ADOBE SYSTEMS INC
10-Q, 1999-10-15
PREPACKAGED SOFTWARE
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Exhibit 10.53

AMENDED, RESTATED AND CONSOLIDATED MASTER
LEASE OF LAND AND IMPROVEMENTS

By and Between

SUMITOMO BANK LEASING AND FINANCE, INC.,

a Delaware corporation,

as Landlord,

and

ADOBE SYSTEMS INCORPORATED,

a Delaware corporation,

as Tenant

THIS LEASE IS NOT INTENDED TO CONSTITUTE A TRUE LEASE
FOR INCOME TAX PURPOSES. SEE SECTION 21.2

AMENDED, RESTATED AND CONSOLIDATED
MASTER LEASE OF LAND AND IMPROVEMENTS

    THIS AMENDED, RESTATED AND CONSOLIDATED MASTER LEASE OF LAND AND IMPROVEMENTS (this "Lease") is by and between SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware corporation ("Landlord"), and ADOBE SYSTEMS INCORPORATED, a Delaware corporation ("Tenant"), and is entered into as of the date set forth in Article I and shall be effective and binding upon the parties hereto as of such date. Capitalized terms used in this Lease shall have the definitions set forth in Appendix A or in the text of this Lease.

RECITALS:

    WHEREAS, Landlord and Tenant are parties to (a) that certain Sublease of the Land and Lease of the Improvements, dated October 12, 1994, as amended by that certain First Amendment to Sublease of the Land and Lease of the Improvements, dated August 15, 1996; and (b) that certain Sublease of the Land and Lease of the Improvements, dated August 15, 1996 (collectively, the "Original Leases"), pursuant to which Landlord funded advances for the construction of improvements on the land described therein;

    WHEREAS, Landlord and Tenant are parties to (a) that certain Construction Management Agreement, dated October 12, 1994, and (b) that certain Construction Management Agreement, dated August 15, 1996 (collectively, the "Original Construction Management Agreements"), pursuant to which Landlord, as owner, appointed Tenant, as construction manager, to manage the construction of the improvements on the land described in the Original Leases;

    WHEREAS, in connection with execution of the Original Leases, Tenant, as trustor, executed in favor of Landlord, as beneficiary (a) that certain Deed of Trust, Financing Statement, Security Agreement and Fixture Filing (with Assignment of Rents and Leases), dated and recorded October 12, 1994, in the Official Records of Santa Clara County as Document No. 12684590, as amended by a First Amendment to Deed of Trust, Financing Statement, Security Agreement and Fixture Filing (with Assignment of Rents and Leases), dated and recorded August 15, 1996, in the Official Records of Santa Clara County as Document No. 13410225; and (b) that certain Deed of Trust, Financing Statement, Security Agreement and Fixture Filing (with Assignment of Rents and Leases), dated and recorded August 15, 1996, in the Official Records of Santa Clara County as Document No. 13410223 (collectively, the "Original Deeds of Trust");

    WHEREAS, under the Original Leases, Tenant delivered to Landlord certain money as a security deposit (the "Original Security Deposit"), which Original Security Deposit was held by Landlord as security for the payment of rent under the Original Leases;

    WHEREAS, Landlord and Tenant are also parties to that certain Pledge Agreement, dated October 12, 1994 (the "Original Pledge Agreement") pursuant to which Tenant deposited and pledged to Landlord certain money and securities, as described therein;

    WHEREAS, Landlord and Sumitomo Bank of New York Trust Company, as custodian (the "Custodian") also entered into that certain Institutional Custody Agreement, dated October 12, 1994 (the "Original Custodial Agreement") pursuant to which the Custodian was appointed as custodian for Landlord to hold the collateral deposited under the Original Pledge Agreement;

    WHEREAS, the obligation of Landlord to set off the Security Deposit against certain amounts owed by Tenant under the Original Lease dated August 15, 1996, and certain other obligations of Landlord to Tenant were secured by that certain Deed of Trust, Security Agreement and Fixture Filing, dated and recorded August 15, 1996, in the Official Records of Santa Clara County as Document No. 13410226 (the "Original Adobe Deed of Trust"); and

    WHEREAS, Landlord and Tenant wish to amend the transactions described in the above Recitals in certain respects, including by (a) entering into a Rent Purchase Agreement and Participation Agreement, pursuant to which the Rent Purchasers will purchase a portion of the Lease Investment Balance and Tenant will make payment of Base Rent to Landlord and Administrative Agent (for the benefit of the Rent Purchasers), in accordance with the terms thereof; (b) returning to Tenant the Original Security Deposit and all collateral pledged to Landlord under the Original Pledge Agreement; (c) terminating the Original Pledge Agreement and the Original Custodial Agreement; (d) reconveying the Original Adobe Deed of Trust; (e) amending, restating and consolidating the Original Deeds of Trust by the execution and delivery of the Amended Deeds of Trust; and (f) amending, restating and consolidating the Original Leases by the execution and delivery of this Lease.

AGREEMENT:

    NOW, THEREFORE, in consideration of the Base Rent reserved herein, and the terms, covenants and conditions set forth below, Landlord and Tenant hereby agree as follow, which agreement shall amend, restate and consolidate the Original Leases and replace the Original Leases in full:

ARTICLE I
BASIC LEASE PROVISIONS

 
1.1		  
 		  
 Date of Lease:		  
 		  
August 11, 1999.
 
1.2		  
 		  
 Landlord:		  
 		  
Sumitomo Bank Leasing and Finance, Inc., a Delaware corporation.
 
1.3		  
 		  
 Tenant:		  
 		  
Adobe Systems Incorporated, a Delaware corporation.
 
1.4		  
 		  
 Administrative Agent:		  
 		  
ABN AMRO Bank N.V., as agent for the Rent Purchasers, collectively.
 
1.5		  
 		  
 Land:		  
 		  
The tract of land more particularly described on Schedule 1 to a particular Lease Supplement, executed and delivered pursuant to this Lease, together with all easements, rights of way, appurtenances and other rights and benefits belonging or pertaining to such tract of land. Landlord makes no representations as to the accuracy of the description of any Land. Land may be further subject to a Ground Lease, as further described in the Lease Supplement applicable thereto.
 
1.6		  
 		  
 Parcels:		  
 		  
The Land and Improvements located on such Land.

 
1.7		  
 		  
 Term:		  
 		  
The term of this Lease ("Master Lease Term") shall commence on the Date of Lease set forth in Section 1.1 above and shall expire five (5) years from the Date of Lease (the "Expiration Date"). The term of each Lease Supplement ("Lease Supplement Term") shall commence on the date set forth in the applicable Lease Supplement and expire on the Expiration Date. The Master Lease Term may be extended based upon terms that are mutually agreeable to Landlord, Tenant, Administrative Agent, and each Rent Purchaser (the "Extension Term") and in accordance with Section 4.3 below. The Master Lease Term, the Extension Term and Lease Supplement Term are sometimes collectively referred to herein as the "Term." The Term shall cease upon, and shall not refer to any period of time after, termination of this Lease or with respect to any Lease Supplement, the termination of such Lease Supplement (whether pursuant to the terms of this Lease or such Lease Supplement, by operation of law, or otherwise).
 
1.8		  
 		  
 Base Rent:		  
 		  
As described in Appendix A.
 
1.9		  
 		  
 Appraisal:		  
 		  
The appraisal of the Improvements located on the Land described in Lease Supplement No. 1 and Lease Supplement No. 2 executed as of the Date of Lease and made by Cushman & Wakefield of California prior to the Date of Lease to determine the fair market value of such Improvements as of the Date of Lease (the "Present Value") and the fair market value of such Improvements estimated as of the Expiration Date (the "Estimated Future Value").

 
 1.10		  
 		  
 Addresses for Notices:		  
 		  
 
 
 		  
 		  
LANDLORD:		  
 		  
 TENANT:
 
 		  
 		  
Sumitomo Bank Leasing and Finance, Inc.
277 Park Avenue
New York, NY 10172
Attention: Chief Credit Officer		  
 		  
Adobe Systems Incorporated
345 Park Avenue
San Jose, CA 95110
Attention: Treasurer
 
 		  
 		  
With a copy to:		  
 		  
With a copy to:
 
 		  
 		  
Graham & James LLP
One Maritime Plaza, Suite 300
San Francisco, CA 94111
Attention: Bruce W. Hyman, Esq.		  
 		  
Adobe Systems Incorporated
345 Park Avenue
San Jose, CA 95110
Attention: General Counsel
 
  		  
 		  
ADMINISTRATIVE AGENT:		  
 		  
and to:
 
 		  
 		  
ABN AMRO Bank N.V.
Syndications Group
1325 Avenue of the Americas, 9th Floor
New York, NY 10019
Attention: Linda Boardman		  
 		  
Shartsis, Friese & Ginsburg
One Maritime Plaza, 18th Floor
San Francisco, CA 94111
Attention: David H. Kremer, Esq.
 
