yet been placed in service. See Note 7, Restructuring Charges.

5. Goodwill and Other Intangible Assets

      Intangible assets consist of the following:

	December 31, 2004							December 31, 2003
	Gross					Net		Gross					Net
	Carrying		Accumulated			Intangible		Carrying		Accumulated			Intangible
	Amount		Amortization			Assets		Amount		Amortization			Assets
	(In thousands)							(In thousands)
Core technology	$	6,429	$	(4,257	)	$	2,172	$	6,355	$	(3,343	)	$	3,012
Developed technology		1,775		(1,775	)		—		1,775		(359	)		1,416
Customer relationships		945		(237	)		708		945		(48	)		897
Patents		297		(297	)		—		297		(297	)		—
Total intangible assets	$	9,446	$	(6,566	)	$	2,880	$	9,372	$	(4,047	)	$	5,325

      Amortization expense of intangible assets was approximately $2.5 million, $1.2 million and $1.1 million for the years ended December 31, 2004, 2003 and 2002, respectively. The weighted-average amortization period of the Company’s core technology, developed technology, customer relationships and patents are 3.5 years, one and one quarter years, five years and three years, respectively. The amortization expense related to identifiable intangible assets as of December 31, 2004 is expected to be $1.1 million, $1.1 million, $0.5 million and $0.1 million for the years ended December 31, 2005, 2006, 2007 and 2008, respectively.

      Core technology at December 31, 2004 and 2003 totaling $1.0 million and $1.4 million, net, related to the Striva acquisition is recorded in a European local currency therefore the gross carrying amount and accumulated amortization are subject to periodic translation adjustments.

      In 2002, the Company recorded an increase in goodwill of $0.7 million related to acquisitions in 2001 to reflect an adjustment to the purchase price allocation in accordance with SFAS 142. In 2003, the Company recorded an increase in goodwill of $51.9 million related to the Striva acquisition. See Note 2, Business Combinations. In 2004, the Company recorded an increase in goodwill related to the Striva acquisition of $0.1 million to reflect net adjustments to the purchase price allocation in accordance with SFAS 142.

6. Commitments and Contingencies

Lease Obligations

      In December 2004, the Company relocated its corporate headquarters within Redwood City, California and entered into a new lease agreement. The lease term is from December 15, 2004 to December 31, 2007 (with a three-year renewal option). Minimum lease payments are $1.5 million, $1.9 million and $2.1 million for the years ended December 31, 2005, 2006 and 2007, respectively.

      The Company entered into two lease agreements in February 2000 for two office buildings in Redwood City, California, which it occupied in August 2001. The lease expires in July 2013. As part of these agreements, the Company purchased certificates of deposit totaling $12.2 million as a security deposit for lease payments until certain financial milestones are met. The letter of credit may be reduced to an amount not less

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than three months of the base rent at the then current rate if our annual revenues reach $750 million and we have quarterly operating profits of at least $100 million for no less than four consecutive calendar quarters. These certificates of deposit are classified as long-term restricted cash on the Company’s consolidated balance sheet.

      The Company leases certain office facilities under various noncancelable operating leases, including those described above, which expire at various dates through 2013 and require the Company to pay operating costs, including property taxes, insurance and maintenance. Rent expense was $16.1 million, $15.4 million and $16.2 million for the years ended December 31, 2004, 2003 and 2002, respectively. Operating lease payments in the table below include approximately $141.3 million, net of actual sublease income, for operating lease commitments for facilities that are included in restructuring charges. See Note 7, Restructuring Charges, for a further discussion.

      Future minimum lease payments as of December 31, 2004 under noncancelable operating leases with original terms in excess of one year are summarized as follows:

	Operating		Sublease
	Leases		Income		Net
	(In thousands)
Years ending December 31:
2005	$	20,640	$	2,108	$	18,532
2006		20,947		2,747		18,200
2007		19,965		2,194		17,771
2008		16,778		2,016		14,762
2009		17,230		1,242		15,988
Thereafter		61,395		—		61,395
Total minimum lease payments	$	156,955	$	10,307	$	146,648

      In February 2005, the Company subleased 187,000 square feet of office space at Pacific Shores Center, its previous corporate headquarters, in Redwood City, California for the remainder of the lease term through July 2013 with a right of termination by the subtenant which is exercisable in July 2009. In 2004, the Company signed sublease agreements for leased office space in Palo Alto and Scotts Valley, California. In 2003, the Company signed sublease agreements for leased office space in San Francisco, Palo Alto and Redwood City, California. During 2002, the Company signed sublease agreements for leased office space in Palo Alto, California and Carrollton, Texas. Under the sublease agreements, the Company received $1.2 million, $0.9 million and $0.1 million sublease income for the years ended December 31, 2004, 2003 and 2002, respectively.

Indemnifications

      The Company sells software licenses and services to its customers under contracts, which the Company refers to as the License to Use Informatica Software (“License Agreement”). Each License Agreement contains the relevant terms of the contractual arrangement with the customer, and generally includes certain provisions for indemnifying the customer against losses, expenses, and liabilities from damages that may be awarded against the customer in the event the Company’s software is found to infringe upon a patent, copyright, trademark, or other proprietary right of a third party. The License Agreement generally limits the

scope of and remedies for such indemnification obligations in a variety of industry-standard respects, including but not limited to certain time and scope limitations and a right to replace an infringing product.

      The Company believes its internal development processes and other policies and practices limit its exposure related to the indemnification provisions of the License Agreement. In addition, the Company

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requires its employees to sign a proprietary information and inventions agreement, which assigns the rights to its employees’ development work to the Company. To date, the Company has not had to reimburse any of its customers for any losses related to these indemnification provisions and no material claims against the Company are outstanding as of December 31, 2004. For several reasons, including the lack of prior indemnification claims and the lack of a monetary liability limit for certain infringement cases under the License Agreement, the Company cannot determine the maximum amount of potential future payments, if any, related to such indemnification provisions.

Warranties

      The Company generally provides a warranty for its software products and services to its customers for a period of three to six months and accounts for its warranties under the FASB’s SFAS No. 5, “Accounting for Contingencies.” The Company’s software products’ media are generally warranted to be free of defects in materials and workmanship under normal use and the products are also generally warranted to substantially perform as described in certain Company documentation. The Company’s services are generally warranted to be performed in a professional manner and to materially conform to the specifications set forth in a customer’s signed contract. In the event there is a failure of such warranties, the Company generally will correct or provide a reasonable work around or replacement product. The Company has provided a warranty accrual of $0.2 million as of December 31, 2004, 2003 and 2002. To date, the Company’s product warranty expense has not been significant.

7. Restructuring Charges

2004 Restructuring Plan

      In October 2004, the Company announced a restructuring plan (2004 Restructuring Plan) related to the December 2004 relocation of the Company’s corporate headquarters within Redwood City, California. In February 2005, the Company subleased its previous corporate headquarters at Pacific Shore Center through July 2013 with a right of termination by the tenant which is exercisable in July 2009. As a result, the Company recorded restructuring charges of approximately $103.6 million, consisting of $21.6 million in leasehold improvement and asset write-offs and $82.0 million related to estimated facility lease losses, which is comprised of the present value of lease payment obligations for the remaining nine year lease term of the previous corporate headquarters, net of actual and estimated sublease income. The Company has actual and estimated sublease income, including the reimbursement of certain property costs such as common area maintenance, insurance and property tax, net of estimated broker commissions of $1.0 million in 2005, $3.5 million in 2006, $3.5 million in 2007, $4.2 million in 2008, $2.7 million in 2009, $0.8 million in 2010, $3.1 million in 2011, $3.7 million in 2012 and $2.1 million in 2013. If the subtenant exercises the right of termination in 2009 and the Company is unable to sublease any of the related Pacific Shores facilities during the remaining lease terms through 2013, restructuring charges could increase by approximately $9.8 million.

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      A summary of the activity of the accrued restructuring charges for the 2004 Restructuring Plan for the year ended December 31, 2004 is as follows:

	Accrued											Accrued
	Restructuring											Restructuring
	Charges at											Charges at
	December 31,		Restructuring		Net Cash		Non-Cash			Reclass of Deferred		December 31,
	2003		Charges		Payments		Charges			Rent Obligations		2004
	(In thousands)
Property and equipment write-offs	$	—	$	21,556	$	—	$	(21,556	)	$	—	$	—
Excess leased facilities		—		82,014		—		—			6,507		88,521
	$	—	$	103,570	$	—	$	(21,556	)	$	6,507	$	88,521

      In future periods, the Company will record accretion on the cash obligations related to the 2004 Restructuring Plan. Accretion represents imputed interest and is the difference between our non-discounted future cash obligations and the discounted present value of these cash obligations. We will recognize approximately $25.1 million of accretion as a restructuring charge over the remaining term of the lease, or approximately nine years as follows: $4.8 million in 2005; $4.4 million in 2006; $4.0 million in 2007; $3.6 million in 2008; $3.1 million in 2009; $2.4 million in 2010; $1.7 million in 2011; $0.9 million in 2012; and $0.2 million in 2013.

2001 Restructuring Plan

      During 2001, the Company announced a restructuring plan (2001 Restructuring Plan) and recorded restructuring charges of approximately $12.1 million, consisting of $1.5 million in leasehold improvement and asset write-offs and $10.6 million related to the consolidation of excess leased facilities in the San Francisco Bay Area and Texas.

      During 2002, the Company recorded additional restructuring charges of approximately $17.0 million, consisting of $15.1 million related to estimated facility lease losses and $1.9 million in leasehold improvement and asset write-offs. The timing of the restructuring accrual adjustment was a result of negotiated and executed subleases for the Company’s excess facilities in Dallas, Texas and Palo Alto, California during the third quarter of 2002. These subleases included terms that provided a lower level of sublease rates than the initial assumptions. The terms of these new subleases were consistent with the continued deterioration of the commercial real estate market in these areas. In addition, cost containment measures initiated in the same quarter, such as delayed hiring and salary reductions, resulted in an adjustment to management’s estimate of occupancy of available vacant facilities. These charges represent adjustments to the original assumptions including, the time period that the buildings will be vacant, expected sublease rates, expected sublease terms and the estimated time to sublease. The Company calculated the estimated costs for the additional restructuring charges based on current market information and trend analysis of the real estate market in the respective area.

      In December 2004, the Company recorded additional restructuring charges of $9.0 million related to estimated facility lease losses. The restructuring accrual adjustments recorded in the third and fourth quarters of 2004 were the result of the relocation of its corporate headquarters within Redwood City, California in December 2004, an executed sublease for the Company’s excess facilities in Palo Alto, California during the third quarter of 2004 and an adjustment to management’s estimate of occupancy of available vacant facilities. These charges represent adjustments to the original assumptions in the 2001 Restructuring Plan charges including, the time period that the buildings will be vacant; expected sublease rates; expected sublease terms; and the estimated time to sublease. The Company calculated the estimated costs for the additional restructuring charges based on current market information and trend analysis of the real estate market in the

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respective area. If the Company is unable to sublease any of the available vacant Pacific Shores facilities included in its 2001 Restructuring Plan during the remaining lease term through 2013, restructuring charges could increase by approximately $3.3 million.

      A summary of the activity of the accrued restructuring charges for the year ended December 31, 2004 is as follows:

	Accrued											Accrued
	Restructuring											Restructuring
	Charges at									Reclass of		Charges at
	December 31,		Restructuring		Net Cash			Non-Cash		Deferred Rent		December 31,
	2003		Charges		Payments			Charges		Obligations		2004
	(In thousands)
Excess leased facilities	$	15,167	$	9,065	$	(4,465	)	$	—	$	963	$	20,730

      A summary of the activity of the accrued restructuring charges for the year ended December 31, 2003 is as follows:

	Accrued									Accrued
	Restructuring									Restructuring
	Charges at									Charges at
	December 31,		Restructuring		Net Cash			Non-Cash		December 31,
	2002		Charges		Payments			Charges		2003
	(In thousands)
Excess leased facilities	$	19,706	$	—	$	(4,539	)	$	—	$	15,167

      A summary of the activity of the accrued restructuring charges for the year ended December 31, 2002 is as follows:

	Accrued										Accrued
	Restructuring										Restructuring
	Charges at										Charges at
	December 31,		Restructuring		Net Cash			Non-Cash			December 31,
	2001		Charges		Payments			Charges			2002
	(In thousands)
Property and equipment write-offs	$	—	$	1,887	$	—		$	(1,887	)	$	—
Excess leased facilities		9,332		15,143		(4,769	)		—			19,706
	$	9,332	$	17,030	$	(4,769	)	$	(1,887	)	$	19,706

      Net cash payments for 2004, 2003 and 2002 for facilities included in the 2001 Restructuring Plan amounted to $4.5 million, $4.5 million and $4.8 million, respectively. Actual future cash requirements may differ from the restructuring liability balances as of December 31, 2004 if the Company continues to be unable to sublease the excess leased facilities, there are changes to the time period that facilities are vacant, or the actual sublease income is different from current estimates.

      Inherent in the estimation of the costs related to the restructuring efforts are assessments related to the most likely expected outcome of the significant actions to accomplish the restructuring. The estimates of sublease income may vary significantly depending, in part, on factors which may be beyond the Company’s control, such as the time periods required to locate and contract suitable subleases and the market rates at the time of such subleases.

      As the related facilities associated with the restructured properties are no longer being utilized in the Company’s operations, the Company reclassified the deferred rent liability to accrued restructuring charges in 2004. As of December 31, 2004, $20.1 million of the $109.3 million accrued restructuring charges was classified as current liabilities and the remaining $89.2 million was classified as noncurrent liabilities.

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8.     Stockholders’ Equity

Common Stock

Repurchase Rights

      In September 2003, upon the acquisition of Striva, the Company entered into restricted stock agreements with three Striva employees. In connection with these agreements, 50% of the converted Striva stock held by each employee is subject to a repurchase right by the Company. The total number of shares of common stock subject to these repurchase rights initially totaled 450,149 when the acquisition closed. The repurchase rights lapse ratably over periods ranging from one to two years through September 2005 based on continued employment of the individuals with the Company. In connection with these shares, the Company recognized deferred stock-based compensation totaling $3.4 million, which is being amortized over the respective vesting periods. The deferred stock-based compensation balance as of December 31, 2004 was $0.4 million, which will be fully amortized in 2005.

      As of December 31, 2004, the Company had the right to repurchase 47,882 shares of the restricted common stock at $.001 per share.

Stock Issued for Services Rendered

      In June 2003, the Company granted unrestricted common stock for consulting services rendered. The Company issued 11,000 shares of common stock. The fair value of the common stock on the date of issuance totaled $76,000. The fair value was recognized as a general and administrative expense in the year ended December 31, 2003 as there was no remaining performance obligation.

Stock Option Plans

1999 Stock Incentive Plan

      The Company’s stockholders approved the 1999 Stock Incentive Plan (the “1999 Incentive Plan”) in April 1999 under which 2,600,000 shares have been reserved for issuance. In addition, any shares not issued under the 1996 Stock Plan are also available for grant. The number of shares reserved under the 1999 Incentive Plan automatically increases annually beginning on January 1, 2000 by the lesser of 16,000,000 shares or 5% of the total amount of fully diluted shares of common stock outstanding as of such date. Under the 1999 Incentive Plan, eligible employees may purchase stock options, stock appreciation rights, restricted shares and stock units. The exercise price for incentive stock options and non-qualified options may not be less than 100% and 85%, respectively, of the fair value of the Company’s common stock at the option grant date. Options granted are exercisable over a maximum term of seven to ten years from the date of the grant and generally vest over a period of four years. As of December 31, 2004, the Company had 7,244,198 shares available for future issuance under the 1999 Incentive Plan.

1999 Non-Employee Director Stock Incentive Plan

      The Company’s stockholders adopted the 1999 Non-Employee Director Stock Option Incentive Plan (the “Directors Plan”) in April 1999 under which 1,000,000 shares have been reserved for issuance. Each non-employee joining the Board of Directors following the completion of the initial public offering would automatically receive options to purchase 100,000 shares of common stock at an exercise price per share equal to the fair market value of the common stock. In April 2003, the Board of Directors amended the Directors Plan such that each non-employee joining the Board of Directors will automatically receive options to purchase 60,000 shares of common stock. These options were exercisable over a maximum term of five years and would vest in four equal annual installments on each yearly anniversary from the date of the grant. The Directors Plan was amended in April 2003 such that one-third of the options vest one year from the grant date

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and the remainder shall vest ratably over 24 months. In May 2004, the Directors Plan was amended such that each non-employee director, who has been a member of the Board for at least six months prior to each annual stockholders meeting, will automatically receive options to purchase 25,000 shares of common stock at each such meeting. Each option will have an exercise price equal to the fair value of the common stock on the automatic grant date and will vest on the first anniversary of the grant date. There was an initial grant for a new Board member totaling 60,000 shares of common stock and five automatic annual options granted for a total of 125,000 shares of the Company’s common stock in 2004 under the Directors Plan. As of December 31, 2004, the Company has 395,000 shares available for future issuance under the Directors Plan.

2000 Employee Stock Incentive Plan

      In January 2000, the Board of Directors approved the 2000 Employee Stock Incentive Plan (the “2000 Incentive Plan”) under which 1,600,000 shares have been reserved for issuance. Under the 2000 Incentive Plan, eligible employees and consultants may purchase stock options, stock appreciation rights, restricted shares and stock units. The exercise price for non-qualified options may not be less than 85% of the fair value of common stock at the option grant date. Options granted are exercisable over a maximum term of ten years from the date of the grant and generally vest over a period of four years from the date of the grant. As of December 31, 2004, the Company had 729,381 shares available for future issuance under the 2000 Incentive Plan.

Assumed Option Plans

      In connection with certain acquisitions made by the Company, Informatica assumed options in the Influence 1996 Incentive Stock Option Plan, the Zimba 1999 Stock Option Plan and the Striva 2000 Stock Plan (the “Assumed Plans”). No further options will be granted under the Assumed Plans.

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Stock Option Plan Activity

      A summary of the Company’s stock option activity under all plans is set forth below:

					Weighted-
					Average
		Number of			Exercise Price
		Shares			per Share
Outstanding at December 31, 2001			7,734,438		$	7.96
	Granted		11,848,462			7.58
	Exercised		(1,591,321	)		1.34
	Canceled		(3,074,259	)		10.65
Outstanding at December 31, 2002			14,917,320			7.81
	Granted		4,368,235			6.59
	Exercised		(1,532,320	)		4.56
	Canceled		(2,168,112	)		11.67
Outstanding at December 31, 2003			15,585,123			7.26
	Granted		7,901,756			6.97
	Exercised		(2,392,359	)		3.70
	Canceled		(3,209,083	)		8.06
Outstanding at December 31, 2004			17,885,437		$	7.47

      The following table summarizes information concerning currently outstanding and exercisable options as of December 31, 2004:

		Options Outstanding						Options Exercisable
				Weighted Average		Weighted-				Weighted-
				Remaining		Average				Average
Range of				Contractual Life		Exercise Price				Exercise Price
Exercise Prices		Number		(Years)		per Share		Number		per Share
	$0.0625 - $4.40		1,475,567		5.20	$	2.28		1,215,936	$	2.10
	$4.51 - $5.69		2,834,417		9.35	$	5.64		71,839	$	4.73
	$5.72 - $6.56		1,295,591		6.86	$	6.28		83,596	$	6.37
	$6.57 - $7.11		1,887,902		5.35	$	6.65		923,534	$	6.65
	$7.13 - $7.66		2,781,183		6.28	$	7.34		467,292	$	7.32
	$7.68 - $7.90		4,483,092		5.45	$	7.90		4,269,120	$	7.90
	$7.91 - $9.14		1,595,751		6.91	$	8.22		1,028,463	$	8.15
	$9.16 - $48.625		1,531,934		5.26	$	16.06		1,012,115	$	18.58
			17,885,437		6.38	$	7.47		9,071,895	$	8.15

      In connection with the grant of certain stock options to employees, the Company recorded deferred stock-based compensation of $0.8 million in 1999 prior to the Company’s initial public offering and $2.8 million in 2000, representing the difference between the deemed fair value of the Company’s common stock and the option exercise price at the date of grant. This deferred stock-based compensation was amortized to operations over a four-year vesting period using the graded vesting method. This amount was computed using the Black-Scholes option valuation model, and the related amortization was charged to operations over the related term of these consulting agreements.

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      In 1999 and 2000, the Company recorded a total of $1.9 million of deferred stock-based compensation in conjunction with the assumption of certain stock options related to business combinations, which is being amortized over four years. In 2001, we recorded a reduction for deferred stock-based compensation of $2.1 million of which $1.9 million was in connection with a cancelled bonus agreement related to cancelled stock options. During 2002, the Company charged $0.2 million of stock-based compensation to operations related to the modification of stock option vesting.

      During 2003, the Company recorded a total of $1.3 million of deferred stock-based compensation in conjunction with the assumption of certain stock options in the acquisition of Striva, which is being amortized to operations over the remaining vesting term of the assumed options, generally three years. Additionally in 2003, an option to purchase common stock was granted to the Company’s CEO with a variable term that was based on future performance. The variable term of the option is such that it requires the Company to periodically remeasure the value of the grant as compared to the fair value of the stock and record related stock-based compensation. The adjustment to deferred stock-based compensation and related amortization of stock-based compensation related to this grant for the year ended December 31, 2003 was $84,000. In 2004, the Company adjusted the deferred stock-based compensation and recorded a benefit of $84,000 related to the periodic remeasurement of the stock option value through its cancellation of the stock option in July 2004.

      Amortization of stock-based compensation has been reclassified to cost of service revenues and research and development, sales and marketing, and general and administrative expenses for the two years ended December 31, 2003 to conform to the 2004 presentation. See Note 1, Description of the Company and Summary of Significant Accounting Policies. Total stock-based compensation was as follows:

		Year Ended December 31,
		2004			2003		2002
		(In thousands)
Cost of service revenues		$	48		$	12	$	4
Research and development			2,216			468		333
Sales and marketing			1,172			252		62
General and administrative			(78	)		208		12
	Total stock-based compensation	$	3,358		$	940	$	411

      Deferred stock-based compensation is presented as a reduction of stockholders’ equity. Amortization of stock-based compensation related to stock options and the common stock subject to repurchase amounted to $2.0 million, $0.8 million and $0.2 million in 2004, 2003 and 2002, respectively.

1999 Employee Stock Purchase Plan

      The stockholders adopted the 1999 Employee Stock Purchase Plan (the “Purchase Plan”) in April 1999 under which 1,600,000 shares have been reserved for issuance. The number of shares reserved under the Purchase Plan automatically increases beginning on January 1 of each year by the lesser of 6,400,000 shares or 2% of the total amount of fully diluted common stock shares outstanding on such date. Under the Purchase Plan, eligible employees may purchase common stock in an amount not to exceed 10% of the employees’ cash compensation. The purchase price per share will be 85% of the lesser of the common stock fair market value either at the beginning of a rolling two-year offering period or at the end of each six-month purchase period within the two-year offering period. During 2004, there were 805,404 shares issued under the Purchase Plan at a weighted-average price of $5.52 per share. As of December 31, 2004, the Company has 5,504,795 shares available for future issuance under the Purchase Plan.

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Stock Option Exchange Program

      In July 2001, the Company adopted a voluntary stock option exchange program for its employees. Under the program, the Company’s employees were given the option to cancel outstanding stock options previously granted in exchange for a new non-qualified stock option grant for an equal number of shares to be granted at a future date, at least six months and one day from the cancellation date of the exchanged options, which was September 14, 2001. Under the exchange program, options to purchase approximately 7.9 million shares of the Company’s common stock were tendered and cancelled. On March 15, 2002, replacement options were granted to participating employees under the exchange program for approximately 7.7 million shares of common stock. Each participant received a one-for-one replacement option for each option included in the exchange at an exercise price of $7.90 per share, which was the fair market value of the Company’s common stock on March 15, 2002. The new options have terms and conditions that are substantially the same as those of the cancelled options. The exchange program did not result in any additional compensation charges or variable plan accounting.

Stockholders’ Rights Plan

      In October 2001, the Board of Directors adopted the Stockholder Rights Plan and declared a dividend distribution of one common stock purchase right for each outstanding share of common stock held on November 12, 2001. Each right entitles the holder to purchase 1/1000th of a share of Series A Preferred Stock of the Company, par value $0.001, at an exercise price of $90 per share. The rights become exercisable in certain circumstances and are redeemable at the Company’s option, at an exercise price of $0.001 per right. The rights expire on the earlier of November 12, 2011 or on the date of their redemption or exchange. The Company may also exchange the rights for shares of common stock under certain circumstances. The Stockholders’ Rights Plan was adopted to protect stockholders from unfair or coercive takeover practices.

Stock Repurchase Plan

      In July 2004, the Company’s Board of Directors authorized a one-year stock repurchase program for up to five million shares of the Company’s common stock. Purchases may be made from time to time in the open market and will be funded from available working capital. The number of shares to be purchased and the timing of purchases will be based on the level of the Company’s cash balances and general business and market conditions. In 2004, the Company purchased 1,055,000 shares at a cost of $6.1 million under this program. These shares were retired and reclassified as authorized and unissued shares of common stock.

      In September 2002, the Company’s Board of Directors authorized a one-year stock repurchase program for up to five million shares of the Company’s common stock. Under this program, the Company purchased 1,642,498 and 352,234 shares of the Company’s common stock at a cost of $11.4 million and $1.8 million in 2003 and 2002, respectively. These shares were retired and reclassified as authorized and unissued shares of common stock. On September 30, 2003, the Company’s one-year stock repurchase program expired.

