ADOBE SYSTEMS INC
10-Q, 1999-10-15
PREPACKAGED SOFTWARE
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CREDIT AGREEMENT
among
ADOBE SYSTEMS INCORPORATED
and
LENDERS NAMED HEREIN
and
ABN AMRO BANK N.V.,
as Administrative Agent for Lenders

     August 11, 1999

TABLE OF CONTENTS

 
    
   Page
         
SECTION I.  INTERPRETATION   1
1.01.   Definitions   1
1.02.   GAAP   15
1.03.   Headings   16
1.04.   Plural Terms   16
1.05.   Time   16
1.06.   Governing Law   16
1.07.   Construction   16
1.08.   Entire Agreement   16
1.09.   Calculation of Interest and Fees   16
1.10.   References   16
1.11.   Other Interpretive Provisions   17
 
SECTION II.  CREDIT FACILITIES		  
 		  
17
2.01.   Facility A   17
2.02.   Facility B   17
2.03.   Notice of Borrowing   18
2.04.   Interest   19
2.05.   Purpose   21
2.06.   Commitment Reductions, Etc.   21
2.07.   Fees   22
2.08.   Prepayments   22
2.09.   Other Payment Terms   23
2.10.   Loan Accounts; Notes   24
2.11.   Loan Funding   24
2.12.   Pro Rata Treatment   25
2.13.   Change of Circumstances   26
2.14.   Taxes on Payments   28
2.15.   Funding Loss Indemnification   29
2.16.   Replacement of Lenders   30
 
SECTION III.  CONDITIONS PRECEDENT		  
 		  
30
3.01.   Initial Conditions Precedent   30
3.02.   Conditions Precedent to Facility B Term Loan Borrowing   30
3.03.   Conditions Precedent to Each Credit Event   31
3.04.   Covenant to Deliver   31
 
SECTION IV.  REPRESENTATIONS AND WARRANTIES		  
 		  
31
4.01.   Borrower's Representations and Warranties   31
4.02.   Reaffirmation   34
 
SECTION V.  COVENANTS		  
 		  
35
5.01.   Affirmative Covenants   35
5.02.   Negative Covenants   37
5.03.   Financial Covenants   43
 
SECTION VI.  DEFAULT		  
 		  
43
6.01.   Events of Default   43
6.02.   Remedies   45
 
SECTION VII.  AGENTS AND RELATIONS AMONG LENDERS		  
 		  
45
7.01.   Appointment, Powers and Immunities of Administrative Agent   45
7.02.   Reliance by Administrative Agent   46
7.03.   Defaults   46
7.04.   Indemnification   46
7.05.   Non-Reliance   46
7.06.   Resignation or Removal of Administrative Agent   47
7.07.   Administrative Agent in its Individual Capacity   47
7.08.   Co-Agents   47
 
SECTION VIII.  MISCELLANEOUS		  
 		  
47
8.01.   Notices   47
8.02.   Expenses   48
8.03.   Indemnification   49
8.04.   Waivers; Amendments   49
8.05.   Successors and Assigns   50
8.06.   Setoff   53
8.07.   No Third Party Rights   53
8.08.   Partial Invalidity   53
8.09.   Jury Trial   53
8.10.   Confidentiality   54
8.11.   Counterparts   54
         
SCHEDULES    
I   Lenders    
II   Pricing Grid    
3.01   Initial Conditions Precedent    
4.01(q)   Subsidiaries    
5.02(a)   Existing Indebtedness    
5.02(b)   Existing Liens    
5.02(e)   Existing Investments    
 
 EXHIBITS		  
 		  
 
A   Notice of Revolving Loan Borrowing (2.03(a))    
B   Notice of Facility B Term Loan Borrowing (2.03(b))    
C   Notice of Interest Period Selection (2.04(b))    
D   Notice of Term Loan Conversion (2.04(c))    
E   Revolving Loan Note (2.10(b))    
F   Term Loan Note (2.10(c))    
G   Assignment Agreement (8.05(c))    

Exhibit 10.54

CREDIT AGREEMENT

    THIS CREDIT AGREEMENT, dated as of August 11, 1999, is entered into by and among:

RECITALS

    A.  Borrower has requested Lenders to provide certain credit facilities to Borrower.

    B.  Lenders are willing to provide such credit facilities upon the terms and subject to the conditions set forth herein.

AGREEMENT

    NOW, THEREFORE, in consideration of the above Recitals and the mutual covenants herein contained, the parties hereto hereby agree as follows:

SECTION I. INTERPRETATION.

    1.01.  Definitions.  Unless otherwise indicated in this Agreement or any other Credit Document, each term set forth below, when used in this Agreement or any other Credit Document, shall have the respective meaning given to that term below or in the provision of this Agreement or other document, instrument or agreement referenced below.

    1.02.  GAAP.  Unless otherwise indicated in this Agreement or any other Credit Document, all accounting terms used in this Agreement or any other Credit Document shall be construed, and all accounting and financial computations hereunder or thereunder shall be computed, in accordance with GAAP. If GAAP changes during the term of this Agreement such that any covenants contained herein would then be calculated in a different manner or with different components, Borrower, Lenders and Administrative Agent agree to negotiate in good faith to amend this Agreement in such respects as are necessary to conform those covenants as criteria for evaluating Borrower's financial condition to substantially the same criteria as were effective prior to such change in GAAP; provided, however, that, until Borrower, Lenders and Administrative Agent so amend this Agreement, all such covenants shall be calculated in accordance with GAAP as in effect immediately prior to such change.

    1.03.  Headings.  Headings in this Agreement and each of the other Credit Documents are for convenience of reference only and are not part of the substance hereof or thereof.

    1.04.  Plural Terms.  All terms defined in this Agreement or any other Credit Document in the singular form shall have comparable meanings when used in the plural form and vice versa.

    1.05.  Time.  All references in this Agreement and each of the other Credit Documents to a time of day shall mean San Francisco, California time, unless otherwise indicated.

    1.06.  Governing Law.  Unless otherwise expressly provided in any Credit Document, this Agreement and each of the other Credit Documents shall be governed by and construed in accordance with the laws of the State of California without reference to conflicts of law rules.

    1.07.  Construction.  This Agreement is the result of negotiations among, and has been reviewed by, Borrower, each Lender, Administrative Agent and their respective counsel. Accordingly, this Agreement shall be deemed to be the product of all parties hereto, and no ambiguity shall be construed in favor of or against Borrower, any Lender or Administrative Agent.

    1.08.  Entire Agreement.  This Agreement and each of the other Credit Documents, taken together, constitute and contain the entire agreement of Borrower, Lenders and Administrative Agent and supersede any and all prior agreements, negotiations, correspondence, understandings and communications among the parties, whether written or oral, respecting the subject matter hereof (including the commitment letter dated as of March 19, 1999, between Borrower and ABN AMRO but excluding the Administrative Agent's Fee Letter).

    1.09.  Calculation of Interest and Fees.  All calculations of interest and fees under this Agreement and the other Credit Documents for any period (a) shall include the first day of such period and exclude the last day of such period and (b) shall be calculated on the basis of a year of 360 days for actual days elapsed, except that during any period any Loan or Portion bears interest based upon the Prime Rate, such interest shall be calculated on the basis of a year of 365 or 366 days, as appropriate, for actual days elapsed.

    1.10.  References.  

    1.11.  Other Interpretive Provisions.  The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement or any other Credit Document shall refer to this Agreement or such other Credit Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Credit Document, as the case may be. The words "include" and "including" and words of similar import when used in this Agreement or any other Credit Document shall not be construed to be limiting or exclusive. In the event of any inconsistency between the terms of this Agreement and the terms of any other Credit Document, the terms of this Agreement shall govern.

SECTION II. CREDIT FACILITIES.

    2.01.  Facility A.  

    2.02.  Facility B.  

    2.03.  Notice of Borrowing.  

    2.04.  Interest.  

    2.05.  Purpose.  

    (a) Borrower shall use the proceeds of the Facility A Revolving Loans for Borrower's working capital and other general corporate purposes.

    (b) Borrower shall use the proceeds of the Facility B Revolving Loans to repurchase shares of its common stock to the extent permitted hereby and for Borrower's general corporate purposes. Borrower shall use the proceeds of the Facility B Term Loans solely to repay the Facility B Revolving Loans on the Facility B Revolving Loan Maturity Date.

    2.06.  Commitment Reductions, Etc.  

    2.07.  Fees.  

    2.08.  Prepayments.  

    2.09.  Other Payment Terms.  

    2.10.  Loan Accounts; Notes.  

    2.11.  Loan Funding.  

    2.12.  Pro Rata Treatment.  

    2.13.  Change of Circumstances.  

    2.14.  Taxes on Payments.  

    2.15.  Funding Loss Indemnification.  If Borrower shall (a) repay, prepay or convert any LIBOR Loan or LIBOR Portion on any day other than the last day of an Interest Period therefor (whether a scheduled payment, an optional prepayment or conversion, a mandatory prepayment or conversion, a payment upon acceleration or otherwise), (b) fail to borrow any LIBOR Loan or LIBOR Portion for which a Notice of Borrowing has been delivered to Administrative Agent (whether as a result of the failure to satisfy any applicable conditions or otherwise) or (c) fail to convert any Portion of the Facility B Term Loan Borrowing into a LIBOR Portion in accordance with a Notice of Term Loan Conversion delivered to Administrative Agent (whether as a result of the failure to satisfy any applicable conditions or otherwise), Borrower shall, within five (5) Business Days after demand by any Lender, reimburse such Lender for and hold such Lender harmless from all costs and losses incurred by such Lender as a result of such repayment, prepayment, conversion or failure; provided, however, that Borrower shall have no obligation to make any payment to any demanding party under this Paragraph 2.15 on account of any such costs or losses unless Borrower receives notice of such costs or losses from the demanding party within six (6) months after they are incurred or realized. Borrower understands that such costs and losses may include, without limitation, losses incurred by a Lender as a result of funding and other contracts entered into by such Lender to fund a LIBOR Loan or LIBOR Portion. Each Lender demanding payment under this Paragraph 2.15 shall deliver to Borrower, with a copy to Administrative Agent, a certificate setting forth the amount of costs and losses for which demand is made, which certificate shall set forth in reasonable detail the calculation of the amount demanded. Such a certificate so delivered to Borrower shall constitute prima facie evidence of such costs and losses. The obligations of Borrower under this Paragraph 2.15 shall survive the payment and performance of the Obligations and the termination of this Agreement.

    2.16.  Replacement of Lenders.  If any Lender shall (a) become a Defaulting Lender more than one (1) time in a period of twelve (12) consecutive months, (b) continue as a Defaulting Lender for more than five (5) Business Days at any time, (c) suspend its obligation to make or maintain LIBOR Loans or LIBOR Portions pursuant to Subparagraph 2.13(b) for a reason which is not applicable to any other Lender or (d) demand any payment under Subparagraph 2.13(c), 2.13(d) or 2.14(a) for a reason which is not applicable to any other Lender, then Administrative Agent may, with the written consent of Borrower, or shall, upon the written request of Borrower, replace such Lender (the "affected Lender"), or cause such affected Lender to be replaced with another lender (the "replacement Lender") satisfying the requirements of an Assignee Lender, by having the affected Lender sell and assign all of its rights and obligations under this Agreement and the other Credit Documents to the replacement Lender pursuant to Subparagraph 8.05(c); provided, however, that if Borrower seeks to exercise such right, it must do so within sixty (60) days after it first knows or should have known of the occurrence of the event or events giving rise to such right, and neither Administrative Agent nor any Lender shall have any obligation to identify or locate a replacement Lender for Borrower. Upon receipt by any affected Lender of a written notice from Administrative Agent stating that Administrative Agent is exercising the replacement right set forth in this Paragraph 2.16, such affected Lender shall sell and assign all of its rights and obligations under this Agreement and the other Credit Documents to the replacement Lender pursuant to an Assignment Agreement and Subparagraph 8.05(c) for a purchase price equal to the sum of the principal amount of the affected Lender's Loans so sold and assigned, all accrued and unpaid interest thereon and its ratable share of all fees to which it is entitled.

SECTION III. CONDITIONS PRECEDENT.

    3.01.  Initial Conditions Precedent.  The obligations of Lenders to make the Loans comprising the initial Borrowing are subject to receipt by Administrative Agent, on or prior to the Closing Date, of each item listed in Schedule 3.01, each in form and substance satisfactory to Administrative Agent and each Lender, and with sufficient copies for, Administrative Agent and each Lender.

    3.02.  Conditions Precedent to Facility B Term Loan Borrowing.  The obligations of Lenders to make the Facility B Term Loans comprising the Facility B Term Loan Borrowing also are subject to receipt by Administrative Agent, on or prior to the Facility B Revolving Loan Maturity Date, of a Term Loan Note for each Lender so requesting such a note, duly executed by Borrower.

    3.03.  Conditions Precedent to Each Credit Event.  

    3.04.  Covenant to Deliver.  Borrower agrees (not as a condition but as a covenant) to deliver to Administrative Agent each item required to be delivered to Administrative Agent as a condition to the occurrence of any Credit Event if such Credit Event occurs. Borrower expressly agrees that the occurrence of any such Credit Event prior to the receipt by Administrative Agent of any such item shall not constitute a waiver by Administrative Agent or any Lender of Borrower's obligation to deliver such item.