 		  
 		  
and to:		  
 		  
 
 
 		  
 		  
ABN AMRO Bank N.V.
101 California Street, Suite 4550
San Francisco, CA 94111-5812
Attention: Jamie Dillon		  
 		  
 
 
 		  
 		  
 		  
 		  
 

    This Article 1 is intended to supplement and/or summarize the provisions set forth in the balance of this Lease. If there is any conflict between any provisions contained in this Article 1 and the balance of this Lease, the balance of this Lease shall control.

ARTICLE II
DEFINITIONS

    All defined terms for the Operative Documents are contained in Appendix A.

ARTICLE III
DEMISE

    3.1  Parcels.  Subject to the terms, covenants and conditions contained herein and in each Lease Supplement, Landlord shall, upon delivery of a Lease Supplement executed by Tenant, agree to lease to Tenant the Parcel covered by such Lease Supplement and Tenant agrees to lease from Landlord the Parcel covered by such Lease Supplement, together with all rights, privileges, easements and appurtenances relating to the Parcels. Tenant agrees that it shall use the Parcels in accordance with all of the terms and conditions of the Ground Lease, if applicable, and shall comply with all terms and conditions of the Ground Lease.

ARTICLE IV
TERM

    4.1  Term.  The Term of this Lease is specified in Article 1.

    4.2  Holding Over.  If Tenant remains in possession of a Parcel after the expiration of the Term without executing a new lease, such holding over shall be construed as a tenancy from month-to-month, subject to all terms, covenants and conditions herein contained and in the applicable Lease Supplement. The Base Rent shall be calculated based upon the Default Rate and shall be required to be paid by Tenant during such holding over in the same manner as during the Term.

    4.3  Extension of Term.  Provided that (i) no Event of Default exists hereunder or would exist except for the passage of time or giving of notice, and (ii) Landlord, in its sole and absolute discretion, consents, Tenant may request, upon not less than twelve (12) months prior written notice to Landlord and Administrative Agent, the extension of the Term of this Lease for an additional period under terms which must be mutually agreeable to Landlord and Tenant. Landlord's consent to the terms of such extension shall be conditioned upon the approval of Administrative Agent and each Rent Purchaser, which may be granted or withheld by such entity in its sole discretion.

ARTICLE V
IMPROVEMENTS

    5.1  Improvements.  All Improvements existing on Land covered by Lease Supplement No. 1 and Lease Supplement No. 2 executed as of the Date of Lease were constructed under the Original Construction Management Agreements. Tenant represents and warrants that all such Improvements were constructed in accordance with the Original Lease and the Original Construction Management Agreements.

    5.2  Title to and Nature of Improvements.  Subject to the provisions of this Lease, including, without limitation, Section 21.2, Tenant agrees that any and all Improvements of whatever nature at any time constructed, placed or maintained on the Land shall be and remain the property of Landlord, subject to Tenant's rights under this Lease and the rights of Administrative Agent and Rent Purchasers under the Operative Documents.

ARTICLE VI
FUNDING

    6.1  Funding.  On the Funding Date, the entire Commitment Amount shall have been funded. Landlord, Administrative Agent and all Rent Purchasers shall have no obligation to fund any further Advances to Tenant after the Date of Lease.

ARTICLE VII
RENT

    7.1  Base Rent.  

    (a) The Base Rent to be paid by Tenant under each Lease Supplement shall begin to accrue on the Rent Commencement Date as specified in such Lease Supplement. Tenant shall pay Base Rent by wire transfer in accordance with the terms of the Participation Agreement. Tenant shall be supplied with such bank account information as Tenant shall require to enable payment by wire transfer of Federal funds. Tenant shall wire transfer to such account in accordance with the terms of the Participation Agreement until notified of any account change. Base Rent payments shall be payable monthly in arrears on the fifteenth (15th) day of each successive month, except that the last installment of Base Rent shall be payable on the last day of the Term (each such date shall be a "Rent Payment Date") and Base Rent payments shall be made to Landlord and Administrative Agent in accordance with the terms of the Participation Agreement. No sooner than thirty (30) days or later than ten (10) days prior to the due date for any installment of Base Rent hereunder, Landlord and Administrative Agent each shall deliver to Tenant Notices indicating the exact dollar amount of the Base Rent that is due on such due date to Landlord or Administrative Agent, as applicable (an "Invoice"). If either Landlord or Administrative Agent fails to send an Invoice, Tenant shall pay the amount shown on the previous month's Invoice from such Entity in accordance with the terms of the Participation Agreement. If Tenant's payment of the amount shown on the previous month's Invoice is less than the Base Rent due such Entity for such month, Tenant shall pay the difference within ten (10) days after receipt of notice from such Entity of such shortfall. If Tenant's payment of the amount shown on the previous month's Invoice exceeds the Base Rent due such Entity for such month, then (provided that no Event of Default has occurred which is continuing), such excess amount shall be credited to the next installment of Base Rent due to such Entity.

    (b) Tenant may select the number and amounts of the Portions into which the Lease Investment Balance is to be divided and the Rental Period for each such Portion by delivering to Administrative Agent and, to the extent Rental Periods may be selected for the Landlord Contribution, Landlord, not less than three (3) Business Days prior to the Date of Lease and thereafter the last day of each Rental Period for a Portion and in accordance with Section 21.3, an irrevocable written notice in the form of Exhibit I, appropriately completed (a "Notice of Rental Period Selection"), subject to the following:

    7.2  Proration.  If the Term for any Lease Supplement or this Lease expires or is otherwise terminated on other than the fifteenth (15th) day of a calendar month, then Base Rent shall be prorated for the period from the immediately preceding Rent Payment Date until the end of the Term on an Actual/360 Basis.

    7.3  No Abatement of Rent.  Except as a consequence of a reduction in the Lease Investment Balance, Tenant shall not be entitled to any abatement, diminution, reduction, setoff or postponement of Base Rent as a consequence of any inconvenience to, interruption of, cessation of or loss of Tenant's use or enjoyment of the Parcels or as a result of any reason whatsoever, including without limitation, the breach by Landlord of this Lease or the breach by Landlord or any other Entity of any Operative Document.

    7.4  Delinquent Rent.  Any Base Rent not paid on the due date shall accrue interest at the Default Rate from the date such Base Rent was originally due until the date such Base Rent is paid. All interest accrued on past due Base Rent shall be due and payable by Tenant at the time the Base Rent is paid, or upon demand by Landlord or Administrative Agent, if earlier.

    7.5  Additional Rent.  

    7.6  Rent Upon Default.  Tenant agrees to pay, and Landlord agrees to accept, the entire Lease Investment Balance as Additional Rent upon an Event of Default pursuant to Section 19.1 below. If Tenant pays the entire Lease Investment Balance, and any other sums owing Landlord, Administrative Agent and each Rent Purchaser, pursuant to Sections 7.6 and 19.1 below, Landlord shall reconvey the applicable Security Instruments to Tenant and Landlord shall deliver to Tenant a duly executed and acknowledged grant deed conveying title to each of the Parcels to Tenant or Tenant's designee.

    7.7  Security Deposit; Pledge Securities; Reconveyance and Termination.  The Original Security Deposit held by Landlord pursuant to the Original Leases shall be returned to Tenant on the Date of Lease. The pledged securities and collateral held by Landlord and/or any custodian under the Original Pledge Agreement and the Original Custodial Agreement shall be returned to Tenant on the Date of Lease in accordance with the provisions of the Original Pledge Agreement and the Original Custodial Agreement governing the return of such pledged securities and collateral upon the expiration or termination of the Original Pledge Agreement. On the Date of Lease, the Original Adobe Deeds of Trust shall be amended and the Original Pledge Agreement and Original Custodial Agreement shall be terminated.


ARTICLE VIII
TAXES; ADDITIONAL CHARGES; GROSS UP

    8.1  Real Estate Taxes.  

    (a) From and after the date of each Lease Supplement, Tenant shall pay during the Term directly to the appropriate taxing authority all Real Estate Taxes (as defined below) and provide Landlord and Administrative Agent a certified copy of an original official receipt received by Tenant showing payment thereof. If the date of each Lease Supplement occurs on, or the Lease Supplement Term expires or otherwise terminates on, any date other than the beginning or end of a taxable year, Tenant's obligation to pay Real Estate Taxes shall be prorated on the basis of a 365-day year, so as to include only that portion of the taxable year which is a part of the Lease Supplement Term. Unless a termination of the Lease results from the purchase of the Parcels pursuant to Article 20 below, any Real Estate Taxes levied against the Parcels which accrue during the Term of this Lease but which would not be due and payable to the appropriate taxing authority until after the expiration of the Term of this Lease (as the same may be extended) shall be paid by Tenant to Landlord upon such termination. Landlord shall pay such amounts to the appropriate taxing authority on a timely basis.