9. Accumulated Other Comprehensive Income

      The components of accumulated other comprehensive income as of December 31, 2004 and 2003, as presented in the consolidated statements of stockholders’ equity, are as follows:

	December 31,			December 31,
	2004			2003
	(In thousands)
Unrealized gain (loss) on investments	$	(645	)	$	152
Foreign currency translation adjustment		2,420			1,634
Accumulated other comprehensive income	$	1,775		$	1,786

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10. Income Taxes

      The federal, state and foreign income tax provisions for the years ended December 31, 2004, 2003 and 2002 are summarized as follows:

		Year Ended December 31,
		2004		2003		2002
		(In thousands)
Current:
	Federal	$	211	$	817	$	—
	State		150		150		50
	Foreign		859		1,157		871
		$	$1,220	$	2,124	$	921

      The components of income (loss) before income taxes attributable to domestic and foreign operations are as follows:

	Year Ended December 31,
	2004			2003			2002
	(In thousands)
Domestic	$	(94,384	)	$	24,905		$	(8,218	)
Foreign		(8,800	)		(15,471	)		(6,475	)
	$	(103,184	)	$	9,434		$	(14,693	)

      A reconciliation of the provision (benefit) computed at the statutory federal income tax rate to the Company’s income tax provision is as follows:

	Year Ended December 31,
	2004			2003			2002
	(In thousands)
Income tax provision (benefit) computed at federal statutory income tax rate	$	(36,114	)	$	3,302		$	(5,143	)
Federal alternative minimum tax		611			817			—
State taxes		98			98			33
Foreign taxes		859			1,157			871
Non-deductible purchased technology		—			1,583			—
Amortization of deferred stock-based compensation and intangibles		1,928			508			77
Other		(437	)		293			222
Valuation allowance		34,275			(5,634	)		4,861
	$	1,220		$	2,124		$	921

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      Significant components of the Company’s deferred tax assets are as follows:

		December 31,
		2004			2003
		(In thousands)
Deferred tax assets:
	Net operating loss carryforwards	$	23,278		$	18,394
	Tax credit carryforwards		11,291			10,687
	Deferred revenue		2,920			3,152
	Reserves and accrued costs not currently deductible		3,691			7,254
	Depreciable assets		1,689			1,688
	Accrued restructuring costs		53,908			7,170
	Amortization of intangibles		341			292
	Capitalized research and development		3,133			1,947
	Other		204			—
			100,455			50,584
Valuation allowance			(100,455	)		(50,584	)
Net deferred tax assets		$	—		$	—

      SFAS 109 provides for the recognition of deferred tax assets if realization of such assets is more likely than not. Based on a number of factors, which includes the Company’s historical operating performance and the reported cumulative net losses in all prior years, the Company has provided a full valuation allowance against its net deferred tax assets. The valuation allowance increased by $49.9 million, which primarily attributable to restructuring charges currently not deductible, decreased by $8.4 million and increased by $8.9 million during the years ended December 31 2004, 2003 and 2002, respectively.

      As of December 31, 2004, approximately $44.1 million of the valuation allowance for deferred taxes was attributable to the tax benefits of stock option deductions which will be credited to equity when realized.

      As of December 31, 2004, the Company has federal net operating loss carryforwards of approximately $64.0 million, federal research and development tax credit carryforwards of approximately $5.5 million and foreign tax credits of approximately $1.4 million. The net operating loss and the aforementioned tax credit carryforwards will expire at various times beginning in 2011, if not utilized. The federal minimum tax credit carryforward of $0.3 million has no expiration date.

      As of December 31, 2004, the Company has state net operating loss and research and development tax credit carryforwards of approximately $14.8 million and $6.0 million, respectively. The state net operating loss carryforward will expire in 2009 and the research and development tax credit has no expiration date. State investment tax credits of $0.2 million will expire in 2008.

      Utilization of net operating loss and tax credit carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. The annual limitation may result in the expiration of the net operating loss and credit carryforwards before utilization.

11. Investment Impairment

      In 2003, the Company made a minority equity investment in a privately-held company that was carried at a cost basis of $0.5 million and was included in other assets. The Company evaluated the investment in December 2004 and determined that the carrying value of this investment was impaired. In December 2004,

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we recorded an investment impairment charge of $0.5 million to other income (expense), net in the Company’s consolidated statement of operations. The Company based its impairment assessment on the performance of the company in which it invested including its cash position, earnings and revenue outlook, liquidity and overall management.

12.                 Employee 401(K) Plan

      The Company’s employee savings and retirement plan is qualified under Section 401 of the Internal Revenue Code. The Plan is available to all regular employees on the Company’s U.S. payroll and provides employees with tax deferred salary deductions and alternative investment options. Employees may contribute up to 25% of their salary up to the statutory prescribed annual limit. The Company matches 50% per dollar contributed by eligible employees who participate in the plan, up to a maximum of $1,500 per calendar year. The Company’s match was suspended for calendar years 2004, 2003 and 2002. Contributions made by the Company vest 100% upon contribution. In addition, the Plan provides for discretionary contributions at the discretion of the Board of Directors. No discretionary contributions have been made by the Company to date.

13. Segment Information

      The Company operates solely in one segment, the development and marketing of enterprise data integration software. The Company markets its products and services in the United States and in foreign countries through its direct sales force and indirect distribution channels. No customer accounted for more than 10% of revenue in 2004, 2003 and 2002. North America revenues include the United States and Canada. Revenue from international customers (defined as those customers outside of North America) accounted for 29%, 27% and 26% of total revenue in 2004, 2003 and 2002, respectively. There were no significant long-lived assets held outside the United States.

      Revenue was derived from customers in the following geographic areas:

	Year Ended December 31,
	2004		2003		2002
	(In thousands)
North America	$	156,565	$	149,736	$	145,178
Europe		54,951		47,778		46,132
Other		8,165		8,019		4,131
	$	219,681	$	205,533	$	195,441

14. Lawsuit Settlement

      In 2003, the Company filed a complaint against Ascential Software Corporation in which the Company asserted that Ascential, and a number of former Informatica employees recruited and hired by Ascential, misappropriated our trade secrets, including sensitive products and marketing information and detailed sales information regarding existing and potential customers and unlawfully used that information to benefit Ascential in gaining a competitive advantage against us. In July 2003, the Company settled this lawsuit with Ascential. The settlement includes a consent judgment being entered against Ascential, and a permanent injunction enjoining Ascential from using, or further disseminating, confidential, sensitive Informatica information and materials. In addition, Ascential paid Informatica a sum of $1.6 million, which is included in other income (expense), net, for the year ended December 31, 2003.

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15. Related Party Transaction

      Mark A. Bertelsen, a director of Informatica since September 2002, serves as a member of Wilson Sonsini Goodrich & Rosati (WSGR), our principal outside legal counsel. Fees paid by the Company to WSGR for legal services rendered for the years ended December 31, 2004, 2003 and 2002 were $0.5 million, $0.6 million and $0.2 million, respectively. The Company believes that the services rendered by WSGR were provided on terms no more or less favorable than those with unrelated parties.

16. Litigation

      On November 8, 2001, a purported securities class action complaint was filed in the United States District Court for the Southern District of New York. The case is entitled In re Informatica Corporation Initial Public Offering Securities Litigation, Civ. No. 01-9922 (SAS) (S.D.N.Y.), related to In re Initial Public Offering Securities Litigation, 21 MC 92 (SAS) (S.D.N.Y.). Plaintiffs’ amended complaint was brought purportedly on behalf of all persons who purchased the Company’s common stock from April 29, 1999 through December  6, 2000. It names as defendants Informatica Corporation, two of the Company’s former officers (the “Informatica defendants”), and several investment banking firms that served as underwriters of the Company’s April 29, 1999 initial public offering and September 28, 2000 follow-on public offering. The complaint alleges liability as to all defendants under Sections 11 and/or 15 of the Securities Act of 1933 and Sections 10(b) and/or 20(a) of the Securities Exchange Act of 1934, on the grounds that the registration statements for the offerings did not disclose that: (1) the underwriters had agreed to allow certain customers to purchase shares in the offerings in exchange for excess commissions paid to the underwriters; and (2) the underwriters had arranged for certain customers to purchase additional shares in the aftermarket at predetermined prices. The complaint also alleges that false analyst reports were issued. No specific damages are claimed.

      Similar allegations were made in other lawsuits challenging over 300 other initial public offerings and follow-on offerings conducted in 1999 and 2000. The cases were consolidated for pretrial purposes. On February 19, 2003, the Court ruled on all defendants’ motions to dismiss. The Court denied the motions to dismiss the claims under the Securities Act of 1933. The Court denied the motion to dismiss the Section 10(b) claim against Informatica and 184 other issuer defendants. The Court denied the motion to dismiss the Section 10(b) and 20(a) claims against the Informatica defendants and 62 other individual defendants.

      The Company accepted a settlement proposal presented to all issuer defendants. In this settlement, plaintiffs will dismiss and release all claims against the Informatica defendants, in exchange for a contingent payment by the insurance companies collectively responsible for insuring the issuers in all of the IPO cases, and for the assignment or surrender of control of certain claims the Company may have against the underwriters. The Informatica defendants will not be required to make any cash payments in the settlement, unless the pro rata amount paid by the insurers in the settlement exceeds the amount of the insurance coverage, a circumstance which the Company does not believe will occur. The settlement will require approval of the Court, which cannot be assured, after class members are given the opportunity to object to the settlement or opt out of the settlement.

      On July 15, 2002, the Company filed a patent infringement action in U.S. District Court in Northern California against Acta Technology, Inc. (“Acta”), now known as Business Objects Data Integration, Inc. (“BODI”), asserting that certain Acta products infringe on three of our patents: U.S. Patent No. 6,014,670, entitled “Apparatus and Method for Performing Data Transformations in Data Warehousing”; U.S. Patent No. 6,339,775, entitled “Apparatus and Method for Performing Data Transformations in Data Warehousing” (this patent is a continuation-in-part of and claims the benefit of U.S. Patent No. 6,014,670); and U.S. Patent No. 6,208,990, entitled “Method and Architecture for Automated Optimization of ETL Throughput in Data Warehousing Applications.” On July 17, 2002, the Company filed an amended complaint alleging that Acta

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products also infringe on one additional patent: U.S. Patent No. 6,044,374, entitled “Object References for Sharing Metadata in Data Marts.” In the suit, the Company is seeking an injunction against future sales of the infringing Acta/BODI products, as well as damages for past sales of the infringing products. The Company has asserted that BODI’s infringement of the Informatica patents was willful and deliberate. On September 5, 2002, BODI answered the complaint and filed counterclaims against us seeking a declaration that each patent asserted is not infringed and is invalid and unenforceable. BODI did not make any claims for monetary relief against us. The parties presented their respective claim constructions to the Court on September 24, 2003 and are waiting for the Court’s ruling. The matter is currently in the discovery phase.

      The Company is also a party to various legal proceedings and claims arising from the normal course of business activities.

      Based on current available information, the Company does not expect that the ultimate outcome of these unresolved matters, individually or in the aggregate, will have a material adverse effect on its results of operations, cash flows or financial position.

17. Subsequent Events

     Sublease Agreement

      On February 28, 2005, the Company entered into a sublease agreement (the Agreement) to sublease approximately 187,000 square feet in Pacific Shores Center, a vacated facility in Redwood City, California, which was included in the 2004 Restructuring Plan. The Agreement is non-cancellable and expires in July 2013 and provides a right of termination by the subtenant which is exercisable in July 2009. As a result, the Company changed its sublease assumptions made in December 2004 in connection with the 2004 Restructuring Plan.

     Stock Repurchase (unaudited)

      From January 1, 2005 through February 18, 2005, we repurchased 420,000 shares of our common stock in the open market at a cost of approximately $3.4 million under our Stock Repurchase Plan, whereby our Board of Directors authorized a one-year stock repurchase program for up to five million shares of the Company’s common stock. Purchases may be made from time to time in the open market and will be funded from available working capital. See Note 8, Stockholders’ Equity.

78

INFORMATICA CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

18. Selected Quarterly Consolidated Financial Data (Unaudited)

		Three Months Ended
		March 31,		June 30,		September 30,			December 31,
		(In thousands, except per share data)
2004:
Total revenues		$	54,173	$	53,034	$	52,428		$	60,046
Gross profit(1)			42,415		42,166		40,717			47,937
Restructuring charges			—		—		9,673			102,963
Income (loss) from operations			1,549		895		(9,866	)		(99,153	)
Net income (loss)			1,891		979		(8,585	)		(98,689	)
Net income (loss) per share:
	Basic and diluted	$	0.02	$	0.01	$	(0.10	)	$	(1.14	)
Shares used in calculation of net income (loss) per share:
	Basic		84,811		85,557		86,002			86,565
	Diluted		89,752		88,394		86,002			86,565
2003:
Total revenues		$	48,421	$	50,619	$	50,605		$	55,888
Gross profit(1)			38,337		40,188		39,804			44,178
Restructuring charges			—		—		4,524			—
Income (loss) from operations			412		2,628		(2,370	)		1,705
Net income (loss)			1,042		3,289		(256	)		3,235
Net income (loss) per share:
	Basic and diluted	$	0.01	$	0.04	$	(0.00	)	$	0.04
Shares used in calculation of net income (loss) per share:
	Basic		80,530		80,143		80,380			83,889
	Diluted		83,159		82,777		80,380			89,594

(1)  Amortization of stock-based compensation has been reclassified for the quarterly periods ended March 31, 2004 and prior to cost of services revenue, research and development, sales and marketing and general and administrative expenses

79

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

      Not applicable.

Item 9A. Control and Procedures

      (a) Evaluation of disclosure controls and procedures. Our management evaluated, with the participation of our Chief Executive Officer and our Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 (i) is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (ii) is accumulated and communicated to Informatica’s management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls and procedures are designed to provide reasonable assurance that such information is accumulated and communicated to our management. Our disclosure controls and procedures include components of our internal control over financial reporting. Management’s assessment of the effectiveness of our internal control over financial reporting is expressed at the level of reasonable assurance that the control system, no matter how well designed and operated, can provide only reasonable, but not absolute, assurance that the control system’s objectives will be met.

      (b) Management’s annual report on internal control over financial reporting. The information required to be furnished pursuant to this item is set forth under the caption “Management’s Report on Internal Control over Financial Reporting” in Item 8 of this Annual Report on Form 10-K, which is incorporated herein by reference.

      (c) Changes in internal control over financial reporting. Under The Public Company Accounting Oversight Board’s Auditing Standard No. 2 (“Standard No. 2”), a “significant deficiency” is a control deficiency, or combination of control deficiencies, that adversely affects the company’s ability to initiate, authorize, record, process or report external financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the company’s annual or interim financial statements that is more than inconsequential will not be prevented or detected. A “material weakness” is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

      Following a review of license revenue for the three months ended September 30, 2004, our independent auditors determined that we incorrectly recorded revenue related to two software license transactions. Based on the delivery requirements and acceptance terms of these software license agreements, the correct accounting treatment is to defer the license revenue for these transactions until the delivery requirements are fulfilled and acceptance has occurred. Accordingly, we deferred the related revenue at September 30, 2004.

      We have determined that, under Standard No. 2 and the prior relevant professional auditing standards, this deficiency constituted a “significant deficiency,” but not a “material weakness” in our internal controls over financial reporting. We advised our independent auditors, who concur with our determination, and our audit committee of this “significant deficiency” in our internal controls over financial reporting. We corrected this deficiency in the fourth quarter of 2004 by establishing additional controls to review revenue transactions.

      While we established additional controls to address this significant deficiency, there was no change in our internal control over financial reporting that occurred during the fourth quarter of 2004 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

80

Item 9B. Other Information

      Not applicable.

PART III

Item 10. Directors and Executive Officers of the Registrant

      Information with respect to Directors is included under the caption “Proposal One — Election of Directors” in the Proxy Statement for the 2005 Annual Meeting, which proxy statement will be filed within 120 days of our fiscal year ended December 31, 2004 (the 2005 Proxy Statement), and is incorporated herein by reference. Information with respect to Executive Officers is included under the heading “Executive Officers of the Registrant” in Part I hereof after Item 4. Information regarding delinquent filers pursuant to Item 405 of Regulation S-K is included under the heading “Section 16(a) Beneficial Ownership Reporting Compliance” in the 2005 Proxy Statement and is incorporated herein by reference.

Code of Business Conduct

      We have adopted a Code of Business Conduct that applies to all of our directors, officers (including our principal executive officer and senior financial and accounting officers) and employees. You can find our Code of Business Conduct on our website at http://www.informatica.com/company/investors/corporate 
governance/default.htm and clicking on the link “Code of Business Conduct.”

      We will post any amendments to the Code of Business Conduct, as well as any waivers that are required to be disclosed by the rules of either the SEC or the NASDAQ Stock Market, on our website.

Item 11. Executive Compensation

      The information required by this item is included under the proposal, “Election of Directors — Director Compensation” and “Executive Officer Compensation” in the 2005 Proxy Statement and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management

      The information required by this item is included under the headings “Security Ownership of Principal Stockholders and Management” and “Equity Compensation Plan Information” in the 2005 Proxy Statement and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions

      The information required by this item is included under the caption “Transactions with Management” in the 2005 Proxy Statement and is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

      The information required by this item is included under the caption under the proposal, “Ratification of Appointment of Independent Registered Public Accounting Firm” in the 2005 Proxy Statement and is incorporated herein by reference.

81

PART IV

Item 15. Exhibits and Financial Statement Schedules

      (a) The following documents are filed as part of this Annual Report on Form 10-K:

      1. Financial Statements

      Reference is made to the Index to consolidated financial statements of Informatica Corporation under Item 8 of Part II hereof.

      2. Financial Statement Schedule

      The following schedule is included herein:

      Valuation and Qualifying Accounts (Schedule II)

      All other schedules are omitted because they are not applicable or the amounts are immaterial or the required information is presented in the consolidated financial statements and notes thereto in Item 8 above.

      3. Exhibits

      See Exhibit Index immediately following the signature page of this Form 10-K.

82

INFORMATICA CORPORATION

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

	Balances at		Charged to					Balances at
	Beginning		Costs and					End of
	of Period		Expenses		Deductions			Period
	(In thousands)
Provision for Doubtful Accounts
Year ended December 31, 2004	$	564	$	361	$	(114	)	$	811
Year ended December 31, 2003	$	461	$	145	$	(42	)	$	564
Year ended December 31, 2002	$	425	$	1,181	$	(1,145	)	$	461

	Balances at								Balances at
	Beginning		Charged to						End of
	of Period		Revenue			Deductions			Period
Sales and Return Allowances
Year ended December 31, 2004	$	705	$	(356	)	$	(311	)	$	38
Year ended December 31, 2003	$	888	$	—		$	(183	)	$	705
Year ended December 31, 2002	$	1,870	$	425		$	(1,407	)	$	888

83

SIGNATURES

      Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, Redwood City, State of California on this 7th day of March 2005.

INFORMATICA CORPORATION

By:  /s/ SOHAIB ABBASI

Sohaib Abbasi

Chief Executive Officer, President and Director

      Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/ SOHAIB ABBASI Sohaib Abbasi	Chief Executive Officer, President and Director (Principal Executive Officer)	March 7, 2005
/s/ EARL E. FRY Earl E. Fry	Chief Financial Officer, Executive Vice President, and Secretary (Principal Financial and Accounting Officer)	March 7, 2005
/s/ DAVID W. PIDWELL David W. Pidwell	Director	March 7, 2005
/s/ A. BROOKE SEAWELL A. Brooke Seawell	Director	March 7, 2005
/s/ JANICE D. CHAFFIN Janice D. Chaffin	Director	March 7, 2005
/s/ MARK A. BERTELSEN Mark A. Bertelsen	Director	March 7, 2005
/s/ CARL J. YANKOWSKI Carl J. Yankowski	Director	March 7, 2005

84

EXHIBIT INDEX

Exhibit
Number			Document
	2	.1	Agreement and Plan of Merger, dated September 11, 2003, by and among Informatica Corporation, a Delaware corporation, Stopwatch Acquisition Corporation, a Delaware corporation, Striva Corporation, a Delaware corporation, and Pete Sinclair as Stockholder Representative.(1)
	2	.2	Amendment No. 1 to Agreement and Plan of Merger, dated September 22, 2003.(1)
	2	.3	Amendment No. 2 to Agreement and Plan of Merger, dated September 29, 2003.(1)
	3	.1	Amended and Restated Certificate of Incorporation of Informatica Corporation.(2)
	3	.2	Bylaws, as amended, of Informatica Corporation.(13)
	3	.4	Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation to increase the aggregate number of shares of the Company’s common stock authorized for issuance from 100,000,000 to 200,000,000 shares.(3)
	3	.5	Certificate of Designation of the Rights, Preferences and Privileges of Series A Participating Preferred Stock of Informatica Corporation.(4)
	4	.1	Reference is made to Exhibits 3.1 and 3.2.
	4	.2	Preferred Stock Rights Agreement, dated as of October 17, 2001, between Informatica Corporation and American Stock Transfer & Trust Company.(4)
	10	.1*	Company’s 2000 Employee Stock Incentive Plan, as amended.(5)
	10	.6*	Form of Indemnification Agreement between the Company and each of its executive officers and directors.(2)
	10	.10*	Company’s 1996 Flexible Stock Incentive Plan, including forms of agreements thereunder.(6)
	10	.11*	Company’s 1999 Stock Incentive Plan, as amended.(7)
	10	.12*	Company’s 1999 Employee Stock Purchase Plan, as amended, including forms of agreements thereunder.(8)
	10	.13*	Company’s 1999 Non-Employee Director Stock Incentive Plan.(2)
	10	.14	Lease Agreement regarding Building 1 Lease, dated as of February 22, 2000, by and between the Company and Pacific Shores Center LLC.(9)
	10	.15	Lease Agreement regarding Building 2 Lease, dated as of February 22, 2000, by and between the Company and Pacific Shores Center LLC.(9)
	10	.19*	Offer Letter, dated as of August 6, 2002, by and between the Company and Clive A. Harrison.(10)
	10	.20*	Description of management arrangement with Earl E. Fry.(10)
	10	.21*	Amendment to 1999 Non-Employee Director Stock Incentive Plan.(11)
	10	.22*	Agreement on the Forgiveness of Employee Loan dated September 13, 2001, by and between the Company and Earl E. Fry.(12)
	10	.23*	Separation Agreement and Release, dated January 30, 2004, by and between the Company and Sanjay Poonen.(13)
	10	.24*	Offer Letter, dated January 8, 2004, by and between the Company and Paul Albright.(13)
	10	.25*	Separation Agreement and Release dated July 21, 2004 by and between Company and Gaurav S. Dhillon.(14)
	10	.26*	Employment Agreement dated July 19, 2004 by and between Company and Sohaib Abbasi.(14)
	10	.27*	Offer Letter dated September 21, 2004, by and between the Company and John Entenmann.(15)
	10	.28	Lease Agreement dated as of October 7, 2004, by and between the Company and Seaport Plaza Associates, LLC.
	10	.29	Form of Executive Severance Agreement dated November 15, 2004 by and between the Company and each of John Entenmann, Earl E. Fry and Girish Pancha.
	10	.30	Separation Agreement and Release dated March 31, 2004 by and between the Company and Clive A. Harrison.
	21	.1	List of Subsidiaries.
	23	.2	Consent of Independent Registered Public Accounting Firm.

Exhibit
Number			Document
	31	.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31	.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32	.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(1)	Incorporated by reference to the identically numbered exhibit to the Company’s Registration Statement on Form 8-K filed with the Securities and Exchange Commission on October 7, 2003.
(2)	Incorporated by reference to the identically numbered exhibit to Amendment No. 1 of the Company’s Registration Statement on Form S-1 (Commission File No. 333-72677) filed with the Securities and Exchange Commission on April 8, 1999.
(3)	Incorporated by reference to the identically numbered exhibit to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2000.
(4)	Incorporated by reference to the identically numbered exhibit to the Company’s Registration Statement on Form 8-A filed with the Securities and Exchange Commission on November 6, 2001.
(5)	Incorporated by reference to the identically numbered exhibit to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 8, 2001.
(6)	Incorporated by reference to the identically numbered exhibit to the Company’s Registration Statement on Form S-1 (Commission File No. 333-72677) filed with the Securities and Exchange Commission on February 19, 1999.
(7)	Incorporated by reference to exhibit 4.3 to the Company’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission on August 3, 2001.
(8)	Incorporated by reference to exhibit 4.4 to the Company’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission on August 3, 2001.
(9)	Incorporated by reference to the identically numbered exhibit to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 30, 2000.

(10)	Incorporated by reference to the identically numbered exhibit to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 13, 2002.
(11)	Incorporated by reference to the identically numbered exhibit to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 7, 2003.
(12)	Incorporated by reference to Exhibit 99.1 to Amendment No. 1 of the Company’s Registration Statement on Form S-3 filed with the Securities and Exchange Commission on December 24, 2003.
(13)	Incorporated by reference to the identically numbered exhibit of the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 12, 2004.
(14)	Incorporated by reference to the identically numbered exhibit of the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 5, 2004.
(15)	Incorporated by reference to the identically numbered exhibit of the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 5, 2004.

*  Indicates management contract or compensatory plan or arrangement.