SECTION IV. REPRESENTATIONS AND WARRANTIES.

    4.01.  Borrower's Representations and Warranties.  In order to induce Administrative Agent and Lenders to enter into this Agreement, Borrower hereby represents and warrants to Administrative Agent and Lenders as follows:

    4.02.  Reaffirmation.  Borrower shall be deemed to have reaffirmed, for the benefit of Lenders and Administrative Agent, each representation and warranty contained in Paragraph 4.01 on and as of the date of each Borrowing (except for representations and warranties expressly made as of a specified date, which shall be true as of such date).

SECTION V.  COVENANTS.

    5.01.  Affirmative Covenants.  Until the termination of this Agreement and the satisfaction in full by Borrower of all Obligations, Borrower will comply, and will cause compliance, with the following affirmative covenants, unless Required Lenders shall otherwise consent in writing:

    5.02.  Negative Covenants.  Until the termination of this Agreement and the satisfaction in full by Borrower of all Obligations, Borrower will comply, and will cause compliance, with the following negative covenants, unless Required Lenders shall otherwise consent in writing:

    5.03.  Financial Covenants.  Until the termination of this Agreement and the satisfaction in full by Borrower of all Obligations, Borrower will comply, and will cause compliance, with the following financial covenants, unless Required Lenders shall otherwise consent in writing:

SECTION VI.  DEFAULT.

    6.01.  Events of Default.  The occurrence or existence of any one or more of the following shall constitute an "Event of Default" hereunder:

    6.02.  Remedies.  At any time after the occurrence and during the continuance of any Event of Default (other than an Event of Default referred to in Subparagraph 6.01(f) or 6.01(g)), Administrative Agent may, with the consent of the Required Lenders, or shall, upon instructions from the Required Lenders, by written notice to Borrower, (a) terminate the Commitments and the obligations of Lenders to make Loans and/or (b) declare all outstanding Obligations payable by Borrower to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the Notes to the contrary notwithstanding. Upon the occurrence or existence of any Event of Default described in Subparagraph 6.01(f) or 6.01(g), immediately and without notice, (1) the Commitments and the obligations of Lenders to make Loans shall automatically terminate and (2) all outstanding Obligations payable by Borrower hereunder shall automatically become immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the Notes to the contrary notwithstanding. In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, Administrative Agent may exercise any other right, power or remedy available to it under any of the Credit Documents or otherwise by law, either by suit in equity or by action at law, or both.

SECTION VII.  AGENTS AND RELATIONS AMONG LENDERS.

    7.01.  Appointment, Powers and Immunities of Administrative Agent.  Each Lender hereby appoints and authorizes Administrative Agent to act as its agent hereunder and under the other Credit Documents with such powers as are expressly delegated to Administrative Agent by the terms of this Agreement and the other Credit Documents, together with such other powers as are reasonably incidental thereto. Administrative Agent shall not have any duties or responsibilities except those expressly set forth in this Agreement or in any other Credit Document, be a trustee for any Lender or have any fiduciary duty to any Lender. Notwithstanding anything to the contrary contained herein, Administrative Agent shall not be required to take any action which is contrary to this Agreement or any other Credit Document or any applicable Governmental Rule. Neither Administrative Agent nor any Lender shall be responsible to any other Lender for any recitals, statements, representations or warranties made by Borrower or any of its Subsidiaries contained in this Agreement or in any other Credit Document, for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Credit Document or for any failure by Borrower or any of its Subsidiaries to perform their respective obligations hereunder or thereunder. Administrative Agent may employ agents and attorneys-in-fact and shall not be responsible to any Lender for the negligence or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. Neither Administrative Agent nor any of its directors, officers, employees, agents or advisors shall be responsible to any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Credit Document or in connection herewith or therewith, except for its or their own gross negligence or willful misconduct. Except as otherwise provided under this Agreement, Administrative Agent shall take such action with respect to the Credit Documents as shall be directed by the Required Lenders. Administrative Agent shall provide each Lender with copies of such documents received from Borrower pursuant to the Credit Documents as such Lender may reasonably request.

    7.02.  Reliance by Administrative Agent.  Administrative Agent shall be entitled to rely upon any certificate, notice or other document (including any cable, telegram, facsimile or telex) believed by it in good faith to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by Administrative Agent with reasonable care. As to any other matters not expressly provided for by this Agreement, Administrative Agent shall not be required to take any action or exercise any discretion, but shall be required to act or to refrain from acting upon instructions of the Required Lenders and shall in all cases be fully protected by Lenders in acting, or in refraining from acting, hereunder or under any other Credit Document in accordance with the instructions of the Required Lenders, and such instructions of the Required Lenders and any action taken or failure to act pursuant thereto shall be binding on all of Lenders.

    7.03.  Defaults.  Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default unless Borrower has failed to make a payment required to be made to Administrative Agent hereunder or Administrative Agent has received a written notice from a Lender or Borrower, referring to this Agreement and describing the provision under which such Default occurred. If Administrative Agent receives such a notice of the occurrence of a Default, Administrative Agent shall give prompt notice thereof to Lenders. Administrative Agent shall take such action with respect to such Default as shall be reasonably directed by the Required Lenders; provided, however, that until Administrative Agent shall have received such directions, Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable in the best interest of Lenders.

    7.04.  Indemnification.  Without limiting the Obligations of Borrower hereunder, each Lender agrees to indemnify Administrative Agent (to the extent not reimbursed by Borrower), ratably in accordance with their Proportionate Shares, for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against Administrative Agent (other than in its capacity as a Lender) in any way relating to or arising out of this Agreement or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or the enforcement of any of the terms hereof or thereof subject to reimbursement on a pro rata basis if any such payment is subsequently recovered from Borrower; provided, however, that no Lender shall be liable for any of the foregoing to the extent they arise from Administrative Agent's gross negligence or willful misconduct. Administrative Agent shall be fully justified in refusing to take or in continuing to take any action hereunder unless it shall first be indemnified to its satisfaction by Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The obligations of each Lender under this Paragraph 7.04shall survive the payment and performance of the Obligations, the termination of this Agreement and any Lender ceasing to be a party to this Agreement (with respect to events which occurred prior to the time such Lender ceased to be a Lender hereunder).

    7.05.  Non-Reliance.  Each Lender represents that it has, independently and without reliance on Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of the business, prospects, management, financial condition and affairs of Borrower and the Subsidiaries and its own decision to enter into this Agreement and agrees that it will, independently and without reliance upon Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own appraisals and decisions in taking or not taking action under this Agreement. Neither Administrative Agent nor any of its affiliates nor any of their respective directors, officers, employees, agents or advisors shall (a) be required to keep any Lender informed as to the performance or observance by Borrower or any of its Subsidiaries of the obligations under this Agreement or any other document referred to or provided for herein or to make inquiry of, or to inspect the properties or books of Borrower or any of its Subsidiaries; (b) have any duty or responsibility to provide any Lender with any credit or other information concerning Borrower or any of its Subsidiaries which may come into the possession of Administrative Agent, except for notices, reports and other documents and information expressly required to be furnished to Lenders by Administrative Agent hereunder; or (c) be responsible to any Lender for (i) any recital, statement, representation or warranty made by Borrower or any officer, employee or agent of Borrower in this Agreement or in any of the other Credit Documents, (ii) the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any Credit Document, (iii) the value or sufficiency of any collateral or the validity or perfection of any of the liens or security interests intended to be created by the Credit Documents, or (iv) any failure by Borrower to perform its obligations under this Agreement or any other Credit Document.

    7.06.  Resignation or Removal of Administrative Agent.  Subject to the appointment and acceptance of a successor Administrative Agent as provided below, Administrative Agent may resign at any time by giving thirty (30) days prior written notice thereof to Borrower and Lenders, and Administrative Agent may be removed at any time with or without cause by the Required Lenders. Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Administrative Agent, which Administrative Agent, if not a Lender, shall be reasonably acceptable to Borrower; provided, however, that Borrower shall have no right to approve a successor Administrative Agent if a Default has occurred and is continuing. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from the duties and obligations thereafter arising hereunder. After any retiring Administrative Agent's resignation or removal hereunder as Administrative Agent, the provisions of this Section VII shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Administrative Agent.

    7.07.  Administrative Agent in its Individual Capacity.  Administrative Agent and its affiliates may make loans to, accept deposits from and generally engage in any kind of banking or other business with Borrower and its Subsidiaries and affiliates as though Administrative Agent were not Administrative Agent hereunder. With respect to Loans, if any, made by Administrative Agent in its capacity as a Lender, Administrative Agent in its capacity as a Lender shall have the same rights and powers under this Agreement and the other Credit Documents as any other Lender and may exercise the same as though it were not Administrative Agent, and the terms "Lender" or "Lenders" shall include Administrative Agent in its capacity as a Lender.

    7.08.  Co-Agents.  The Co-Agents assume no responsibility, obligation or duty under this Agreement or any of the other Credit Documents in their capacity as co-agents, and the title "Co-Agent" implies no fiduciary duty on their part.

SECTION VIII.  MISCELLANEOUS.

    8.01.  Notices.  Except as otherwise provided herein, all notices, requests, demands, consents, instructions or other communications to or upon Borrower, any Lender or Administrative Agent under this Agreement or the other Credit Documents shall be in writing and faxed, mailed, delivered or, where permitted, electronically mailed, if to Borrower or Administrative Agent, at its respective facsimile number or address set forth below or, if to any Lender, at the address or facsimile number specified beneath the heading "Address for Notices" under the name of such Lender in Part B of Schedule I (or to such other facsimile number or address for any party as indicated in any notice given by that party to the other parties or in any applicable Assignment Agreement). All such notices and communications shall be effective (a) when sent by an overnight courier service of recognized standing, upon delivery; (b) when mailed, first class postage prepaid and addressed as aforesaid through the United States Postal Service, upon receipt; (c) when delivered by hand, upon delivery; (d) when faxed, upon confirmation of receipt and (e) when electronically mailed, upon return confirmation of receipt; provided, however, that any notice delivered to Administrative Agent under Section II shall not be effective until received by Administrative Agent.

Administrative Agent:   ABN AMRO Bank N.V.
    Syndications Group
    1325 Avenue of the Americas, 9th Floor
    New York, NY 10019
    Attn: Linda Boardman
    Tel. No: (212) 314-1724
    Fax. No: (212) 314-1712
    Email: [email protected]
 
 		  
 		  
 With a copy to:
 
 		  
 		  
ABN AMRO Bank N.V.
    101 California Street, Suite 4550
    San Francisco, CA 94111-5812
    Attn: Jamie Dillon
    Tel: (415) 984-3750
    Fax: (415) 362-3524
    Email: [email protected]
 
Borrower:		  
 		  
Adobe Systems Incorporated
    345 Park Avenue
    San Jose, CA 95110-2704
    Attn: Barbara Hill, Treasurer
    Tel. No: (408) 536-3272
    Fax No. (408) 537-4035
    Email: [email protected]

    Each Notice of Borrowing, Notice of Term Loan Conversion and Notice of Interest Period Selection shall be given by Borrower to Administrative Agent's office located at the address referred to above during Administrative Agent's normal business hours; provided, however, that any such notice received by Administrative Agent after 11:00 a.m. (San Francisco time) on any Business Day shall be deemed received by Administrative Agent on the next Business Day. In any case where this Agreement authorizes notices, requests, demands or other communications by Borrower to Administrative Agent or any Lender to be made by telephone or facsimile, Administrative Agent or any Lender may conclusively presume that anyone purporting to be a person designated in any incumbency certificate or other similar document received by Administrative Agent or a Lender is such a person.

    8.02.  Expenses.  Borrower shall pay on demand, whether or not any Loan is made hereunder, (a) all reasonable fees and expenses, including reasonable attorneys' fees and expenses, incurred by Administrative Agent in connection with the syndication of the facilities provided hereunder, the preparation, negotiation, execution and delivery of, and the exercise of its duties under, this Agreement and the other Credit Documents, and the preparation, negotiation, execution and delivery of amendments and waivers hereunder and thereunder and (b) all reasonable fees and expenses, including reasonable attorneys' fees and expenses, incurred by Administrative Agent and Lenders in the enforcement or attempted enforcement of any of the Obligations or in preserving any of Administrative Agent's or Lenders' rights and remedies (including, without limitation, all such fees and expenses incurred in connection with any "workout" or restructuring affecting the Credit Documents or the Obligations or any bankruptcy or similar proceeding involving Borrower or any of its Subsidiaries). As used herein, the term "reasonable attorneys' fees and expenses" shall include, without limitation, allocable costs and expenses of Administrative Agent's and Lenders' in-house legal counsel and staff. The obligations of Borrower under this Paragraph 8.02 shall survive the payment and performance of the Obligations and the termination of this Agreement.