    (b) Except to the extent that Real Estate Tax bills and statements are sent directly to Tenant by the taxing authority, upon receipt by Landlord of the tax bills or statements, Landlord will use reasonable efforts to promptly advise Tenant in writing of all Real Estate Taxes and shall deliver copies of all applicable tax bills or statements to Tenant. Tenant shall pay directly to the taxing authority all Real Estate Taxes prior to the later of (i) thirty (30) days after receipt by Tenant from Landlord of a copy of such bills and statements referred to above, or (ii) five (5) Business Days prior to delinquency. As used herein, the term "Real Estate Taxes" shall mean any and all taxes, governmental fees and similar charges or assessments levied or assessed against the Improvements and/or the Land including, without limitation, ad valorem taxes and special assessments applicable to real property specifically set forth in a Ground Lease; provided, however, that Real Estate Taxes shall not include any Landlord Taxes (as defined below). Real Estate Taxes shall also include any and all documentary, transfer, sales, mortgage, recording or similar taxes imposed on Landlord or Tenant in connection with any sale of the Parcels to a third party in accordance with this Lease following an Event of Default by Tenant or in a transaction to which Tenant is a party. As used herein, the term "Landlord Taxes" shall mean any and all franchise, gains, gift, succession, excess profits, gross receipts, revenue, estate, rental, income or similar taxes or taxes in lieu thereof imposed upon Landlord or any party other than Tenant (or an affiliate thereof) and any withholding tax imposed as a collection device for, in lieu of, or otherwise related to any of the foregoing without regard to whether such tax is required to be collected by Tenant and without regard to whether Tenant would be liable for such withholding tax in the event it failed to so withhold. For purposes of the foregoing, an income tax shall include, without limitation, any tax imposed under the United States Internal Revenue Code, as well as any tax which could qualify as an "income tax" under United States Treasury Regulation Section 1.901-2 (except to the extent any such statute or regulation is subsequently modified to include a tax or other governmental charge of a materially different type and nature from the taxes currently described therein) and any income tax which may be payable under the laws of any jurisdiction either now or in the future. Real Estate Taxes for any given tax year shall exclude assessment installments that are not due and payable during such tax year.

    8.2  Personal Property Taxes.  Tenant shall pay directly to the appropriate taxing authorities prior to delinquency any and all taxes and assessments levied or assessed during the Term upon or against Tenant's furniture, equipment, trade fixtures and any other personal property in the Parcels.

    8.3  Right to Contest.  Tenant shall not be required to pay any Real Estate Taxes or any other taxes for which Tenant is liable hereunder (including, without limitation, any taxes for which Tenant is required to indemnify Landlord under Section 22.1) (including penalties and interest), so long as (i) Tenant shall contest the same or the validity thereof by appropriate legal proceedings in such a manner to prevent the sale of any portion of the Parcels and (ii) the position to be taken by Tenant pursuant to such contest would have a realistic possibility of success if litigated. For purposes of this Lease, Tenant may conclusively establish that a position to be taken in a contest would have a realistic possibility of success if litigated by providing to Landlord a letter from counsel stating an opinion to such effect. In the event of any such contest, Tenant shall, within thirty (30) days after the final determination thereof, pay and discharge the amounts determined to be due in accordance therewith and with the provisions of this Lease, together with any penalties, fines, interest, costs and expenses that may have accrued thereon or that may have resulted from Tenant's contest. Tenant also shall have a right to contest any taxes for which it is liable hereunder, but with regard to which the position to be taken pursuant to such contest would not have a realistic possibility of success if litigated, provided that Tenant pays such taxes on or prior to the date upon which such taxes are asserted to be due by the relevant governmental authority. Notwithstanding the foregoing provisions of this Section 8.3, Tenant shall have an unconditional right to contest (without prior payment) any taxes imposed by law upon Tenant rather than upon Landlord. Tenant's decision to pay any taxes prior to contesting its or another party's underlying liability therefor shall not be deemed to imply or suggest that the position to be taken in such contest would not have a realistic possibility of success if litigated. Landlord shall cooperate fully with Tenant in connection with the exercise of Tenant's right of contest contained herein, and in the event that applicable law shall require that Landlord, rather than Tenant, pursue legal proceedings for such contest, Landlord will initiate and pursue such contest upon Tenant's request and in accordance with Tenant's instructions (including, without limitation, Tenant's instructions as to the selection of legal counsel and matters of strategy or settlement); provided, however, that Landlord shall not be subject to any liability for the payment of any costs or expenses in connection with any such contest or proceedings, and Tenant will indemnify and save harmless Landlord from any such costs and expenses (including, without limitation, reasonable attorneys' fees, costs of court and appraisal costs), reimbursing Landlord therefor upon demand (or paying such costs and expenses directly when due, all as directed by Landlord). Tenant shall be entitled to any refund of any taxes and penalties or interest from any governmental authority to the extent the refund represents moneys paid to the governmental authority by Tenant or paid by Landlord and reimbursed by Tenant.

    8.4  Additional Charges.  All payments made by Tenant under this Lease and each other Operative Document shall be made free and clear of, and without reduction or withholding for or on account of, any present or future taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed pursuant to any Legal Requirement, excluding, however, any Landlord Taxes (all such nonexcluded taxes, levies, imposts, deductions, charges or withholdings being hereinafter called "Additional Charges"). Tenant shall be responsible for the payment of any such Additional Charges; and if any such Additional Charges are required to be withheld from any amounts payable to Landlord, Administrative Agent or any Rent Purchaser hereunder or under any other Operative Document, then the amounts so payable to Landlord, Administrative Agent or such Rent Purchaser shall be increased by an amount ("Additional Amount") necessary to yield to Landlord, Administrative Agent or such Rent Purchaser (after payment of all Additional Charges) the Base Rent, Additional Rent and other amounts payable hereunder or under any other Operative Document at the rates or in the amounts specified in this Lease or such other Operative Document. Whenever any Additional Charges are required to be withheld by Tenant, such Additional Charges shall be deducted or withheld by Tenant, and shall be paid by Tenant to the appropriate governmental authority in accordance with applicable Legal Requirements. As promptly as possible thereafter, Tenant shall send to Landlord and Administrative Agent for their own accounts a copy of an original official receipt (or other evidence of payment) received by Tenant showing payment thereof. If Tenant is required to pay Landlord, Administrative Agent or any Rent Purchaser any Additional Amount, Landlord shall, and shall request that Administrative Agent and the applicable Rent Purchaser, use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change its jurisdiction if the making of such a change would avoid the need for, or reduce to the greatest extent possible the amount of, any such Additional Amount which may thereafter accrue and would not, in the reasonable judgment of Landlord, Administrative Agent or such Rent Purchaser, be otherwise disadvantageous to it. The agreements in this Section 8.4 shall survive the termination of this Lease with respect to any Additional Charges or payments that become due during the Term.

ARTICLE IX
INSURANCE

    9.1  Liability Insurance.  At all times during the Term, Tenant shall obtain at Tenant's sole cost and expense a policy or policies of commercial general liability insurance on an "occurrence" basis against claims for "personal injury" liability, including bodily injury, death or property damage liability. The liability insurance policy shall contain coverage limits no less than the following: (1) Three Million Dollars ($3,000,000) per person; (2) Five Million Dollars ($5,000,000) per incident; and (3) One Million Dollars ($1,000,000) for property damage.

    9.2  Builders' Risk Insurance.  With respect to any Improvements which may be under construction and not yet covered by insurance under the terms of Section 9.3, Tenant shall maintain or cause to be maintained at Tenant's sole cost and expense a policy or policies of builders' risk insurance in an amount equal to the value upon completion of the work (exclusive of land, foundation, excavation, grading, landscaping, architectural and development fees and other items customarily excluded from such coverage), insuring against the risks customarily insured against under such insurance, including fire, vandalism, malicious mischief, sprinkler leakage, lightning, and windstorm.