EX-10.28

Exhibit 10.28

SEAPORT PLAZA

100 and 200 CARDINAL WAY
REDWOOD CITY, CALIFORNIA

OFFICE LEASE AGREEMENT

BETWEEN

SEAPORT PLAZA ASSOCIATES, LLC, a California limited liability company
(“LANDLORD”)

AND

INFORMATICA CORPORATION, a Delaware corporation
(“TENANT”)

OFFICE LEASE AGREEMENT

     THIS OFFICE LEASE AGREEMENT (the “Lease”) is made and entered into as of the 7^th day of October, 2004, by and between SEAPORT PLAZA ASSOCIATES, LLC, a California limited liability company (“Landlord”) and INFORMATICA CORPORATION, a Delaware corporation (“Tenant”). The following exhibits and attachments are incorporated into and made a part of the Lease: Exhibit A (Outline and Location of Premises), Exhibit B (Expenses and Taxes), Exhibit C (Work Letter), Exhibit D (Commencement Letter), Exhibit E (Building Rules and Regulations), Exhibit F (Additional Provisions), Exhibit G (Parking Agreement) and Exhibit H (Generator Area).

1.   Basic Lease Information.

1.01	“Building” shall mean, collectively, the 2 buildings located at 100 Cardinal Way and 200 Cardinal Way, all located in Redwood City, California. “Rentable Square Footage of the Building” is deemed to be 159,350 square feet based upon the combined rentable area of the buildings. “Base Building” shall have the meaning set forth in Section 5.
1.02	“Premises” shall mean the Building which is shown on Exhibit A to this Lease. The “Rentable Square Footage of the Premises” is deemed to be 159,350 square feet. Landlord and Tenant stipulate and agree that the Rentable Square Footage of the Building and the Rentable Square Footage of the Premises are correct.
1.03	“Base Rent”:

	Annual Rate	Monthly
Months of Term	Per Square Foot	Base Rent
12/15/04 — 12/31/05	$9.60	$127,480.00
01/01/06 — 12/31/06	$12.00	$159,350.00
01/01/07 — 12/31/07	$13.20	$175,285.00

Notwithstanding anything in this Lease to the contrary, so long as Tenant is not in Default under this Lease, Tenant shall be entitled to an abatement of rental as described below:

(a)	an abatement of Base Rent with respect to the Premises, as originally described in this Lease, for the first 16 days of the Term in the amount of $4,112.26 per day, which totals $65,796.16 (the “Abated Base Rent”); plus
(b)	an abatement of Tenant’s Monthly Expense and Tax Payment (defined below) applicable to the Premises, as originally described in this Lease, for the first 16 days of the Term in the amount of $2,331.65 per day, which totals $37,306.40 (the “Abated Additional Rent”). The Abated Base Rent and the Abated Additional Rent are referred to collectively as the “Abated Rent”.

	If Tenant defaults under this Lease at any time during the Term and fails to cure such default within any applicable cure period under this Lease, then all Abated Rent shall immediately become due and payable. Only Base Rent and Tenant’s Monthly Expense and Tax Payment shall be abated pursuant to this Section 1.03, as more particularly described herein, and all other Additional Rent and other costs and charges specified in this Lease shall remain as due and payable pursuant to the provisions of this Lease.
1.04	“Tenant’s Pro Rata Share”: 100.00%.
	“Tenant’s Monthly Expense and Tax Payment”: $72,281.16, which is Tenant’s Pro Rata Share of the monthly estimated Expenses and monthly estimated Taxes (as more fully described in, and subject to adjustment as described in, Exhibit B attached hereto). The first monthly installment of Tenant’s Monthly Expense and Tax Payment shall be due and payable upon execution and delivery of this Lease by Tenant.
1.05	Intentionally Omitted.
1.06	“Term”: A period of 36 months and 17 days. Subject to Section 3, the Term shall commence on December 15, 2004 (the “Commencement Date”) and, unless terminated early in accordance with this Lease, end on December 31, 2007 (the “Termination Date”).
1.07	Allowance: $956,100.00, as more fully described in the Work Letter attached hereto as Exhibit C.

1

1.08	“Security Deposit”: $175,285.00, as more fully described in Section 6.
1.09	“Guarantor(s)”: As of the date of this Lease, there are no Guarantors.
1.10	“Brokers”: BT Commercial (“Tenant’s Broker”), which represented Tenant in connection with this transaction, and Cornish & Carey Commercial (“Landlord’s Broker”), which represented Landlord in connection with this transaction.
1.11	“Permitted Use”: General office use, including training and research and development relating to software products.
1.12	“Notice Address(es)”:

Landlord:	Tenant:
Seaport Plaza Associates, LLC c/o Equity Office Management, L.L.C. 950 Tower Lane, Suite 950 Foster City, California 94404 Attn: Property Manager	Prior to the Commencement Date: Informatica Corporation 2100 Seaport Boulevard Redwood City, California 94063 Attn: General Counsel   On and after the Commencement Date: At the Premises Attn: General Counsel

	A copy of any notices to Landlord shall be sent to Equity Office, One Market, Spear Tower, Suite 600, San Francisco, California 94105, Attn: San Francisco Regional Counsel.
1.13	“Business Day(s)” are Monday through Friday of each week, exclusive of New Year’s Day, Presidents Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day (“Holidays”). Landlord may designate additional Holidays that are commonly recognized by other office buildings in the area where the Building is located. “Building Service Hours” are 8:00 a.m. to 5:00 p.m. on Business Days. Notwithstanding the foregoing, so long as Tenant is the Sole Tenant of the Building (as defined in Section 7.01), the Building Service Hours are 8:00 a.m. to 6:00 p.m. on Business Days and 8:00 a.m. to 1:00 p.m. on Saturdays.
1.14	Intentionally Omitted.
1.15	“Property” means the Building and the parcel(s) of land on which it is located and, at Landlord’s discretion, the parking facilities and other improvements, if any, serving the Building and the parcel(s) of land on which they are located.

2.   Lease Grant.

     The Premises are hereby leased to Tenant from Landlord for Tenant’s exclusive use (subject to the limitations set forth in this Lease), together with the right to use any portions of the Property that are designated by Landlord for the common use of tenants and others and are not within the Premises for the exclusive use of Tenant such as sidewalks, driveways, parking areas, public restrooms, vending areas and landscape areas (the “Common Areas”). Tenant shall have access to the Building and the Common Areas for Tenant 24 hours per day/7 days per week, subject to the terms of this Lease and such security or monitoring systems as Landlord may reasonably impose, including, without limitation, sign-in procedures and/or presentation of identification cards.

3.   Adjustment of Commencement Date; Possession.

     3.01 Intentionally Omitted.

     3.02 The Premises are accepted by Tenant in “as is” condition and configuration without any representations or warranties by Landlord. By taking possession of the Premises, Tenant agrees that the Premises are in good order and satisfactory condition, subject to Landlord’s repair, restoration and correction obligations as provided herein. Notwithstanding anything to the contrary set forth herein, except to the extent caused by Tenant or any Tenant Related Parties (as defined in Section 13), the base Building electrical, heating, ventilation and air conditioning, mechanical and plumbing systems servicing the Premises shall be in good and working order and condition as of the date Landlord delivers possession of the Premises to Tenant. If the foregoing are not in good and working order as provided above, Landlord shall be responsible for repairing, restoring or correcting same at its cost and expense promptly, provided that Tenant has delivered written notice thereof to Landlord not later than 180 days

2

following the date Landlord delivers possession of the Premises to Tenant. Notwithstanding the foregoing, Tenant, and not Landlord, shall be responsible, at its cost, for any repairs and for the correction of any defects that arise out of or in connection with the specific nature of Tenant’s business (other than general office use), the acts or omissions of Tenant, its agents, employees or contractors (other than reasonable wear and tear), Tenant’s arrangement of any furniture, equipment or other property in the Premises, any repairs, alterations, additions or improvements performed by or on behalf of Tenant, including the Initial Alterations, and any design or configuration of the Premises created by or for Tenant which specifically results in the need for such repair or such defect in the base Building systems servicing the Premises. Landlord shall not be liable for a failure to deliver possession of the Premises or any other space due to the holdover or unlawful possession of such space by another party, however Landlord shall use reasonable efforts to obtain possession of the space. The commencement date for the space, in such event, shall be postponed until the date Landlord delivers possession of the Premises to Tenant free from occupancy by any party. If Tenant takes possession of the Premises before the Commencement Date, such possession shall be subject to the terms and conditions of this Lease and Tenant shall pay Rent (defined in Section 4.01) to Landlord for each day of possession before the Commencement Date. However, except for the cost of utilities and the cost of services requested by Tenant (e.g. the use of dumpsters or special janitorial services after being informed that such services will be provided additional charge to Tenant), Tenant shall not be required to pay Rent for any days of possession before the Commencement Date during which Tenant, with the approval of Landlord, is in possession of the Premises for the sole purpose of performing improvements or installing furniture, equipment or other personal property. Notwithstanding the foregoing, provided that this Lease has been fully executed by all parties and Tenant has delivered all prepaid rental, the Security Deposit and the insurance certificates required hereunder, Tenant shall be permitted to occupy the Premises for purposes of performing demolition, improvements pursuant to Exhibit C, installing furniture, equipment or other personal property as of the date that Landlord delivers possession of the Premises to Tenant. Such possession prior to the Commencement Date shall be subject to all of the terms and conditions of the Lease, except that Tenant shall not be required to pay Base Rent or Tenant’s Pro Rata Share of Expenses and Taxes with respect to the period of time prior to the Commencement Date during which Tenant occupies the Premises for such purposes. However, Tenant shall be liable for any special or after hour services provided to Tenant during such period as described above.

     3.03 Notwithstanding anything to the contrary set forth herein, provided that this Lease has been duly executed and delivered by Tenant, together with all prepaid rental and the Security Deposit required hereunder on or before October 11, 2004, in the event Landlord fails to deliver possession of the Premises to Tenant before January 1, 2005, Tenant, as its sole remedy, may terminate this Lease by giving Landlord written notice of termination on or before January 5, 2005. In such event, this Lease shall be deemed null and void and of no further force and effect and Landlord shall promptly refund any prepaid rent and Security Deposit previously advanced by Tenant under this Lease and the Security Deposit the parties hereto shall have no further responsibilities or obligations to each other with respect to this Lease. Notwithstanding the foregoing, Tenant shall have no right to terminate this Lease is Tenant has commenced the Initial Alterations or utilized any portion of the Allowance pursuant to Exhibit C.

4.   Rent.

     4.01 Tenant shall pay Landlord, without any setoff or deduction, unless expressly set forth in this Lease, all Base Rent and Additional Rent due for the Term (collectively referred to as “Rent”). “Additional Rent” means all sums (exclusive of Base Rent) that Tenant is required to pay Landlord under this Lease. Base Rent and recurring monthly charges of Additional Rent shall be due and payable in advance on the first day of each calendar month without notice or demand, provided that the installment of Base Rent for the first full calendar month (subject to the Abated Base Rent pursuant to Section 1.03) of the Term, and the first monthly installment (subject to the Abated Additional Rent pursuant to Section 1.03) of Additional Rent for Expenses and Taxes, shall be payable upon the execution of this Lease by Tenant. All other items of Rent shall be due and payable by Tenant on or before 30 days after billing by Landlord. Rent shall be made payable to the entity, and sent to the address, Landlord designates and shall be made by good and sufficient check or by other means acceptable to Landlord. Tenant shall pay Landlord an administration fee equal to 5% of all past due Rent, provided that Tenant shall be entitled to a grace period of 5 days for the first 2 late payments of Rent in a calendar year. In addition, past due Rent shall accrue interest at 12% per annum. Landlord’s acceptance of less than the correct amount of Rent shall be considered a payment on account of the earliest Rent due. Rent for any partial month during the Term shall be prorated. No endorsement or statement on a check or letter accompanying payment shall be considered an accord and satisfaction. Tenant’s covenant to pay Rent is independent of every other covenant in this Lease.

     4.02 Tenant shall pay Tenant’s Pro Rata Share of Taxes and Expenses in accordance with Exhibit B of this Lease.

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5.   Compliance with Laws; Use.

     The Premises shall be used for the Permitted Use and for no other use whatsoever. Subject to the limitation provided in this Section 5, Tenant shall comply with all statutes, codes, ordinances, orders, rules and regulations of any municipal or governmental entity whether in effect now or later, including the Americans with Disabilities Act (“Law(s)”), regarding the operation of Tenant’s business and the use, condition, configuration and occupancy of the Premises. In addition, Tenant shall, at its sole cost and expense, promptly comply with any Laws that relate to the “Base Building” (defined below), but only to the extent such obligations are triggered by Tenant’s specific use of the Premises, other than for general office use, or Alterations or improvements in the Premises performed or requested by Tenant. “Base Building” shall include the structural portions of the Building, the public restrooms and the Building mechanical, electrical and plumbing systems and equipment located in the internal core of the Building on the floor or floors on which the Premises are located. Notwithstanding anything to the contrary set forth in this Lease, nothing herein shall require Tenant to perform any alterations, additions or improvements which are necessary to comply with Laws with respect to the Common Areas, unless such compliance relates to the Common Areas on any floor on which the Premises are located and arises directly out of the performance of work by or on behalf of Tenant in the Premises or Tenant’s use of the Premises for purposes other than general office use or any acts or omissions of Tenant or any Tenant Related Party. In addition, notwithstanding anything to the contrary set forth in this Lease, nothing herein shall require Tenant, with respect to the Common Areas or the Premises, to comply with Laws which require structural alterations, capital improvements or the installation of new or additional mechanical, electrical, plumbing or fire/life safety systems on a Building-wide basis without reference to the particular use of Tenant. Landlord will, at Landlord’s expense (except to the extent properly included in Expenses), perform all acts required to comply with such Laws with respect to the foregoing as the same affect the Premises and the Building. In addition, notwithstanding anything to the contrary set forth in this Lease, Landlord, at Landlord’s expense (except to the extent properly included in Expenses), shall be responsible for complying with Title III of the Americans with Disabilities Act (ADA) with respect to the Common Areas of the Building. Notwithstanding the foregoing, Landlord shall have the right to contest any alleged violation of the ADA or other Laws in good faith, including, without limitation, the right to apply for and obtain a waiver or deferment of compliance, the right to assert any and all defenses allowed by Law and the right to appeal any decisions, judgments or rulings to the fullest extent permitted by Law. Landlord, after the exhaustion of any and all rights to appeal or contest, will make all repairs, additions, alterations or improvements necessary to comply with the terms of any final order or judgment, provided that if Landlord elects not to contest any alleged violation, Landlord will promptly make necessary all repairs, additions, alterations or improvements. Tenant shall promptly provide Landlord with copies of any notices it receives regarding an alleged violation of Law. Tenant shall comply with the rules and regulations of the Building attached as Exhibit E and such other reasonable rules and regulations adopted by Landlord from time to time (provided any such additional rules and regulations are not inconsistent with the terms of this Lease and do not materially increase Tenant’s obligations or materially decrease Tenant’s rights under this Lease), including rules and regulations for the performance of Alterations (defined in Section 9). The rules and regulations shall be generally applicable, and generally applied in the same manner, to all tenants of the Building. To Landlord’s actual knowledge, as of the date hereof, the Premises and the Building are free of any asbestos. For purposes of this Section, “Landlord’s actual knowledge” shall be deemed to mean and limited to the current actual knowledge of Kenneth Young at the time of execution of this Lease and not any implied, imputed, or constructive knowledge of said individual or of Landlord or any parties related to or comprising Landlord and without any independent investigation or inquiry having been made or any implied duty to investigate or make any inquiries; it being understood and agreed that such individual shall have no personal liability in any manner whatsoever hereunder or otherwise related to the transactions contemplated hereby.

6.   Security Deposit.

     The Security Deposit shall be delivered to Landlord upon the execution of this Lease by Tenant and held by Landlord without liability for interest (unless required by Law) as security for the performance of Tenant’s obligations. The Security Deposit is not an advance payment of Rent or a measure of damages. Landlord may use all or a portion of the Security Deposit to satisfy past due Rent or to cure any Default (defined in Section 18) by Tenant. If Landlord uses any portion of the Security Deposit, Tenant shall, within 5 days after demand, restore the Security Deposit to its original amount. Landlord shall return any unapplied portion of the Security Deposit to Tenant within 21 days after the later to occur of: (a) determination of the final Rent due from Tenant; or (b) the later to occur of the Termination Date or the date Tenant surrenders the Premises to Landlord in compliance with Section 25. Landlord may assign the Security Deposit to a successor or transferee of this Lease and, following the assignment, Landlord shall have no further liability for the return of the Security Deposit. Landlord shall not be required to keep the Security Deposit separate from its other accounts. Tenant hereby waives the provisions of Section 1950.7 of the California Civil Code, or any similar or successor Laws now or hereinafter in effect.

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7.   Building Services.

     7.01 If Tenant is leasing 100% of the Rentable Square Footage of the Building or if Tenant’s Pro Rata Share is 100% (in either event, for purposes of this Lease, Tenant shall be deemed the “Sole Tenant of the Building”), Landlord agrees to furnish Tenant with (a) elevator service in the Building during the Term of this Lease, and (b) the following services, subject to Tenant’s obligation to contract for directly and pay for such services: (i) water service for use in the lavatories on each floor on which the Premises are located; (ii) heat and air conditioning in season during Building Service Hours (or such longer hours, if desired by Tenant) at such temperatures and in such amounts as are standard for comparable buildings; (iii) electricity to the Premises for Tenant’s use, in accordance with and subject to the terms and conditions in Section 7.03 below; and (iv) gas for boilers of the Building and water heaters, if any. So long as Tenant is the Sole Tenant of the Building, Tenant, at its sole cost, shall provide the following services to the Premises: (A) janitorial service; (B) pest control service; (C) refuse collection; and (D) such other services as Tenant desires and which Landlord reasonably determines are necessary or appropriate for the Building.

     If Tenant was required to pay directly for or provide the above services (other than elevator service) at any time during the Term, and, thereafter, by mutual agreement between Landlord and Tenant, or by operation of law or otherwise, Tenant is not the Sole Tenant of the Building or is otherwise not required to provide the above services, then, at Landlord’s request and, at Landlord’s option, as a condition to Landlord providing the services described in Section 7.02 below, Tenant shall transfer to Landlord any utility accounts and/or service contracts (including, without limitation, any maintenance service agreements entered into by Tenant, as described in Section 9.01 below or otherwise) relating to all or any of the services to be provided by Landlord described in Section 7.02 below to the extent such accounts and/or contracts are assignable, and Tenant shall otherwise cooperate with Landlord in transferring control of, and responsibility for, such services from Tenant to Landlord. Tenant shall remain liable for all sums incurred in connection with such accounts or service contracts relating to the period prior to the date such accounts and service contracts are transferred to, and assumed by, Landlord.

     7.02 If Tenant is not the Sole Tenant of the Building (as defined in Section 7.01 above), Landlord agrees to furnish Tenant with elevator service in the Building during the Term of this Lease, and, subject to the terms of the second paragraph of Section 7.01 above, Landlord also agrees to provide the following services: (a) water service for use in the lavatories on each floor on which the Premises are located; (b) heat and air conditioning in season during Building Service Hours, at such temperatures and in such amounts as are standard for comparable Class A buildings in the Redwood City area, provided that, Tenant, upon such advance notice as is reasonably required by Landlord, shall have the right to receive HVAC service during hours other than Building Service Hours, and Tenant shall pay Landlord’s then standard charge for additional service as reasonably determined by Landlord from time to time, provided that Landlord agrees that charge for after-hours HVAC service shall be limited to Landlord’s actual costs of supplying the after-hours HVAC services; (c) maintenance and repair of the Property as described in Section 9.02; (d) janitorial service on Business Days, provided if Tenant’s use, floor covering or other improvements require special services in excess of the standard services for the Building, Tenant shall pay the additional cost attributable to the special services; (e) electricity to the Premises for general office use, in accordance with and subject to the terms and conditions in Section 7.03; (f) gas for boilers of the Building and water heaters serving the Building generally, if any; (g) pest control service for the Common Areas of the Building; (h) refuse collection for the Building; and (i) such other services as Landlord reasonably determines are necessary or appropriate for the Building.

     7.03 Electricity used by Tenant in the Premises shall, at Landlord’s option, be paid for by Tenant either: (a) through inclusion in Expenses (except as provided for excess usage); (b) by a separate charge payable by Tenant to Landlord; or (c) by separate charge billed by the applicable utility company and payable directly by Tenant. Without the consent of Landlord, Tenant’s use of electrical service shall not exceed, either in voltage, rated capacity, use beyond Building Service Hours or overall load, that which Landlord reasonably deems to be standard for the Building. Notwithstanding the foregoing, if Tenant is the Sole Tenant of the Building, Tenant’s use of electrical service may exceed Building Service Hours. Landlord shall have the right to measure electrical usage by commonly accepted methods and if Tenant is not the Sole Tenant of the Building and it is determined that Tenant is using excess electricity, Tenant shall pay Landlord for the cost of such excess electrical usage as Additional Rent.

     7.04 Landlord’s failure to furnish, or any interruption, diminishment or termination of services required to be provided by Landlord pursuant to this Lease due to the application of Laws, the failure of any equipment, the performance of repairs, improvements or alterations, utility interruptions or the occurrence of an event of Force Majeure (defined in Section 26.03) (collectively a “Service Failure”) shall not render Landlord liable to Tenant, constitute a constructive eviction of Tenant, give rise to an abatement of Rent, nor relieve Tenant from the obligation to fulfill any covenant or agreement. However, if the Premises, or a material portion of the Premises, are made untenantable for a period in excess of 3 consecutive Business Days as a result of a Service Failure that is reasonably within the control of Landlord to correct (other than a Service Failure in connection with Tenant’s failure to perform Tenant’s

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obligations under this Lease, in which event Tenant shall not be entitled to any abatement or other remedy), then Tenant, as its sole remedy, shall be entitled to receive an abatement of Rent payable hereunder during the period beginning on the 4^th consecutive Business Day of the Service Failure and ending on the day the service has been restored. If the entire Premises have not been rendered untenantable by the Service Failure, the amount of abatement shall be equitably prorated. Notwithstanding the foregoing, if a Service Failure is reasonably within the control of Landlord (other than a Service Failure in connection with Tenant’s failure to perform Tenant’s obligations under this Lease, in which event Tenant shall not be entitled to any termination right), and (a) continues for 180 consecutive days after the Service Failure and (b) is not being diligently remedied by Landlord, then Tenant, as its sole remedy, shall have the right to elect to terminate this Lease within 10 days after the expiration of said 180 day period without penalty, by delivering written notice to Landlord of its election thereof; provided, however, if Landlord is diligently pursuing the repair or restoration of the service, Tenant shall not be entitled to terminate the Lease but rather Tenant’s sole remedy shall be to abate Rent as provided above. The foregoing termination right shall not apply if the Service Failure is due to fire or other casualty. Instead, in such an event, the terms and provisions of Section 16 shall apply.

8.   Leasehold Improvements.

     All improvements in and to the Premises, including any Alterations (collectively, “Leasehold Improvements”) shall remain upon the Premises at the end of the Term without compensation to Tenant. Landlord, however, by written notice to Tenant at least 30 days prior to the Termination Date, may require Tenant, at its expense, to remove (a) any Cable (defined in Section 9.01) installed by or for the benefit of Tenant, and (b) any Alterations (subject to the limitations set forth herein) that, in Landlord’s reasonable judgment, are of a nature that would require removal and repair costs that are materially in excess of the removal and repair costs associated with standard office improvements (collectively referred to as “Required Removables”). Required Removables shall include, without limitation, internal stairways, raised floors, personal baths and showers, vaults, rolling file systems and structural alterations and modifications. However, it is agreed that Required Removables shall not include any usual office improvements such as gypsum board, partitions, ceiling grids and tiles, fluorescent lighting panels, Building standard doors and non-glued down carpeting. The designated Required Removables shall be removed by Tenant before the Termination Date. Tenant shall repair damage caused by the installation or removal of Required Removables. If Tenant fails to perform its obligations in a timely manner, Landlord may perform such work at Tenant’s expense. Tenant, at the time it requests approval for a proposed Alteration, may request in writing that Landlord advise Tenant whether the Alteration or any portion of the Alteration is a Required Removable. Within 10 days after receipt of Tenant’s request, Landlord shall advise Tenant in writing as to which portions of the Alteration are Required Removables, and Tenant shall have no obligation to remove any Alterations which Landlord advises Tenant in writing that Tenant is not required to remove.

9.   Repairs and Alterations.

     9.01 Tenant shall periodically inspect the Premises to identify any conditions that are dangerous or in need of maintenance or repair. Tenant shall provide Landlord with notice in a timely manner of any conditions with respect to the Premises that are dangerous or which (a) are in need of repair or maintenance by Landlord (and Landlord is obligated to perform such repair pursuant to the terms of this Lease), or (b) are in need of repair and maintenance of a material nature. Tenant shall, at its sole cost and expense, perform all maintenance and repairs to the Premises that are not Landlord’s express responsibility under this Lease, and keep the Premises in good condition and repair, reasonable wear and tear excepted. Tenant’s repair and maintenance obligations include, without limitation, repairs to: (a) floor covering; (b) interior partitions; (c) doors; (d) the interior side of demising walls; (e) electronic, phone and data cabling and related equipment that is installed by or for the exclusive benefit of Tenant (collectively, “Cable”); (f) supplemental air conditioning units, kitchens, including hot water heaters, plumbing, and similar facilities exclusively serving Tenant; and (g) Alterations. In addition and notwithstanding anything to the contrary contain in Section 9.02 below, if Tenant is the Sole Tenant of the Building, Tenant’s repair obligations shall also include, without limitation, the following: (1) mechanical (including HVAC), electrical, plumbing and fire/life safety systems serving the Building in general (including any equipment related thereto and located upon the roof of the Building); and (2) the interior Common Areas of the Building (Landlord shall maintain the exterior Common Areas of the Building in accordance with its obligations as provided in Section 9.02 below). To the extent Landlord is not reimbursed by insurance proceeds, Tenant shall reimburse Landlord for the cost of repairing damage to the Building caused by the acts of Tenant, Tenant Related Parties and their respective contractors and vendors (other than reasonable wear and tear). If Tenant fails to commence any repairs to the Premises for more than 15 days after notice from Landlord (although notice shall not be required in an emergency) and diligently prosecute the same to completion, Landlord may make the repairs, and Tenant shall pay the reasonable cost of the repairs. Tenant shall have no obligation to maintain the structural elements of the Building. Notwithstanding anything to the contrary set forth herein, and except to the extent caused by Tenant or any of the Tenant Related Parties’ acts and/or omissions, including any Alterations performed by or on behalf of Tenant, or as a result of a Casualty (in which case Section 16 shall control), so long as Tenant is the Sole Tenant of the Building, to the extent Landlord is made

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aware and Landlord determines in its sole discretion that any capital improvement (as distinguished from replacement parts or components installed in the ordinary course of business) must be made to properly repair, maintain, or replace any portion of the Premises for which Tenant is responsible, Landlord shall cause such work to be completed and Tenant shall pay the amortized portion of such expenditure in the manner described for capital expenses as set forth in Exhibit B to this Lease. Tenant shall be responsible for paying amortized amounts due during the Term and any extension thereof.