    8.03.  Indemnification.  To the fullest extent permitted by law, Borrower agrees to protect, indemnify, defend and hold harmless Administrative Agent, Lenders and their Affiliates and their respective directors, officers, employees, agents and advisors ("Indemnitees") from and against any and all liabilities, losses, damages or expenses of any kind or nature and from any suits, claims or demands (including in respect of or for reasonable attorney's fees and other expenses) arising on account of or in connection with any matter or thing or action or failure to act by Indemnitees, or any of them, arising out of or relating to the Credit Documents or any transaction contemplated thereby, including without limitation any use by Borrower of any proceeds of the Loans, except to the extent such liability arises from the willful misconduct or gross negligence of such Indemnitee. Upon receiving knowledge of any suit, claim or demand asserted by a third party that Administrative Agent or any Lender believes is covered by this indemnity, Administrative Agent or such Lender shall give Borrower notice of the matter and an opportunity to defend it, at Borrower's sole cost and expense, with legal counsel reasonably satisfactory to Administrative Agent or such Lender, as the case may be. Administrative Agent or such Lender may also require Borrower to defend the matter. Any failure or delay of Administrative Agent or any Lender to notify Borrower of any such suit, claim or demand shall not relieve Borrower of its obligations under this Paragraph 8.03 but shall reduce such obligations to the extent of any increase in those obligations caused solely by any such failure or delay which is unreasonable. The obligations of Borrower under this Paragraph 8.03 shall survive the payment and performance of the Obligations and the termination of this Agreement.

    8.04.  Waivers; Amendments.  Any term, covenant, agreement or condition of this Agreement or any other Credit Document may be amended or waived, and any consent under this Agreement or any other Credit Document may be given, if such amendment, waiver or consent is in writing and is signed by Borrower and the Required Lenders (or Administrative Agent on behalf of the Required Lenders with the written approval of the Required Lenders); provided, however that:

    No failure or delay by Administrative Agent or any Lender in exercising any right under this Agreement or any other Credit Document shall operate as a waiver thereof or of any other right hereunder or thereunder nor shall any single or partial exercise of any such right preclude any other further exercise thereof or of any other right hereunder or thereunder. Unless otherwise specified in such waiver or consent, a waiver or consent given hereunder shall be effective only in the specific instance and for the specific purpose for which given.

    8.05.  Successors and Assigns.  

    8.06.  Setoff.  In addition to any rights and remedies of Lenders provided by law, each Lender shall have the right, with the prior consent of Administrative Agent but without prior notice to or consent of Borrower, any such notice and consent being expressly waived by Borrower to the extent permitted by applicable law, upon the occurrence and during the continuance of an Event of Default, to set-off and apply against the Obligations any amount owing from such Lender to Borrower. The aforesaid right of set-off may be exercised by such Lender against Borrower or against any trustee in bankruptcy, debtor in possession, assignee for the benefit of creditors, receiver or execution, judgment or attachment creditor of Borrower or against anyone else claiming through or against Borrower or such trustee in bankruptcy, debtor in possession, assignee for the benefit of creditors, receiver, or execution, judgment or attachment creditor, notwithstanding the fact that such right of set-off may not have been exercised by such Lender at any prior time. Each Lender agrees promptly to notify Borrower after any such set-off and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such set-off and application.

    8.07.   No Third Party Rights.  Nothing expressed in or to be implied from this Agreement is intended to give, or shall be construed to give, any Person, other than the parties hereto and their permitted successors and assigns hereunder, any benefit or legal or equitable right, remedy or claim under or by virtue of this Agreement or under or by virtue of any provision herein.

    8.08.  Partial Invalidity.  If at any time any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect under the law or any jurisdiction, neither the legality, validity or enforceability of the remaining provisions of this Agreement nor the legality, validity or enforceability of such provision under the law of any other jurisdiction shall in any way be affected or impaired thereby.

    8.09.  Jury Trial.  EACH OF BORROWER, LENDERS AND ADMINISTRATIVE AGENT, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY CREDIT DOCUMENT.

    8.10.  Confidentiality.  

    8.11.  Counterparts.  This Agreement may be executed in any number of identical counterparts, any set of which signed by all the parties hereto shall be deemed to constitute a complete, executed original for all purposes.

[The first signature page follows.]

    IN WITNESS WHEREOF, Borrower, Lenders and Administrative Agent have caused this Agreement to be executed as of the day and year first above written.

         
BORROWER   ADOBE SYSTEMS INCORPORATED
 
 		  
 		  
By:		  
/s/ John E. Warnock
 
 		  
 		  
 		  
Name:		  
John E. Warnock
 
 		  
 		  
 		  
Title:		  
Chairman and Chief Executive Officer
 
 		  
 		  
By:		  
/s/ Harold L. Covert
 
 		  
 		  
 		  
Name:		  
Harold L. Covert
 
 		  
 		  
 		  
Title:		  
Executive Vice President and
Chief Financial Officer
 
 ADMINISTRATIVE AGENT:		  
 		  
 ABN AMRO BANK N.V.
 
 		  
 		  
By:		  
/s/ Jamie Dillon
 
 		  
 		  
 		  
Name:		  
Jamie Dillon
 
 		  
 		  
 		  
Title:		  
Vice President
 
 		  
 		  
By:		  
/s/ Nia M. Miller
 
 		  
 		  
 		  
Name:		  
Nia M. Miller
 
 		  
 		  
 		  
Title:		  
Assistant Vice President
 
 LENDERS:		  
 		  
 ABN AMRO BANK N.V.
 
 		  
 		  
By:		  
/s/ Jamie Dillon
 
 		  
 		  
 		  
Name:		  
Jamie Dillon
 
 		  
 		  
 		  
Title:		  
Vice President
 
 		  
 		  
By:		  
/s/ Nia M. Miller
 
 		  
 		  
 		  
Name:		  
Nia M. Miller
 
 		  
 		  
 		  
Title:		  
Assistant Vice President
 
 		  
 		  
 BANK OF AMERICA, N.A.
 
 		  
 		  
By:		  
/s/ Fred L. Thorne
 
 		  
 		  
 		  
Name:		  
Fred L. Thorne
 
 		  
 		  
 		  
Title:		  
Managing Director
 
 		  
 		  
 BANK HAPOALIM B.M.
 
 		  
 		  
By:		  
/s/ John Rice
 
 		  
 		  
 		  
Name:		  
John Rice
 
 		  
 		  
 		  
Title:		  
Vice President and Senior Lending Officer
 
 		  
 		  
By:		  
/s/ Paul Watson
 
 		  
 		  
 		  
Name:		  
Paul Watson
 
 		  
 		  
 		  
Title:		  
Vice President and Lending Officer
 
 		  
 		  
 BANK OF MONTREAL
 
 		  
 		  
By:		  
/s/ Michael P. Joyce
 
 		  
 		  
 		  
Name:		  
Michael P. Joyce
 
 		  
 		  
 		  
Title:		  
Managing Director
 
 		  
 		  
 BANQUE NATIONALE DE PARIS
 
 		  
 		  
By:		  
/s/ Gavin S. Holles
 
 		  
 		  
 		  
Name:		  
Gavin S. Holles
 
 		  
 		  
 		  
Title:		  
Vice President
 
 		  
 		  
By:		  
/s/ Michael D. McCorriston
 
 		  
 		  
 		  
Name:		  
Michael D. McCorriston
 
 		  
 		  
 		  
Title:		  
Vice President
 
 		  
 		  
 THE FIRST NATIONAL BANK OF CHICAGO
 
 		  
 		  
By:		  
/s/ Stephanie Mack
 
 		  
 		  
 		  
Name:		  
Stephanie Mack
 
 		  
 		  
 		  
Title:		  
Associate Underwriter
 
 		  
 		  
 FIRST UNION NATIONAL BANK
 
 		  
 		  
By:		  
/s/ Paul L. Menconi
 
 		  
 		  
 		  
Name:		  
Paul L. Menconi
 
 		  
 		  
 		  
Title:		  
Vice President
 
 		  
 		  
 FLEET NATIONAL BANK
 
 		  
 		  
By:		  
/s/ William E. Rurode, Jr.
 
 		  
 		  
 		  
Name:		  
William E. Rurode, Jr.
 
 		  
 		  
 		  
Title:		  
Executive Vice President
 
 		  
 		  
 THE INDUSTRIAL BANK OF JAPAN, LIMITED
 
 		  
 		  
By:		  
/s/ Ken Iwata
 
 		  
 		  
 		  
Name:		  
Ken Iwata
 
 		  
 		  
 		  
Title:		  
Senior Vice President & Manager
 
 		  
 		  
 KEYBANK NATIONAL ASSOCIATION
 
 		  
 		  
By:		  
/s/ Mary K. Young
 
 		  
 		  
 		  
Name:		  
Mary K. Young
 
 		  
 		  
 		  
Title:		  
Assistant Vice President
 
 		  
 		  
 MELLON BANK, N.A.
 
 		  
 		  
By:		  
/s/ Lawrence C. Ivey
 
 		  
 		  
 		  
Name:		  
Lawrence C. Ivey
 
 		  
 		  
 		  
Title:		  
Vice President
 
 		  
 		  
 THE NORTHERN TRUST COMPANY
 
 		  
 		  
By:		  
/s/ David J. Mitchell
 
 		  
 		  
 		  
Name:		  
David J. Mitchell
 
 		  
 		  
 		  
Title:		  
Vice President
 
 		  
 		  
 THE ROYAL BANK OF SCOTLAND PLC
 
 		  
 		  
By:		  
/s/ Karen L. Stefancic
 
 		  
 		  
 		  
Name:		  
Karen L. Stefancic
 
 		  
 		  
 		  
Title:		  
Vice President
 
 		  
 		  
 THE SUMITOMO BANK, LIMITED
 
 		  
 		  
By:		  
/s/ Azar Shakeri
 
 		  
 		  
 		  
Name:		  
Azar Shakeri
 
 		  
 		  
 		  
Title:		  
Vice President
 
 		  
 		  
 UBS AG STAMFORD BRANCH
 
 		  
 		  
By:		  
/s/ Robert H. Riley III
 
 		  
 		  
 		  
Name:		  
Robert H. Riley III
 
 		  
 		  
 		  
Title:		  
Executive Director
 
 		  
 		  
By:		  
/s/ Paula Mueller
 
 		  
 		  
 		  
Name:		  
Paula Mueller
 
 		  
 		  
 		  
Title:		  
Director

SCHEDULE I

LENDERS

PART A—COMMITMENTS

Lender
   Facility A
Commitment
   Facility B
Commitment
   Total
                   
ABN AMRO Bank N.V.   $ 9,288,321.21   $ 9,288,321.21   $ 18,576,642.42
 
Bank of Montreal		  
 		  
 		  
8,467,153.28		  
 		  
 		  
8,467,153.28		  
 		  
 		  
16,934,306.56
 
 
The First National Bank of Chicago		  
 
 		  
 
 		  
 
8,467,153.28		  
 
 		  
 
 		  
 
8,467,153.28		  
 
 		  
 
 		  
 
16,934,306.56
 
 
First Union National Bank		  
 
 		  
 
 		  
 
8,467,153.28		  
 
 		  
 
 		  
 
8,467,153.28		  
 
 		  
 
 		  
 
16,934,306.56
 
 
KeyBank National Association		  
 
 		  
 
 		  
 
8,467,153.28		  
 
 		  
 
 		  
 
8,467,153.28		  
 
 		  
 
 		  
 
16,934,306.56
 
 
Fleet National Bank		  
 
 		  
 
 		  
 
8,467,153.28		  
 
 		  
 
 		  
 
8,467,153.28		  
 
 		  
 
 		  
 
16,934,306.56
 
 
The Sumitomo Bank, Limited		  
 
 		  
 
 		  
 
7,500,000.00		  
 
 		  
 
 		  
 
7,500,000.00		  
 
 		  
 
 		  
 
15,000,000.00
 
 
The Northern Trust Company		  
 
 		  
 
 		  
 
7,299,270.07		  
 
 		  
 
 		  
 
7,299,270.07		  
 
 		  
 
 		  
 
14,598,540.14
 
 
Bank of America, N.A.		  
 
 		  
 
 		  
 
5,255,474.45		  
 
 		  
 
 		  
 
5,255,474.45		  
 
 		  
 
 		  
 
10,510,948.90
 
 
Banque Nationale de Paris		  
 
 		  
 
 		  
 
5,255,474.45		  
 
 		  
 
 		  
 
5,255,474.45		  
 
 		  
 
 		  
 
10,510,948.90
 
 
The Industrial Bank of Japan, Limited		  
 
 		  
 
 		  
 
5,255,474.45		  
 
 		  
 
 		  
 
5,255,474.45		  
 
 		  
 
 		  
 
10,510,948.90
 
 
Mellon Bank, N.A.		  
 
 		  
 
 		  
 
5,255,474.45		  
 
 		  
 
 		  
 
5,255,474.45		  
 
 		  
 
 		  
 
10,510,948.90
 
 
The Royal Bank of Scotland plc		  
 
 		  
 
 		  
 
5,255,474.45		  
 
 		  
 
 		  
 
5,255,474.45		  
 
 		  
 
 		  
 
10,510,948.90
 
 
UBS AG Stamford Branch		  
 
 		  
 
 		  
 
4,379,562.04		  
 
 		  
 
 		  
 
4,379,562.04		  
 
 		  
 
 		  
 
8,759,124.08
 
 
Bank Hapoalim B.M.		  
 
 		  
 
 		  
 
2,919,708.03		  
 
 		  
 
 		  
 
2,919,708.03		  
 
 		  
 
 		  
 
5,839,416.06
 
 
Total		  
 
 		  
 
$		  
 
100,000,000.00		  
 
 		  
 
$		  
 
100,000,000.00		  
 
 		  
 
$		  
 
200,000,000.00

PART B - ADDRESSES, ETC.

ABN AMRO BANK N.V.