    9.3  All-Risk Insurance.  With respect to any Improvements now or hereafter situated on the Land, at all times, Tenant shall, at Tenant's sole cost and expense, obtain and maintain, or cause to be obtained and maintained, (a) a policy or policies of all-risk insurance covering the Improvements, providing coverage against loss or damage by fire, vandalism, malicious mischief, sprinkler leakage, lightning, windstorm, and other insurable perils, as, under good insurance practice, from time to time are insured against under all-risk coverage for properties of similar character, age and location in an amount or amounts not less than one hundred percent (100%) of the then actual replacement cost (exclusive of land, foundation, excavations, grading, landscaping, architectural and development fees and other items customarily excluded from such coverage and without any deduction for depreciation); (b) on and after September 15, 1999, earthquake coverage for the Improvements (excluding any Tenant's Property) in the amount of not less than $10,000,000.00, with a deductible of not more than $1,000,000.00; and (c) standard flood coverage.

    9.4  General Requirements.  The insurance required under this Article IX may be furnished under a "primary" policy and an "umbrella" policy or policies. Landlord, Administrative Agent and each Rent Purchaser shall be named as an additional insured under Tenant's policy of insurance required under Section 9.1; and such policies shall contain an endorsement for cross-liability coverage. Landlord shall be named as sole loss payee with respect to all insurance required under Sections 9.2 and 9.3. Tenant shall furnish Landlord and Administrative Agent with certificates from Tenant's insurers with respect to the insurance required to be carried hereunder on or before the date such insurance is required to be carried. The certificates shall state that such insurance is in full force and effect and that coverage will not be reduced below the amounts required under this Article IX or otherwise limited or canceled without thirty (30) days' prior written notice to Landlord and Administrative Agent. Renewal certificates shall be furnished to Landlord and Administrative Agent not less than thirty (30) days prior to the expiration of each such policy. Any blanket insurance policy or policies that insure Tenant against the risks and for the amounts herein specified shall be deemed to satisfy the obligation of Tenant hereunder, provided that Landlord, Administrative Agent and each Rent Purchaser shall be named as additional insured parties thereunder as their interest may appear and that the coverage afforded Landlord, Administrative Agent and each Rent Purchaser will not be reduced or diminished by reason of the use of such blanket policy of insurance, and provided further that the requirements set forth herein are otherwise satisfied, and provided that any such policy of blanket insurance shall specify the amount of the total insurance allocated to the risks required to be insured hereunder and such allocated amount meets the requirements of this Article IX. All insurance required by this Article IX shall be with an insurance company licensed to do business in the state in which the Parcel is located with a general policyholder's rating, as rated by the most current available "Best" Insurance Reports, of no less than A-VII.

    9.5  Waiver of Subrogation.  Notwithstanding anything to the contrary contained herein, to the extent permitted by law and so long as any insurance coverage maintained by Tenant is not diminished by reason thereof, Tenant hereby (a) releases and waives any rights it may have against Landlord, Administrative Agent, any Rent Purchaser and their respective officers, agents and employees on account of any loss or damages occasioned to Tenant, its property or the Parcels, and arising from any risk covered by any fire and extended coverage insurance maintained by Tenant, whether or not due to the negligence of Landlord, Administrative Agent, any Rent Purchaser, or their respective agents, employees, contractors, licensees, invitees or other persons, and (b) waives on behalf of any insurer providing such insurance to Tenant any right of subrogation that any such insurer may have or acquire against Landlord, Administrative Agent, any Rent Purchaser or such persons by virtue of payment of any loss under such insurance. Tenant shall cause its insurance policies to contain a waiver of subrogation clauses in accordance with the foregoing.

    9.6  Indemnity.  Tenant shall protect, defend, indemnify, hold and save Landlord, Administrative Agent and each Rent Purchaser harmless from and against any and all losses, costs, liabilities or damages (including reasonable attorneys' fees and disbursements and court costs) arising by reason of: (i) any failure of Tenant to maintain insurance for the benefit of Landlord, Administrative Agent and each Rent Purchaser as required pursuant to this Article IX; (ii) the failure to obtain the waiver of subrogation clause required by Section 9.5 hereof; or (iii) the invalidation of such insurance policy required to be obtained by Tenant hereunder by Tenant's insurer. Tenant's duty to indemnify Landlord, Administrative Agent and each Rent Purchaser under this Section 9.6 shall survive the expiration or earlier termination of this Lease with respect to events occurring during the Term.

ARTICLE X
USE

    10.1  Use.  

    10.2  Contest of Legal Requirements.  Tenant shall have the right at its sole cost and expense to contest the validity of any Legal Requirements applicable to the Parcels by appropriate proceedings diligently conducted in good faith; and upon the request of Tenant and at Tenant's sole cost and expense, Landlord will join and cooperate with Tenant in such proceedings. Subject to Section 8.3, and any other provision of this Lease to the contrary notwithstanding, Tenant's right to contest Legal Requirements must be exercised in such a manner as to avoid any exposure of the Parcels or any part thereof to foreclosure or execution sale or exposure of Landlord, Administrative Agent or any Rent Purchaser to civil or criminal penalties arising from Tenant's non-compliance with such Legal Requirements. Tenant shall defend and indemnify Landlord, Administrative Agent and each Rent Purchaser against, and hold Landlord, Administrative Agent and each Rent Purchaser harmless from, any and all liability, loss, cost, damage, injury or expense (including, without limitation, attorneys' fees and costs) which Landlord, Administrative Agent or any Rent Purchaser may sustain or suffer by reason of Tenant's failure or delay in complying with, or Tenant's contest of, any such Legal Requirements (or Landlord's contest, if requested in writing by Tenant), and Tenant's duty to indemnify Landlord, Administrative Agent and each Rent Purchaser under this Section 10.2 shall survive the expiration or earlier termination of this Lease.

ARTICLE XI
UTILITIES AND SERVICES

    11.1  Services to the Parcels.  At Tenant's sole cost and expense, Tenant shall make its own arrangements for the provision of all utilities and services to be provided to or consumed on the Parcels, including, without limitation, air conditioning and ventilation, service contracts, heating, electric power, telephone, water (both domestic and fire protection), sanitary sewer, storm drain, natural gas and janitorial services, including for the installation, maintenance and repair of service lines and meters to measure Tenant's consumption of such utilities.

ARTICLE XII
MAINTENANCE AND REPAIRS; SURRENDER OF THE PARCELS

    12.1  Tenant Obligations.  Landlord shall have no obligation to maintain the Parcels. Tenant shall at all times and at Tenants' sole cost and expense maintain the Parcels in good repair, normal wear and tear excepted.

    12.2  Surrender of the Parcels.  Except as provided in Section 20.1 below, upon the expiration or earlier termination of the Term, Tenant shall surrender each Parcel to Landlord in its then condition, subject to compliance by Tenant on or prior to such date with its obligations under this Lease and the other Operative Documents, but including, any condition resulting from: (i) wear and tear; (ii) obsolescence; (iii) damage that is caused by Landlord or its agents, employees or contractors; and (iv) any improvements, alterations, additions, repairs, replacements or decorations, in, to or of the Parcels or on the Land which are not Tenant's Property which Tenant may elect to remain on the Land or the Parcels. Title to all Tenant's Property shall be and remain in Tenant throughout the Term, and at any time during the Term of this Lease, the same may be removed by Tenant, or, at Tenant's abandonment or written election, surrendered with the Parcels, in which event title to such surrendered property shall, if Landlord so elects in Landlord's sole discretion, be deemed transferred to Landlord. Any of such property that is not removed from the Parcels on or prior to the expiration or early termination of this Lease or any Lease Supplement shall be considered abandoned and Landlord may deal with it as Landlord elects.

ARTICLE XIII
LIENS

    13.1  Pay and Discharge Liens.  Except for claims that Tenant is contesting in good faith in such manner as to avoid any exposure of the Parcels or any part thereof to foreclosure or execution sale, Tenant shall promptly pay and discharge all claims for work or labor done, supplies furnished or services rendered to the Parcels, and shall keep the Parcels free and clear of all mechanics' and materialmen's liens in connection therewith.

ARTICLE XIV
ASSIGNMENT BY LANDLORD

    14.1  Further Mortgages or Encumbrances by Landlord.  Except for the Security Instruments and the Rent Purchasers' Deed of Trust, and any amendments thereto, Landlord shall not cause or create any mortgages, deeds of trust, encumbrances or exception to exist with respect to the Parcels at any time. Landlord agrees that it will not materially modify any Security Instrument nor will it cause any new bonds or assessments to encumber the Parcels without Tenant approval.