     If Tenant is the Sole Tenant of the Building Tenant, at Tenant’s own expense, shall procure and maintain in full force and effect, a maintenance/service contract(s) (the “Service Contract”), in a form and with a maintenance contractor approved by Landlord, providing for the service, maintenance and repair of all (i) heating, ventilating and air conditioning systems and equipment, (ii) fire/life safety systems and equipment, and (iii) if reasonably required by Landlord, any other plumbing, electrical or mechanical systems and equipment serving the Building. The service contract(s) must include all services suggested by the equipment manufacturer within the operation/maintenance manual relating to such equipment and systems and must become effective and a copy thereof delivered to Landlord within 45 days after the Commencement Date with respect to items (i) and (ii) above, or within 30 days after requested by Landlord with respect to item (iii) above. Tenant shall follow all reasonable recommendations of said contractor for the maintenance and repair of the equipment and systems covered by the Service Contract. The Service Contract shall provide that the contractor shall perform regularly scheduled inspections, preventative maintenance and service on the covered equipment and systems, and that having made such inspections, said contractor shall furnish a complete report of any defective conditions found to be existing with respect to such equipment, together with any recommendations for maintenance, repair and/or replacement thereof. Said report shall be furnished to Tenant with a copy to Landlord. Landlord may, upon notice to Tenant, enter into such a service contract on behalf of Tenant or perform the work and in either case charge Tenant the cost thereof along with a reasonable amount for Landlord’s overhead.

     9.02 Landlord shall keep and maintain in good repair and working order and watertight and perform maintenance upon the: (a) structural elements of the Building (including the foundations, exterior walls, sub-flooring and support beams); (b) except to the extent the same is a Tenant obligation when Tenant is the Sole Tenant of the Building as such obligations are described in Section 9.01 above, mechanical (including HVAC), electrical, plumbing and fire/life safety systems serving the Building in general; (c) Common Areas; (d) roof of the Building (including downspouts and gutters); (e) exterior windows of the Building; and (f) elevators serving the Building. Landlord shall promptly make repairs for which Landlord is responsible. Tenant hereby waives any and all rights under and benefits of subsection 1 of Section 1932, and Sections 1941 and 1942 of the California Civil Code, or any similar or successor Laws now or hereinafter in effect.

     9.03 Tenant shall not make alterations, repairs, additions or improvements or install any Cable (collectively referred to as “Alterations”) without first obtaining the written consent of Landlord in each instance, which consent shall not be unreasonably withheld or delayed. Landlord shall use reasonable efforts to respond to any such request by Tenant within 10 Business Days, but in any event shall respond to such request within 12 Business Days, in each case following Landlord’s receipt of any plans and specifications and other information or items required pursuant to this Section with respect to such Alteration. Notwithstanding the foregoing, Tenant shall have the right, without consent of, but upon at least 10 Business Days’ prior written notice to Landlord, to make non-structural, non-Cosmetic Alterations (defined below) within the interior of the Premises, which do not impair the value of the Building or affect the Building systems, and which cost, in the aggregate, less than $5,000.00 in any 12 month period during the Term of this Lease, provided that such Alterations shall nevertheless be subject to all of the remaining requirements of this Section 9.03 other than the requirement of Landlord’s prior consent. However, Landlord’s consent shall not be required for any Alteration that satisfies all of the following criteria (a “Cosmetic Alteration”): (a) is of a cosmetic nature such as painting, wallpapering, hanging pictures and installing carpeting; (b) is not visible from the exterior of the Premises or Building; (c) will not affect the Base Building; and (d) does not require work to be performed inside the walls or above the ceiling of the Premises. Cosmetic Alterations shall be subject to all the other provisions of this Section 9.03. Prior to starting work, Tenant shall furnish Landlord with plans and specifications; names of contractors reasonably acceptable to Landlord (provided that Landlord may designate specific contractors with respect to Base Building); required permits and approvals; evidence of contractor’s and subcontractor’s insurance in amounts reasonably required by Landlord and naming Landlord as an additional insured; and, to the extent the estimated cost of such Alterations exceeds $100,000.00, any security for performance in amounts reasonably required by Landlord. Changes to the plans and specifications must also be submitted to Landlord for its approval. Alterations shall be constructed in a good and workmanlike manner using materials of a quality reasonably approved by Landlord. Tenant shall reimburse Landlord for any reasonable sums paid by Landlord for third party examination of Tenant’s plans for non-Cosmetic Alterations. Upon completion, Tenant shall furnish “as-built” plans for non-Cosmetic Alterations, completion affidavits and full and final waivers of lien. Landlord’s approval of an Alteration shall not be deemed a representation by Landlord that the Alteration complies with Law.

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10.   Entry by Landlord.

     Landlord may enter the Premises to inspect, show or clean the Premises or to perform or facilitate the performance of repairs, alterations or additions to the Premises or any portion of the Building. Except in emergencies or to provide Building services, Landlord shall provide Tenant with at least 24 hours prior verbal notice of entry and shall use reasonable efforts to minimize any interference with Tenant’s use of the Premises. If reasonably necessary, Landlord may temporarily close all or a portion of the Premises to perform repairs, alterations and additions. However, except in emergencies, Landlord will not close the Premises if the work can reasonably be completed on weekends and after Building Service Hours. Entry by Landlord shall not constitute a constructive eviction or entitle Tenant to an abatement or reduction of Rent; provided, however, Tenant shall be entitled to an abatement of Rent in accordance with Section 7.03 if the Building is closed, other than as required by Law or by order of proper governmental authority, and Tenant is unable to use the Premises as a result of such closure for a period of at least 3 consecutive Business Days.

11.   Assignment and Subletting.

     11.01 Except in connection with a Permitted Transfer (defined in Section 11.04), Tenant shall not assign, sublease, transfer or encumber any interest in this Lease or allow any third party to use any portion of the Premises (collectively or individually, a “Transfer”) without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed if Landlord does not exercise its recapture rights under Section 11.02. If the entity which controls the voting shares/rights of Tenant changes at any time, such change of ownership or control shall constitute a Transfer unless Tenant is an entity whose outstanding stock is listed on a recognized securities exchange or if at least 80% of its voting stock is owned by another entity, the voting stock of which is so listed. Tenant hereby waives the provisions of Section 1995.310 of the California Civil Code, or any similar or successor Laws, now or hereinafter in effect, and all other remedies, including, without limitation, any right at law or equity to terminate this Lease, on its own behalf and, to the extent permitted under all applicable Laws, on behalf of the proposed transferee. Any attempted Transfer in violation of this Section is voidable by Landlord. In no event shall any Transfer, including a Permitted Transfer, release or relieve Tenant from any obligation under this Lease.

     11.02 Tenant shall provide Landlord with financial statements for the proposed transferee, a fully executed copy of the proposed assignment, sublease or other Transfer documentation and such other information as Landlord may reasonably request. Within 15 Business Days after receipt of the required information and documentation, Landlord shall either: (a) consent to the Transfer by execution of a consent agreement in a form reasonably designated by Landlord; (b) reasonably refuse to consent to the Transfer in writing; or (c) in the event of an assignment of this Lease or subletting of more than 20% of the Rentable Area of the Premises for the remaining Term (excluding unexercised options), recapture the portion of the Premises that Tenant is proposing to Transfer. If Landlord exercises its right to recapture, this Lease shall automatically be amended (or terminated if the entire Premises is being assigned or sublet) to delete the applicable portion of the Premises effective on the proposed effective date of the Transfer. Tenant shall pay Landlord a review fee of $1,000.00 for Landlord’s review of any Permitted Transfer or requested Transfer.

     11.03 Tenant shall pay Landlord 50% of all rent and other consideration which Tenant receives as a result of a Transfer that is in excess of the Rent payable to Landlord for the portion of the Premises and Term covered by the Transfer. Tenant shall pay Landlord for Landlord’s share of the excess within 30 days after Tenant’s receipt of the excess. Tenant may deduct from the excess, on a straight-line basis, all reasonable and customary expenses directly incurred by Tenant attributable to the Transfer, including without limitation, brokerage fees, legal fees and construction costs. If Tenant is in Default, Landlord may require that all sublease payments be made directly to Landlord, in which case Tenant shall receive a credit against Rent in the amount of Tenant’s share of payments received by Landlord.

     11.04 Tenant may assign this Lease to a successor to Tenant by purchase, merger, consolidation or reorganization (an “Ownership Change”) or assign this Lease or sublet all or a portion of the Premises to an Affiliate without the consent of Landlord, provided that all of the following conditions are satisfied (a “Permitted Transfer”): (a) Tenant is not in Default; (b) in the event of an Ownership Change, Tenant’s successor shall own substantially all of the assets of Tenant and have a net worth which is at least equal to Tenant’s net worth as of the day prior to the proposed Ownership Change; (c) the Permitted Use does not allow the Premises to be used for retail purposes; and (d) Tenant shall give Landlord written notice at least 5 Business Days prior to the effective date of the Permitted Transfer. Tenant’s notice to Landlord shall include information and documentation evidencing the Permitted Transfer and showing that each of the above conditions has been satisfied. If requested by Landlord, Tenant’s successor shall sign a commercially reasonable form of assumption agreement. “Affiliate” shall mean an entity controlled by, controlling or under common control with Tenant.

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12.   Liens.

     Tenant shall not permit mechanics’ or other liens to be placed upon the Property, Premises or Tenant’s leasehold interest in connection with any work or service done or purportedly done by or for the benefit of Tenant or its transferees. Tenant shall give Landlord notice at least 15 days prior to the commencement of any work in the Premises to afford Landlord the opportunity, where applicable, to post and record notices of non-responsibility. Tenant, within 10 days of notice from Landlord, shall fully discharge any lien by settlement, by bonding or by insuring over the lien in the manner prescribed by the applicable lien Law. If Tenant fails to do so, Landlord may bond, insure over or otherwise discharge the lien. Tenant shall reimburse Landlord for any amount paid by Landlord, including, without limitation, reasonable attorneys’ fees.

13.   Indemnity and Waiver of Claims.

     Tenant hereby waives all claims against and releases Landlord and its trustees, members, principals, beneficiaries, partners, officers, directors, employees, Mortgagees (defined in Section 23) and agents (the “Landlord Related Parties”) from all claims for any injury to or death of persons, damage to property or business loss in any manner related to (a) Force Majeure, (b) acts of third parties, (c) the bursting or leaking of any tank, water closet, drain or other pipe, (d) the inadequacy or failure of any security services, personnel or equipment, or (e) any matter not within the reasonable control of Landlord. Notwithstanding the foregoing, except as provided in Article 15 to the contrary, Tenant shall not be required to waive any claims against Landlord (other than for loss or damage to Tenant’s business) where such loss or damage is due to the negligence or willful misconduct of Landlord or any Landlord Related Parties. Except to the extent caused by the negligence or willful misconduct of Landlord or any Landlord Related Parties, Tenant shall indemnify, defend and hold Landlord and Landlord Related Parties harmless against and from all liabilities, obligations, damages, penalties, claims, actions, costs, charges and expenses, including, without limitation, reasonable attorneys’ fees and other professional fees (if and to the extent permitted by Law) (collectively referred to as “Losses”), which may be imposed upon, incurred by or asserted against Landlord or any of the Landlord Related Parties by any third party and arising out of or in connection with any damage or injury occurring in the Premises or any acts or omissions (including violations of Law) of Tenant, the Tenant Related Parties or any of Tenant’s transferees, contractors or licensees. Except to the extent caused by the negligence or willful misconduct of Tenant or any Tenant Related Parties, Landlord shall indemnify, defend and hold Tenant, its trustees, members, principals, beneficiaries, partners, officers, directors, employees and agents (“Tenant Related Parties”) harmless against and from all Losses which may be imposed upon, incurred by or asserted against Tenant or any of the Tenant Related Parties by any third party and arising out of or in connection with the acts or omissions (including violations of Law) of Landlord or the Landlord Related Parties.

14.   Insurance.

     Tenant shall maintain the following insurance (“Tenant’s Insurance”): (a) Commercial General Liability Insurance applicable to the Premises and its appurtenances providing, on an occurrence basis, a minimum combined single limit of $2,000,000.00; (b) Property/Business Interruption Insurance written on an All Risk or Special Perils form, with coverage for broad form water damage including earthquake sprinkler leakage, at replacement cost value and with a replacement cost endorsement covering all of Tenant’s business and trade fixtures, equipment, movable partitions, furniture, merchandise and other personal property within the Premises (“Tenant’s Property”) and any Leasehold Improvements performed by or for the benefit of Tenant; (c) Workers’ Compensation Insurance in amounts required by Law; and (d) Employers Liability Coverage of at least $1,000,000.00 per occurrence. Any company writing Tenant’s Insurance shall have an A.M. Best rating of not less than A-VIII. All Commercial General Liability Insurance policies shall name as additional insureds Landlord (or its successors and assignees), the managing agent for the Building (or any successor), EOP Operating Limited Partnership, Equity Office Properties Trust and other designees of Landlord and its successors as the interest of such designees shall appear. All policies of Tenant’s Insurance shall contain endorsements that the insurer(s) shall give Landlord and its designees at least 30 days’ advance written notice of any cancellation, termination, material change or lapse of insurance. Tenant shall provide Landlord with a certificate of insurance evidencing Tenant’s Insurance prior to the earlier to occur of the Commencement Date or the date Tenant is provided with possession of the Premises, and thereafter as necessary to assure that Landlord always has current certificates evidencing Tenant’s Insurance. Landlord shall maintain the following insurance (“Landlord’s Insurance”), the premiums of which will be included in Expenses: (1) Commercial General Liability insurance applicable to the Property, Building and Common Areas providing, on an occurrence basis, a minimum combined single limit of at least $2,000,000.00; and (2) All Risk Property Insurance on the Building at replacement cost value, as reasonably estimated by Landlord.

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15.   Subrogation.

     Landlord and Tenant hereby waive and shall cause their respective insurance carriers to waive any and all rights of recovery, claims, actions or causes of action against the other for any loss or damage with respect to Tenant’s Property, Leasehold Improvements, the Building, the Premises, or any contents thereof, including rights, claims, actions and causes of action based on negligence, which loss or damage is (or would have been, had the insurance required by this Lease been carried) covered by insurance.

16.   Casualty Damage.

     16.01 If all or any portion of the Premises becomes untenantable by fire or other casualty to the Premises (collectively a “Casualty”), Landlord, within 45 days after the date of the Casualty, shall cause a general contractor selected by Landlord to provide Landlord and Tenant with a written estimate of the amount of time required using standard working methods to Substantially Complete the repair and restoration of the Premises and any Common Areas necessary to provide access to the Premises (“Completion Estimate”). If the Completion Estimate indicates that the Premises or any Common Areas necessary to provide access to the Premises cannot be made tenantable within 180 days from the date the repair is started, then either party shall have the right to terminate this Lease upon written notice to the other within 10 days after receipt of the Completion Estimate. Tenant, however, shall not have the right to terminate this Lease if the Casualty was caused by the negligence or intentional misconduct of Tenant or any Tenant Related Parties. In addition, Landlord, by notice to Tenant within 90 days after the date of the Casualty, shall have the right to terminate this Lease if: (1) the Premises have been materially damaged and there is less than 2 years of the Term remaining on the date of the Casualty; (2) any Mortgagee requires that the insurance proceeds be applied to the payment of the mortgage debt; or (3) a material uninsured loss to the Building occurs. In addition to Landlord’s right to terminate as provided herein, Tenant shall have the right to terminate this Lease if: (a) a substantial portion of the Premises has been damaged by Casualty and such damage cannot reasonably be repaired within 60 days after receipt of the Completion Estimate; (b) there is less than 2 years of the Term remaining on the date of such Casualty; (c) the Casualty was not caused by the gross negligence or willful misconduct of Tenant or its agents, employees or contractors; and (d) Tenant provides Landlord with written notice of its intent to terminate within 30 days after the date of the Casualty.

     16.02 If this Lease is not terminated, Landlord shall promptly and diligently, subject to reasonable delays for insurance adjustment or other matters beyond Landlord’s reasonable control, restore the Premises (including the Leasehold Improvements) and Common Areas at Landlord’s expense (except to the extent properly included in Expenses or otherwise provided in this Section 16.02). Such restoration shall be to substantially the same condition that existed prior to the Casualty, except for modifications required by Law or any other modifications to the Common Areas deemed desirable by Landlord. Upon notice from Landlord, Tenant shall assign to Landlord (or to any party designated by Landlord) all property insurance proceeds payable to Tenant under Tenant’s Insurance with respect to any Leasehold Improvements performed by or for the benefit of Tenant; provided if the estimated cost to repair such Leasehold Improvements exceeds the amount of insurance proceeds received by Landlord from Tenant’s insurance carrier, the excess cost of such repairs shall be paid by Tenant to Landlord prior to Landlord’s commencement of repairs. Within 15 days of demand, Tenant shall also pay Landlord for any reasonable additional excess costs that are determined during the performance of the repairs. Landlord shall not be liable for any inconvenience to Tenant, or injury to Tenant’s business resulting in any way from the Casualty or the repair thereof. Provided that Tenant is not in Default, during any period of time that all or a material portion of the Premises is rendered untenantable (including Tenant’s inability to access the Premises) as a result of a Casualty, the Rent shall abate for the portion of the Premises that is untenantable and not used by Tenant.

     16.03 The provisions of this Lease, including this Section 16, constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part of the Premises or the Property, and any Laws, including, without limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any rights or obligations concerning damage or destruction in the absence of an express agreement between the parties, and any similar or successor Laws now or hereinafter in effect, shall have no application to this Lease or any damage or destruction to all or any part of the Premises or the Property.

17.   Condemnation.

     Either party may terminate this Lease if any material part of the Premises is taken or condemned for any public or quasi-public use under Law, by eminent domain or private purchase in lieu thereof (a “Taking”). Landlord shall also have the right to terminate this Lease if there is a Taking of any portion of the Building or Property which would have a material adverse effect on Landlord’s ability to profitably operate the remainder of the Building. The terminating party shall provide written notice of termination to the other party within 45 days after it first receives notice of the Taking. The termination shall be effective on the date the physical taking occurs. If this Lease is not terminated, Base Rent and Tenant’s

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Pro Rata Share shall be appropriately adjusted to account for any reduction in the square footage of the Building or Premises. All compensation awarded for a Taking shall be the property of Landlord. The right to receive compensation or proceeds are expressly waived by Tenant, however, Tenant may file a separate claim for Tenant’s Property and Tenant’s reasonable relocation expenses, provided the filing of the claim does not diminish the amount of Landlord’s award. If only a part of the Premises is subject to a Taking and this Lease is not terminated, Landlord, with reasonable diligence, will restore the remaining portion of the Premises as nearly as practicable to the condition immediately prior to the Taking. Tenant hereby waives any and all rights it might otherwise have pursuant to Section 1265.130 of the California Code of Civil Procedure, or any similar or successor Laws.

18.   Events of Default.

     Each of the following occurrences shall be a “Default”: (a) Tenant’s failure to pay any portion of Rent when due, if the failure continues for 5 days after written notice to Tenant (“Monetary Default”); (b) Tenant’s failure (other than a Monetary Default) to comply with any term, provision, condition or covenant of this Lease, if the failure is not cured within 30 days after written notice to Tenant provided, however, if Tenant’s failure to comply cannot reasonably be cured within 30 days, Tenant shall be allowed additional time (not to exceed 60 days) as is reasonably necessary to cure the failure so long as Tenant begins the cure within 30 days and diligently pursues the cure to completion; (c) Tenant or any Guarantor becomes insolvent, makes a transfer in fraud of creditors, makes an assignment for the benefit of creditors, admits in writing its inability to pay its debts when due or forfeits or loses its right to conduct business; and (d) the leasehold estate is taken by process or operation of Law. All notices sent under this Section shall be in satisfaction of, and not in addition to, notice required by Law so long as such notice complies with such Law.

19.   Remedies.

     19.01 Upon the occurrence of any Default under this Lease, whether enumerated in Section 18 or not, Landlord shall have the option to pursue any one or more of the following remedies without any notice (except as expressly prescribed herein) or demand whatsoever (and without limiting the generality of the foregoing, Tenant hereby specifically waives notice and demand for payment of Rent or other obligations, except for those notices specifically required pursuant to the terms of Section 18 or this Section 19 (to the extent such notices comply with applicable law), and waives any and all other notices or demand requirements imposed by applicable law):

(a)   Terminate this Lease and Tenant’s right to possession of the Premises and recover from Tenant an award of damages equal to the sum of the following:

(i)	The Worth at the Time of Award of the unpaid Rent which had been earned at the time of termination;
(ii)	The Worth at the Time of Award of the amount by which the unpaid Rent which would have been earned after termination until the time of award exceeds the amount of such Rent loss that Tenant affirmatively proves could have been reasonably avoided;
(iii)	The Worth at the Time of Award of the amount by which the unpaid Rent for the balance of the Term after the time of award exceeds the amount of such Rent loss that Tenant affirmatively proves could be reasonably avoided;
(iv)	Any other amount necessary to compensate Landlord for all the detriment either proximately caused by Tenant’s failure to perform Tenant’s obligations under this Lease or which in the ordinary course of things would be likely to result therefrom; and
(v)	All such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time under applicable law.

The “Worth at the Time of Award” of the amounts referred to in parts (i) and (ii) above, shall be computed by allowing interest at the lesser of a per annum rate equal to: (A) the greatest per annum rate of interest permitted from time to time under applicable law, or (B) the Prime Rate plus 5%. For purposes hereof, the “Prime Rate” shall be the per annum interest rate publicly announced as its prime or base rate by a federally insured bank selected by Landlord in the State of California. The “Worth at the Time of Award” of the amount referred to in part (iii), above, shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus 1%;

(b)

Employ the remedy described in California Civil Code § 1951.4 (Landlord may continue this Lease in effect after Tenant’s breach and abandonment and recover Rent as it

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	becomes due, if Tenant has the right to sublet or assign, subject only to reasonable limitations); or
(c)	Notwithstanding Landlord’s exercise of the remedy described in California Civil Code § 1951.4 in respect of an event or events of default, at such time thereafter as Landlord may elect in writing, to terminate this Lease and Tenant’s right to possession of the Premises and recover an award of damages as provided above in Paragraph 19.01(a).

     19.02 The subsequent acceptance of Rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, other than the failure of Tenant to pay the particular Rent so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of acceptance of such Rent. No waiver by Landlord of any breach hereof shall be effective unless such waiver is in writing and signed by Landlord.

     19.03 TENANT HEREBY WAIVES ANY AND ALL RIGHTS CONFERRED BY SECTION 3275 OF THE CIVIL CODE OF CALIFORNIA AND BY SECTIONS 1174 (c) AND 1179 OF THE CODE OF CIVIL PROCEDURE OF CALIFORNIA AND ANY AND ALL OTHER LAWS AND RULES OF LAW FROM TIME TO TIME IN EFFECT DURING THE LEASE TERM PROVIDING THAT TENANT SHALL HAVE ANY RIGHT TO REDEEM, REINSTATE OR RESTORE THIS LEASE FOLLOWING ITS TERMINATION BY REASON OF TENANT’S BREACH. TENANT ALSO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR RELATING TO THIS LEASE.

     19.04 No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy, and each and every right and remedy shall be cumulative and in addition to any other right or remedy given hereunder or now or hereafter existing by agreement, applicable law or in equity. In addition to other remedies provided in this Lease, Landlord shall be entitled, to the extent permitted by applicable law, to injunctive relief, or to a decree compelling performance of any of the covenants, agreements, conditions or provisions of this Lease, or to any other remedy allowed to Landlord at law or in equity. Forbearance by Landlord to enforce one or more of the remedies herein provided upon an event of default shall not be deemed or construed to constitute a waiver of such default.

     19.05 If Tenant is in Default of any of its non-monetary obligations under the Lease, Landlord shall have the right to perform such obligations. Tenant shall reimburse Landlord for the cost of such performance upon demand together with an administrative charge equal to 10% of the cost of the work performed by Landlord.

     19.06 This Section 19 shall be enforceable to the maximum extent such enforcement is not prohibited by applicable law, and the unenforceability of any portion thereof shall not thereby render unenforceable any other portion.