Domestic Lending Office and Euro-Dollar Lending Office:

Address for Notices of Borrowing, Notices of Interest Period Selection and Notices of Facility B Conversion:

Address for all other notices:

With a copy of all notices to:

Wiring Instructions:

BANK OF AMERICA, N.A.

Domestic Lending Office and Euro-Dollar Lending Office:

Address for Notices of Borrowing, Notices of Interest Period Selection and Notices of Facility B Conversion:

Address for all other notices:

Wiring Instructions:

BANK HAPOALIM B.M.

Domestic Lending Office and Euro-Dollar Lending Office:

Address for Notices of Borrowing, Notices of Interest Period Selection and Notices of Facility B Conversion:

Address for all other notices:

Wiring Instructions:

BANK OF MONTREAL

Domestic Lending Office and Euro-Dollar Lending Office:

Address for Notices of Borrowing, Notices of Interest Period Selection and Notices of Facility B Conversion:

Address for all other notices:

With a copy of all notices to:

Wiring Instructions:

BANQUE NATIONALE DE PARIS

Domestic Lending Office and Euro-Dollar Lending Office:

Address for Notices of Borrowing, Notices of Interest Period Selection and Notices of Facility B Conversion:

Address for all other notices:

Wiring Instructions:

THE FIRST NATIONAL BANK OF CHICAGO

Domestic Lending Office and Euro-Dollar Lending Office:

Address for Notices of Borrowing, Notices of Interest Period Selection and Notices of Facility B Conversion:

Address for all other notices:

Wiring Instructions:

FIRST UNION NATIONAL BANK

Domestic Lending Office and Euro-Dollar Lending Office:

Address for Notices of Borrowing, Notices of Interest Period Selection and Notices of Facility B Conversion:

Address for all other notices:

Wiring Instructions:

FLEET NATIONAL BANK

Domestic Lending Office and Euro-Dollar Lending Office:

Address for Notices of Borrowing, Notices of Interest Period Selection and Notices of Facility B Conversion:

Address for all other notices:

Wiring Instructions:

THE INDUSTRIAL BANK OF JAPAN, LIMITED

Domestic Lending Office and Euro-Dollar Lending Office:

Address for Notices of Borrowing, Notices of Interest Period Selection and Notices of Facility B Conversion:

Address for all other notices:

Wiring Instructions:

KEYBANK NATIONAL ASSOCIATION

Domestic Lending Office and Euro-Dollar Lending Office:

Address for Notices of Borrowing, Notices of Interest Period Selection and Notices of Facility B Conversion:

Address for all other notices:

Wiring Instructions:

MELLON BANK, N.A.

Domestic Lending Office and Euro-Dollar Lending Office:

Address for Notices of Borrowing, Notices of Interest Period Selection and Notices of Facility B Conversion:

Address for all other notices:

Wiring Instructions:

THE NORTHERN TRUST COMPANY

Domestic Lending Office and Euro-Dollar Lending Office:

Address for Notices of Borrowing, Notices of Interest Period Selection and Notices of Facility B Conversion:

Address for all other notices:

Wiring Instructions:

THE ROYAL BANK OF SCOTLAND PLC

Domestic Lending Office and Euro-Dollar Lending Office:

Address for Notices of Borrowing, Notices of Interest Period Selection and Notices of Facility B Conversion:

Address for all other notices:

Wiring Instructions:

THE SUMITOMO BANK, LIMITED

Domestic Lending Office and Euro-Dollar Lending Office:

Address for Notices of Borrowing, Notices of Interest Period Selection and Notices of Facility B Conversion:

Address for all other notices:

Wiring Instructions:

UBS AG

Domestic Lending Office and Euro-Dollar Lending Office:

Address for Notices of Borrowing, Notices of Interest Period Selection and Notices of Facility B Conversion:

Address for all other notices:

Wiring Instructions:

SCHEDULE II

PRICING GRID

 
    
   Applicable Margin
   Commitment
Fee Percentage
  
Debt/
EBITDA
Ratio*
   Pricing
Level
   Base
Rate
Loans
   LIBOR
Loans
   Facility A
   Facility B
  
Less than or equal to 0.45   1   0 % 0.750 % 0.2000 % 0.175 %
 
>0.45,
Less than or equal to 0.75		  
 		  
2		  
 		  
0		  
%		  
0.875		  
%		  
0.250		  
%		  
0.175		  
%
 
>0.75,
Less than or equal to 1.00		  
 		  
3		  
 		  
0		  
%		  
1.000		  
%		  
0.300		  
%		  
0.175		  
%
 
>1.00,
Less than or equal to 1.50		  
 		  
4		  
 		  
0		  
%		  
1.125		  
%		  
0.350		  
%		  
0.175		  
%
 
>1.50		  
 		  
5		  
 		  
0		  
%		  
1.375		  
%		  
0.350		  
%		  
0.175		  
%
*
For a consecutive four-quarter period.

EXPLANATION

1.
The Applicable Margin for each Loan and Portion and the Commitment Fee Percentage for each Facility will be set for each Pricing Period and will vary depending upon whether such period is a Level 1 Period, a Level 2 Period, a Level 3 Period, a Level 4 Period or a Level 5 Period.

2.
The first Pricing Period will commence on the date of the Credit Agreement and end on September 30, 1999 and each Pricing Period thereafter will commence on the first day immediately following the preceding Pricing Period and end on the last day of the month three months thereafter.

3.
The first Pricing Period will be a Level 2 Period.

4.
Each Pricing Period thereafter will be a Level 1 Period, a Level 2 Period, a Level 3 Period, a Level 4 Period or a Level 5 Period depending upon Borrower's Debt/EBITDA Ratio for the consecutive four-quarter period ending one quarter prior to the first day of such Pricing Period.

5.
Examples:

(a)
Borrower's Debt/EBITDA Ratio for the consecutive four-quarter period ending May 28, 1999 is 0.80. The Pricing Period of October 1, 1999 - December 31, 1999 will be a Level 3 period.

(b)
Borrower's Debt/EBITDA Ratio for the consecutive four-quarter period ending August 27, 1999 is 0.60. The Pricing Period of January 1, 2000 - March 31, 1999 will be a Level 2 period.

SCHEDULE 3.01

INITIAL CONDITIONS PRECEDENT

A.
Principal Credit Documents.
B.
Borrower Corporate Documents.
C.
Financial Statements, Financial Condition, Etc.
D.
Opinions. Favorable written opinions from each of the following counsel for Borrower, each dated the Closing Date, addressed to Administrative Agent for the benefit of Administrative Agent and Lenders, covering such legal matters as Administrative Agent may reasonably request and otherwise in form and substance satisfactory to Administrative Agent and each Lender:
E.
Other Items.

SCHEDULES 4.01(q)
SUBSIDIARIES
Company Name
   Jurisdiction
   Number of Shares Issued and Outstanding
   Shareholders*
Adobe Systems AG
(Switzerland)		   Switzerland   1,000   Adobe Systems Benelux BV
Adobe Systems International Limited Partnership
(Cayman Islands entity)		   Cayman Islands entity, Barbados residency   Frame International, Inc.: 10%
Adobe: 90%		   Frame Int'l—10% general partner; Adobe Systems Incorporated—90% limited partner
Adobe Systems Benelux BV
(Netherlands)		   The Netherlands   41   Adobe Systems International Limited Partnership (effective 7/28/99)
Adobe Systems Danmark ApS   Denmark   1,000   Adobe Systems Benelux BV
Adobe Systems Direct Limited   United Kingdom   50,000   Adobe Systems Europe Limited
Adobe Systems Europe Limited**
(Europe)		   United Kingdom   355,000   Adobe Systems Benelux BV
Adobe Systems France EURL   France   10   Adobe Systems Benelux BV
Adobe Systems GmbH
(Germany)		   Germany   350,000   Adobe Systems Benelux BV
Adobe Systems Iberica SL
(Spain)		   Spain   1,000   Adobe Systems Benelux BV
Adobe Systems Italia Srl   Italy   20,000 quotas   Adobe Systems Benelux BV—95%
Adobe Systems Europe Limited—5%
Adobe Systems Nordic AB
(Sweden)		   Sweden   2,000   Adobe Systems Benelux BV
Adobe Systems Norge ASA
(Norway)		   Norway   1,000   Adobe Systems Benelux BV
Adobe Systems Norge AS
(Norway)		   Norway   1,000   Adobe Systems Norge ASA
Adobe Systems UK Limited   United Kingdom   1,000   Adobe Systems Incorporated
Frame Technologies International Limited
(Ireland)		   Ireland   128,995   Adobe Systems Incorporated (128,994)
Fand Limited (1)
(as nominee)
Adobe Systems FSC, Inc.   Guam, United States   1,000   Adobe Systems Incorporated
Frame International, Inc.   Delaware, United States   1,000   Adobe Systems Incorporated
Sandcastle, Inc.   California, United States   1,000   Adobe Systems Incorporated
Adobe Systems Company Ltd.**
(Japan)		   Japan   3,600   Adobe Systems Benelux BV
Adobe Systems Japan, Inc.   California, United States   5,000   Adobe Systems Incorporated
Adobe Systems Pty. Ltd.   Australia   402,893   Adobe Systems Benelux BV
Adobe Systems India Pvt. Ltd.   India   1,000   Adobe Systems Incorporated
Adobe Systems Korea Ltd.   Korea   5,000   Adobe Systems Benelux BV
Adobe Systems Pte. Pty
(Singapore)		   Singapore   100,000   Adobe Systems Benelux BV
Adobe Systems Brasil Limitada   Brazil   27,000 quotas   Adobe Systems Benelux BV (26,999 quotas)
Adobe Systems Pty. Ltd. (1 quota)
*
All Subsidiaries are directly or indirectly 100% owned by Adobe Systems Incorporated, although a nominee for Adobe is noted where applicable.

**
Material Subsidiary.


SCHEDULES 5.02(a)

EXISTING INDEBTEDNESS

1.
Amended, restated and consolidated master lease agreement between Sumitomo Bank Leasing and Finance and Adobe Systems Incorporated, dated August 11, 1999 for $142,500,000

2.
Note Payable to Robin Henson due 2006 for $604,800

3.
Bank guarantee from Deutsche Bank Munich for the Hamburg office lease contract for DM92,300 (approximately US$50,000)

4.
Letter of comfort from Adobe Systems Incorporated for the Munich office lease contract (no specific amount)

5.
Bank guarantee for the Netherlands office of DFL139,460 (approximately US$66,000)

6.
Bank guarantee for Adobe Direct taxes in the Netherlands of DFL7,350 (US$3,500)

7.
Bank guarantee for a car lease in Belgium of BEF88,860 (US$2,300)

8.
Bank guarantee for the Italy office of ITL26,510,000 (US$15,000)

9.
Guarantees of VAT reimbursement in Italy of ITL683,407,279 (US$366,500)

10.
Bank guarantee for the Switzerland office of CHF66,000 (US$43,000)

11.
Contingent liability regarding turnkey manufacturing inventory

SCHEDULES 5.02(b)

EXISTING LIENS

1.
Lien filed by the State of Texas March 26, 1996 for payroll taxes of $1,068

2.
Lien filed by IRS for incomplete Form 1099 reporting, for $4,000 (extension granted)

3.
Rent deposit for Belgium office of DFL27,855 (US$13,000)

4.
Rent deposit for France office of FRF255,862 (US$40,200)

5.
Bill guarantees through Banco Bilbao Vizcaya for judicial requests due to antipiracy actions of ESP11,000,000 (US$70,000)

6.
Rent deposit for Spain office of ESP1,160,000 (US$7,500)

7.
Rent deposit for Italy office of ITL1,327,500 (US$800)

8.
Rent deposit for Singapore office of SGD53,666 (US$32,000)

9.
Rent deposit for Korea office of KRW75,091,500 (US$65,000)

10.
Rent deposit for China office of US$34,026

11.
Rent deposit for Argentina office of US$2,700

SCHEDULES 5.02(e)

EXISTING INVESTMENTS

    See Adobe Investment Policy (attached)

 
 
 
 
[LOGO]
  
 
 
 		  
 
 
 Adobe Systems Incorporated		  
 
 
 		  
 
 
1585 Charleston Road        
P.O. Box 7900
Mountain View, CA 94039-7900
Phone 415 961.4400
Fax 415 961.3769

INVESTMENT GUIDELINES FOR ADOBE SYSTEMS INCORPORATED

Funds Managed By Weiss, Peck & Greer

INVESTMENT OBJECTIVES AND PROCEDURES

    The Advisor shall manage the account of Adobe Systems Incorporated in accordance with the following objectives:


    The Advisor shall achieve these objectives in the context of the following investment parameters:

PERMISSIBLE INVESTMENTS

    U.S. Government and Agencies - Obligations of the U.S. Government and its federal agencies may be purchased.

    Repurchase Agreements - Repurchase agreements will be transacted with banks and primary broker/ dealers. Collateral must be delivered versus payment. No safekeeping agreements will be entered into, and no repurchase agreements will be executed with non-primary broker/dealers or savings and loans.

    Financial Institutions - Obligations issued by financial institutions with Standard & Poor's or Moody's short-term rating of A-1 or P-1 or long-term rating of A or deposit rating of A or better by either Standard & Poor's or Moody's.

    Corporate Obligations - All commercial paper, medium term notes, and public debt securities will be rated Standard & Poor's or Moody's short-term rating of A-1 or P-1, or long-term rating of A or better, by either Standard & Poor's or Moody's.