    14.2  Landlord's Right to Sell.  Subject to Tenant's Purchase Option set forth in Article 20 hereof, Landlord may not transfer all or any portion of its right, title and interest in any Parcel; provided, however that nothing contained in this Lease shall be deemed in any way to limit, restrict or otherwise affect the right of Landlord at any time and from time to time to sell or transfer all or any portion of its right, title and estate in any Parcel, with Tenant's consent, which shall not be unreasonably withheld, (provided, however, that Landlord acknowledges and agrees that it shall be reasonable for Tenant to withhold its consent if any such sale or transfer proposed by Landlord would result in an increase in the amount of Real Estate Taxes payable with respect to such Parcel as a consequence of a reassessment thereof) to: (i) a Landlord Affiliate (excluding, however, a non-substantive entity that is formed specifically for the purposes of owning the Parcels subject to this Lease and has no other substantive operations or which is a special purpose entity under the provisions of EITF 90-15); (ii) Administrative Agent, any Rent Purchaser, or another financial institution or trust established by such an institution (excluding, however, a non-substantive entity that is formed specifically for the purposes of owning the Parcels subject to this Lease and has no other substantive operations or which is a special purpose entity under the provisions of EITF 90-15); or (iii) if an Event of Default has occurred and is continuing at the time of such sale or transfer, to any Entity. Notwithstanding the foregoing, if Tenant consents to the transfer proposed by Landlord, Landlord shall provide Administrative Agent (or any Affiliate thereof or, with Tenant's consent, any Rent Purchaser to which Administrative Agent may transfer such right) a right of first refusal with regard to such transfer by giving notice to Administrative Agent that it wishes to undertake such transfer and the terms of such proposed transfer. The Administrative Agent shall notify Landlord of any decision to exercise such right within thirty (30) days of receipt of such notice from Landlord and, if any such right is not exercised within such time period, Landlord may consummate such transfer with a third party on the terms offered to Administrative Agent. Any sale or transfer by Landlord whatsoever shall by its express terms recognize and confirm the right of possession of Tenant to the Parcels and Tenant's other rights arising out of this Lease shall not be affected or disturbed in any way by any such sale, transfer, assignment or conveyance (except for any disturbance resulting from a foreclosure sale conducted pursuant to the laws of the state where each Parcel is located at which independent third party bids were permitted pursuant to the applicable Security Instruments all subject to the terms of Section 19.3), and any transferee shall expressly assume in writing all obligations of Landlord to be performed following the date of transfer. Nothing in this Section 14.2 shall prohibit Landlord from selling rents to any financial institution pursuant to the Participation Agreement and/or the Rent Purchase Agreement executed by and between Landlord, Administrative Agent and the Rent Purchasers (without transferring Landlord's interest in the Parcels) or from granting a security interest to the Rent Purchasers as additional inducement to participate in this transaction.

    14.3  Transfer of Funds and Property.  At each time Landlord sells, assigns, transfers or conveys the entire right, title and estate of Landlord in any Parcel and in this Lease, Landlord shall turn over to the transferee any funds or other property then held by Landlord under this Lease and thereupon all the liabilities and obligations on the part of the Landlord under this Lease arising after the effective date of such sale, assignment, transfer or conveyance shall terminate as to the transferor and be binding upon the transferee.

ARTICLE XV
ASSIGNMENT AND SUBLEASING

    15.1  Right to Assign.  

    15.2  Right to Sublet.  

    15.3  Mortgage by Tenant.  Tenant shall not have the right to mortgage, pledge or otherwise encumber all or any portion of the right, title and estate of Tenant in any Parcel or in this Lease, without the prior written consent of Landlord and Administrative Agent.

ARTICLE XVI
EMINENT DOMAIN

    16.1  Total or Substantial Taking.  If title or access is taken for any public or quasi-public use, or under any statute or by right of condemnation or eminent domain, or by sale in lieu thereof (a "Taking") with respect to any or all of a Parcel, or if title to so much of the Parcel or access thereto is Taken, or if the Parcel or access thereto is damaged, blocked or impaired by the Taking, so that, in Tenant's sole discretion, such Parcel or access thereto, even after a reasonable amount of reconstruction thereof, will no longer be suitable for the conduct of Tenant's (and/or Tenant's subtenants') business, then in any such event, the Lease Supplement relating to such Parcel shall terminate on the date of such Taking, and, to the extent the compensation for such Taking payable to Landlord pursuant to Section 16.4 is less than the Purchase Price for such Parcel, Tenant shall pay the balance of the Purchase Price for such Parcel into escrow as provided in the Participation Agreement for distribution as provided in the Rent Purchase Agreement. Landlord shall not exercise any right to terminate a Ground Lease without Tenant's prior approval, in Tenant's sole discretion. Tenant shall restore the Parcels to the extent provided in a Ground Lease in the event the applicable Lease Supplement and Ground Lease are terminated. The provisions of Section 16.4 shall be applicable only as to the compensation allocated to the ground lessee under a Ground Lease in the event of a Taking.

    16.2  Partial Taking.  If any part of a Parcel, or access thereto, shall be subject to a Taking, and the Parcel or the remaining part thereof and access thereto will be, in Tenant's reasonable discretion, suitable for the conduct of Tenant's (and/or Tenant's subtenants') business in a manner consistent with the conduct of such business prior to such Taking, all of the terms, covenants and conditions of this Lease and the Lease Supplement covering such Parcel shall continue, except that Base Rent shall be adjusted to reflect the decreased Lease Investment Balance remaining after application thereto of the award made to Landlord for such Taking.

    16.3  Temporary Taking.  If the whole or any part of any Parcel is subject to a Taking for temporary use or occupancy, this Lease shall not terminate by reason thereof and Tenant shall continue to pay, in the manner and at the times herein specified, the full amount of the Base Rent payable by Tenant hereunder, and, except only to the extent that Tenant may be prevented from so doing by reason of such Taking, Tenant shall continue to perform and observe all of the other terms, covenants and conditions hereof on the part of Tenant to be performed and observed, as though the Taking had not occurred. In the event of any such temporary Taking, Tenant shall be entitled to receive the entire amount of the award made for the Taking, whether paid by way of damages, rent or otherwise. If the temporary Taking is for a term in excess of thirty (30) days, then the Taking shall be treated as a permanent Taking and be governed by Section 16.1 or 16.2, as applicable.

    16.4  Damages.  The compensation attributable to the Parcels (in each case the compensation or value shall be determined as of the date of the Taking) awarded or paid upon any Taking (other than a temporary Taking, which shall be governed by Section 16.3), whether awarded to Landlord, Tenant, or any of them, shall be held by the Escrow Agent described in Section 17.3(b), and distributed in the same manner as insurance proceeds pursuant to Section 17.3. For purposes of this Section 16.4, references to the term "casualty" or similar terms in Section 17.3 shall be deemed to refer to "Taking." Any portion of such compensation which Tenant does not want to use for any construction, restoration or reconstruction shall be paid as follows (the order of payment as set forth below shall be the "Distribution Formula"): (i) to Landlord (but only to the extent of the then-existing Lease Investment Balance and all accrued and unpaid Base Rent and Additional Rent); and (ii) with any remaining excess to be paid to Tenant. Any compensation in excess of the Lease Investment Balance, plus all accrued and unpaid Base Rent and Additional Rent, shall be paid to Tenant. Any compensation payable to Landlord shall be deposited in escrow as provided in the Participation Agreement and distributed as provided in the Rent Purchase Agreement.

    16.5  Notice and Execution.  Immediately upon service of process upon Landlord or Tenant in connection with any Taking relating to any Parcel or any portion thereof or access thereto, each party shall give the other Notice thereof. Each party agrees to execute and deliver to the other all instruments that may be required to effectuate the provisions of this Article XVI. Tenant reserves the right to appear in and to contest any proceedings in connection with any such Taking. Tenant shall immediately reimburse Landlord on demand for all reasonable out-of-pocket costs and expenses incurred by Landlord in complying with Landlord's obligations under this Section 16.5.

    16.6  Terms of Ground Lease.  Notwithstanding any of the foregoing provisions of this Article XVI, Landlord and Tenant acknowledge that in the event of any inconsistency between the foregoing terms of this Article XVI and Article XI of the Ground Lease, the terms of Article XI of the Ground Lease shall control; and Tenant shall have no right to terminate this Lease as a consequence of a Taking unless Landlord shall also have the right to terminate the Ground Lease as a consequence thereof (provided that Tenant may exercise the Purchase Option under Section 20.1 at any time); Landlord shall not exercise any right to terminate the Ground Lease without Tenant's prior approval, in Tenant's sole discretion; Tenant shall restore the Parcels to the extent provided in the Ground Lease in the event this Lease and the Ground Lease are not terminated; and the provisions of Section 16.4 above shall be applicable only to the compensation allocated to the ground lessee under the terms of the Ground Lease in the event of a Taking.