20.   Limitation of Liability.

     NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, THE LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD) SHALL BE LIMITED TO THE INTEREST OF LANDLORD IN THE PROPERTY. TENANT SHALL LOOK SOLELY TO LANDLORD’S INTEREST IN THE PROPERTY FOR THE RECOVERY OF ANY JUDGMENT OR AWARD AGAINST LANDLORD OR ANY LANDLORD RELATED PARTY. NEITHER LANDLORD NOR ANY LANDLORD RELATED PARTY SHALL BE PERSONALLY LIABLE FOR ANY JUDGMENT OR DEFICIENCY, AND IN NO EVENT SHALL LANDLORD OR ANY LANDLORD RELATED PARTY BE LIABLE TO TENANT FOR ANY LOST PROFIT, DAMAGE TO OR LOSS OF BUSINESS OR ANY FORM OF SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGE. BEFORE FILING SUIT FOR AN ALLEGED DEFAULT BY LANDLORD, TENANT SHALL GIVE LANDLORD AND THE MORTGAGEE(S) WHOM TENANT HAS BEEN NOTIFIED HOLD MORTGAGES (DEFINED IN SECTION 23 BELOW), NOTICE AND REASONABLE TIME TO CURE THE ALLEGED DEFAULT.

21.	Intentionally Omitted.
22.	Holding Over.

     If Tenant fails to surrender all or any part of the Premises at the termination of this Lease, occupancy of the Premises after termination shall be that of a tenancy at sufferance. Tenant’s occupancy shall be subject to all the terms and provisions of this Lease, and Tenant shall pay an amount (on a per month basis without reduction for partial months during the holdover) equal to 150% of the sum of the Base Rent and Additional Rent due for the period immediately preceding the holdover. No holdover by Tenant or payment by Tenant after the termination of this Lease shall be construed to extend the Term or prevent Landlord from immediate recovery of possession of the Premises by summary proceedings or otherwise. If Landlord is unable to deliver possession of the Premises to a new tenant or to perform improvements for a new tenant as a result of Tenant’s holdover and Tenant fails to vacate the Premises

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within 30 days after notice from Landlord, Tenant shall be liable for all damages that Landlord suffers from the holdover.

23.   Subordination to Mortgages; Estoppel Certificate.

     Tenant accepts this Lease subject and subordinate to any mortgage(s), deed(s) of trust, ground lease(s) or other lien(s) now or subsequently arising upon the Premises, the Building or the Property, and to renewals, modifications, refinancings and extensions thereof (collectively referred to as a “Mortgage”). The party having the benefit of a Mortgage shall be referred to as a “Mortgagee”. This clause shall be self-operative, but upon request from a Mortgagee, Tenant shall execute a commercially reasonable subordination and non-disturbance agreement in favor of the Mortgagee. As an alternative, a Mortgagee shall have the right at any time to subordinate its Mortgage to this Lease. Upon request, Tenant, without charge, shall attorn to any successor to Landlord’s interest in this Lease. Landlord and Tenant shall each, within 10 Business Days after receipt of a written request from the other, execute and deliver a commercially reasonable estoppel certificate to those parties as are reasonably requested by the other (including a Mortgagee or prospective purchaser). Without limitation, such estoppel certificate may include a certification as to the status of this Lease, the existence of any defaults and the amount of Rent that is due and payable. Notwithstanding the foregoing, upon written request by Tenant, Landlord will use reasonable efforts to obtain a non-disturbance, subordination and attornment agreement from Landlord’s then current Mortgagee on such Mortgagee’s then current standard form of agreement. “Reasonable efforts” of Landlord shall not require Landlord to incur any cost, expense or liability to obtain such agreement, it being agreed that Tenant shall be responsible for any fee or review costs charged by the Mortgagee. Upon request of Landlord, Tenant will execute the Mortgagee’s form of non-disturbance, subordination and attornment agreement and return the same to Landlord for execution by the Mortgagee. Landlord’s failure to obtain a non-disturbance, subordination and attornment agreement for Tenant shall have no effect on the rights, obligations and liabilities of Landlord and Tenant or be considered to be a default by Landlord hereunder. Landlord represents that as of the date of this Lease, there exists no Mortgage encumbering Landlord’s interest in the Building or Property.

24.   Notice.

     All demands, approvals, consents or notices (collectively referred to as a “notice”) shall be in writing and delivered by hand or sent by registered or certified mail with return receipt requested or sent by overnight or same day courier service at the party’s respective Notice Address(es) set forth in Section 1. Each notice shall be deemed to have been received on the earlier to occur of actual delivery or the date on which delivery is refused, or, if Tenant has vacated the Premises or any other Notice Address of Tenant without providing a new Notice Address, 3 days after notice is deposited in the U.S. mail and sent by certified mail, return receipt requested or with a courier service in the manner described above. Either party may, at any time, change its Notice Address (other than to a post office box address) by giving the other party written notice of the new address.

25.   Surrender of Premises.

     At the termination of this Lease or Tenant’s right of possession, Tenant shall remove Tenant’s Property from the Premises, and quit and surrender the Premises to Landlord, broom clean, and in good order, condition and repair, ordinary wear and tear and damage which Landlord is obligated to repair hereunder excepted. If Tenant fails to remove any of Tenant’s Property within 2 days after termination of this Lease or Tenant’s right to possession, Landlord, at Tenant’s sole cost and expense, shall be entitled (but not obligated) to remove and store Tenant’s Property. Landlord shall not be responsible for the value, preservation or safekeeping of Tenant’s Property. Tenant shall pay Landlord, upon demand, the expenses and storage charges incurred. If Tenant fails to remove Tenant’s Property from the Premises or storage, within 30 days after notice, Landlord may deem all or any part of Tenant’s Property to be abandoned and title to Tenant’s Property shall vest in Landlord to the extent permitted under applicable law.

26.   Miscellaneous.

     26.01 This Lease shall be interpreted and enforced in accordance with the Laws of the State of California and Landlord and Tenant hereby irrevocably consent to the jurisdiction and proper venue of such state or commonwealth. If any term or provision of this Lease shall to any extent be void or unenforceable, the remainder of this Lease shall not be affected. If there is more than one Tenant or if Tenant is comprised of more than one party or entity, the obligations imposed upon Tenant shall be joint and several obligations of all the parties and entities, and requests or demands from any one person or entity comprising Tenant shall be deemed to have been made by all such persons or entities. Notices to any one person or entity shall be deemed to have been given to all persons and entities. Tenant represents and warrants to Landlord that each individual executing this Lease on behalf of Tenant is authorized to do so on behalf of Tenant and that Tenant is not, and the entities or individuals constituting Tenant or which may own or control Tenant or which may be owned or controlled by Tenant are not, among the individuals or entities identified on any list compiled pursuant to Executive Order 13224 for

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the purpose of identifying suspected terrorists.

     26.02 If either party institutes a suit against the other for violation of or to enforce any covenant, term or condition of this Lease, the prevailing party shall be entitled to all of its costs and expenses, including, without limitation, reasonable attorneys’ fees. Landlord and Tenant hereby waive any right to trial by jury in any proceeding based upon a breach of this Lease. Either party’s failure to declare a default immediately upon its occurrence, or delay in taking action for a default, shall not constitute a waiver of the default, nor shall it constitute an estoppel.

     26.03 Whenever a period of time is prescribed for the taking of an action by Landlord or Tenant (other than the payment of the Security Deposit or Rent), the period of time for the performance of such action shall be extended by the number of days that the performance is actually delayed due to strikes, acts of God, shortages of labor or materials, war, terrorist acts, civil disturbances and other causes beyond the reasonable control of the performing party (“Force Majeure”).

     26.04 Landlord shall have the right to transfer and assign, in whole or in part, all of its rights and obligations under this Lease and in the Building and Property. Upon transfer Landlord shall be released from any further obligations hereunder and Tenant agrees to look solely to the successor in interest of Landlord for the performance of such obligations, provided that, any successor pursuant to a voluntary, third party transfer (but not as part of an involuntary transfer resulting from a foreclosure or deed in lieu thereof) shall have assumed in writing Landlord’s obligations under this Lease and further provided that Landlord and its successors, as the case may be, shall remain liable after their respective periods of ownership with respect to any sums due in connection with a breach or default by such party that arose during such period of ownership by such party.

     26.05 Landlord has delivered a copy of this Lease to Tenant for Tenant’s review only and the delivery of it does not constitute an offer to Tenant or an option. Tenant represents that it has dealt directly with and only with Tenant’s Broker as a broker representing Tenant in connection with this Lease. Tenant shall indemnify and hold Landlord and the Landlord Related Parties harmless from all claims of any other brokers claiming to have represented Tenant in connection with this Lease. Landlord shall indemnify and hold Tenant and the Tenant Related Parties harmless from all claims of any brokers claiming to have represented Landlord in connection with this Lease or any claim by Tenant’s Broker relating to Landlord’s breach of the Broker Agreement (defined below). Landlord agrees to pay a brokerage commission to Tenant’s Broker and Landlord’s Broker in accordance with the terms of a separate written commission agreement to be entered into by and between Landlord and each of Tenant’s Broker and Landlord’s Broker (collectively, the “Broker Agreement”), provided that in no event shall Landlord be obligated to pay a commission to Tenant’s Broker and/or Landlord’s Broker in connection with any extension of the Term or in connection with any additional space that is leased by Tenant pursuant to the terms of this Lease except as may be specifically provided otherwise in such Broker Agreement or future written agreement between Landlord and Tenant’s Broker. Equity Office Properties Management Corp. (“EOPMC”) is an affiliate of Landlord and represents only the Landlord in this transaction. Any assistance rendered by any agent or employee of EOPMC in connection with this Lease or any subsequent amendment or modification hereto has been or will be made as an accommodation to Tenant solely in furtherance of consummating the transaction on behalf of Landlord, and not as agent for Tenant.

     26.06 Time is of the essence with respect to the performance of each of the covenants and agreements of this Lease; provided, however, that failure of Landlord to provide Tenant with any notification within the time periods prescribed in this Lease regarding adjustments in Base Rent, reimbursements for any Expenses or Taxes or any other charges provided for hereunder, shall not relieve Tenant of its obligation to make such payments, which payments shall be made by Tenant at such time as required under this Lease. The expiration of the Term, whether by lapse of time, termination or otherwise, shall not relieve either party of any obligations which accrued prior to or which may continue to accrue after the expiration or termination of this Lease.

     26.07 Tenant may peacefully have, hold and enjoy the Premises, subject to the terms of this Lease, provided Tenant pays the Rent and fully performs all of its covenants and agreements. This covenant shall be binding upon Landlord and its successors only during its or their respective periods of ownership of the Building.

     26.08 This Lease does not grant any rights to light or air over or about the Building. Landlord excepts and reserves exclusively to itself any and all rights not specifically granted to Tenant under this Lease. This Lease constitutes the entire agreement between the parties and supersedes all prior agreements and understandings related to the Premises, including all lease proposals, letters of intent and other documents. Neither party is relying upon any warranty, statement or representation not contained in this Lease. This Lease may be modified only by a written agreement signed by an authorized representative of Landlord and Tenant.

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     26.09 This Lease may be executed in two or more counterparts, each of which shall be deemed to be a duplicate original, but all of which together shall constitute one and the same instrument. Landlord and Tenant hereby agree that the facsimile signatures shall be binding upon the parties to this Lease.

[SIGNATURES ARE ON FOLLOWING PAGE]

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     Landlord and Tenant have executed this Lease as of the day and year first above written.

LANDLORD:
SEAPORT PLAZA ASSOCIATES, LLC, a California limited liability company
By:	EOM Operating Limited Partnership, a Delaware limited partnership, its sole member
	By:	Equity Office Properties Trust, a Maryland real estate investment trust, its general partner
		By:
		Name:
		Title:
		Date:	October 7, 2004
TENANT:
INFORMATICA CORPORATION, a Delaware corporation
By:
Name:
Title:
Date:	October 7, 2004
Tenant’s Tax ID Number (SSN or FEIN)

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EXHIBIT A

OUTLINE AND LOCATION OF PREMISES

1

EXHIBIT B

EXPENSES AND TAXES

     This Exhibit is attached to and made a part of the Lease by and between SEAPORT PLAZA ASSOCIATES, LLC, a California limited liability company (“Landlord”) and INFORMATICA CORPORATION, a Delaware corporation (“Tenant”) for space in the Buildings located at 100 and 200 Cardinal Way, Redwood City, California.

1.   Payments.

     1.01 Tenant shall pay Tenant’s Pro Rata Share of the total amount of Expenses and Taxes for each calendar year during the Term. Landlord shall provide Tenant with a good faith estimate of the total amount of Expenses and Taxes for each calendar year during the Term. On or before the first day of each month, Tenant shall pay to Landlord a monthly installment equal to one-twelfth of Tenant’s Pro Rata Share of Landlord’s estimate of the total amount of Expenses and Taxes. If Landlord determines that its good faith estimate was incorrect by a material amount, Landlord may provide Tenant with a revised estimate. After its receipt of the revised estimate, Tenant’s monthly payments shall be based upon the revised estimate. If Landlord does not provide Tenant with an estimate of the total amount of Expenses and Taxes by January 1 of a calendar year, Tenant shall continue to pay monthly installments based on the previous year’s estimate until Landlord provides Tenant with the new estimate. Upon delivery of the new estimate, an adjustment shall be made for any month for which Tenant paid monthly installments based on the previous year’s estimate. Tenant shall pay Landlord the amount of any underpayment within 30 days after receipt of the new estimate. Any overpayment shall be refunded to Tenant within 30 days or credited against the next due future installment(s) of Additional Rent.

     1.02 As soon as is practical following the end of each calendar year, Landlord shall furnish Tenant with a statement of the actual amount and Tenant’s Pro Rata Share of Expenses and Taxes for the prior calendar year. If the estimated amount of Expenses and Taxes for the prior calendar year is more than the actual amount of Expenses and Taxes for the prior calendar year, Landlord shall apply any overpayment by Tenant against Additional Rent due or next becoming due, provided if the Term expires before the determination of the overpayment, Landlord shall refund any overpayment to Tenant after first deducting the amount of Rent due. If the estimated amount of Expenses and Taxes for the prior calendar year is less than the actual amount of Expenses and Taxes for such prior year, Tenant shall pay Landlord, within 30 days after its receipt of the statement of Expenses and Taxes, any underpayment for the prior calendar year.

2.   Expenses.

     2.01 “Expenses” means all costs and expenses incurred in each calendar year in connection with operating, maintaining, repairing, and managing the Building and the Property. Expenses include, without limitation: (a) all labor and labor related costs, including wages, salaries, bonuses, taxes, insurance, uniforms, training, retirement plans, pension plans and other employee benefits for employees directly involved in the operation and maintenance of the Building and the Property; (b) management fees, provided that in no event shall Tenant’s Pro Rata Share of such management fees for any given calendar year during the Term exceed 4.0% of the aggregate amount Base Rent payable by Tenant under the Lease during such calendar year; (c) the cost of equipping, staffing and operating an on-site and/or off-site management office for the Building, provided if the management office services one or more other buildings or properties, the shared costs and expenses of equipping, staffing and operating such management office(s) shall be equitably prorated and apportioned between the Building and the other buildings or properties; (d) accounting costs; (e) the cost of services; (f) rental and purchase cost of parts, supplies, tools and equipment; (g) insurance premiums and deductibles; (h) electricity, gas and other utility costs; and (i) the amortized cost of capital improvements or capital replacements (as distinguished from non-capital replacement parts or components installed in the ordinary course of business) which are: (1) performed primarily to reduce current or future operating expense costs, upgrade Building security or otherwise improve the operating efficiency of the Property; or (2) required to comply with any Laws that are enacted, or first interpreted to apply to the Property, after the date of this Lease. The cost of capital improvements shall be amortized by Landlord over the lesser of the Payback Period (defined below) or the useful life of the capital improvement as reasonably determined by Landlord; provided that in no event shall Tenant’s Pro Rata Share of the amortized cost of any of any capital improvements or capital replacements shall not exceed $25,000.00, the aggregate, during any calendar year of the Term, except to the extent such capital improvements or capital replacements are required as a result of the acts or omissions of Tenant or any Tenant Related Parties (other than reasonable wear and tear), including any Alterations performed by or on behalf of Tenant. “Payback Period” means the reasonably estimated period of time that it takes for the cost savings resulting from a capital improvement to equal the total cost of the capital improvement. Landlord, by itself or through an affiliate, shall have the right to directly perform, provide and be compensated for any services under this Lease. If Landlord incurs Expenses for the Building or Property together with one or more other buildings or properties, whether pursuant to a reciprocal easement agreement, common area

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agreement or otherwise, the shared costs and expenses shall be equitably prorated and apportioned between the Building and Property and the other buildings or properties.

     2.02 Expenses shall not include: the cost of capital improvements (except as set forth above); depreciation; principal payments of mortgage and other non-operating debts of Landlord; the cost of repairs or other work to the extent Landlord is reimbursed by insurance or condemnation proceeds; costs in connection with leasing space in the Building, including brokerage commissions; lease concessions, rental abatements and construction allowances granted to specific tenants; costs and expenses incurred by Tenant or any other tenants of the Building and paid for or payable directly by Tenant or such other tenants either to third parties or to Landlord under agreements for direct payment or reimbursement for non-customary benefits or services; costs incurred in connection with the sale, financing or refinancing of the Building; fines, interest and penalties incurred due to the late payment of Taxes or Expenses; organizational expenses associated with the creation and operation of the entity which constitutes Landlord; any cost or expense related to removal, cleaning, abatement or remediation of hazardous materials in or about the Building, Common Area or Property, including, without limitation, asbestos, except to the extent such removal, cleaning, abatement or remediation is non-material and related to the general repair and maintenance of the Building, Common Area or Property; or any penalties or damages that Landlord pays to Tenant under this Lease or pays to other tenants in the Building under their respective leases or incurs as a result of Landlord’s breach of any leases with other tenants of the Building.

     2.03 If the Building is not at least 95% occupied during any calendar year or if Landlord is not supplying services to at least 95% of the total Rentable Square Footage of the Building at any time during a calendar year, Expenses shall, at Landlord’s option, be determined as if the Building had been 95% occupied and Landlord had been supplying services to 95% of the Rentable Square Footage of the Building during that calendar year. Notwithstanding the foregoing, Landlord may calculate the extrapolation of Expenses under this Section based on 100% occupancy and service so long as such percentage is used consistently for each year of the Term. The extrapolation of Expenses under this Section shall be performed in accordance with the methodology specified by the Building Owners and Managers Association.

3.   “Taxes” shall mean: (a) all real property taxes and other assessments on the Building and/or Property, including, but not limited to, gross receipts taxes, assessments for special improvement districts and building improvement districts, governmental charges, fees and assessments for police, fire, traffic mitigation or other governmental service of purported benefit to the Property, taxes and assessments levied in substitution or supplementation in whole or in part of any such taxes and assessments and the Property’s share of any real estate taxes and assessments under any reciprocal easement agreement, common area agreement or similar agreement as to the Property; (b) all personal property taxes for property that is owned by Landlord and used in connection with the operation, maintenance and repair of the Property; and (c) out-of-pocket costs and fees incurred in connection with seeking reductions in any tax liabilities described in (a) and (b), including, without limitation, any reasonable costs incurred by Landlord for compliance, review and appeal of tax liabilities. Without limitation, Taxes shall not include any income, capital levy, transfer, capital stock, gift, estate or inheritance tax. If a change in Taxes is obtained for any year of the Term during which Tenant paid Tenant’s Pro Rata Share of any Taxes, then Taxes for that year will be retroactively adjusted and Landlord shall provide Tenant with a credit, if any, based on the adjustment. Tenant shall pay Landlord the amount of Tenant’s Pro Rata Share of any such increase in Taxes within 30 days after Tenant’s receipt of a statement from Landlord.

4.    Audit Rights. Tenant, within 365 days after receiving Landlord’s statement of Expenses, may give Landlord written notice (“Review Notice”) that Tenant intends to review Landlord’s records of the Expenses for that calendar year to which the statement applies. Within a reasonable time after receipt of the Review Notice, Landlord shall make all pertinent records available for inspection that are reasonably necessary for Tenant to conduct its review. If any records are maintained at a location other than the management office for the Building, Tenant may either inspect the records at such other location or pay for the reasonable cost of copying and shipping the records. If Tenant retains an agent to review Landlord’s records, the agent must be with a CPA firm licensed to do business in the state or commonwealth where the Property is located. Landlord agrees that Tenant may retain a third party agent to review Landlord’s books and records which third party agent is not a CPA firm, so long as the third party agent retained by Tenant shall have expertise in and familiarity with general industry practice with respect to the operation of and accounting for a first class office building and whose compensation shall in no way be contingent upon or correspond to the financial impact on Tenant resulting from the review. Tenant shall be solely responsible for all costs, expenses and fees incurred for the audit. However, notwithstanding the foregoing, if Landlord and Tenant determine that Expenses for the Building for the year in question were less than stated by more than 5%, Landlord, within 30 days after its receipt of paid invoices therefor from Tenant, shall reimburse Tenant for the reasonable amounts paid by Tenant to third parties in connection with such review by Tenant. Within 90 days after the records are made available to Tenant, Tenant shall have the right to give Landlord written notice (an “Objection Notice”) stating in reasonable detail any objection to Landlord’s statement of Expenses for that year. If

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Tenant fails to give Landlord an Objection Notice within the 90 day period or fails to provide Landlord with a Review Notice within the 365 day period described above, Tenant shall be deemed to have approved Landlord’s statement of Expenses and shall be barred from raising any claims regarding the Expenses for that year. The records obtained by Tenant shall be treated as confidential. In no event shall Tenant be permitted to examine Landlord’s records or to dispute any statement of Expenses unless Tenant has paid and continues to pay all Rent when due.

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EXHIBIT C

WORK LETTER

     This Exhibit (“Work Letter”) is attached to and made a part of the Lease by and between SEAPORT PLAZA ASSOCIATES, LLC, a California limited liability company (“Landlord”) and INFORMATICA CORPORATION, a Delaware corporation (“Tenant”) for space in the Buildings located at 100 and 200 Cardinal Way, Redwood City, California.

As used in this Work Letter, the “Premises” shall be deemed to mean the Premises, as initially defined in the Lease to which this Work Letter is attached.

1.

Tenant, following the delivery of the Premises by Landlord and the full and final execution and delivery of the Lease to which this Work Letter is attached and all prepaid rental and security deposits required under such agreement, shall have the right to perform alterations and improvements in the Premises (the “Initial Alterations”). Notwithstanding the foregoing, Tenant and its contractors shall not have the right to perform Initial Alterations in the Premises unless and until Tenant has complied with all of the terms and conditions of Section 9 of the Lease, including, without limitation, approval by Landlord of the final plans for the Initial Alterations and the contractors to be retained by Tenant to perform such Initial Alterations; provided that (a) Landlord shall approval or provide its reasonably detailed reason for disapproval of Tenant’s final plans for the Initial Alterations within 10 days after Tenant’s submittal thereof to Landlord, and (b) so long as the Lease has been fully executed by the parties hereto and Tenant has delivered to Landlord all prepaid rental and security deposits required under the Lease, Tenant shall have the right, commencing on October 15, 2004, to commence demolition of the interior of the Premises, subject to the limitations set forth in this Work Letter, regardless of whether Landlord has provided final approval of Tenant’s plans for the Initial Alterations in accordance with this Section. Tenant shall be responsible for all elements of the design of Tenant’s plans (including, without limitation, compliance with law, functionality of design, the structural integrity of the design, the configuration of the premises and the placement of Tenant’s furniture, appliances and equipment), and Landlord’s approval of Tenant’s plans shall in no event relieve Tenant of the responsibility for such design. Landlord’s approval of the contractors to perform the Initial Alterations shall not be unreasonably withheld. The parties agree that Landlord’s approval of the general contractor to perform the Initial Alterations shall not be considered to be unreasonably withheld if any such general contractor (i) does not have trade references reasonably acceptable to Landlord, (ii) does not maintain insurance as required pursuant to the terms of this Lease, (iii) does not have the ability to be bonded for the work in an amount of no less than 150% of the total estimated cost of the Initial Alterations, (iv) does not provide current financial statements reasonably acceptable to Landlord, or (v) is not licensed as a contractor in the state/municipality in which the Premises is located. Tenant acknowledges the foregoing is not intended to be an exclusive list of the reasons why Landlord may reasonably withhold its consent to a general contractor. Landlord hereby approves of DES to be retained by Tenant as the architect for the Initial Alterations and Novo Construction to be retained by Tenant as the general contractor for the Initial Alterations. Landlord hereby approves in concept Tenant’s installation of the Initial Alterations described on Schedule 1 hereto and the space plans attached as Schedule 2 hereto, subject to the terms and conditions set forth in this Work Letter and Section 9 of the Lease, including without limitation Landlord’s review and approval of the final plans and specifications for such Initial Alterations. Tenant shall have the right to modify the Initial Alterations described in Schedule 1 prior to Tenant’s submittal of the final plans for such Initial Alterations to Landlord.

2.