    Asset-Backed Securities (ABS) - Securities, rated AAA, supported by assets, such as automobile loans, owned by the issuer and, usually, placed with a trustee. Must have a WAL (Weighted Average Life) not exceeding the longest allowable security under the Investment Policy. Limited to Aaa rating by Moody's and a AAA rating by Standard & Poor's.

    Taxable and Tax-Exempt Municipal Obligations - All tax-exempt issues must have short-term debt ratings of MIG1/VMIG1 or P1 by Moody's or SP-1 or A1 by Standard & Poor's or better. Long-term debt must be rated Baa and/or BBB or better by Moody's or Standard & Poor's. Insured issues which are rated based on their insurance must be rated Aaa by Moody's or AAA by Standard & Poor's.

    Municipal securities subject to the Alternative Minimum Tax Calculation are permissible.

    Unrated Tax-Exempt Securities - Issues that are not rated may be purchased, if in the opinion of the Advisor, they are of equivalent investment quality which meet one or more of the following criteria:


    Unrated securities will be limited to 25% of the portfolio.

    Auction-Rate Preferred Stocks - Industrial auction-rate preferreds must be rated A or better by either Standard & Poor's or Moody's. In addition, these securities must be evaluated and approved by the Advisor.

    Money Market Funds or Sweep Account - As a portion of the liquidity of Adobe System's account, the Advisor may invest in money market funds on a short-term basis. Only funds that seek to maintain a net asset value of $1.00 and maintain investment parameters that are at least as restrictive as those of the manager's will be permissible.

DIVERSIFICATION

    Portfolio diversification of the portfolio will be a tool for minimizing risk while maintaining liquidity.

    No more than 10% of the portfolio will be invested with any one issuer, with the exception of the U.S. Government and its agencies for which no limit will be imposed.

    For corporate credits, maximum permissible concentration in an industry is 25% of the portfolio.

    Auction-rate preferred stocks shall be limited to 15% of the portfolio. Corporate obligations for an issuer rated AAA by either Standard & Poor's or Moody's, shall be limited to 50% of the Portfolio.

    Insured municipal securities rated AAA based on their insurance are limited to 50% of the portfolio.

    No more than 10% of the portfolio will be invested in securities rated Baa and/or BBB by Moody's or Standard & Poor's.

    Municipal securities escrowed in or collateralized with U.S. Government and its agencies' securities will be limited to 50% of the portfolio. Municipal securities that may have been funded to maturity in U.S. Government or its agencies' securities may be up to 50% of the portfolio.

PORTFOLIO CONCENTRATIONS

    The Advisor will annually discuss tax implications for certain investments issued by certain states that may provide incremental after-tax benefits to Adobe Systems.

MATURITY RESTRICTIONS

    The maximum maturity of any issue of the portfolio will be 3 years.

    For securities that have put dates, reset dates, auction dates, or trade based on their average maturity, the put date, auction date, reset date, or average maturity will be used instead of the final maturity date for duration and maturity guideline purposes.

DURATION

    The average duration of the portfolio will range from 1.0 to 2.0 years.

EXCEPTIONS TO THE POLICY

    No intended exceptions to this policy will occur without Adobe Systems' prior approval.

    In the event that any unintended exceptions to this policy do occur, it will be reported on a monthly basis. Actions to eliminate any unauthorized exception will be taken as soon as the exception is discovered.

VALUATION AND REPORTING

    All assets held for Adobe Systems in this account will be priced to market value at each month's end. A complete and detailed listing of all securities held for this account, a summary of performance, and a detailed transaction ledger will be provided to the client on a monthly basis.

    For accounting purposes, all investments shall be deemed to be in the "Available-for-sale" category, as defined under Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities."

POLICY REVIEW

    A review of the sufficiency of this policy will be conducted annually in conjunction with a review of account performance. Any modifications or amendments to this policy must be in written form. Adobe Systems has the right to modify this policy at any time upon written notice to the advisor.

BENCHMARK

    The performance benchmark for this portfolio will be calculated as the average of the Bankers Trust Tax-Exempt Tender note and Lehman Bros. 3-year Tax-Exempt Bond Index. This benchmark will be used as a relative measure of performance but not as the sole measure of performance quality. Optimal after-tax total rates of return are the key objective. A negative return of 2% or more on a 12-month rolling basis will trigger immediate review of the manager and the investment strategy.

INVESTMENT ADVISOR
   Weiss, Peck & Greer
 
Date:		  
June 9, 1994
 
 		  
By:		  
/s/ Arthur L. Schwarz
Arthur L. Schwarz
        Partner
 
 CLIENT
  
 		  
 Adobe Systems Incorporated
 
Date:		  
December 21, 1994
 
 		  
By:		  
/s/ M. Bruce Nakao
      M. Bruce Nakao
Senior Vice President
Chief Financial Officer

 
 
 
 
[LOGO]
  
 
 
 		  
 
 
 Adobe Systems Incorporated		  
 
 
 		  
 
 
1585 Charleston Road        
P.O. Box 7900
Mountain View, CA 94039-7900
Phone 415 961.4400
Fax 415 961.3769

ADOBE LIQUIDITY ACCOUNT
WPG 9041

INVESTMENT GUIDELINES FOR ADOBE SYSTEMS INCORPORATED

Funds managed By Weiss, Peck & Greer

INVESTMENT OBJECTIVES AND PROCEDURES

    The Advisor shall manage the account of Adobe Systems Incorporated in accordance with the following objectives:


    The Advisor shall achieve these objectives in the context of the following investment parameters:

PERMISSIBLE INVESTMENTS

    U.S. Government and Agencies - Obligations of the U.S. Government and its federal agencies may be purchased.

    Repurchase Agreements - Repurchase agreements will be transacted with banks and primary broker/ dealers. Collateral must be delivered versus payment. No safekeeping agreements will be entered into, and no repurchase agreements will be executed with non-primary broker/dealers or savings and loans.

    Financial Institutions - Obligations issued by financial institutions with Standard & Poor's or Moody's short-term rating of A-1 or P-1 or long-term rating of A or deposit rating of A or better by either Standard & Poor's or Moody's.

    Corporate Obligations - All commercial paper, medium term notes, and public debt securities will be rated Standard & Poor's or Moody's short-term rating of A-1 or P-1, or long-term rating of A or better, by either Standard & Poor's or Moody's.

    Asset-Backed Securities (ABS) - Securities, rated AAA, supported by assets, such as automobile loans, owned by the issuer and, usually, placed with a trustee. Must have a WAL (Weighted Average Life) not exceeding the longest allowable security under the Investment Policy. Limited to Aaa rating by Moody's and a AAA rating by Standard & Poor's.

    Taxable and Tax-Exempt Municipal Obligations - All tax-exempt issues must have short-term debt ratings of MIG1/VMIG1 or P1 by Moody's or SP-1 or A1 by Standard & Poor's or better. Long-term debt must be rated Baa and/or BBB or better by Moody's or Standard & Poor's. Insured issues which are rated based on their insurance must be rated Aaa by Moody's or AAA by Standard & Poor's.

    Municipal securities subject to the Alternative Minimum Tax Calculation are permissible.

    Unrated Tax-Exempt Securities - Issues that are not rated may be purchased, if in the opinion of the Advisor, they are of equivalent investment quality which meet one or more of the following criteria:


    Unrated securities will be limited to 25% of the portfolio.

    Auction-Rate Preferred Stocks - Industrial auction-rate preferreds must be rated A or better by either Standard & Poor's or Moody's. In addition, these securities must be evaluated and approved by the Advisor.

    Money Market Funds or Sweep Account - As a portion of the liquidity of Adobe System's account, the Advisor may invest in money market funds on a short-term basis. Only funds that seek to maintain a net asset value of $1.00 and maintain investment parameters that are at least as restrictive as those of the manager's will be permissible.

DIVERSIFICATION

    Portfolio diversification of the portfolio will be a tool for minimizing risk while maintaining liquidity.

    No more than 10% of the portfolio will be invested with any one issuer, with the exception of the U.S. Government and its agencies for which no limit will be imposed.

    For corporate credits, maximum permissible concentration in an industry is 25% of the portfolio.

    Auction-rate preferred stocks shall be limited to 15% of the portfolio. Corporate obligations for an issuer rated AAA by either Standard & Poor's or Moody's, shall be limited to 50% of the Portfolio.

    Insured municipal securities rated AAA based on their insurance are limited to 50% of the portfolio.

    No more than 10% of the portfolio will be invested in securities rated Baa and/or BBB by Moody's or Standard & Poor's.

    Municipal securities escrowed in or collateralized with U.S. Government and its agencies' securities will be limited to 50% of the portfolio. Municipal securities that may have been funded to maturity in U.S. Government or its agencies' securities may be up to 50% of the portfolio.

PORTFOLIO CONCENTRATIONS

    The Advisor will annually discuss tax implications for certain investments issued by certain states that may provide incremental after-tax benefits to Adobe Systems.

MATURITY RESTRICTIONS

    The maximum maturity of any issue in the portfolio may not exceed 1.5 years.

    For securities that have put dates, reset dates, auction dates, or trade based on their average maturity, the put date, auction date, reset date, or average maturity will be used instead of the final maturity date for duration and maturity guideline purposes.

DURATION

    The maximum duration of the portfolio may not exceed 6 months.

EXCEPTIONS TO THE POLICY

    No intended exceptions to this policy will occur without Adobe Systems' prior approval.

    In the event that any unintended exceptions to this policy do occur, it will be reported on a monthly basis. Actions to eliminate any unauthorized exception will be taken as soon as the exception is discovered.

VALUATION AND REPORTING

    All assets held for Adobe Systems in this account will be priced to market value at each month's end. A complete and detailed listing of all securities held for this account, a summary of performance, and a detailed transaction ledger will be provided to the client on a monthly basis.

    For accounting purposes, all investments shall be deemed to be in the "Available-for-sale" category, as defined under Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities."

POLICY REVIEW

    A review of the sufficiency of this policy will be conducted annually in conjunction with a review of account performance. Any modifications or amendments to this policy must be in written form. Adobe Systems has the right to modify this policy at any time upon written notice to the advisor.

BENCHMARK

    The benchmark for the portfolio will be the Merrill Lynch 3-Month Bill.

INVESTMENT ADVISOR
   WEISS, PECK & GREER, L.L.C.
 
Date:		  
10-3-97
 
 		  
By:		  
/s/ [ILLEGIBLE]
 
 CLIENT
  
 		  
 ADOBE SYSTEMS INCORPORATED
 
Date:		  
10-3-97
 
 		  
By:		  
/s/ P. Jackson Bell

 
 
 
 
[LOGO]
  
 
 
 		  
 
 
 Adobe Systems Incorporated		  
 
 
 		  
 
 
1585 Charleston Road        
P.O. Box 7900
Mountain View, CA 94039-7900
Phone 415 961.4400
Fax 415 961.3769

INVESTMENT GUIDELINES FOR ADOBE SYSTEMS INCORPORATED

Funds Managed By Sterling Capital Management

INVESTMENT OBJECTIVES AND PROCEDURES

    The Advisor shall manage the account of Adobe Systems Incorporated in accordance with the following objectives:


    The Advisor shall achieve these objectives in the context of the following investment parameters:

PERMISSIBLE INVESTMENTS

    U.S. Government and Agencies - Obligations of the U.S. Government, its federal agencies may also be purchased.

    Repurchase Agreements - Repurchase agreements will be transacted with banks and primary broker/ dealers. Collateral must be delivered versus payment. No safekeeping agreements will be entered into, and no repurchase agreements will be executed with non-primary broker/dealers or savings and loans.

    Financial Institutions - Obligations issued by financial institutions with Standard & Poor's or Moody's short-term rating of A-1 or P-1 or long-term rating of A or deposit rating of A or better by either Standard & Poor's or Moody's.

    Corporate Obligations - All commercial paper, medium term notes, and public debt securities will be rated Standard & Poor's or Moody's short-term rating of A-1 or P-1, or long-term rating of A or better, by either Standard & Poor's or Moody's.

    Asset-Backed Securities (ABS) - Securities, rated AAA, supported by assets, such as automobile loans, owned by the issuer and, usually, placed with a trustee. Must have a WAL (Weighted Average Life) not exceeding the longest allowable security under the Investment Policy. Limited to AAA rating by Moody's and a AAA rating by Standard & Poor's.

    Taxable and Tax-Exempt Municipal Obligations - All tax-exempt issues must have short-term debt ratings of MIG1/VMIG1 or P1 by Moody's or SP-1 or A-1 by Standard & Poor's. Long-term debt must be rated A or better.

    All general obligations of governmental entities bearing a long-term rating of A or better or have a short-term rating of SP-1 or VMIG1 or better by Standard & Poor's Corporation or Moody's Investors Service, Inc.

    All revenue obligations issued in conjunction with governmental entities described above bearing a long-term rating of A or short-term rating of SP-1 or VMIG1 by Standard & Poor's or Moody's.

    Pre-refunded municipal issues are permissible if, in the opinion of the Advisor, they are of equivalent investment quality and have been funded to maturity or are collateralized.

    Municipal securities subject to the Alternative Minimum Tax Calculation are permissible.

    Auction-Rate Preferred Stocks - Industrial auction-rate preferreds must be rated A or better by either Standard & Poor's or Moody's. In addition, these securities must be evaluated and approved by the Advisor.