ARTICLE XVII
DAMAGE OR DESTRUCTION

    17.1  Casualty.  If any of the improvements now or hereafter situated on a Parcel (including the Improvements) are damaged or destroyed by fire or other casualty, except as provided to the contrary in Section 17.2, this Lease and corresponding Lease Supplement shall continue in full force and effect without any abatement or reduction in Base Rent, and Tenant, at Tenant's election, shall either (a) restore such improvements substantially to their condition prior to the damage or destruction, subject to Landlord's approval in accordance with the terms of an applicable construction management agreement, if any, which shall not be unreasonably withheld, of the plans and general contractor's construction contract; or (b) not restore such improvements and terminate the Lease Supplement for such Parcel as provided in Section 17.2. Notwithstanding the foregoing, Tenant shall be required to perform, or cause to be performed, at Tenant's sole cost and expense, any work or service required by any Legal Requirement for the protection of persons or property from any risk, or for the abatement of any nuisance, created by or arising from the casualty or the damage or destruction caused thereby.

    17.2  Termination of Lease Supplement.  In the case of: (a) any damage or casualty of any Improvements located on a particular Parcel, which in the good faith judgment of Tenant's Board of Directors would render the Improvements either unsuitable or uneconomic for restoration or continued use by Tenant; (b) the damage or destruction of all or substantially all (as determined in good faith by Tenant's Board of Directors) of the Improvements; or (c) the damage or destruction of the Improvements where restoration cannot (as determined in good faith by Tenant's Board of Directors) reasonably be completed either within 365 days or prior to the Expiration Date, then Tenant shall elect to terminate the Lease Supplement and exercise the Purchase Option for such Parcel. In the event Tenant terminates the Lease Supplement pursuant to the preceding sentence, Tenant shall purchase Landlord's interest in such Parcel for a purchase price equal to the Purchase Price for the Parcel as such Purchase Price shall have the meaning set forth in Section 20.1. The purchase of Landlord's interest in the Parcel shall be pursuant to the terms of Section 20.1, as applicable to the Parcel. Upon the completion of such purchase, the Lease Supplement and all obligations with respect to the purchased Parcel shall terminate.

    17.3  Insurance Proceeds.  In the event of any fire or other casualty, the proceeds of any insurance policies maintained by Tenant pursuant to Section 9.2 or 9.3 shall be held, applied and dealt with as follows:

ARTICLE XVIII
QUIET ENJOYMENT

    18.1  Quiet Enjoyment.  Landlord covenants to secure to Tenant the quiet possession of the Parcels for the full Term against all persons claiming the same, by, through or in the right of Landlord, subject to Landlord's rights and remedies under Article XIX upon an Event of Default by Tenant. The existence of any Permitted Title Exceptions shall not be deemed to constitute a breach of Landlord's obligations hereunder. Tenant shall, immediately upon demand, reimburse Landlord for all reasonable costs, expenses and damages incurred or paid by Landlord in the performance of Landlord's obligations under this Article XVIII (except for any costs, expenses or damages arising from any Landlord liens or Landlord's willful breach of this Lease). Landlord agrees that, so long as no Event of Default has occurred and is continuing, Landlord shall not exercise the right to terminate any Ground Lease.

ARTICLE XIX
DEFAULT

    19.1  Default.  Each of the following events shall constitute an event of default ("Event of Default") by Tenant:

    19.2  Landlord's Remedies.  Landlord shall have the remedies specified below and the exercise of such remedies shall be subject to the rights of Administrative Agent and the Rent Purchasers set forth in the Participation Agreement and the Rent Purchase Agreement:

    19.3  No Waiver.  No failure by Landlord or Tenant to insist upon the strict performance of any term, covenant or condition of this Lease or to exercise any right or remedy consequent upon a breach thereof and no acceptance of full or partial Base Rent or Additional Rent during the continuance of any breach shall constitute a waiver of any such breach or of the term, covenant, or condition. No term, covenant or condition of this Lease to be performed or complied with by Tenant or Landlord, and no breach thereof, shall be waived, terminated, altered or modified except by a written instrument executed by Landlord and Tenant. No waiver of any breach shall affect or alter this Lease, but each and every term, covenant, and condition of this Lease shall continue in full force and effect with respect to any other then existing subsequent breach thereof.

    19.4  Effect of Assignment.  Notwithstanding an Entity's prior assignment or transfer of its interest as Tenant under this Lease, so long as Landlord and Administrative Agent have been given Notice of such assignment pursuant to Section 15.1 and Section 21.3, Landlord shall give such Entity copies of all Notices required by this Article XIX in connection with any Event of Default, and such Entity shall have the period granted hereunder to Tenant to cure such Event of Default, unless such Entity shall have been released from all obligations arising under this Lease and all Operative Documents. Landlord may not assert any rights against such Entity in the absence of such Notice and opportunity to cure, so long as Landlord and Administrative Agent have been given Notice of such assignment pursuant to Sections 15.1 and 21.3.

    19.5  Landlord Right to Perform.  If Tenant fails to perform any covenant or agreement to be performed by Tenant under this Lease, and if the failure or default continues for thirty (30) days after Notice to Tenant (except for emergencies and except for payment of any lien or encumbrance threatening the imminent sale of any Parcel or any portion thereof, in which case payment or performance may be made as soon as necessary to minimize the damage to person or property caused by such emergency or to prevent any such sale), Landlord may, but shall have no obligation to, pay the same and perform such covenant or agreement on behalf of and at the expense of Tenant and do all reasonably necessary work and make all reasonably necessary payments in connection therewith including, but not limited to, the payment of reasonable attorneys' fees and disbursements incurred by Landlord. Notwithstanding the foregoing, Landlord shall have no right to perform on behalf of Tenant so long as Tenant: (1) is diligently and in good faith attempting to cure such matter and prosecuting such cure to completion; (2) has the financial ability to so comply; and (3) commenced cure of such matter within thirty (30) days after Tenant's receipt of Notice thereof from Landlord. Failure by Tenant to comply with the above shall allow Landlord to commence in a reasonable and customary manner and in good faith to attempt to cure such matter. Upon demand, Tenant shall reimburse Landlord for the reasonable amount so paid, together with interest at the Default Rate from the date incurred until the date repaid. Neither the performance by Landlord pursuant to this Section 19.5 nor the exercise by Landlord of any of its other rights and remedies shall constitute a cure or waiver of any Event of Default or nullify any Notice of Default or sale, unless and until all obligations under the Operative Documents are paid in full.

    19.6  Landlord's Default.  If Landlord fails to perform any covenant or agreement to be performed by Landlord under Section 14.1, Section 16.4, Article XX, Article XXI, or Section 21.8 of this Lease (including, but not limited to, Landlord's failure to keep the Parcels free of any and all liens created by or through Landlord except as approved by Tenant in writing), and if the failure or default continues for thirty (30) days after Notice to Landlord (except for emergencies and except for payment of any lien or encumbrance threatening the imminent sale of the Parcels or any portion thereof, in which case payment or cure may be made as soon as necessary to minimize the damage to person or property caused by such emergency or to prevent any such sale), Tenant may, but shall have no obligation to, pay the same and cure such default on behalf of and, so long as such failure to perform arises due to Landlord's gross negligence, willful misconduct, or willful breach of this Lease, at the expense of Landlord and do all reasonably necessary work and make all reasonably necessary payments in connection therewith including, but not limited to, the payment of reasonable attorneys' fees and disbursements incurred by Tenant. Notwithstanding the foregoing, Tenant shall have no right to cure any such failure to perform by Landlord so long as Landlord is diligently and in good faith attempting to cure such matter. Notwithstanding anything to the contrary, Landlord's liability under this Lease shall in all events be limited as provided in Section 21.13 below, or as otherwise indicated in this Lease.

ARTICLE XX
TENANT'S OPTION TO PURCHASE OR TERMINATE

    20.1  Option To Purchase Parcels. Purchase Option.  On any Rent Payment Date during the Term, Tenant shall have the option ("Purchase Option") to purchase all, but not less than all of a Parcel covered by a Lease Supplement. The purchase price ("Purchase Price") for the Parcel shall be the sum of accrued and unpaid Base Rent, any accrued and unpaid Additional Rent, plus the Lease Investment Balance under the applicable Lease Supplement and expenses incurred by Landlord in consummating the transfer of the Parcel pursuant to this Article XX. The Purchase Price shall be deposited by Tenant in escrow as provided in the Participation Agreement and distributed as provided in the Rent Purchase Agreement.

    20.2  Termination Option.  

ARTICLE XXI
MISCELLANEOUS

    21.1  Relationship.  Neither this Lease nor any other Operative Documents or transactions contemplated hereby or thereby shall in any respect be interpreted, deemed or construed as constituting Landlord, Rent Purchasers, Administrative Agent and Tenant as partners or joint venturers, one with the other, or as creating any partnership, joint venture, association or, except as set forth in Section 21.2 below, any other relationship other than that of landlord and tenant: and, except as set forth in Section 21.2 below, both Landlord and Tenant agree not to make any contrary assertion, contention, claim or counterclaim in any action, suit or other legal proceeding involving either Landlord or Tenant or the subject matter of this Lease.