Provided Tenant is not in Monetary Default or material non-Monetary Default under the Lease at the time Tenant requests a payment of the Allowance, Landlord agrees to contribute the sum of $956,100.00 (i.e., $6.00 per Rentable Square Footage of the Premises) (the “Allowance”) toward the cost of performing the Initial Alterations in preparation of Tenant’s occupancy of the Premises. The Allowance may only be used for the cost of preparing design and construction documents and mechanical and electrical plans for the Initial Alterations, permit fees and for hard and soft costs in connection with the Initial Alterations (including cabling) and for the cost of furniture and equipment to be used exclusively within the Premises. The Allowance payable as to any portion of the Initial Alterations being performed by the general contractor (as opposed to soft costs such as permit fees and the cost of furniture equipment, etc.) (the “GC Portion”), less a 10% retainage (which retainage shall be payable as part of the final draw), shall be paid to Tenant or, at Landlord’s option, to the order of the general contractor that performs the Initial Alterations, in periodic disbursements within 30 days after receipt of the following documentation: (i) an application for payment and sworn statement of contractor substantially in the form of AIA Document G-702 covering all work for which disbursement is to be made to a date specified therein; (ii) Contractor’s, subcontractor’s and material supplier’s waivers of liens which shall cover all Initial Alterations for which disbursement is being requested and all other statements and forms required for compliance with the mechanics’ lien laws of the state in which the Premises is located, together with all such invoices, contracts, or other supporting data as Landlord or Landlord’s Mortgagee may reasonably require; (iii) plans and

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	specifications for the Initial Alterations, together with a certificate from an AIA architect that such plans and specifications comply in all material respects with all laws affecting the Building, Property and Premises; (iv) copies of all construction contracts for the Initial Alterations, together with copies of all change orders, if any; and (v) a request to disburse from Tenant containing an approval by Tenant of the work done and a good faith estimate of the cost to complete the Initial Alterations. Upon completion of the Initial Alterations, and prior to final disbursement of the Allowance, Tenant shall furnish Landlord with: (1) general contractor and architect’s completion affidavits, (2) full and final waivers of lien, (3) as-built plans of the Initial Alterations, and (4) the certification of Tenant and its architect that the Initial Alterations have been installed in a good and workmanlike manner in accordance with the approved plans, and in accordance with applicable laws, codes and ordinances. In no event shall Landlord be required to disburse the Allowance more than one time per month. Notwithstanding the foregoing, with respect to Tenant’s use of the Allowance or any portion thereof for the non-GC Portion of the Initial Alterations such as permit fees, and the cost of design and construction drawings, cabling, furniture and equipment incurred in accordance with this Section 2, Landlord shall disburse the Allowance (or the applicable portion thereof) with respect to such items within 15 days after receipt of paid invoices evidencing the cost thereof, but in no event more than twice per month. If the Initial Alterations exceed the Allowance, Tenant shall be entitled to the Allowance in accordance with the terms hereof, but each individual disbursement of the Allowance shall be disbursed in the proportion that the Allowance bears to the total cost for the Initial Alterations, less the 10% retainage referenced above. Notwithstanding anything herein to the contrary, Landlord shall not be obligated to disburse any portion of the Allowance during the continuance of an uncured default under the Lease, and Landlord’s obligation to disburse shall only resume when and if such default is cured.
3.	So long as Tenant is not in Monetary Default or material non-Monetary Default under the Lease at the time Landlord would otherwise apply the Unused Allowance (defined below) to Rent in accordance with this Section, if any portion of the Allowance which exceeds the cost of the Initial Alterations (“Unused Allowance”), Landlord shall, upon completion of the Initial Alterations and payment of all costs related thereto, apply the Unused Allowance against the second and subsequent installments of Base Rent and Additional Rent due under the Lease.
4.	Tenant agrees to accept the Premises in its “as-is” condition and configuration (subject to any limitations expressly set forth in the Lease), it being agreed that Landlord shall not be required to perform any work or, except as provided above with respect to the Allowance, incur any costs in connection with the construction or demolition of any improvements in the Premises.
5.	This Work Letter shall not be deemed applicable to any additional space added to the Premises at any time or from time to time, whether by any options under the Lease or otherwise, or to any portion of the original Premises or any additions to the Premises in the event of a renewal or extension of the original Term of the Lease, whether by any options under the Lease or otherwise, unless expressly so provided in the Lease or any amendment or supplement to the Lease.

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SCHEDULE 1 TO WORK LETTER

LIST OF CERTAIN INITIAL ALTERATIONS

Initial Alterations at 100 Cardinal Way:

•   reconfigure current space and install new hard wall private offices such that the total number of private offices in 100 Cardinal Way is approx. 60.

•   install workstations

•   install conference rooms and meeting rooms

•   possibly install additional rooftop air-cooled chiller, which installation shall be in accordance with Section 8 of Exhibit F to the Lease

Initial Alterations at 200 Cardinal Way:

•   reconfigure current space and install new hard wall private offices such that the total number of private offices in 200 Cardinal Way is approximately 35

•   install workstations

•   install conference rooms and meeting rooms

•   increase size of existing data center to approx. 4,500 square feet with associated system upgrades, including new generator to be installed in accordance with Section 5 of Exhibit F to the Lease

•   install rooftop air-cooled chillers, which installation shall be in accordance with Section 8 of Exhibit F to the Lease

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SCHEDULE 2 TO WORK LETTER

PRELIMINARY SPACE PLANS FOR CERTAIN INITIAL ALTERATIONS

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EXHIBIT D

COMMENCEMENT LETTER
(EXAMPLE)

Date
Tenant	Informatica Corporation
Address

Re:      Commencement Letter with respect to that certain Lease dated as of the       day of                     , 2004, by and between SEAPORT PLAZA ASSOCIATES, LLC, a California limited liability company, as Landlord, and INFORMATICA CORPORATION, a Delaware corporation, as Tenant, for 159,350 rentable square feet located at 100 and 200 Cardinal Way, Redwood City, California.

Dear                                           :

     In accordance with the terms and conditions of the above referenced Lease, Tenant accepts possession of the Premises and agrees:

1.	The Commencement Date of the Lease is
2.	The Termination Date of the Lease is                                         .

     Please acknowledge your acceptance of possession and agreement to the terms set forth above by signing all 3 counterparts of this Commencement Letter in the space provided and returning 2 fully executed counterparts to my attention.

Sincerely,

                                        
Authorized Signatory

Agreed and Accepted:

Tenant:	Informatica Corporation, a Delaware corporation
By:
Name:
Title:
Date:

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EXHIBIT E

BUILDING RULES AND REGULATIONS

     The following rules and regulations shall apply, where applicable, to the Premises, the Building, the parking facilities (if any), the Property and the appurtenances. In the event of a conflict between the following rules and regulations and the remainder of the terms of the Lease, the remainder of the terms of the Lease shall control. Capitalized terms have the same meaning as defined in the Lease.

1.	Sidewalks, doorways, vestibules, halls, stairways and other similar areas shall not be obstructed by Tenant or used by Tenant for any purpose other than ingress and egress to and from the Premises. No rubbish, litter, trash, or material shall be placed, emptied, or thrown in those areas. At no time shall Tenant permit Tenant’s employees to loiter in Common Areas or elsewhere about the Building or Property.
2.	Plumbing fixtures and appliances shall be used only for the purposes for which designed and no sweepings, rubbish, rags or other unsuitable material shall be thrown or placed in the fixtures or appliances. Damage resulting to fixtures or appliances by Tenant, its agents, employees or invitees shall be paid for by Tenant and Landlord shall not be responsible for the damage.
3.	No signs, advertisements or notices shall be painted or affixed to windows, doors or other parts of the Building, except those of such color, size, style and in such places as are first approved in writing by Landlord. All tenant identification and suite numbers at the entrance to the Premises shall be installed by Landlord, at Tenant’s cost and expense, using the standard graphics for the Building. Except in connection with the hanging of lightweight pictures and wall decorations, no nails, hooks or screws shall be inserted into any part of the Premises or Building except by the Building maintenance personnel without Landlord’s prior approval, which approval shall not be unreasonably withheld.
4.	Landlord may provide and maintain in the first floor (main lobby) of the Building an alphabetical directory board or other directory device listing tenants and no other directory shall be permitted unless previously consented to by Landlord in writing.
5.	Tenant shall not place any lock(s) on any door in the Premises or Building without Landlord’s prior written consent, which consent shall not be unreasonably withheld, and Landlord shall have the right at all times to retain and use keys or other access codes or devices to all locks within and into the Premises. A reasonable number of keys to the locks on the entry doors in the Premises shall be furnished by Landlord to Tenant at Tenant’s cost and Tenant shall not make any duplicate keys. All keys shall be returned to Landlord at the expiration or early termination of the Lease.
6.	All contractors, contractor’s representatives and installation technicians performing work in the Building shall be subject to Landlord’s prior approval, which approval shall not be unreasonably withheld, and shall be required to comply with Landlord’s standard rules, regulations, policies and procedures, which may be revised from time to time.
7.	Movement in or out of the Building of furniture or office equipment, or dispatch or receipt by Tenant of merchandise or materials requiring the use of elevators, stairways, lobby areas or loading dock areas, shall be restricted to hours reasonably designated by Landlord. Tenant shall obtain Landlord’s prior approval by providing a detailed listing of the activity, which approval shall not be unreasonably withheld. If approved by Landlord, the activity shall be under the supervision of Landlord and performed in the manner required by Landlord. Tenant shall assume all risk for damage to articles moved and injury to any persons resulting from the activity. If equipment, property, or personnel of Landlord or of any other party is damaged or injured as a result of or in connection with the activity, Tenant shall be solely liable for any resulting damage, loss or injury.
8.	Landlord shall have the right to approve the weight, size, or location of heavy equipment or articles in and about the Premises, which approval shall not be unreasonably withheld. Damage to the Building by the installation, maintenance, operation, existence or removal of Tenant’s Property shall be repaired at Tenant’s sole expense.
9.	Corridor doors, when not in use, shall be kept closed.
10.	Tenant shall not: (1) make or permit any improper, objectionable or unpleasant noises or odors in the Building, or otherwise interfere in any way with other tenants or persons having business with them; (2) solicit business or distribute or cause to be distributed, in any portion of the Building, handbills, promotional materials or other advertising; or (3) conduct or permit other activities in the Building that might, in Landlord’s sole opinion, constitute a nuisance.

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11.	No animals, except those assisting handicapped persons, shall be brought into the Building or kept in or about the Premises.
12.	No inflammable, explosive or dangerous fluids or substances shall be used or kept by Tenant in the Premises, Building or about the Property, except for those substances as are typically found in similar premises used for general office purposes and are being used by Tenant in a safe manner and in accordance with all applicable Laws. Tenant shall not, without Landlord’s prior written consent, use, store, install, spill, remove, release or dispose of, within or about the Premises or any other portion of the Property, any asbestos-containing materials or any solid, liquid or gaseous material now or subsequently considered toxic or hazardous under the provisions of 42 U.S.C. Section 9601 et seq. or any other applicable environmental Law which may now or later be in effect. Tenant shall comply with all Laws pertaining to and governing the use of these materials by Tenant and shall remain solely liable for the costs of abatement and removal.
13.	Tenant shall not use or occupy the Premises in any manner or for any purpose which might injure the reputation or impair the present or future value of the Premises or the Building. Tenant shall not use, or permit any part of the Premises to be used for lodging, sleeping or for any illegal purpose.
14.	Tenant shall not take any action which would violate Landlord’s labor contracts or which would cause a work stoppage, picketing, labor disruption or dispute or interfere with Landlord’s or any other tenant’s or occupant’s business or with the rights and privileges of any person lawfully in the Building (“Labor Disruption”). Tenant shall take the actions necessary to resolve the Labor Disruption, and shall have pickets removed and, at the request of Landlord, immediately terminate any work in the Premises that gave rise to the Labor Disruption, until Landlord gives its written consent for the work to resume. Tenant shall have no claim for damages against Landlord or any of the Landlord Related Parties nor shall the Commencement Date of the Term be extended as a result of the above actions.
15.	Tenant shall not install, operate or maintain in the Premises or in any other area of the Building, electrical equipment that would overload the electrical system beyond its capacity for proper, efficient and safe operation as determined solely by Landlord. Tenant shall not furnish cooling or heating to the Premises, including, without limitation, the use of electric or gas heating devices, without Landlord’s prior written consent. Tenant shall not use more than its proportionate share of telephone lines and other telecommunication facilities available to service the Building.
16.	Tenant shall not operate or permit to be operated a coin or token operated vending machine or similar device (including, without limitation, telephones, lockers, toilets, scales, amusement devices and machines for sale of beverages, foods, candy, cigarettes and other goods), except for machines for the exclusive use of Tenant’s employees and invitees.
17.	Bicycles and other vehicles are not permitted inside the Building or on the walkways outside the Building, except in areas designated by Landlord.
18.	Landlord may from time to time adopt systems and procedures for the security and safety of the Building and the Property, its occupants, entry, use and contents. Tenant, its agents, employees, contractors, guests and invitees shall comply with Landlord’s systems and procedures.
19.	Landlord shall have the right to prohibit the use of the name of the Building or any other publicity by Tenant that in Landlord’s sole opinion may impair the reputation of the Building or its desirability. Upon written notice from Landlord, Tenant shall refrain from and discontinue such publicity immediately.
20.	Neither Tenant nor its agents, employees, contractors, guests or invitees shall smoke or permit smoking in the Common Areas, unless a portion of the Common Areas have been declared a designated smoking area by Landlord, nor shall the above parties allow smoke from the Premises to emanate into the Common Areas or any other part of the Building. Landlord shall have the right to designate the Building (including the Premises) as a non-smoking building.
21.	Landlord shall have the right to designate and approve standard window coverings for the Premises and to establish rules to assure that the Building presents a uniform exterior appearance. Tenant shall ensure, to the extent reasonably practicable, that window coverings are closed on windows in the Premises while they are exposed to the direct rays of the sun.
22.	Deliveries to and from the Premises shall be made only at the times in the areas and through the entrances and exits reasonably designated by Landlord. Tenant shall not make deliveries to or from the Premises in a manner that might interfere with the use by any other tenant of its

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	premises or of the Common Areas, any pedestrian use, or any use which is inconsistent with good business practice.
23.	The work of cleaning personnel shall not be hindered by Tenant after 5:30 p.m., and cleaning work may be done at any time when the offices are vacant. Windows, doors and fixtures may be cleaned at any time. Tenant shall provide adequate waste and rubbish receptacles to prevent unreasonable hardship to the cleaning service.

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EXHIBIT F

ADDITIONAL PROVISIONS

     This Exhibit is attached to and made a part of the Lease by and between SEAPORT PLAZA ASSOCIATES, LLC, a California limited liability company (“Landlord”) and INFORMATICA CORPORATION, a Delaware corporation (“Tenant ”) for space in the Buildings located at 100 and 200 Cardinal Way, Redwood City, California.

1.   Renewal Option.

     1.01 Grant of Option; Conditions. Tenant shall have the right to extend the Term (the “Renewal Option”) for one additional period of 3 years commencing on the day following the Termination Date of the initial Term and ending on the third anniversary of the Termination Date (the “Renewal Term”), if:

(a)	Landlord receives notice of exercise (“Initial Renewal Notice”) not less than 8 full calendar months prior to the expiration of the initial Term and not more than 12 full calendar months prior to the expiration of the initial Term; and
(b)	Tenant is not in default under the Lease beyond any applicable cure periods at the time that Tenant delivers its Initial Renewal Notice or at the time Tenant delivers its Binding Notice (as defined below); and
(c)	Not more than 50% of the Rentable Square Footage of the Premises is sublet (other than pursuant to a Permitted Transfer, as defined in Section 11 of the Lease) at the time that Tenant delivers its Initial Renewal Notice or at the time Tenant delivers its Binding Notice; and
(d)	The Lease has not been assigned (other than pursuant to a Permitted Transfer) prior to the date that Tenant delivers its Initial Renewal Notice or prior to the date Tenant delivers its Binding Notice.

     1.02 Terms Applicable to Premises During Renewal Term.

(a)

The initial Base Rent rate per rentable square foot for the Premises during the Renewal Term shall equal the Prevailing Market (hereinafter defined) rate per rentable square foot for the Premises. Base Rent during the Renewal Term shall increase, if at all, in accordance with the increases assumed in the determination of Prevailing Market rate. Base Rent attributable to the Premises shall be payable in monthly installments in accordance with the terms and conditions of Section 4 of the Lease.

(b)

Tenant shall pay Additional Rent (i.e. Taxes and Expenses) for the Premises during the Renewal Term in accordance with Section 4 of the Lease, and the manner and method in which Tenant reimburses Landlord for Tenant’s share of Taxes and Expenses, shall be some of the factors considered in determining the Prevailing Market rate for the Renewal Term.

     1.03 Initial Procedure for Determining Prevailing Market. Within 30 days after receipt of Tenant’s Initial Renewal Notice, Landlord shall advise Tenant of the applicable Base Rent rate for the Premises for the Renewal Term. Tenant, within 15 days after the date on which Landlord advises Tenant of the applicable Base Rent rate for the Renewal Term, shall either (i) give Landlord final binding written notice (“Binding Notice”) of Tenant’s exercise of its Renewal Option, or (ii) if Tenant disagrees with Landlord’s determination, provide Landlord with written notice of rejection (the “Rejection Notice”). If Tenant fails to provide Landlord with either a Binding Notice or Rejection Notice within such 15 day period, Tenant’s Renewal Option shall be null and void and of no further force and effect. If Tenant provides Landlord with a Binding Notice, Landlord and Tenant shall enter into the Renewal Amendment (as defined below) upon the terms and conditions set forth herein. If Tenant provides Landlord with a Rejection Notice, Landlord and Tenant shall work together in good faith to agree upon the Prevailing Market rate for the Premises during the Renewal Term. Upon agreement, Landlord and Tenant shall enter into the Renewal Amendment in accordance with the terms and conditions hereof. Notwithstanding the foregoing, if Landlord and Tenant are unable to agree upon the Prevailing Market rate for the Premises within 30 days after the date on which Tenant provides Landlord with the Rejection Notice, the Prevailing Market rate shall be determined in accordance with the arbitration procedures described in Section 1.04 below.

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     1.04 Arbitration Procedure.

(a)	Landlord and Tenant, within 5 days after the end of the 30 day period, shall each simultaneously submit to the other, in a sealed envelope, its good faith estimate of the Prevailing Market rate for the Premises during the Renewal Term (collectively referred to as the “Estimates”). If the higher of such Estimates is not more than 105% of the lower of such Estimates, then Prevailing Market rate shall be the average of the two Estimates. If the Prevailing Market rate is not resolved by the exchange of Estimates, then, within 7 days after the exchange of Estimates, Landlord and Tenant shall each select an appraiser to determine which of the two Estimates most closely reflects the Prevailing Market rate for the Premises during the Renewal Term. Each appraiser so selected shall be certified as an MAI appraiser or as an ASA appraiser and shall have had at least 5 years experience within the previous 10 years as a real estate appraiser working in Redwood City, California, with working knowledge of current rental rates and practices. For purposes hereof, an “MAI” appraiser means an individual who holds an MAI designation conferred by, and is an independent member of, the American Institute of Real Estate Appraisers (or its successor organization, or in the event there is no successor organization, the organization and designation most similar), and an “ASA” appraiser means an individual who holds the Senior Member designation conferred by, and is an independent member of, the American Society of Appraisers (or its successor organization, or, in the event there is no successor organization, the organization and designation most similar).
(b)	Upon selection, Landlord’s and Tenant’s appraisers shall work together in good faith to agree upon which of the two Estimates most closely reflects the Prevailing Market rate for the Premises. The Estimate chosen by such appraisers shall be binding on both Landlord and Tenant as the Base Rent rate for the Premises during the Renewal Term. If either Landlord or Tenant fails to appoint an appraiser within the 7 day period referred to above, the appraiser appointed by the other party shall be the sole appraiser for the purposes hereof. If the two appraisers cannot agree upon which of the two Estimates most closely reflects the Prevailing Market within 20 days after their appointment, then, within 10 days after the expiration of such 20 day period, the two appraisers shall select a third appraiser meeting the aforementioned criteria. Once the third appraiser (i.e. arbitrator) has been selected as provided for above, then, as soon thereafter as practicable but in any case within 14 days, the arbitrator shall make his determination of which of the two Estimates most closely reflects the Prevailing Market rate and such Estimate shall be binding on both Landlord and Tenant as the Base Rent rate for the Premises. If the arbitrator believes that expert advice would materially assist him, he may retain one or more qualified persons to provide such expert advice. The parties shall share equally in the costs of the arbitrator and of any experts retained by the arbitrator. Any fees of any appraiser, counsel or experts engaged directly by Landlord or Tenant, however, shall be borne by the party retaining such appraiser, counsel or expert.
(c)	If the Prevailing Market rate has not been determined by the commencement date of the Renewal Term, Tenant shall pay Base Rent upon the terms and conditions in effect during the last month of the initial Term for the Premises until such time as the Prevailing Market rate has been determined. Upon such determination, the Base Rent for the Premises shall be retroactively adjusted to the commencement of the Renewal Term for the Premises. If such adjustment results in an underpayment of Base Rent by Tenant, Tenant shall pay Landlord the amount of such underpayment within 30 days after the determination thereof. If such adjustment results in an overpayment of Base Rent by Tenant, Landlord shall credit such overpayment against the next installment of Base Rent due under the Lease and, to the extent necessary, any subsequent installments, until the entire amount of such overpayment has been credited against Base Rent.

     1.05 Renewal Amendment. If Tenant is entitled to and properly exercises its Renewal Option, Landlord shall prepare an amendment (the “Renewal Amendment”) to reflect changes in the Base Rent, Term, Termination Date and other appropriate terms. The Renewal Amendment shall be sent to Tenant within a reasonable time after receipt of the Binding Notice and Tenant shall execute and return the Renewal Amendment to Landlord within 15 days after Tenant’s receipt of same, but, upon final determination of the Prevailing Market rate applicable during the Renewal Term as described herein, an otherwise valid exercise of the Renewal Option shall be fully effective whether or not the Renewal Amendment is executed.

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     1.06 Definition of Prevailing Market. For purposes of this Renewal Option, “Prevailing Market” shall mean 95% of the arms length fair market annual rental rate per rentable square foot under renewal leases and amendments entered into on or about the date on which the Prevailing Market is being determined hereunder for space comparable to the Premises in the Building and office buildings comparable to the Building in the Redwood City, California area. The determination of Prevailing Market shall take into account any material economic differences between the terms of the Lease and any comparison lease or amendment, such as rent abatements, construction costs and other concessions and the manner, if any, in which the landlord under any such lease is reimbursed for operating expenses and taxes. The determination of Prevailing Market shall also take into consideration any reasonably anticipated changes in the Prevailing Market rate from the time such Prevailing Market rate is being determined and the time such Prevailing Market rate will become effective under the Lease.

2.   Monument Signage.

     2.01 During the initial Term and any extension thereof and provided that Tenant leases at least 100,000 rentable square feet in the Building, Tenant, at Tenant’s sole cost, but subject to governmental approval, shall have the right to place its name on the Building’s monument sign located on the corner of Cardinal Way and Saginaw Way (the “Monument Sign”). The design, size and color of the signage with Tenant’s name to be included on the Monument Sign, and the manner in which it is attached to the Monument Sign, shall be subject to the reasonable approval of Landlord and all applicable governmental authorities, and if Tenant is no longer the Sole Tenant of the Building, Landlord shall have the right to require that all names on the Monument Sign be of the same size and style. Tenant, at its cost, shall be responsible for the maintenance, repair or replacement of Tenant’s signage on the Monument Sign, and, so long as Tenant is the Sole Tenant of the Building, Tenant shall also maintain the Monument Sign, all of which shall be maintained in a manner reasonably satisfactory to Landlord. So long as Tenant is the Sole Tenant of the Building, Tenant shall have exclusive use of the Monument Sign. In the event Tenant is not the Sole Tenant of the Building, the Monument Sign will be maintained by Landlord and Tenant shall pay its proportionate share of the cost of any maintenance and repair associated with the Monument Sign.

     2.02 Upon expiration or earlier termination of the Lease or Tenant’s right to possession of the Premises, or if Tenant leases less than 100,000 rentable square feet in the Building, and Tenant fails to remove its signage from the Monument Sign and repair any damage caused by such removal, Landlord, at Tenant’s cost, payable as Additional Rent within 30 days after demand therefor, shall have the right to remove Tenant’s signage from the Monument Sign and restore the Monument Sign to the condition it was in prior to installation of Tenant’s signage thereon, ordinary wear and tear excepted.

     2.03 The rights provided in this Section 2 shall be non-transferable unless otherwise agreed by Landlord in writing (other than to a Permitted Transfer). Notwithstanding the foregoing, in the event Tenant assigns the Lease to a third party and Landlord consents to such assignment, Landlord shall not unreasonably withhold its consent to the transfer of Tenant’s right to use the Monument Sign pursuant to the terms of this Section 2 to such third party assignee.

3.   New Monument Sign.

     3.01 Construction of Monument Sign. Notwithstanding anything to the contrary set forth in the Lease, Tenant, following the delivery of the Premises by Landlord and the full and final execution and delivery of the Lease and all prepaid rental and the Security Deposit required under the Lease, shall have the right to construct, at its sole cost, a monument sign (the “New Monument Sign”) at the Property and install Tenant’s name on such New Monument Sign, subject to the limitations set forth in this Section 3. So long as Tenant is the Sole Tenant of the Building, Tenant shall have exclusive use of the New Monument Sign. Notwithstanding the foregoing, Tenant and its contractors shall not have the right to construct the New Monument Sign unless and until Tenant has complied with all of the terms and conditions of Section 9.03 of the Lease, including, without limitation, approval by Landlord of the final plans for the New Monument Sign and the contractors to be retained by Tenant to perform such construction. The location, design, size and color of the New Monument Sign and the manner the Monument Sign is installed at the Property, as well as the location, design, size and color of the signage with Tenant’s name to be included on the New Monument Sign and the manner in which it is attached to the New Monument Sign, shall be subject to the reasonable approval of Landlord and shall be in compliance with all applicable Laws. Landlord shall provide approval of the New Monument Sign or its reasons for disapproval within 10 days following Tenant’s submittal to Landlord of the plans and specifications for the New Monument Sign. Upon installation, the New Monument Sign shall become the property of Landlord, without compensation to Tenant, and in the event Tenant is no longer the Sole Tenant of the Building, at Landlord’s option Landlord shall have the right to install the names of other tenant’s of the Building on the New Monument Sign without compensation to Tenant, so long as such installation does not unreasonably interfere with the location of Tenant’s name on the New Monument Sign.