    Money Market Funds or Sweep Account - As a portion of the liquidity of Adobe System's account, the Advisor may invest in money market funds on a short-term basis.

DIVERSIFICATION

    Portfolio diversification of the portfolio will be a tool for minimizing risk while maintaining liquidity.

    No more than 10% of the portfolio will be invested with any one issuer, with the exception of the U.S. Government and its agencies for which no limit will be imposed.

    For corporate credits, the maximum permissible concentration in an industry is 25% of the portfolio.

    Auction rate preferred stocks rated A or better by either Standard & Poor's or Moody's shall be limited to 25% of the portfolio. Corporate obligations for an issuer rated A or better by either Standard & Poor's or Moody's, shall be limited to 50% of the portfolio.

    Municipal securities can be up to 100% of the portfolio.

    Asset-backed securities shall be limited to 10% of the portfolio.

    Municipal securities escrowed in or collateralized with U.S. Government and its agencies' securities will be limited to 50% of the portfolio.

PORTFOLIO CONCENTRATIONS

    The Advisor will annually discuss tax implications for certain investments issued by certain states that may provide incremental after-tax benefits to Adobe Systems.

MATURITY RESTRICTIONS

    The maximum effective maturity of any issue of the portfolio will be 2 years. Variable rate obligations with maturities in excess of 2 years will be permissible if the rate adjustment occurs within 12 months and/or there exists a put option/provision for the instrument that can be exercised within 2 years.

DURATION

    The average duration of the portfolio will range from .5 to 1.25 years.

EXCEPTIONS TO THE POLICY

    No intended exceptions to this policy will occur without Adobe Systems' prior approval.

    In the event that any unintended exceptions to this policy do occur, it will be reported on a monthly basis. Actions to eliminate any unauthorized exception will be taken as soon as the exception is discovered.

VALUATION AND REPORTING

    All assets held for Adobe Systems in this account will be priced to market value at Adobe System's fiscal month end. A complete and detailed listing of all securities held for this account, a summary of performance, and a detailed transaction ledger will be provided to the client on a monthly basis.

    For accounting purposes, all investments shall be deemed to be in the "Available-for-sale" category, as defined under Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities."

POLICY REVIEW

    A review of the sufficiency of this policy will be conducted annually in conjunction with a review of account performance. Any modifications or amendments to this policy must be in written form. Adobe Systems has the right to modify this policy at any time upon written notice to the Advisor.

BENCHMARK

    The benchmark will be used as a relative measure of performance but not as the sole measure of performance quality. Optimal after-tax total rates of return are the key performance objective. The 1-Year Municipal Index will be the benchmark used for performance measurement of this portfolio. The portfolio will not be permitted to have negative returns on a 12-month rolling average basis.

INVESTMENT ADVISOR
   Sterling Capital Management
 
Date:		  
 
 
 		  
By:		  
 
 
 CLIENT
  
 		  
 Adobe Systems Incorporated
 
Date:		  
 
 
 		  
By:		  
/s/ M. Bruce Nakao
      M. Bruce Nakao
Senior Vice President
Chief Financial Officer

ADDENDUM TO INVESTMENT POLICY AGREEMENT

    This Addendum is being made this 15th day of October, 1997 with respect to that certain Investment Policy Agreement dated December 21, 1994 between Adobe Systems, Inc. ("Client") and Sterling Capital Management Company ("Advisor").

    1.  This Addendum amends the Investment Policy Agreement, and in the event of any conflict or inconsistency between the provisions of this Addendum and the provisions of the Investment Policy Agreement, the provisions of this Addendum shall supersede and control.

    2.  In response to section "Maturity Restrictions", the following change should be included:

    3.  In response to section "Duration", the following change should be included:

    4.  In response to section "Benchmark", the following change should be included:

    The undersigned do hereby acknowledge and agree to the aforementioned addendum to the Investment Policy Agreement between Adobe Systems, Inc. and Sterling Capital Management Company.

"Client"      
 
 ADOBE SYSTEMS, INC.
  
 		  
 		  
 
 
By:		  
/s/ P. Jackson Bell
P. Jackson Bell - Chief Financial Officer		  
 		  
 		  
 
 
Dated:		  
October 15, 1997
 
 		  
 		  
 
 
"Advisor"		  
 		  
 		  
 
 
 STERLING CAPITAL MANAGEMENT COMPANY
  
 
 
By:		  
/s/ Alexander W. McAlister
Alexander W. McAlister - Senior Vice President		  
 		  
 		  
 
 
Dated:		  
October 15, 1997
 
 		  
 		  
 

ADOBE SYSTEMS INCORPORATED POLICY/PROCEDURE STATEMENT

    Control #:   2.3-2
    Department:   Treasury
    Page:   1 of 11
    Issue Date:    
    Created by:   Barbara Hill
    Supersedes:    

POLICY DESCRIPTION: Investments

1.0 PURPOSE

    The purpose of the Investment Policy is to establish a worldwide Policy and guidelines to direct the investment of temporarily idle or surplus cash of the Company. Surplus cash shall be defined as funds exceeding the operational requirements of the Company and not immediately required for working capital, capital investments, debt repayment or other financial obligation. The basic objectives of the Investment Policy are, in order of priority:


2.0 SCOPE

    This Policy shall apply to Adobe Systems Incorporated and all majority owned entities. This Policy shall specifically apply to all funds managed in-house by Adobe. In separate attached exhibits, additional guidelines and/or variations on this Policy are included for funds managed by outside investment managers as well as Adobe's foreign subsidiaries. This policy provides for investments in U.S. dollar denominated instruments only.

    This policy applies to:

        X  All Adobe Companies

        / /  Domestic Adobe Companies (in the U.S. and Canada)

        / /  International Adobe Companies

        / /  Other (describe:                                 )

3.0 RESPONSIBILITY

    

3.1
The Board of Directors is responsible to:

1.
Direct the Corporate Investment Committee
3.2
The Corporate Investment Committee is responsible to:

1.
Establish and maintain the Corporate Investment Policy;

2.
Periodically review the investment guidelines and policies, as required by changing conditions, but at least annually;

3.
Submit any recommended changes to that policy as needed to the Board of Directors for approval;

4.
The Committee shall consist of the President, Chief Financial Officer, Treasurer, Assistant Treasurer and Cash Manager.
3.3
The Chief Financial Officer (CFO) has the responsibility for:

1.
Executing the investment policy as well as designate those who can execute it;

2.
Administrative and operating approval for establishing any and all bank accounts, safekeeping/custody accounts, and brokerage accounts;

3.
Selection of or changes in investment managers;

4.
Monitoring investment results of all investment managers engaged, as well as results of in-house investment activities;

5.
Advance approval of all investment transactions outside the parameters of the current investment policy, and notification to the Board of Directors of such transactions, and

6.
Control systems and procedures that provide for an appropriate level if segregation of duties related to the conduct and accounting for investment activity.
3.4
The Treasurer has the responsibility for:

1.
Investment of the excess cash in accordance with the guidelines specified in this policy;

2.
Custody of securities as well as maintenance of bank/brokerage accounts required for investment trading, and the underlying accounting for such transactions;

3.
Reporting the status of investments to the Corporate Investment Committee on a quarterly basis, and more frequently in the event of unusual and material events in the marketplace that would effect the status of the portfolio;

4.
Managing all in-house funds in accordance with this investment policy as well as directing funds to any Investment Advisor/Management firm which has been approved by the CFO.
3.5
For purposes of compliance, the investments managed by any Investment Advisor/Management firm shall not be combined with investments made by the Treasurer but shall be considered separately.

4.0 POLICIES

    

4.1
Statement of Objectives

    The surplus cash of the Company will be invested in accordance with principles of sound investment management and this Investment Policy. Any exceptions to this policy will have to be approved, in writing, by the Chief Financial Officer.

    The basic objectives of the Investment Policy are, in order of priority:

4.2
Overall Risk Profile

    The above mentioned objectives and the methods that the Company will use to achieve them are described below: It is noted, however, that these guidelines will remain applicable until the Company's cash position and outlook change significantly, at which time, the guidelines should be reviewed and, if appropriate, revised.




4.3
Safekeeping

    Investments will be held in a custodial account, a safekeeping account or a broker's segregated account. All of the U.S. institutions qualified to do business with the Company are authorized to hold investments in safekeeping on behalf of the Company. All investments owned by the Company will be held in safekeeping by a dealer or financial institution so qualified. For Outside Investment Managers, a safekeeping/custody account may be established with an eligible bank or trust company to accept delivery of all investments made by the Investment Manager. Corporate Treasury will reconcile the safekeeping/ custody account statement to the investment report submitted by the Investment Manager on a monthly basis.

4.4
External Investment Managers

    Upon approval of the Chief Financial Officer, the Company may utilize outside fund managers to manage investments under the following criteria:

4.5
Internal Investments

4.6
Subsidiaries and Regional Offices (for those subsidiaries without specific investment guidelines)

4.7
Controls


5.0 PROCEDURE

6.0 EXCEPTIONS

    

6.1
This Policy provides guidelines for the management of the investment portfolio. Under some circumstances, investment transactions that are appropriate for the Company and entirely within the spirit of this Investment Policy as described may not fall within the prescribed quantitative guidelines contained in this Investment Policy. It may be determined that an investment transaction is in the best interest of the Company and is consistent with the objectives of this Investment Policy, in that case, the transaction may be permitted even though it is not consistent with the quantitative guidelines, subject to the following controls:

1.
Whenever a transaction that is an exception to the quantitative guidelines is made, it will be approved in writing by the Chief Financial Officer prior to being executed and will be reported to the Investment Committee at the next scheduled meeting.

2.
It is the responsibility of the Treasurer to immediately report to the Investment Committee any credit downgrade, default, bankruptcy or event which may affect the investment's value. The Investment Committee shall analyze viable elections with respect to the investment in question. Securities of investments that no longer meet the criteria of this Policy should be sold or exchanged when market conditions permit realization of reasonable value. The Investment Committee shall decide an appropriate strategy regarding such an investment. Any investments or portfolios of investments, which are assumed as the result of an acquisition or merger, will be evaluated for compliance with this Policy. If necessary, a plan for returning the portfolio to compliance under guidelines will be established. A workout period will be established for this return to compliance.

7.0 DEFINITIONS

    This section of the Investment Policy describes the securities and investments in which the Company is authorized to invest. Appendix A lists the limits and diversification requirements for each investment.

7.1
United States Government Securities—Marketable securities which are a direct obligation of the U.S. Government, issued by or guaranteed as to the principal and interest by the U.S. Government and supported by the full faith and credit of the United States. Included but not limited to U.S. Treasury Bills, Notes and Bonds.

7.2
United States Government Agency Securities—Debt securities issued by Government sponsored enterprises, Federal agencies and certain international institutions which are not direct obligations of the United States, but involve Government sponsorship and are fully guaranteed by Government agencies or enterprises or have implicit guarantees because of their relationship to the U.S. Government. Including but not limited to:

•
Federal National Mortgage Association (FNMA)

•
Government National Mortgage Association (GNMA)

•
Federal Farm Credit Bank (FFCB)

•
Federal Home Loan Mortgage Corporation (FHLMC)

•
Federal Home Loan Bank (FHLB)

•
Student Loan Marketing Association (SLMA)

•
Agency for International Development (AID)
7.3
Repurchase Agreements/Reverse Repurchase Agreements—Collateralized loans by the Company to the seller (a bank, broker or primary dealer in U.S. Government securities) secured by the securities transferred to the purchaser (the Company). They must always be fully collateralized by U.S. Treasury or U.S. agency obligations. Collateral must be market priced greater than the invested amount at the time of purchase (usually 102%).

7.4
Bank Money Instruments—Obligations of commercial banks. Including but not limited to negotiable certificates of deposit (domestic, Yankee and Euro CDs), Banker's Acceptances, Bank Time Deposits

(domestic or Euro). Deposits placed with offshore branches of approved banks (Euro CDs and TDs) will be limited to branches located in the British Commonwealth, including London, Toronto, Montreal, Nassau, and Grand Cayman.

7.5
Short-term Corporate Instruments—Commercial paper and other short-term, unsecured promissory notes issued by corporations. Eligible investments must have at least a short-term rating of A-1 (Standard & Poor's) or P-1 (Moody's) and/or a long-term debt rating of at least of A by Standard & Poor's or Moody's. Medium-term notes and Master notes must have a long-term rating of at least A by Standard & Poor's or Moody's.

7.6
Municipal Obligations—Direct obligations of and obligations fully guaranteed by a state, territory, or a possession of the United States, or any political subdivision of any of the foregoing, or of the District of Columbia as will as obligations of any county or other local governmental body within the U.S. Including but not limited to:

•
Tax-exempt commercial paper

•
Short Term Notes

•
Bond Anticipation Notes (BANs)

•
Tax Anticipation Notes (TANs)

•
Revenue Anticipation Notes (RANs)

•
General Obligations (GOs)

•
Variable Rate Demand Notes (Low Floaters)

•
Revenue Bonds

•
Put Bonds

•
Other Municipal Notes

•
Weekly Floaters

    Approved credit enhancements include:

7.7
Auction Rate Securities—Tax exempt bond funds which are leveraged and highly collateralized, whose shares are sold by utilizing a Dutch Auction or other remarketing mechanisms, thus allowing the security to trade at its par value at each reset date. They must be rated at least AAA by S&P or Aaa by Moody's.