    21.2  Form of Transaction: Certain Tax Matters.  Landlord and Tenant hereby agree and declare that the transactions contemplated by this Lease are intended to constitute, both as to matters of form and substance:

    Accordingly, and notwithstanding any other provision of this Lease to the contrary, Landlord and Tenant agree and declare that (A) the transactions contemplated hereby are intended to have a dual, rather than single, form and (B) all references in this Lease to the "Lease" of the Parcels which fail to reference such dual form do so as a matter of convenience only and do not reflect the intent of Landlord and Tenant as to the true form of such arrangements.

    (b) Landlord and Tenant agree that, in accordance with their intentions and the substance of the transactions contemplated hereby, Tenant (and not Landlord) shall be treated as the owner of the Parcels for Federal, state, local income tax purposes and this Lease shall be treated as a financing arrangement secured by the Parcels. Tenant shall be entitled to take any deduction, credit allowance or other reporting, filing or other tax position consistent with such characterizations. Landlord shall not file any Federal, state or local income tax returns, reports or other statements in a manner which is inconsistent with the foregoing provisions of this Section 21.2.

    (c) Tenant acknowledges that it has retained accounting, tax and legal advisors to assist it in structuring this Lease and Tenant is not relying on any representations of Landlord regarding the proper treatment of this transaction for accounting, income tax or any other purpose.

    21.3  Notices.  Each Notice shall be in writing and shall be sent by personal delivery, overnight courier (charges prepaid or billed to the sender) or by the deposit of such with the United States Postal Service, or any official successor thereto, designated as registered or certified mail, return receipt requested, bearing adequate postage and in each case addressed as provided in the Section 1.10. Each Notice shall be effective upon being personally delivered or actually received. The time period in which a response to any such Notice must be given or any action taken with respect thereto shall commence to run from the date of personal delivery or receipt of the Notice by the addressee thereof, as reflected on the return receipt of the Notice. Rejection or other refusal to accept shall be deemed to be receipt of the Notice sent. By giving to the other party at least thirty (30) days' prior Notice thereof, either party to this Lease shall have the right from time to time during the Term of this Lease to change the address(es) thereof and to specify as the address(es) thereof any other address(es) within the continental United States of America.

    21.4  Severability of Provisions.  If any term, covenant or condition of this Lease shall be invalid or unenforceable, the remainder of this Lease, or the application of such term, covenant or condition to Entities or circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby.

    21.5  Entire Agreement: Amendment.  This Lease and each Operative Document constitutes the entire agreement of Landlord, Administrative Agent, each Rent Purchaser and Tenant with respect to the subject matter hereof and thereof. Neither this Lease nor any provision hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed as set forth in the Rent Purchase Agreement.

    21.6  Memorandum of Amended and Restated Lease.  Neither party shall record this Lease. However, concurrently with the execution of any Lease Supplement, Landlord and Tenant shall execute a Memorandum of Lease ("Memorandum of Lease") in the form attached to each Lease Supplement and by this reference made a part hereof, which Memorandum of Lease shall be promptly recorded in the Official Records.

    21.7  Successors and Assigns.  Subject to Articles XIV and XV, this Lease shall inure to the benefit of and be binding upon Landlord and Tenant and their respective heirs, executors, legal representatives, successors and assigns. Whenever in this Lease a reference to any Entity is made, such reference shall be deemed to include a reference to the heirs, executors, legal representatives, successors and permitted assigns of such Entity.

    21.8  Commissions.  Landlord and Tenant each represent and warrant that neither has dealt with any broker in connection with this transaction and that no real estate broker, salesperson or finder has the right to claim a real estate brokerage, salesperson's commission or finder's fee by reason of contact between the parties brought about by such broker, salesperson or finder. Each party shall hold and save the other harmless of and from any and all loss, cost, damage, injury or expense arising out of or in any way related to claims for real estate broker's or salesperson's commissions or fees based upon allegations made by the claimant that it is entitled to such a fee from the indemnified party arising out of contact with the indemnifying party or alleged introductions of the indemnifying party to the indemnified party.

    21.9  Attorneys' Fees.  In the event any action is brought by Landlord or Tenant against the other to enforce or for the breach of any of the terms, covenants or conditions contained in this Lease, the prevailing party shall be entitled to recover reasonable attorneys' fees to be fixed by the court, together with costs of suit therein incurred. Tenant shall pay the reasonable attorneys' fees incurred by Landlord for the review and negotiation of this Lease.

    21.10  Governing Law.  This Lease and the obligations of the parties hereunder shall be governed by and interpreted, construed and enforced in accordance with the laws of the State of California.

    21.11  Counterparts.  This Lease may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall comprise but a single instrument.

    21.12  Time Is of the Essence.  Time is of the essence of this Lease, and of each provision hereof.

    21.13  Limitations on Recourse.  The obligations of Tenant and Landlord under this Lease shall be without recourse to any partner, officer, trustee, beneficiary, shareholder, director or employee of Tenant or Landlord. Except for the gross negligence or willful misconduct of Landlord or for breach of Landlord's obligations to fund pursuant to Article VI above, Landlord's liability to Tenant for any default by Landlord under this Lease: (1) shall be limited to Landlord's equity in the Parcels; and (2) shall extend to any actual damages of Tenant, but shall not extend to any foreseeable or unforeseeable consequential damages.

    21.14  Estoppel Certificates.  Within thirty (30) days after request therefor by either party, the non-requesting party shall deliver, in recordable form, a certificate to any proposed mortgagee, purchaser, sublessee or assignee and to the requesting party, certifying (if such be the case) that this Lease is in full force and effect, the date of Tenant's most recent payment of Base Rent, that, to the best of its knowledge, the non-requesting party has no defenses or offsets outstanding, or stating those claimed, and any other information reasonably requested. Failure to deliver said statement in time shall be conclusive upon the non-requesting party that: (a) this Lease is in full force and effect, without modification except as may be represented by the requesting party; (b) there are no uncured defaults in the requesting party's performance and the non-requesting party has no right of offset, counterclaim or deduction against the non-requesting party's obligations hereunder; (c) no more than one month's Base Rent has been paid in advance; and (d) any other matters reasonably requested in such certificate.

    21.15  As-Is Lease.  Landlord makes no representations or warranties concerning the condition, suitability or any other matters relating to the Parcels, and Tenant hereby acknowledges that Tenant leases the Parcels from Landlord on an "as is" basis.

    21.16  Net Lease.  Except as otherwise provided in this Lease, Tenant agrees that this Lease is an absolute net Lease, and the Base Rent called for hereunder shall be paid as required inclusive of all expenses associated with the Parcels, including without limitation, Real Estate Taxes and insurance premiums for the insurance required to be carried hereunder, and all other reasonable and customary costs and expenses incurred by Landlord, in connection with the Parcels or this Lease, all of which shall be paid or reimbursed by Tenant unless otherwise specifically provided herein. Tenant agrees to reimburse Landlord, within five (5) Business Days following receipt of any written demand therefor, for all reasonable and customary fees, late charges, title endorsements, and other costs and expenses charged to Landlord which accrue during any period.

    21.17  Landlord's Representations and Warranties.  Landlord hereby represents and warrants that:

    21.18  Tenant's Representations and Warranties.  In order to induce Landlord, Administrative Agent and each Rent Purchaser to enter into the Operative Documents, Tenant hereby represents and warrants to Landlord, Administrative Agent and each Rent Purchaser as follows:

    21.19  Capital Adequacy.  If, after the date hereof, Landlord, Administrative Agent or any Rent Purchaser shall have reasonably determined that the adoption after the date hereof of any Legal Requirement regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any Governmental Authority charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy, whether or not having the force of law, of any such Governmental Authority, has or would have the effect of reducing the rate of return on the capital of Landlord or any Rent Purchaser as a consequence of its obligations hereunder to a level below that which Landlord or any Rent Purchaser could have achieved but for such adoption, change or compliance (taking into consideration Landlord's and Rent Purchasers' policies with respect to capital adequacy), then from time to time, within fifteen (15) days after written demand (which demand shall be accompanied by a statement setting forth the basis for such demand) delivered to Tenant by Landlord, Administrative Agent or any Rent Purchaser, Tenant shall pay to Landlord, Administrative Agent and/ or such Rent Purchaser such additional amount or amounts as will compensate Landlord, Administrative Agent and/or any Rent Purchaser for such reduction.