     3.02 Repair and Maintenance. In the event Tenant is not the Sole Tenant of the Building, the

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New Monument Sign will be maintained by Landlord and Tenant shall pay the cost of any maintenance or repair associated with the New Monument Sign and such amount shall constitute Additional Rent; provided that in the event that the names of other tenants of the Building are also placed on the sign, Tenant shall only be required to pay its proportionate share of such maintenance and repair cost. Notwithstanding the foregoing, so long as Tenant is the Sole Tenant of the Building, Tenant, at its cost, shall be responsible for the maintenance, repair or replacement of Tenant’s signage on the New Monument Sign, which shall be maintained in a manner reasonably satisfactory to Landlord.

     3.03 Termination. Upon expiration or earlier termination of the Lease or Tenant’s right to possession of the Premises, or if Tenant leases less than 100,000 rentable square feet of the Building, Landlord, at Tenant’s cost, payable as Additional Rent within 30 days after demand therefor, shall have the right, at Tenant’s sole cost, to (i) remove the New Monument Sign and repair any damage to the Property resulting from such removal, or (ii) remove Tenant’s signage from the New Monument Sign and restore the New Monument Sign to the condition it was in prior to installation of Tenant’s signage thereon, ordinary wear and tear excepted. Notwithstanding anything to the contrary set forth herein or in the Lease, the New Monument Sign shall remain upon the Property at the end of the Term without compensation to Tenant; however, Landlord, by written notice to Tenant at least 30 days prior to the Termination Date, may designate the New Monument Sign as a Required Removable pursuant to Section 8 of the Lease and require Tenant to remove the New Monument Sign in accordance with Section 8 of the Lease. Within 10 days after receipt of Tenant’s written request (which request may be made at the time Tenant submits the plans and specifications for the New Monument Sign for Landlord’s approval pursuant to Section 3.01 or at any time thereafter), Landlord shall advise Tenant in writing whether the New Monument Sign shall be a Required Removable.

     3.04 No Transfer. The rights provided to Tenant in this Section 3 shall be non-transferable unless otherwise agreed by Landlord in writing (other than to a Permitted Transfer). Notwithstanding the foregoing, in the event Tenant assigns the Lease to a third party and Landlord consents to such assignment, Landlord shall not unreasonably withhold its consent to the transfer of Tenant’s right to use the New Monument Sign pursuant to the terms of this Section 3 to such third party assignee.

4.   Emergency Generator (With Tank).

     4.01 Tenant, subject to Landlord’s review and approval of Tenant’s plans therefor, which approval shall not be unreasonably withheld, shall have the right to install a 75 kilowatt supplemental generator (the “Generator”) and an above ground fuel tank (the “Tank”) to provide emergency additional electrical capacity to the Premises during the Term. Tenant’s plans for the Generator and the Tank shall include a secondary containment system to protect against and contain any release of hazardous materials. The Generator and the Tank shall be placed at the location outlined on Exhibit H attached hereto and made a part hereof (the “Generator Area”). Notwithstanding the foregoing, Tenant’s right to install the Generator and the Tank shall be subject to Landlord’s approval, which approval shall not be unreasonably withheld, of the manner in which the Generator and the Tank is installed, the manner in which any fuel pipe is installed, the manner in which any ventilation and exhaust systems are installed, the manner in which any cables are run to and from the Generator to the Premises and the measures that will be taken to eliminate any vibrations or sound disturbances from the operation of the Generator, including, without limitation, any necessary 2 hour rated enclosures or sound installation. Landlord shall provide its approval or reasons for disapproval of the foregoing within 10 days after Tenant’s submittal of the plans for the Generator and any other information required hereunder. Landlord shall have the right to require an acceptable enclosure to hide or disguise the existence of the Generator and the Tank and to minimize any adverse effect that the installation of the Generator and the Tank may have on the appearance of the Building and Property. Tenant shall be solely responsible for obtaining all necessary governmental and regulatory approvals and for the cost of installing, operating, maintaining and removing the Generator and the Tank. Tenant shall not install or operate the Generator or the Tank until Tenant has obtained and submitted to Landlord copies of all required governmental permits, licenses and authorizations necessary for the installation and operation of the Generator and the Tank. In addition to, and without limiting Tenant’s obligations under the Lease, Tenant shall comply with all applicable environmental and fire prevention Laws pertaining to Tenant’s use of the Generator Area. Tenant shall also be responsible for the cost of all utilities consumed in the operation of the Generator and the Tank.

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     4.02 Tenant shall be responsible for assuring that the installation, maintenance, operation and removal of the Generator and the Tank shall in no way damage any portion of the Building or Property. To the maximum extent permitted by Law, the Generator and the Tank and all appurtenances in the Generator Area shall be at the sole risk of Tenant, and Landlord shall have no liability to Tenant if the Generator, the Tank or any appurtenances installations are damaged for any reason. Tenant agrees to be responsible for any damage caused to the Building or Property in connection with the installation, maintenance, operation or removal of the Generator and, in accordance with the terms of Section 13 of the Lease, to indemnify, defend and hold Landlord and the Landlord Related Parties harmless from all liabilities, obligations, damages, penalties, claims, costs, charges and expenses, including, without limitation, reasonable architects’ and attorneys’ fees (if and to the extent permitted by Law), which may be imposed upon, incurred by, or asserted against Landlord or any of the Landlord Related Parties in connection with the installation, maintenance, operation or removal of the Generator and the Tank, including, without limitation, any environmental and hazardous materials claims. In addition to, and without limiting Tenant’s obligations under the Lease, Tenant covenants and agrees that the installation and use of the Generator and the Tank and appurtenances shall not adversely affect the insurance coverage for the Building. If for any reason, the installation or use of the Generator, the Tank and/or the appurtenances shall result in an increase in the amount of the premiums for such coverage, then Tenant shall be liable for the full amount of any such increase.

     4.03 Tenant shall be responsible for the installation, operation, cleanliness, maintenance and removal of the Generator and the Tank and the appurtenances, all of which shall remain the personal property of Tenant, and shall be removed by Tenant at its own expense at the expiration or earlier termination of the Lease. Tenant shall repair any damage caused by such removal, including the patching of any holes to match, as closely as possible, the color surrounding the area where the Generator, Tank and appurtenances were attached. Such maintenance and operation shall be performed in a manner to avoid any unreasonable interference with any other tenants or Landlord. Tenant shall take the Generator Area “as is” in the condition in which the Generator Area is in as of the Commencement Date, without any obligation on the part of Landlord to prepare or construct the Generator Area for Tenant’s use or occupancy. Without limiting the foregoing, Landlord makes no warranties or representations to Tenant as to the suitability of the Generator Area for the installation and operation of the Generator or the Tank. Tenant shall have no right to make any changes, alterations, additions, decorations or other improvements to the Generator Area without Landlord’s prior written consent. Tenant agrees to maintain the Generator and the Tank, including without limitation, any enclosure installed around the Generator and the Tank in good condition and repair. Tenant shall be responsible for performing any maintenance and improvements to any enclosure surrounding the Generator and the Tank so as to keep such enclosure in good condition.

     4.04 Tenant, upon prior notice to Landlord and subject to the rules and regulations enacted by Landlord, shall have access to the Generator and the Tank and its surrounding area for the purpose of installing, repairing, maintaining and removing said Generator and the Tank.

     4.05 Tenant shall only test the Generator before or after Normal Business Hours and at a time mutually agreed to in writing by Landlord and Tenant in advance. Tenant shall be permitted to use the Generator Area solely for the maintenance and operation of the Generator and the Tank, and the Generator, Tank and Generator Area are solely for the benefit of Tenant. All electricity generated by the Generator may only be consumed by Tenant in the Premises.

     4.06 Landlord shall have no obligation to provide any services, including, without limitation, electric current, to the Generator Area.

     4.07 Tenant shall have no right to sublet the Generator Area or to assign its interest hereunder.

     4.08 During the initial Term, Tenant shall not be obligated to pay Landlord any Additional Rent or fee for the use of the Generator Area. After the initial Term, Landlord may charge Tenant a monthly fee (the “Generator Fee”) for the use of the Generator Area, which Generator Fee shall be deemed Additional Rent under the Lease and may be adjusted from time to time to reflect the then current rates for the Generator Area, as reasonably determined by Landlord.

5.      UPS. Tenant shall have the right to install an uninterrupted power system in the Premises (the “UPS”), subject to the prior approval of Landlord as to the specifications, the location of the UPS within the Premises and the manner in which the UPS will be installed, provided that Landlord shall provide approval or reasons for disapproval with respect to such matters within 10 days following Tenant’s submittal of the plans and specifications for the UPS. Tenant shall be responsible for the cost of all electricity consumed in connection with the operation of such UPS and, at Landlord’s option if Tenant is no longer the Sole Tenant of the Building, for the cost of installing a submeter to measure such electrical consumption. Tenant shall be solely responsible for the maintenance and repair of the UPS. Upon installation, the UPS shall constitute a Leasehold Improvement and, at Landlord’s option, a Required Removable pursuant to Section 8 of the Lease.

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6.      Landlord Default. Landlord shall be in default under the Lease if (i) Landlord fails to pay any sum or sums due to Tenant or fails to perform any of its obligations hereunder and said failure continues for a period of 30 days after written notice thereof from Tenant to Landlord (provided that if such failure cannot reasonably be cured within said 30 day period, Landlord shall be in default hereunder only if Landlord fails to commence the cure of said failure as soon as reasonably practicable under the circumstances, or having commenced the curative action, fails to diligently pursue same) and (ii) each Mortgagee, (as defined in Article 23), if any, of whose identity Tenant has been notified in writing shall have failed to cure such default within 30 days (or such longer period of time as may be specified in any written agreement between Tenant and Mortgagee regarding such matter) after receipt of written notice from Tenant of Landlord’s failure to cure within the time periods provided above. In the event of a default by Landlord under the Lease, Tenant shall use reasonable efforts to mitigate its damages and losses arising from any such default and Tenant may pursue any and all remedies available to it at law or in equity, provided, however, in no event shall Tenant claim a constructive or actual eviction or that the Premises have become unsuitable or unhabitable prior to a default and failure to cure by Landlord and its Mortgagee, if any, under the Lease, and further provided, in no event shall Tenant be entitled to receive more than its actual direct damages, it being agreed that Tenant hereby waives any claim it otherwise may have for special or consequential damages.

7.      Tenant’s Security System. Subject to the terms of the Lease, including, without limitation Section 9.03, Tenant may, at its own expense, install its own security system (“Tenant’s Security System”) in the Premises; provided, however, that Tenant shall coordinate the installation and operation of Tenant’s Security System with Landlord to assure that Tenant’s Security System does not interfere with or adversely impact Landlord’s security system and the Building’s systems and equipment and to the extent that Tenant’s Security System interferes with or adversely impacts Landlord’s security system and the Building systems and equipment, Tenant shall not be entitled to install or operate it (and Tenant shall not actually install or operate Tenant’s Security System unless Tenant has obtained Landlord’s approval of the same in writing prior to such installation or operation). Tenant shall be solely responsible, at Tenant’s sole cost and expense, for the monitoring, operation and removal of Tenant’s Security System.

8.   HVAC Unit.

     8.01 Tenant, at its cost, shall be permitted to install on the roof of the each building comprising the Building one additional air-cooled stand alone package heating, ventilation and air conditioning system(s) (individually or collectively, the “HVAC Unit”). Each HVAC Unit shall not exceed 100 tons of chilling capacity. If at any time Landlord, in its sole discretion, deems it necessary, Tenant shall provide and install, at Tenant’s sole cost and expense, appropriate aesthetic screening, reasonably satisfactory to Landlord, for the HVAC Unit (the “Screening”). The HVAC Unit, its appurtenances and Screening, if any, shall be installed in accordance with the terms of Section 9 of the Lease, including, without limitation, the prior approval of Landlord in accordance with Section 9 of the Lease including, without limitation, Landlord’s approval of the precise location of the HVAC Unit on the roof of the Building (such area on the roof, as designated by Landlord, being referred to herein as the “Chiller Roof Space”), the manner in which the HVAC Unit is lifted to, and installed on, the roof of the Building, and the manner in which the HVAC Unit is connected to the Premises.

     8.02 Landlord agrees that Tenant, upon reasonable prior written notice to Landlord, shall have access to the roof of the Building and the Chiller Roof Space for the purpose of installing, maintaining, repairing and removing the HVAC Unit, the appurtenances and the Screening, if any, all of which shall be performed by Tenant or Tenant’s authorized representative or contractors, which shall be approved by Landlord, at Tenant’s sole cost and risk. It is agreed, however, that only authorized engineers, employees or properly authorized contractors of Tenant, or persons under their direct supervision, will be permitted to have access to the roof of the Building and the Chiller Roof Space. Tenant further agrees to exercise firm control over the people requiring access to the roof of the Building and the Chiller Roof Space in order to keep to a minimum the number of people having access to the roof of the Building and the Chiller Roof Space and the frequency of their visits.

     8.03 Tenant shall be responsible for the cost of all electricity consumed in connection with the operation of the HVAC Unit and, if Tenant is not the Sole Tenant of the Building, for the cost of installing a submeter, if required by Landlord, to measure such electrical consumption. Tenant, at its sole cost and expense, shall procure and maintain in full force and effect, a contract (the "Service Contract”) for the service, maintenance, repair and replacement of the HVAC Unit with a HVAC service and maintenance contracting firm reasonably acceptable to Landlord. Tenant shall follow all reasonable recommendations of said contractor for the maintenance, repair and replacement of the HVAC Unit. The Service Contract shall provide that the contractor shall perform inspections of the HVAC Unit at intervals of not less than 3 months and that having made such inspections, said contractor shall furnish a complete report of any defective conditions found to be existing with respect to the HVAC Unit, together with any recommendations for maintenance, repair and/or replacement thereof. Said report shall be furnished to Tenant with a copy to Landlord.

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     8.04 The installation, maintenance, operation and removal of the HVAC Unit, the appurtenances and the Screening, if any, is not permitted to damage the Building or the roof thereof, or interfere with the use of the Building and roof by Landlord. Tenant agrees to be responsible for any damage caused to the roof or any other part of the Building, which may be caused by Tenant or any of its agents or representatives. Tenant agrees to maintain all of the Tenant’s equipment placed on or about the roof or in any other part of the Building in proper operating condition and maintain same in satisfactory condition as to appearance and safety, as determined by Landlord Such maintenance and operation shall be performed in a manner to avoid any interference with Landlord. Tenant agrees that at all times during the Term, it will keep the roof of the Building and the Chiller Roof Space free of all trash or waste materials produced by Tenant or any Tenant Related Parties or contractors.

     8.05 The HVAC Unit, appurtenances, and Screening, if any, shall remain the property of Tenant until the expiration or earlier termination of the Lease or Tenant’s right to possession of the Premises, at which time they shall become the property of Landlord; provided, however, that Landlord may, at Landlord’s option, require the Tenant, at Tenant’s expense, to remove the HVAC Unit, appurtenances and/or Screening and restore the affected area(s) to the condition they were in prior to installation of such items, ordinary wear and tear excepted, including, without limitation, the patching of any holes in the roof membrane to match, as closely as possible, the color surrounding the area where the HVAC Unit, appurtenances and Screening were attached. If Tenant fails to remove such items and/or perform such restoration work, Landlord shall be entitled to do so, at Tenant’s cost.

     8.06 Tenant must provide Landlord with prior written notice of any installation, removal or repair on the roof of the Building and coordinate such work with Landlord in order to avoid voiding or otherwise adversely affecting any warranties granted to Landlord with respect to the roof. If necessary, Tenant, at its sole cost and expense, shall retain any contractor having a then existing warranty in effect on the roof to perform such work (to the extent that it involves the roof), or, at Tenant’s option, to perform such work in conjunction with Tenant’s contractor. If Landlord contemplates roof repairs that could affect Tenant’s HVAC Unit, Landlord shall formally notify Tenant at least 30 days in advance (except in cases of an emergency) prior to the commencement of such contemplated work in order to allow Tenant to make other arrangements for such service.

     8.07 Tenant specifically acknowledges and agrees that the terms and conditions of Section 13 of the Lease (Insurance and Waiver of Claims) shall apply with full force and effect to the Chiller Roof Space.

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EXHIBIT G

PARKING AGREEMENT

     This Exhibit (the “Parking Agreement”) is attached to and made a part of the Lease by and between SEAPORT PLAZA ASSOCIATES, LLC, a California limited liability company (“Landlord”) and INFORMATICA CORPORATION, a Delaware corporation (“Tenant”) for space in the Buildings located at 100 and 200 Cardinal Way, Redwood City, California.

1.	The capitalized terms used in this Parking Agreement shall have the same definitions as set forth in the Lease to the extent that such capitalized terms are defined therein and not redefined in this Parking Agreement. In the event of any conflict between the Lease and this Parking Agreement, the latter shall control.
2.	During the initial Term and any extension thereof, Tenant agrees to lease from Landlord and Landlord agrees to lease to Tenant a total of 553 non-reserved parking spaces in the parking facility servicing the Building (“Parking Facility”). There shall be no charge for Tenant’s use of such parking spaces during the Term of the Lease (including any extension thereof). So long as Tenant is the Sole Tenant of the Building, Tenant shall have the right to install signs within the Parking Facility stating that the Parking Facility is for the exclusive use of Tenant, its employees and visitors; provided that (a) any such signs shall be to any required governmental approvals and further subject to Landlord’s prior reasonable approval as to the location, design, size, color and manner in which they are installed at the Parking Facility, (b) the installation of such signs shall not prohibit Landlord, its agents, employees, contractors or service providers from using the Parking Facility in connection with Landlord’s performance of any of its obligations or exercise of any of its rights under the Lease, and (c) upon the expiration or earlier termination of the Lease or Tenant’s right to possession of the Premises, or if Tenant is no longer the Sole Tenant of the Building, Tenant shall remove such signs from the Parking Facility and repair any damage caused by such removal and if Tenant fails to remove such signs, Landlord shall have the right, at Tenant’s cost, payable as Additional Rent within 30 days after demand therefore, to remove such signs and repair any damage caused by such removal.
3.	Tenant shall at all times comply with all applicable ordinances, rules, regulations, codes, laws, statutes and requirements of all federal, state, county and municipal governmental bodies or their subdivisions respecting the use of the Parking Facility. Landlord reserves the right to adopt, modify and enforce reasonable rules (“Rules”) governing the use of the Parking Facility from time to time including any key-card, sticker or other identification or entrance system and hours of operation. The Rules set forth herein are currently in effect. Landlord may refuse to permit any person who violates such Rules to park in the Parking Facility, and any violation of the Rules shall subject the car to removal from the Parking Facility.
4.	Tenant acknowledges that Landlord has no liability for claims arising through acts or omissions of any independent operator of the Parking Facility. Landlord shall have no liability whatsoever for any damage to items located in the Parking Facility, nor for any personal injuries or death arising out of any matter relating to the Parking Facility, and in all events, Tenant agrees to look first to its insurance carrier and to require that Tenant’s employees look first to their respective insurance carriers for payment of any losses sustained in connection with any use of the Parking Facility. Tenant hereby waives on behalf of its insurance carriers all rights of subrogation against Landlord or Landlord’s agents. Landlord reserves the right to assign specific parking spaces, and to reserve parking spaces for visitors, small cars, handicapped persons and to the extent Tenant is no longer the Sole Tenant of the Building, for other tenants, guests of tenants or other parties, which assignment and reservation or spaces may be relocated as determined by Landlord from time to time, and Tenant and persons designated by Tenant hereunder shall not park in any location designated for such assigned or reserved parking spaces. Tenant acknowledges that the Parking Facility may be closed entirely or in part in order to make repairs or perform maintenance services, or to alter, modify, re-stripe or renovate the Parking Facility, or if required by casualty, strike, condemnation, act of God, governmental law or requirement or other reason beyond the operator’s reasonable control.
5.	If Tenant shall default under this Parking Agreement, the operator shall have the right to remove from the Parking Facility any vehicles hereunder which shall have been involved or shall have been owned or driven by parties involved in causing such default, without liability therefor whatsoever. In addition, if Tenant shall default under this Parking Agreement, Landlord shall have the right to cancel this Parking Agreement on 10 days’ written notice, unless within such 10 day period, Tenant cures such default. If Tenant defaults with respect to the same term or condition under this Parking Agreement more than 3 times during any 12 month period, and Landlord notifies Tenant thereof promptly after each such default, the next default of such term or condition during the succeeding 12 month period, shall, at Landlord’s election, constitute an incurable default. Such cancellation right shall be cumulative and in addition to any other rights or remedies available to Landlord at law

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or equity, or provided under the Lease (all of which rights and remedies under the Lease are hereby incorporated herein, as though fully set forth). Any default by Tenant under the Lease shall be a default under this Parking Agreement, and any default under this Parking Agreement shall be a default under the Lease.

RULES

(i)	Tenant shall have access to the Parking Facility on a 24-hour basis, 7 days a week, subject to the other terms of this Parking Agreement and the Lease. Tenant shall not store or permit its employees to store any automobiles in the Parking Facility without the prior written consent of the operator. Except for emergency repairs, Tenant and its employees shall not perform any work on any automobiles while located in the Parking Facility, or on the Property. If it is necessary for Tenant or its employees to leave an automobile in the Parking Facility overnight, Tenant shall provide the operator with prior notice thereof designating the license plate number and model of such automobile.
(ii)	Cars must be parked entirely within the stall lines painted on the floor, and only small cars may be parked in areas reserved for small cars.
(iii)	All directional signs and arrows must be observed.
(iv)	The speed limit shall be 5 miles per hour.
(v)	Parking spaces reserved for handicapped persons must be used only by vehicles properly designated.
(vi)	Parking is prohibited in all areas not expressly designated for parking, including without limitation:

(a)	Areas not striped for parking
(b)	aisles
(c)	where “no parking” signs are posted
(d)	ramps
(e)	loading zones

(vii)	Parking stickers, key cards or any other devices or forms of identification or entry supplied by the operator shall remain the property of the operator. Such device must be displayed as requested and may not be mutilated in any manner. The serial number of the parking identification device may not be obliterated. Parking passes and devices are not transferable and any pass or device in the possession of an unauthorized holder will be void.
(viii)	Monthly fees shall be payable in advance prior to the first day of each month. Failure to do so will automatically cancel parking privileges and a charge at the prevailing daily parking rate will be due. No deductions or allowances from the monthly rate will be made for days on which the Parking Facility is not used by Tenant or its designees.
(ix)	Parking Facility managers or attendants are not authorized to make or allow any exceptions to these Rules.
(x)	Every parker is required to park and lock his/her own car.
(xi)	Loss or theft of parking pass, identification, key cards or other such devices must be reported to Landlord and to the Parking Facility manager immediately. Any parking devices reported lost or stolen found on any authorized car will be confiscated and the illegal holder will be subject to prosecution. Lost or stolen passes and devices found by Tenant or its employees must be reported to the office of the Parking Facility immediately.
(xii)	Washing, waxing, cleaning or servicing of any vehicle by the customer and/or his agents is prohibited. Parking spaces may be used only for parking automobiles.
(xiii)	Tenant agrees to acquaint all persons to whom Tenant assigns a parking space with these Rules.

6.   TENANT ACKNOWLEDGES AND AGREES THAT, TO THE FULLEST EXTENT PERMITTED BY LAW, LANDLORD SHALL NOT BE RESPONSIBLE FOR ANY LOSS OR DAMAGE TO TENANT OR TENANT’S PROPERTY (INCLUDING, WITHOUT LIMITATIONS, ANY LOSS OR DAMAGE TO TENANT’S AUTOMOBILE OR THE CONTENTS THEREOF DUE TO THEFT, VANDALISM OR ACCIDENT) ARISING FROM OR RELATED TO TENANT’S USE OF THE PARKING

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	FACILITY OR EXERCISE OF ANY RIGHTS UNDER THIS PARKING AGREEMENT, WHETHER OR NOT SUCH LOSS OR DAMAGE RESULTS FROM LANDLORD’S ACTIVE NEGLIGENCE OR NEGLIGENT OMISSION. THE LIMITATION ON LANDLORD’S LIABILITY UNDER THE PRECEDING SENTENCE SHALL NOT APPLY HOWEVER TO LOSS OR DAMAGE ARISING DIRECTLY FROM LANDLORD’S WILLFUL MISCONDUCT.
7.	Without limiting the provisions of Paragraph 6 above, Tenant hereby voluntarily releases, discharges, waives and relinquishes any and all actions or causes of action for personal injury or property damage occurring to Tenant arising as a result of parking in the Parking Facility, or any activities incidental thereto, wherever or however the same may occur, and further agrees that Tenant will not prosecute any claim for personal injury or property damage against Landlord or any of its officers, agents, servants or employees for any said causes of action. It is the intention of Tenant by this instrument, to exempt and relieve Landlord from liability for personal injury or property damage caused by negligence.
8.	The provisions of Section 20 of the Lease are hereby incorporated by reference as if fully recited.
	Tenant acknowledges that Tenant has read the provisions of this Parking Agreement, has been fully and completely advised of the potential dangers incidental to parking in the Parking Facility and is fully aware of the legal consequences of agreeing to this instrument.

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EXHIBIT H

GENERATOR AREA

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EX-10.29

Exhibit 10.29

INFORMATICA CORPORATION

EXECUTIVE SEVERANCE AGREEMENT

     This Severance Agreement is entered into as of November 15, 2004 (the “Effective Date”) by and between Informatica Corporation (the “Company”) and _________(“Executive”).