7.8
Money Market Preferred Stock—Preferred stock with a variable dividend rate which is determined through a Dutch Auction mechanism allowing the security to trade at par on the auction dates. These

securities are eligible for the intercorporate Dividend-Received Deduction (70% tax-exempt for federal income tax purposes) as long as the security is held a minimum of 46 days and is not debt-financed.

7.9
Auction Variable Rate Bonds and Notes—Floating rate municipal bonds or notes on which interest is exempt from federal income tax and are sold using a Dutch Auction rate reset mechanism. They must be rated AAA by S&P or Aaa by Moody's.

7.10
Money Market Mutual Funds—Shares of an open-end investment company registered under the Investment Company Act of 1940 as amended. The investments of that company should comply with the SEC regulations under Rule 2a-7 including:

•
Maintain constant net asset value

•
Provide daily liquidity

•
Average weighted maturity not to exceed 90 days

•
Individual instrument maturity not to exceed 13 months

•
95% of the portfolio must possess the highest possible rating (or equivalent) and the remaining 5% will possess the second highest rating.

8.0 RELATED DOCUMENTS AND FORMS

APPENDIX A

INVESTMENT POLICY
TABLE OF QUALIFIED INVESTMENTS AND LIMITS

    This table lists the investments allowed by the Investment Policy. Investments not listed herein may be considered according to the parameters described in section 6.0. Diversification limits refer to the maximum concentration at the time of purchase. The Maturity limitation refers to the maximum maturity from the settlement date.

Qualified Investment
   Diversification Limit
   Credit Rating
   Credit Limitation
   Maturity
Limitation
United States Government Securities   No Maximum   N/A   N/A   2 years
United States Gov't Agency Securities   No Maximum   N/A   N/A   2 years
Repurchase Agreements   25% of portfolio   Fully collateralized by US gov't   Only with Fed's primary dealers or approved banks   21 days
Reverse Repurchase Agreements   N/A       Only with approved Banks or Dealers   21 days
Bank Money Instruments   One obligation not to exceed $15 mm; any one issuer or guarantor not to exceed the greater of 10% of portfolio or $15mm   Short-term rating of A1 or P1; long-term rating of A or above   Top 50 US banks or top 50 World banks (by assets)   2 years
Short-term Corporate Instruments   One obligation not to exceed $15 mm; any one issuer or guarantor not to exceed the greater of 10% of portfolio or $15mm   Short-term rating of A1 or P1; long-term rating of A or above   N/A   2 years
Municipal Obligations   One obligation not to exceed $15 mm; any one issuer or guarantor not to exceed the greater of 10% of portfolio or $15mm   Short-term rating of A1, P1 or MIG-1; long-term rating of A or above   Issue must be at least $50mm in size; MBIA, FGIC or AMBAC insured ok up to the greater of 30% of portfolio or $30mml; foreign bank LOC must be A1/P1.   2 years
Auction-Rate Securities   25% of portfolio or $30mm whichever is greater   Rated AAA/Aaa   N/A   90 days
Auction-Rate Preferreds   25% of portfolio or $30mm whichever is greater   Rated at least A   N/A   90 days
Auction Variable Rate Bonds and Notes   One obligation not to exceed $15 mm; any one issuer or guarantor not to exceed the greater of 10% of portfolio or $15mm   Rated AAA/Aaa   N/A   90 days
Money Market Funds   25% of portfolio or $30mm whichever is greater   Follow SEC 2a-7 guidelines   Assets of at least $100mm, redemption on request   N/A

APPENDIX B

APPROVED BANKING INSTITUTIONS

    Banks authorized to conduct general investment business with the Company must meet the following credit requirements: *

U.S. BANKS

    


INTERNATIONAL BANKS

    

*
Banks which do not meet these criteria may be used in some circumstances, such as in a case where banking services from a qualified bank are not available. However, approval must be obtained in writing from the Chief Financial Officer and documentation must be received as to why a qualified bank was not used.

Bank Credit Analysis

    The Investment Policy shall employ the bank credit rating services of Thomson BankWatch as a benchmark for its bank credit analysis. BankWatch's ratings are based upon a qualitative and quantitative analysis of all segments of the organization. The ratings are BankWatch's assessment of the likelihood of receiving payment of principal and interest on a timely basis. The ratings incorporate BankWatch's opinion as to the vulnerability of the bank to adverse developments which may impact the market's perception of the company, thereby affecting the marketability of its securities.

Peer Group
       Overall strength and performance
A   Unquestioned strength, no perceived credit risk
B   Very strong credit, little or no credit risk
C   Average, with at least one fundamental weakness
D   Severe problems, uncertainty and vulnerability exist
E   Very serious problems, viability is in doubt

APPENDIX C

APPROVED SECURITIES DEALERS

QUALIFICATIONS

    Securities brokers meeting the following qualifications may buy and sell investments on behalf of the Company, and may act as a safekeeping agent for Company's securities.

EXHIBIT A
NOTICE OF REVOLVING LOAN BORROWING
                ,     

ABN AMRO BANK N.V.
  as Administrative Agent
Syndications Group
1325 Avenue of the Americas, 9th Floor
New York, NY 10019
Attn: Linda Boardman

    1.  Reference is made to that certain Credit Agreement, dated as of August 11, 1999 (the "Credit Agreement"), among Adobe Systems Incorporated ("Borrower"), the financial institutions listed in Schedule I to the Credit Agreement (the "Lenders") and ABN AMRO BANK N.V., as agent for Lenders (in such capacity, "Administrative Agent"). Unless otherwise indicated, all terms defined in the Credit Agreement have the same respective meanings when used herein.

    2.  Pursuant to Subparagraph 2.03(a) of the Credit Agreement, Borrower hereby irrevocably requests a Revolving Loan Borrowing upon the following terms:

    3.  Borrower hereby certifies to Administrative Agent and Lenders that, on the date of this Notice of Revolving Loan Borrowing and after giving effect to the requested Revolving Loan Borrowing:

    4.  Please disburse the proceeds of the requested Revolving Loan Borrowing to




    IN WITNESS WHEREOF, Borrower has executed this Notice of Revolving Loan Borrowing on the date set forth above.

 
 		  
ADOBE SYSTEMS INCORPORATED
 
 		  
 		  
 		  
 		  
 		  
 
 
 		  
By:		  
 		  
 
 
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
Title:		  
 		  
 
 
 		  
 		  
 		  
 		  
 		  
 
  By:    
 
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
Title:		  
 		  
 


EXHIBIT B
NOTICE OF FACILITY B TERM LOAN BORROWING
    ,  

ABN AMRO BANK N.V.
  as Administrative Agent
Syndications Group
1325 Avenue of the Americas, 9th Floor
New York, NY 10019
Attn: Linda Boardman

    1.  Reference is made to that certain Credit Agreement, dated as of August 11, 1999 (the "Credit Agreement"), among Adobe Systems Incorporated ("Borrower"), the financial institutions listed in Schedule I to the Credit Agreement (the "Lenders") and ABN AMRO BANK N.V., as agent for Lenders (in such capacity, "Administrative Agent"). Unless otherwise indicated, all terms defined in the Credit Agreement have the same respective meanings when used herein.

    2.  Pursuant to Subparagraph 2.03(b) of the Credit Agreement, Borrower hereby irrevocably requests the Facility B Term Loan Borrowing on the Facility B Revolving Loan Maturity Date upon the following terms:

Portion Amount
   Portion Type
   Interest Period
   LIBO Rate Basis
$         month[s]    
$         month[s]    
$         month[s]    
$         month[s]    
$         month[s]    
$         month[s]    

    3.  Borrower hereby certifies to Administrative Agent and Lenders that, on the date of this Notice of Facility B Term Loan Borrowing and after giving effect to the requested Borrowing:

    4.  The proceeds of the Facility B Term Loan Borrowing shall be distributed to the Facility B Lenders on the Facility B Revolving Loan Maturity Date to repay all Facility B Revolving Loans outstanding on that date.

    IN WITNESS WHEREOF, Borrower has executed this Notice of Facility B Term Loan Borrowing on the date set forth above.

 
 		  
ADOBE SYSTEMS INCORPORATED
 
 		  
 		  
 		  
 		  
 		  
 
 
 		  
By:		  
 		  
 
 
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
Title:		  
 		  
 
 
 		  
 		  
 		  
 		  
 		  
 
  By:    
 
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
Title:		  
 		  
 


EXHIBIT C
NOTICE OF INTEREST PERIOD SELECTION
    ,  

ABN AMRO BANK N.V.
  as Administrative Agent
Syndications Group
1325 Avenue of the Americas, 9th Floor
New York, NY 10019
Attn: Linda Boardman

    1.  Reference is made to that certain Credit Agreement, dated as of August 11, 1999 (the "Credit Agreement"), among Adobe Systems Incorporated ("Borrower"), the financial institutions listed in Schedule I to the Credit Agreement (the "Lenders") and ABN AMRO BANK N.V., as agent for Lenders (in such capacity, "Administrative Agent"). Unless otherwise indicated, all terms defined in the Credit Agreement have the same respective meanings when used herein.

    2.  Pursuant to Subparagraph 2.04(b) of the Credit Agreement, Borrower hereby irrevocably selects a new Interest Period for a [Revolving Loan Borrowing][Portion of the Facility B Term Loan Borrowing] as follows:

    IN WITNESS WHEREOF, Borrower has executed this Notice of Interest Period Selection on the date set forth above.

 
 		  
ADOBE SYSTEMS INCORPORATED
 
 		  
 		  
 		  
 		  
 		  
 
 
 		  
By:		  
 		  
 
 
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
Title:		  
 		  
 
 
 		  
 		  
 		  
 		  
 		  
 
  By:    
 
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
Title:		  
 		  
 

EXHIBIT D
NOTICE OF TERM LOAN CONVERSION
                ,     

ABN AMRO BANK N.V.
  as Administrative Agent
Syndications Group
1325 Avenue of the Americas, 9th Floor
New York, NY 10019
Attn: Linda Boardman

    1.  Reference is made to that certain Credit Agreement, dated as of August 11, 1999 (the "Credit Agreement"), among Adobe Systems Incorporated ("Borrower"), the financial institutions listed in Schedule I to the Credit Agreement (the "Lenders") and ABN AMRO BANK N.V., as agent for Lenders (in such capacity, "Administrative Agent"). Unless otherwise indicated, all terms defined in the Credit Agreement have the same respective meanings when used herein.

    2.  Pursuant to Subparagraph 2.04(c) of the Credit Agreement, Borrower hereby irrevocably requests to convert a Portion of the Facility B Term Loan Borrowing at the end of its current Interest Period as follows:

Portion Amount
   Portion Type
   Interest Period
   LIBO Rate Basis
$         month[s]    
$         month[s]    
$         month[s]    
$         month[s]    
$         month[s]    
$         month[s]    

    IN WITNESS WHEREOF, Borrower has executed this Notice of Term Loan Conversion on the date set forth above.

 
 		  
ADOBE SYSTEMS INCORPORATED
 
 		  
 		  
 		  
 		  
 		  
 
 
 		  
By:		  
 		  
 
 
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
Title:		  
 		  
 
 
 		  
 		  
 		  
 		  
 		  
 
  By:    
 
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
Title:		  
 		  
 


EXHIBIT E
REVOLVING LOAN NOTE

$     ,    
 
  
   
      ,    
   
   

    FOR VALUE RECEIVED, ADOBE SYSTEMS INCORPORATED, a Delaware corporation ("Borrower"), hereby promises to pay to the order of                   , a                  (" Lender"), the principal sum of                  DOLLARS ($        ) or such lesser amount as shall equal the aggregate outstanding principal balance of the Facility [A][B] Revolving Loans made by Lender to Borrower pursuant to the Credit Agreement referred to below (as amended from time to time, the "Credit Agreement"), on or before the [Facility A][Facility B Revolving Loan] Maturity Date specified in the Credit Agreement; and to pay interest on said sum, or such lesser amount, at the rates and on the dates provided in the Credit Agreement.

    Borrower shall make all payments hereunder, for the account of Lender's Applicable Lending Office, to Administrative Agent as indicated in the Credit Agreement, in lawful money of the United States and in same day or immediately available funds.

    Borrower hereby authorizes Lender to record on the schedule(s) annexed to this note the date and amount of each Revolving Loan and of each payment or prepayment of principal made by Borrower and agrees that all such notations shall constitute prima facie evidence of the matters noted; provided, however, that the failure of Lender to make any such notation shall not affect Borrower's obligations hereunder.

    This note is one of the Revolving Loan Notes referred to in the Credit Agreement, dated as of August 11, 1999, among Borrower, Lender and the other financial institutions from time to time parties thereto (collectively, the "Lenders") and ABN AMRO Bank N.V., as agent for Lenders. This note is subject to the terms of the Credit Agreement, including the rights of prepayment and the rights of acceleration of maturity set forth therein. Terms used herein have the meanings assigned to those terms in the Credit Agreement, unless otherwise defined herein.

    The transfer, sale or assignment of any rights under or interest in this note is subject to certain restrictions contained in the Credit Agreement, including Paragraph 8.05 thereof.

    Borrower shall pay all reasonable fees and expenses, including reasonable attorneys' fees, incurred by Lender in the enforcement or attempt to enforce any of Borrower's obligations hereunder not performed when due. Borrower hereby waives notice of presentment, demand, protest or notice of any other kind. This note shall be governed by and construed in accordance with the laws of the State of California.

    IN WITNESS WHEREOF, Borrower has executed this Revolving Loan Note on the date set forth above.

 
 		  
ADOBE SYSTEMS INCORPORATED
 
 		  
 		  
 		  
 		  
 		  
 
 
 		  
By:		  
 		  
 
 
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
Title:		  
 		  
 
 
 		  
 		  
 		  
 		  
 		  
 
  By:    
 
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
Title:		  
 		  
 

LOANS AND PAYMENTS OF PRINCIPAL

Date
   Type of
Loan
   Amount of
Loan
   Interest
Period
   Amount of
Principal Paid
or Prepaid
   Unpaid
Principal
Balance
   Notation
Made By
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


EXHIBIT F
TERM LOAN NOTE

$     ,    
 
  
   
      ,    
   
   

    FOR VALUE RECEIVED, ADOBE SYSTEMS INCORPORATED, a Delaware corporation ("Borrower"), hereby promises to pay to the order of            , a              ("Lender"), the principal sum of            DOLLARS ($       ), payable on the Facility B Term Loan Maturity Date; and to pay interest on the outstanding balance of said sum at the rates and on the dates provided in the Credit Agreement referred to below (as amended from time to time, the "Credit Agreement").

    Borrower shall make all payments hereunder, for the account of Lender's Applicable Lending Office, to Administrative Agent as indicated in the Credit Agreement, in lawful money of the United States and in same day or immediately available funds.

    This note is one of the Term Loan Notes referred to in the Credit Agreement, dated as of August 11, 1999, among Borrower, Lender and the other financial institutions from time to time parties thereto (collectively, the "Lenders") and ABN AMRO Bank N.V., as agent for Lenders. This note is subject to the terms of the Credit Agreement, including the rights of prepayment and the rights of acceleration of maturity set forth therein. Terms used herein have the meanings assigned to those terms in the Credit Agreement, unless otherwise defined herein.

    The transfer, sale or assignment of any rights under or interest in this note is subject to certain restrictions contained in the Credit Agreement, including Paragraph 8.05 thereof.

    Borrower shall pay all reasonable fees and expenses, including reasonable attorneys' fees, incurred by Lender in the enforcement or attempt to enforce any of Borrower's obligations hereunder not performed when due. Borrower hereby waives notice of presentment, demand, protest or notice of any other kind. This note shall be governed by and construed in accordance with the laws of the State of California.

    IN WITNESS WHEREOF, Borrower has executed this Term Loan Note on the date set forth above.

    ADOBE SYSTEMS INCORPORATED
 
 		  
 		  
 		  
 		  
 		  
 		  
 
    By:    
 
 		  
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
 		  
Title:		  
 		  
 
 
 		  
 		  
 		  
 		  
 		  
 		  
 
    By:    
 
 		  
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
 		  
Title:		  
 		  
 

EXHIBIT G
ASSIGNMENT AGREEMENT

    THIS ASSIGNMENT AGREEMENT, dated as of the date set forth at the top of Attachment 1 hereto, by and among:

RECITALS

    A.  Assignor Lender is one of Lenders which is a party to the Credit Agreement dated as of August 11, 1999, by and among ADOBE SYSTEMS INCORPORATED ("Borrower,") Assignor Lender and the other financial institutions parties thereto (collectively, the "Lenders") and ABN AMRO BANK N.V., as agent for Lenders (in such capacity, "Administrative Agent"). (Such credit agreement, as amended, supplemented or otherwise modified in accordance with its terms from time to time to be referred to herein as the "Credit Agreement").

    B.  Assignor Lender wishes to sell, and Assignee Lender wishes to purchase, all or a portion of Assignor Lender's rights under the Credit Agreement pursuant to Subparagraph 8.05(c) of the Credit Agreement.

AGREEMENT

    Now, therefore, the parties hereto hereby agree as follows:

    1.  Definitions.  Except as otherwise defined in this Assignment Agreement, all capitalized terms used herein and defined in the Credit Agreement have the respective meanings given to those terms in the Credit Agreement.

    2.  Sale and Assignment.  Subject to the terms and conditions of this Assignment Agreement, Assignor Lender hereby agrees to sell, assign and delegate, without recourse except to the extent of its representations and warranties expressly set forth herein, to each Assignee Lender and each Assignee Lender hereby agrees to purchase, accept and assume the rights, obligations and duties of a Lender under the Credit Agreement and the other Credit Documents having Commitments and Loans as set forth under the caption "Commitments or Loans Transferred" opposite such Assignee Lender's name on Attachment 1 hereto and corresponding Proportionate Shares. Such sale, assignment and delegation shall become effective on the date designated in Attachment 1 hereto (the "Assignment Effective Date"), which date shall be, unless Administrative Agent shall otherwise consent, at least five (5) Business Days after the date following the date counterparts of this Assignment Agreement are delivered to Administrative Agent in accordance with Paragraph 3 hereof.

    3.  Assignment Effective Notice.  Upon (a) receipt by Administrative Agent of five (5) counterparts of this Assignment Agreement (to each of which is attached a fully completed Attachment 1), each of which has been executed by Assignor Lender and each Assignee Lender (and, to the extent required by Subparagraph 8.05(c) of the Credit Agreement, by Borrower and Administrative Agent) and (b) payment to Administrative Agent of the registration and processing fee specified in Subparagraph 8.05(f) of the Credit Agreement by Assignor Lender, Administrative Agent will transmit to Borrower, Assignor Lender and each Assignee Lender an Assignment Effective Notice substantially in the form of Attachment 2 hereto, fully completed (an "Assignment Effective Notice").

    4.  Assignment Effective Date.  At or before 12:00 noon (local time of Assignor Lender) on the Assignment Effective Date, each Assignee Lender shall pay to Assignor Lender, in immediately available or same day funds, an amount equal to the purchase price, as agreed between Assignor Lender and such Assignee Lender (the "Purchase Price"), for the Commitments, Loans and Proportionate Shares purchased by such Assignee Lender hereunder. Effective upon receipt by Assignor Lender of the Purchase Price payable by each Assignee Lender, the sale, assignment and delegation to such Assignee Lender of such Commitments, Loans and Proportionate Shares as described in Paragraph 2 hereof shall become effective.

    5.  Payments After the Assignment Effective Date.  Assignor Lender and each Assignee Lender hereby agree that Administrative Agent shall, and hereby authorize and direct Administrative Agent to, allocate amounts payable under the Credit Agreement and the other Credit Documents as follows:

Assignor Lender and each Assignee Lender shall make any separate arrangements between themselves which they deem appropriate with respect to payments between them of amounts paid under the Credit Documents on account of the Commitments, Loans and Proportionate Shares assigned to such Assignee Lender, and neither Administrative Agent nor Borrower shall have any responsibility to effect or carry out such separate arrangements.

    6.  Delivery of Notes.  On or prior to the Assignment Effective Date, Assignor Lender will deliver to Administrative Agent the Notes, if any, payable to Assignor Lender. On or prior to the Assignment Effective Date, Borrower will, if so requested by Assignee Lender(s) and Assignor Lenders, deliver to Administrative Agent new Notes for each Assignee Lender and Assignor Lender, in each case in principal amounts reflecting, in accordance with the Credit Agreement, their respective Commitments and Loans (as adjusted pursuant to this Assignment Agreement). Each such new Note shall be dated as provided in Subparagraph 8.05(c) of the Credit Agreement. Promptly after the Assignment Effective Date, Administrative Agent will send to each of Assignor Lender and the Assignee Lenders its new Notes and will send to Borrower the superseded Notes payable to Assignor Lender, marked "Replaced."

    7.  Delivery of Copies of Credit Documents.  Concurrently with the execution and delivery hereof, Assignor Lender will provide to each Assignee Lender (if it is not already a Lender party to the Credit Agreement) conformed copies of all documents delivered to Assignor Lender on or prior to the Closing Date in satisfaction of the conditions precedent set forth in the Credit Agreement.

    8.  Further Assurances.  Each of the parties to this Assignment Agreement agrees that at any time and from time to time upon the written request of any other party, it will execute and deliver such further documents and do such further acts and things as such other party may reasonably request in order to effect the purposes of this Assignment Agreement.

    9.  Further Representations, Warranties and Covenants.  Assignor Lender and each Assignee Lender further represent and warrant to and covenant with each other, Administrative Agent and Lenders as follows:

    10.  Effect of this Assignment Agreement.  On and after the Assignment Effective Date, (a) each Assignee Lender shall be a Lender with Commitments and Loans equal to the Commitments and Loans set forth under the caption "Commitments or Loans After Assignment" opposite such Assignee Lender's name on Attachment 1 hereto and corresponding Proportionate Shares and shall have the rights, duties and obligations of such a Lender under the Credit Agreement and the other Credit Documents and (b) Assignor Lender shall be a Lender with Commitments and Loans equal to the Commitments and Loans set forth under the caption "Commitments or Loans After Assignment" opposite Assignor Lender's name on Attachment 1 hereto and corresponding Proportionate Shares and shall have the rights, duties and obligations of such a Lender under the Credit Agreement and the other Credit Documents, or, if the Commitments and Loans of Assignor Lender have been reduced to $0, Assignor Lender shall cease to be a Lender and shall have no further obligation to make any Loans.

    11.  Miscellaneous.  This Assignment Agreement shall be governed by, and construed in accordance with, the laws of the State of California. Paragraph headings in this Assignment Agreement are for convenience of reference only and are not part of the substance hereof.

    IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement to be executed by their respective duly authorized officers as of the date set forth in Attachment 1 hereto.

    , as
   
   
    Assignor Lender
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
    By:    
 
 		  
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
 		  
Title:		  
 		  
 
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
    , as an
   
   
    Assignee Lender
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
    By:    
 
 		  
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
 		  
Title:		  
 		  
 
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
    , as an
   
   
    Assignee Lender
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
    By:    
 
 		  
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
 		  
Title:		  
 		  
 
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
    , as an
   
   
    Assignee Lender
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
    By:    
 
 		  
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
 		  
Title:		  
 		  
 
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 

CONSENTED TO AND ACKNOWLEDGED BY:    
 
ADOBE SYSTEMS INCORPORATED		  
 		  
 
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
By:    
       
 
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
 
 
 		  
 		  
Title:		  
 		  
 
 
 		  
 		  
 		  
 
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
By:    
       
 
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
 
 
 		  
 		  
Title:		  
 		  
 
 
 		  
 		  
 		  
 
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
,        
       
As Administrative Agent        
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
By:    
       
 
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
 
 
 		  
 		  
Title:		  
 		  
 
 
 		  
 		  
 		  
 
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
ACCEPTED FOR RECORDATION IN REGISTER:        
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
,        
       
As Administrative Agent        
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
By:    
       
 
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
 
 
 		  
 		  
Title:		  
 		  
 
 
 		  
 		  
 		  
 


ATTACHMENT 1
TO ASSIGNMENT AGREEMENT
    ,  
ATTACHMENT 1
TO ASSIGNMENT AGREEMENT
PART A

 
   Commitments or Loans Assigned
   Commitments or Loans After Assignment
Assignor Lender:
   Facility A Commitment
   Facility B Commitment/Loan
   Facility A Commitment
   Facility B Commitment/Loan
    $     $     $     $  
Assignee Lenders:                        
    $     $     $     $  
    $     $     $     $  
    $     $     $     $  
    $     $     $     $  

PART B

[Assignee Participant]

Domestic Lending Office:

Euro-Dollar Lending Office:

Address for Notices:

Wiring Instructions for the U.S. Borrowing:

C.  ASSIGNMENT EFFECTIVE DATE:
                        ,  

ATTACHMENT 2
TO ASSIGNMENT AGREEMENT
FORM OF
ASSIGNMENT EFFECTIVE NOTICE

    Reference is made to the Credit Agreement, dated as of August 11, 1999, among ADOBE SYSTEMS INCORPORATED ("Borrower"), the financial institutions parties thereto (the "Lenders") and ABN AMRO BANK N.V., as agent for Lenders (in such capacity, "Administrative Agent"). Administrative Agent hereby acknowledges receipt of five executed counterparts of a completed Assignment Agreement, a copy of which is attached hereto. [Note: Attach copy of Assignment Agreement.] Terms defined in such Assignment Agreement are used herein as therein defined.

    1.  Pursuant to such Assignment Agreement, you are advised that the Assignment Effective Date will be            .

    2.  Pursuant to such Assignment Agreement, Assignor Lender is required to deliver to Administrative Agent on or before the Assignment Effective Date the Note, if any, payable to Assignor Lender.

    3.  Pursuant to such Assignment Agreement, Borrower is required to deliver to Administrative Agent on or before the Assignment Effective Date the following Notes, each dated        [Insert appropriate date]:

    [Describe each new Note, if any, for Assignor Lender and each Assignee Lender as to principal amount.]

    4.  Pursuant to such Assignment Agreement, each Assignee Lender is required to pay its Purchase Price to Assignor Lender at or before 12:00 Noon on the Assignment Effective Date in immediately available funds.

 
 		  
Very truly yours,

ABN AMRO BANK N.V.
  as Administrative Agent
 
 		  
 		  
 		  
 		  
 		  
 
 
 		  
By:		  
 		  
 
 
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
Title:		  
 		  
 



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