     1. At-Will Employment. Executive and the Company agree that Executive’s employment with the Company constitutes “at-will” employment. Executive and the Company acknowledge that this employment relationship may be terminated at any time, upon written notice to the other party, with or without good cause or for any or no cause, at the option either of the Company or Executive. However, as described in this Severance Agreement, Executive may be entitled to severance benefits depending upon the circumstances of Executive’s termination of employment. Upon the termination of Executive’s employment with the Company for any reason, Executive will be entitled to payment of all accrued but unpaid vacation, expense reimbursements, and other benefits due to Executive through his termination date under any Company-provided or paid plans, policies, and arrangements. Executive agrees to resign from all positions that he holds with the Company immediately following the termination of his employment if the Board so requests.

     2. Term of Agreement. This Severance Agreement will have an initial term of two years commencing on the Effective Date. On the second anniversary of the Effective Date, and on each annual anniversary of the Effective Date thereafter, this Severance Agreement automatically will renew for an additional one-year term unless the Company provides Executive with notice of non-renewal at least 90 days prior to the date of automatic renewal.

     3. Severance.

          (a) Termination Without Cause or Resignation for Good Reason in Connection with a Change of Control. If Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason, and the termination is in connection with a Change of Control, then, subject to Section 4, Executive will receive: (i) continued payment of his or her base salary for a period of twelve months (the “Continuance Period” if Executive is entitled to receive payments under this Section 3(a)), (ii) reimbursement for any applicable premiums to continue coverage for Executive and Executive’s eligible dependents under the Company’s Benefit Plans for the Continuance Period, or, if earlier, until Executive is eligible for similar benefits from another employer (provided Executive validly elects to continue coverage under applicable law), and (iii) twelve months accelerated vesting of equity awards (whether such equity awards were granted prior to or on or after the Effective Date).

          (b) All Other Terminations. If Executive’s employment with the Company terminates voluntarily by Executive without Good Reason or is terminated for Cause by the Company, then (i) all further vesting of Executive’s outstanding equity awards will terminate immediately, (ii) all payments of compensation by the Company to Executive hereunder will terminate immediately (except as to amounts already earned), (iii) Executive will be paid all accrued but unpaid vacation, expense reimbursements and other benefits due to Executive through his termination date under any Company-provided or paid plans, policies, and arrangements, and (iv) Executive will be eligible for severance benefits only in accordance with the Company’s then established policies and practices.

          (c) Termination due to Death or Disability. If Executive’s employment terminates by reason of death or Disability, then (i) Executive will be entitled to receive benefits only in accordance with the Company’s then applicable plans, policies, and arrangements, and (ii) Executive’s outstanding equity awards will terminate in accordance with the terms and conditions of the applicable award agreement(s).

          (d) Sole Right to Severance. This Severance Agreement is intended to represent Executive’s sole entitlement to severance payments and benefits in connection with the termination of his employment. To the extent Executive is entitled to receive severance or similar payments and/or benefits under any other Company plan, program, agreement, policy, practice, or the like, severance payments and benefits due to Executive under this Severance Agreement will be so reduced.

     4. Conditions to Receipt of Severance; No Duty to Mitigate.

          (a) Separation Agreement and Release of Claims. The receipt of any severance pursuant to Section 3 will be subject to Executive signing and not revoking a separation agreement and release of claims in a form reasonably acceptable to the Company. No severance will be paid or provided until the separation agreement and release agreement becomes effective.

          (b) Non-Competition. In the event of a termination of Executive’s employment that otherwise would entitle Executive to the receipt of severance pursuant to Section 3, Executive agrees not to engage in Competition during the Continuance Period. If Executive engages in Competition within such period, all continuing payments and benefits to which Executive otherwise may be entitled pursuant to Section 3 will cease immediately.

          (c) Nonsolicitation. In the event of a termination of Executive’s employment that otherwise would entitle Executive to the receipt of severance pursuant to Section 3, Executive agrees that, during the Continuance Period, Executive, directly or indirectly, whether as employee, owner, sole proprietor, partner, director, member, consultant, agent, founder, co-venturer or otherwise, will (i) not solicit, induce, or influence any person to modify his or her employment or consulting relationship with the Company (the “No-Inducement”), and (ii) not solicit business from any of the Company’s substantial customers and users (the “No-Solicit”). If Executive breaches the No-Inducement or the No-Solicit, all continuing payments and benefits to which Executive otherwise may be entitled pursuant to Section 3 will cease immediately.

          (d) Nondisparagement. In the event of a termination of Executive’s employment that otherwise would entitle Executive to the receipt of severance pursuant to Section 3, Executive agrees to refrain from any disparagement, criticism, defamation, slander of the Company, its directors, or its employees, or tortious interference with the contracts and relationships of the Company. The foregoing restrictions will not apply to any statements that are made truthfully in response to a subpoena or other compulsory legal process.

          (e) No Duty to Mitigate. Executive will not be required to mitigate the amount of any payment contemplated by this Severance Agreement, nor will any earnings that Executive may receive from any other source reduce any such payment.

     5. Definitions.

          (a) Benefit Plans. For purposes of this Severance Agreement, “Benefit Plans” means plans, policies, or arrangements that the Company sponsors (or participates in) and that immediately prior to Executive’s termination of employment provide Executive and Executive’s eligible dependents with medical, dental, or vision benefits. Benefit Plans do not include any other type of benefit (including, but not by way of limitation, financial counseling, disability, life insurance, or retirement benefits). A requirement that the Company provide Executive and Executive’s eligible dependents with coverage under the Benefit Plans will not be satisfied unless the coverage is no less favorable than that provided to Executive and Executive’s eligible dependents immediately prior to Executive’s termination of employment. Subject to the immediately preceding sentence, the Company may, at its option, satisfy any requirement that the Company provide coverage under any Benefit Plan by instead providing coverage under a separate plan or plans providing coverage that is no less favorable or by paying Executive a lump-sum payment which is, on an after-tax basis, sufficient to provide Executive and Executive’s eligible dependents with equivalent coverage under a third party plan that is reasonably available to Executive and Executive’s eligible dependents.

          (b) Cause. For purposes of this Severance Agreement, “Cause” means (i) Executive’s act of dishonesty or fraud in connection with the performance of his responsibilities to the Company with the intention that such act result in Executive’s substantial personal enrichment, (ii) Executive’s conviction of, or plea of nolo contendere to, a felony,

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(iii) Executive’s willful failure to perform his duties or responsibilities, or (iv) Executive’s violation or breach of Executive’s Employee Proprietary Information and Inventions Agreement; provided that if any of the foregoing events is capable of being cured, the Company will provide notice to Executive describing the nature of such event and Executive will thereafter have 30 days to cure such event.

          (c) Change of Control. For purposes of this Severance Agreement, “Change of Control” means (i) a sale of all or substantially all of the Company’s assets, (ii) any merger, consolidation, or other business combination transaction of the Company with or into another corporation, entity, or person, other than a transaction in which the holders of at least a majority of the shares of voting capital stock of the Company outstanding immediately prior to such transaction continue to hold (either by such shares remaining outstanding or by their being converted into shares of voting capital stock of the surviving entity) a majority of the total voting power represented by the shares of voting capital stock of the Company (or the surviving entity) outstanding immediately after such transaction, (iii) the direct or indirect acquisition (including by way of a tender or exchange offer) by any person, or persons acting as a group, of beneficial ownership or a right to acquire beneficial ownership of shares representing a majority of the voting power of the then outstanding shares of capital stock of the Company, (iv) the individuals who, at the beginning of any period of two consecutive years, constitute the Board (the “Incumbent Directors”) cease for any reason during such period to constitute at least a majority of the Board, unless the election or the nomination for election by the Company’s stockholders of a director first elected during such period was approved by the vote of at least a majority of the Incumbent Directors, whereupon such director also shall be classified as an Incumbent Director, or (v) a dissolution or liquidation of the Company.

          (d) Competition. For purposes of this Severance Agreement, Executive will be deemed to have engaged in “Competition” if Executive, without the consent of the Board, directly or indirectly provides services to (whether as an employee, consultant, agent, proprietor, principal, partner, stockholder, corporate officer, director, or otherwise), or has or obtains any ownership interest in or participates in the financing, operation, management, or control of, any person, firm, corporation, or business that competes with the Company. Executive having solely an ownership interest of less than 1% of any corporation shall not be Competition.

          (e) Disability. For purposes of this Severance Agreement, Disability shall have the same defined meaning as in the Company’s long-term disability plan.

          (f) Good Reason. For purposes of this Severance Agreement, with respect to a termination that occurs on or following the date three months preceding a Change of Control, “Good Reason” means the occurrence of any of the following without Executive’s express written consent: (i) a material reduction in Executive’s position or duties other than a reduction where Executive assumes similarly functional duties on a divisional basis following a Change of Control due to the Company becoming part of a larger entity, (ii) a reduction in Executive’s Base Salary other than a one-time reduction of not more than 10% that also is applied to substantially all of the Company’s other executive officers, (iii) a material reduction in the aggregate level of benefits made available to Executive other than a reduction that also is applied to substantially all of the Company’s other executive officers, or (iv) relocation of Executive’s primary place of business for the performance of his duties to the Company to a location that is more than 35 miles from its prior location.

          (g) In Connection with a Change of Control. For purposes of this Severance Agreement, a termination of Executive’s employment with the Company is “in Connection with a Change of Control” if Executive’s employment is terminated during the period beginning three months prior to a Change of Control and ending twelve months following a Change of Control (the “Change of Control Period”). Notwithstanding the foregoing, a resignation by Executive for Good Reason shall be in Connection with a Change of Control only if the event that constitutes Good Reason occurs during the Change of Control Period.

     6. Assignment. This Severance Agreement will be binding upon and inure to the benefit of (a) the heirs, executors, and legal representatives of Executive upon Executive’s death, and (b) any successor of the Company. Any such successor of the Company will be deemed substituted for the Company under the terms of this Severance Agreement for all purposes. For this purpose, “successor” means any person, firm, corporation, or other business entity which at any time, whether by purchase, merger, or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company. None of the rights of Executive to receive any form of compensation payable pursuant to this Severance Agreement may be assigned or transferred except by will or the laws of descent and

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distribution. Any other attempted assignment, transfer, conveyance, or other disposition of Executive’s right to compensation or other benefits will be null and void.

     7. Notices. All notices, requests, demands, and other communications called for hereunder will be in writing and will be deemed given (a) on the date of delivery if delivered personally, (b) one day after being sent by a well established commercial overnight service, or (c) four days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to the parties or their successors at the following addresses, or at such other addresses as the parties may later designate in writing:

If to the Company:
 
Attn: Chief Executive Officer
Informatica Corporation
2100 Seaport Boulevard
Redwood City, CA 94063
 
If to Executive:
 
at the last residential address known by the Company.

     8. Severability. If any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this Severance Agreement will continue in full force and effect without said provision.

     9. Arbitration. The Parties agree that any and all disputes arising out of the terms of this Severance Agreement, their interpretation, and any of the matters herein released, shall be subject to binding arbitration in San Mateo County before the American Arbitration Association under its National Rules for the Resolution of Employment Disputes, supplemented by the California Code of Civil Procedure. The Parties agree that the prevailing party in any arbitration shall be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award. The Parties hereby agree to waive their right to have any dispute between them resolved in a court of law by a judge or jury. This paragraph will not prevent either party from seeking injunctive relief (or any other provisional remedy) from any court having jurisdiction over the Parties and the subject matter of their dispute relating to Executive’s obligations under this Severance Agreement and the Confidentiality Agreement.

     10. Integration. This Severance Agreement, together with the Employee Proprietary Information and Inventions Agreement between Executive and the Company (the “Confidential Information Agreement”) and Executive’s Company stock option agreements, represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous agreements whether written or oral. No waiver, alteration, or modification of any of the provisions of this Severance Agreement will be binding unless in a writing that specifically references this Section and is signed by duly authorized representatives of the parties hereto.

     11. Waiver of Breach. The waiver of a breach of any term or provision of this Severance Agreement, which must be in writing, will not operate as or be construed to be a waiver of any other previous or subsequent breach of this Severance Agreement.

     12. Survival. The Confidential Information Agreement and Sections 4 and 9 will survive the termination of this Severance Agreement.

     13. Headings. All captions and Section headings used in this Severance Agreement are for convenient reference only and do not form a part of this Severance Agreement.

     14. Tax Withholding. All payments made pursuant to this Severance Agreement will be subject to withholding of applicable taxes.

     15. Governing Law. This Severance Agreement will be governed by the laws of the State of California (with the exception of its conflict of laws provisions).

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     16. Acknowledgment. Executive acknowledges that he has had the opportunity to discuss this matter with and obtain advice from his private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this Severance Agreement, and is knowingly and voluntarily entering into this Severance Agreement.

     17. Counterparts. This Severance Agreement may be executed in counterparts, and each counterpart will have the same force and effect as an original and will constitute an effective, binding agreement on the part of each of the undersigned.

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     IN WITNESS WHEREOF, each of the parties has executed this Severance Agreement, in the case of the Company by a duly authorized officer, as of the day and year written below.

COMPANY:

INFORMATICA CORPORATION

By:		Date: November 15, 2004
	Sohaib Abbasi
	President & CEO
EXECUTIVE:
		Date: November 15, 2004

SIGNATURE PAGE TO EXECUTIVE SEVERANCE AGREEMENT

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EX-10.30

Exhibit 10.30

INFORMATICA CORPORATION

CLIVE HARRISON SEVERANCE AGREEMENT AND MUTUAL RELEASE

     This Severance Agreement and Release (“Agreement”) is made by and between Informatica Corporation (the “Company”), and Clive Harrison (“Executive”).

     WHEREAS, Executive was employed by the Company as its Executive Vice President of Worldwide Field Operations;

     WHEREAS, Executive has resigned from such position, and

     WHEREAS, the Executive agrees to release the Company other from any claims arising from or related to Executive’s service relationship;

     NOW THEREFORE, in consideration of the mutual promises made herein, the Company and Executive (collectively referred to as “the Parties”) hereby agree as follows:

     1. Resignation of Employment. Executive hereby acknowledges resignation of his employment effective upon March 31, 2004 (the “Resignation Date”).

     2. Payment of Salary. Executive acknowledges and represents that the Company has paid all salary, wages, accrued vacation and any and all other benefits due to Executive as of the Resignation Date.

     3. Consideration. As consideration for Executive entering into this Agreement, the Company agrees to provide Executive with the following benefits:

          (a) Lump-Sum Salary Payment. A lump-sum payment equal to four (4) months’ of Executive’s annual base salary, specifically $83,333.33, less applicable withholding.

          (b) Stock Option Accelerated Vesting. All of Executive’s outstanding Company options (the “Options) shall, on the Effective Date, have their vesting accelerated as to six (6) months’ additional vesting. To the extent not vested on the Effective Date and after such acceleration, the Options shall terminate and become without further force and effect. Following the Resignation Date, Executive shall have ninety (90) days, as specified in his individual option agreements, to exercise any vested options, after which such Options shall, to the extent unexercised, become without further force and effect.

     4. Mutual Release of Claims. Executive agrees that the foregoing consideration represents settlement in full of all outstanding obligations owed to Executive by the Company. Executive and the Company, on behalf of themselves and their respective heirs, executors, officers, directors, employees, investors, shareholders, administrators, predecessor and successor corporations, and assigns, hereby fully and forever release each other and their respective heirs, executors, officers, directors, employees, investors, shareholders, administrators, predecessor and successor

corporations, and assigns of and from any claim, duty, obligation or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected, that any of them may possess arising from any omissions, acts or facts that have occurred up until and including the effective date of this Agreement including, without limitation,

          (a) any and all claims relating to or arising from Executive’s employment relationship with the Company and the termination of that relationship;

          (b) any and all claims relating to, or arising from, Executive’s right to purchase, or actual purchase of shares of stock of the Company;

          (c) any and all claims for wrongful discharge of employment; breach of contract, both express and implied; breach of a covenant of good faith and fair dealing, both express and implied; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; and defamation;

          (d) any and all claims for violation of any federal, state or municipal statute, including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, and the California Fair Employment and Housing Act;

          (e) any and all claims arising out of any other laws and regulations relating to employment or employment discrimination; and

          (f) any and all claims for attorneys’ fees and costs.

The Company and Executive agree that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters released. This release does not extend to any obligations incurred under this Agreement.

     The parties acknowledge that they have been advised by legal counsel and are familiar with the provisions of California Civil Code Section 1542, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

     The parties, being aware of said Code Section, agrees to expressly waive any rights they may have thereunder, as well as under any other statute or common law principles of similar effect.

     5. Return of Company Property. Executive agrees to return all Company property, including all computing equipment, to the Company upon the effectiveness of this Agreement.

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     6. Indemnification. Executive shall be entitled to indemnification, in accordance with the applicable provisions of the Company’s articles of incorporation and bylaws (or, if greater indemnification rights are provided thereby, to the fullest extent allowed by law), and under any applicable policy of insurance secured by the Company, against expense, liability and loss that Executive may incur by reason of any demand, claim, action, suit or proceeding arising from or relating to the performance of Executive’s duties as an officer or director of the Company or any of its subsidiaries.

     7. Mutual Non-Disparagement. The Company agrees that its executive officers will refrain from any disparagement, criticism, defamation, slander of Executive, or tortious interference with the contracts and relationships of the Executive. Executive agrees to refrain from any disparagement, criticism, defamation, slander of the Company or its employees, or tortious interference with the contracts and relationships of the Company. The foregoing restrictions will not apply to any statements that are made truthfully in response to a subpoena or other compulsory legal process.

     8. Non-Solicitation. In consideration for the severance benefits Executive is to receive herein Executive agrees that he will not, at any time during the twelve months following his Resignation Date, directly solicit or cause any other individual or entity to directly solicit, any individuals to leave the Company’s employ for any reason or interfere in any other manner with the employment relationships at the time existing between the Company and its then current employees. The foregoing restrictions will not apply to any general advertisements or solicitations that are published in a publicly available medium.

     9. Tax Consequences. The Company makes no representations or warranties with respect to the tax consequences of the payment of any sums or provision of any benefits, accelerated vesting or extension of the post-termination exercisability period of the Options to Executive under the terms of this Agreement. The Company will withhold sums from Executive’s compensation hereunder sufficient to satisfy the Company’s withholding obligations. Executive agrees and understands that he is responsible for payment, if any, of his portion (but not any employer portion) of the local, state and/or federal taxes on the sums paid hereunder by the Company and any penalties or assessments thereon.

     10. No Admission of Liability. No action taken by the Parties hereto, or either of them, either previously or in connection with this Agreement shall be deemed or construed to be (a) an admission of the truth or falsity of any claims heretofore made or (b) an acknowledgment or admission by either party of any fault or liability whatsoever to the other party or to any third party.

     11. Costs. The Parties shall each bear their own costs, expert fees, attorneys’ fees and other fees incurred in connection with this Agreement.

     12. Arbitration and Equitable Relief.

          (a) The parties hereto agree that, to the extent permitted by law, any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation,

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validity, construction, performance, breach, or termination thereof shall be settled by arbitration to be held in San Mateo County, California, in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association (the “Rules”). The arbitrator may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having jurisdiction.

          (b) The arbitrator shall apply California law to the merits of any dispute or claim, without reference to rules of conflict of law. The arbitration proceedings shall be governed by federal arbitration law and by the Rules, without reference to state arbitration law. The parties hereto hereby expressly consent to the personal jurisdiction of the state and federal courts located in California for any action or proceeding arising from or relating to this Agreement and/or relating to any arbitration in which the parties are participants.

          (c) The Company will pay the costs and expenses of such arbitration, and each party shall pay its own counsel fees and expenses incurred in connection with such arbitration.

          (d) THE PARTIES HERETO HAVE READ AND UNDERSTAND SECTION 12, WHICH DISCUSSES ARBITRATION. THE PARTIES HERETO UNDERSTAND THAT BY SIGNING THIS AGREEMENT, THEY AGREE, TO THE EXTENT PERMITTED BY LAW, TO SUBMIT ANY FUTURE CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH, OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF THEIR RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING CLAIMS:

               (i) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION.

               (ii) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR MUNICIPAL STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR LABOR STANDARDS ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR CODE SECTION 201, et seq;

               (iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.

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     13. Authority. The Company represents and warrants that the undersigned has the authority to act on behalf of the Company and to bind the Company and all who may claim through it to the terms and conditions of this Agreement. Executive represents and warrants that he has the capacity to act on his own behalf and on behalf of all who might claim through him to bind them to the terms and conditions of this Agreement.

     14. No Representations. Each party represents that it has had the opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement. Neither party has relied upon any representations or statements made by the other party hereto which are not specifically set forth in this Agreement.

     15. Severability. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision.

     16. Entire Agreement. This Agreement along with the previously executed Employee Proprietary Information and Inventions Agreement and any applicable stock option agreements between the parties (as modified in Section 3 above) represent the entire agreement and understanding between the Company and Executive concerning Executive’s employment transition and eventual separation from the Company, and supersedes, replaces and fully discharges all obligations under any and all prior agreements and understandings concerning Executive’s relationship with the Company and his compensation by the Company.

     17. No Oral Modification. This Agreement may only be amended in writing signed by Executive and the Company’s Chief Executive Officer or Chief Financial Officer.

     18. Effective Date. This Agreement is effective as of the Date that it has been signed by both parties.

     19. Counterparts. This Agreement may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.

     20. Cooperation with the Company. Executive agrees to cooperate fully with the Company in the transition of his duties, including but not limited to, responding to reasonable requests from the Company’s Chairman of the Board, Chief Financial Officer or the Company’s legal counsel in connection with any and all existing or future litigation or procedures to perfect the Company’s intellectual property rights. The Executive also agrees to furnish upon reasonable request, information necessary in order to assist Company in meeting Company’s reporting requirements and Executive’s continuing Section 16 reporting obligations on a timely manner and as prescribed by the then current SEC and/or NASDAQ rules. Executive understands that he remains subject to the SEC and NASDAQ prohibitions on insider trading even after the Resignation Date. The Executive and Company shall enter into a separate Consulting Services Agreement, to be approved by both parties, for consulting services to be provided by Executive during the period from April 1, 2004 through May 31, 2004.

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     21. Public Communication of Executive’s Separation from Company. Company shall issue a press release and a general Company employee communication following Executive’s resignation, announcing Executive’s departure from the Company.

     22. Voluntary Execution of Agreement. This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the Parties hereto, with the full intent of releasing all claims. The Parties acknowledge that:

          (a) They have read this Agreement;

          (b) They have been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of their own choice or that they have voluntarily declined to seek such counsel;

          (c) They understand the terms and consequences of this Agreement and of the releases it contains;

          (d) They are fully aware of the legal and binding effect of this Agreement.

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     IN WITNESS WHEREOF, the Parties have executed this Agreement.

	Informatica Corporation
	/s/ Earl E. Fry
Date:	March 31, 2004
	Executive, an individual
	/s/ Clive Harrison
Date:	March 31, 2004

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EX-21.1

Exhibit 21.1

SUBSIDIARIES OF REGISTRANT

NAME	JURISDICTION OF INCORPORATION
Informatica GmbH	Germany
Informatica Software Limited	United Kingdom
Informatica Software Ltd.	Canada
Informatica Japan KK	Japan
Influence Software	California
Informatica Software (Switzerland) AG	Switzerland
Informatica International, Inc.	Delaware
Informatica Cayman Ltd.	Cayman Islands
IS Informatica Software Ltda.	Brazil
Informatica Belgie N.V.	Belgium
Informatica Nederland B.V.	The Netherlands
Informatica France S.A.S.	France
Striva Corporation	Delaware
Striva Technology Inc.	California
Striva Technology Limited	United Kingdom
Informatica Business Solutions Private Ltd.	India
Informatica International, Inc. – Singapore Branch	Singapore

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     We consent to the incorporation by reference in the Registration Statements (Form S-8 Nos. 333-77299, 333-89523, 333-42118, 333-42112, 333-42110, 333-54614, 333-66754, 333-99627, 333-109687 and 333-119780; and Form S-3 Nos. 333-51754, 333-42120, 333-45304, 333-51754, 333-66752 and 333-109683) of Informatica Corporation of our reports dated March 3, 2005, with respect to the consolidated financial statements and schedule of Informatica Corporation, Informatica Corporation management’s assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of Informatica Corporation, included in this Annual Report (Form 10-K) for the year ended December 31, 2004.

/s/ ERNST & YOUNG LLP

Palo Alto, California
March 3, 2005

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

     I, Sohaib Abbasi, certify that:

1.   I have reviewed this annual report on Form 10-K of Informatica Corporation;

2.   Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.   Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15 (f) and 15d-15(f)) for the registrant and we have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and
d.	Disclosed in this annual report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal year that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ SOHAIB ABBASI
Sohaib Abbasi
Chief Executive Officer and President

Dated: March 7, 2005

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Earl E. Fry, certify that:

1.   I have reviewed this annual report on Form 10-K of Informatica Corporation;

2.   Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.   Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15 (f) and 15d-15(f)) for the registrant and we have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and
d.	Disclosed in this annual report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ EARL E. FRY
Earl E. Fry
Chief Financial Officer and Executive Vice President

Dated: March 7, 2005

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Annual Report of Informatica Corporation (the “Company”) on Form 10-K for the period ending December 31, 2004, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Sohaib Abbasi, Chief Executive Officer, and Earl E. Fry, Chief Financial Officer, of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

     A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission upon request.

/s/ SOHAIB ABBASI

Sohaib Abbasi

Chief Executive Officer

March 7, 2005

/s/ EARL E. FRY

Earl. E. Fry

Chief Financial Officer

March 7, 2005