    21.20  Affirmative Covenants of Tenant.  Until the termination of this Lease and the satisfaction in full by Tenant of all Obligations, Tenant will comply, and will cause compliance, with the following affirmative covenants, unless Landlord and Majority Rent Purchasers shall otherwise consent in writing:

    21.21  Negative Covenants of Tenant.  Until the termination of this Lease and the satisfaction in full by Tenant of all Obligations, Tenant will comply, and will cause compliance, with the following negative covenants, unless Landlord and Majority Rent Purchasers shall otherwise consent in writing:

Notwithstanding the foregoing, with respect to the Parcels only the Liens described in clauses (i) through (iv) shall be considered "Permitted Liens."

    21.22  Financial Covenants.  Until the termination of this Lease and the satisfaction in full by Tenant of all Obligations, Tenant will comply, and will cause compliance, with the following financial covenants, unless Landlord and Majority Rent Purchasers shall otherwise consent in writing:

    21.23  Regulation D Compensation.  For so long as the Landlord or any Rent Purchaser is required to maintain reserves against Eurocurrency Liabilities (or any other category of liabilities which include deposits by reference to which the LIBOR Rate is determined or any category of extensions of credit or other assets which includes loans by a non-United States office of the Landlord or any Rent Purchaser to United States residents), and, as a result, the cost to the Landlord or such Rent Purchaser (or its funding office) of making or maintaining its Advances is increased, then the Landlord or such Rent Purchaser may require the Tenant to pay, contemporaneously with each payment of Base Rent, an additional amount (the "Additional Amount") at a rate per annum up to but not exceeding the excess of (i) (A) the applicable LIBOR Rate divided by (B) one minus the Eurocurrency Reserve Requirements, over (ii) the applicable LIBOR Rate. In the event that the Landlord or such Rent Purchaser wishes to require payment of the Additional Amount, Landlord or such Rent Purchaser (through Administrative Agent), (x) shall so notify the Tenant, in which case the Additional Amount shall be payable to the Landlord or such Rent Purchaser, at the place indicated in such notice with respect to each Borrowing Period commencing at least three (3) Business Days after the giving of such notice and (y) shall furnish to the Tenant at least five (5) business days prior to each date on which Base Rent is payable (the "Additional Amount Notice") a certificate setting forth the Additional Amount to which it is then entitled under this Section 21.21 (which shall be consistent with its good faith estimate of the level at which the related reserves are maintained by it). Each such certificate shall be accompanied by such information as the Tenant may reasonably request as to the computation set forth therein.

    21.24  Nonmerger of Estates.  If both Landlord's and Tenant's estates in the Parcels become vested in the same owner, this Lease shall nevertheless not be destroyed by application of the doctrine of merger except at the express election of Landlord and the consent of Administrative Agent.

    21.25  Title to and Nature of Improvements.  Subject to the provisions of Sections 12.2 and as otherwise appropriate in this Lease, Tenant agrees that any and all Improvements of whatever nature at any time constructed, placed or maintained upon any part of the Land shall be and remain the property of the Landlord, subject to Tenant's rights under this Lease, including, without limitation, Section 21.2 and the rights of Administrative Agent and the Rent Purchasers under the Operative Documents.

    21.26  Nondiscrimination.  Tenant hereby covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through it, and this Lease is made and accepted upon and subject to the following conditions: that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, age, handicap, marital status, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Parcels herein leased, nor shall Tenant itself, or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Parcels herein leased.

    21.27  Grant of Option by Landlord to SPC.  Notwithstanding anything to the contrary herein, Landlord may grant to a special purpose funding entity which is an Affiliate of such Landlord (such entity being an "SPC"), the option to provide to Tenant all or part of any Commitment Amount that Landlord would otherwise be obligated to advance to Tenant, provided that (i) nothing herein shall constitute a commitment to make any loan by any SPC, (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such commitment, Landlord shall be obligated to make such advance pursuant to the terms hereof, and (iii) Landlord shall not sell or transfer to such SPC Landlord's interest in any Parcel. The making of an advance by an SPC hereunder shall utilize the commitment of the Landlord to the same extent, and as if, such advance were made by Landlord, but shall not release Landlord from any other liability under the Operative Documents. Each party hereto agrees that no SPC shall be liable for any indemnity or similar payment obligation under this Lease or the other Operative Documents (all liability for which shall remain with Landlord). In furtherance of the foregoing, each party hereto hereby agrees, which agreement shall survive the termination of this Lease, that, prior to the date that is one year and one day after the payment in full all outstanding senior Indebtedness of any SPC, it will not institute against, or join any other Entity in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or similar proceedings under the laws of the United States of America or any state thereof. In addition, notwithstanding anything to the contrary contained in this Section 21.27, any SPC may with notice, but without prior written consent of Tenant and without paying any registration and proceeding fee, assign all or part of its interest in any amounts advanced hereunder by Landlord. In no event shall Tenant be obligated to pay to an SPC that has made a advance hereunder any greater amount than Tenant would have been obligated to pay under this Lease if Landlord had made such Advance the Tenant and Administrative Agent shall continue to deal solely and directly with, and send notices solely to, Landlord with respect to any amounts advanced hereunder by its SPC and Landlord shall not transfer or grant to its SPC the right to approve any amendment, waiver or consent hereunder. This Section 21.27 may not be amended without the written consent of Landlord.

ARTICLE XXII
INDEMNIFICATION

    22.1  Tax Indemnity.  Notwithstanding anything in Article 8 (Taxes) to the contrary, Tenant shall protect and defend Landlord, Administrative Agent and Rent Purchasers from and against all criminal prosecution regarding and shall indemnify and hold Landlord, Administrative Agent and Rent Purchasers harmless from and against any and all losses, costs, liabilities or damages (including reasonable attorneys' fees and disbursements and court costs) arising by reason of:

    Tenant's duty to indemnify Landlord, Administrative Agent and each Rent Purchaser under this Section 22.1 shall apply only to taxes arising during the Term (whether or not due and payable at the conclusion of the Term), but shall otherwise survive the expiration or earlier termination of this Lease.

    22.2  Indemnification Concerning the Parcels.  Tenant will defend, protect, indemnify and save harmless Landlord, Administrative Agent and each Rent Purchaser from and against all liabilities, obligations, claims, damages, causes of action, costs and expenses, imposed upon or incurred by Landlord, Administrative Agent and each Rent Purchaser by reason of the occurrence or existence of any of the following during the Term, except to the extent caused by the willful misconduct, gross negligence, or willful breach of contract of such Entity or its respective agents: (a) any accident, injury to or death of persons or loss of or damage to property occurring on or about the Parcels or Improvements; (b) performance of any labor or services or the furnishing of any materials or other property in respect of the Parcels or the Improvements; (d) the negligence or willful misconduct on the part of Tenant or any of its agents, invitees, employees or contractors or any other persons entering onto the Parcels or the Improvements at the request, behest or with the permission of Tenant; (d) the use or occupancy of the Improvements; or (e) the use of the Land. Tenant's duty to indemnify Landlord, Administrative Agent and each Rent Purchaser under this Section 22.2 shall survive the expiration or earlier termination of this Lease with respect to events occurring during the Term or after the Term while Landlord has record title to and Tenant is occupying the Parcels.

    22.3  Environmental Indemnity.  Tenant agrees to indemnify and hold Landlord, Administrative Agent and each Rent Purchaser harmless from and against, and to reimburse Landlord, Administrative Agent and each Rent Purchaser with respect to, any and all claims, demands, causes of action, losses, damages, liabilities, costs and expenses (including attorneys' fees and court costs), fines and/or penalties of any and every kind or character, known or unknown, fixed or contingent, asserted or potentially asserted against or incurred by Landlord, Administrative Agent or such Rent Purchaser at any time and from time to time by reason of, in connection with or arising out of (a) the failure of Tenant to perform any obligation herein required to be performed by Tenant regarding Applicable Environmental Laws, (b) any violation of any Applicable Environmental Law by Tenant with respect to the Parcels or any disposal or other release by Tenant or with respect to the Parcels of any hazardous substance, environmental contaminants or solid waste on or to the Parcels, whether or not resulting in a violation of any Applicable Environmental Law, (c) any act, omission, event or circumstance by Tenant or with any respect to the Parcels which constitutes or has constituted violation of any Applicable Environmental Law with respect to the Parcels, regardless of whether the act, omission, event or circumstance constituted a violation of any Applicable Environmental Law at the time of its existence or occurrence, and (d) any and all claims or proceedings (whether brought by private party or governmental agencies) for bodily injury, property damage, abatement or remediation, environmental damage or impairment or any other injury or damage resulting from or relating to any hazardous or toxic substance or contaminated material located upon or migrating into, from or through the Parcels (whether or not the release of such materials was caused by Tenant, a subtenant, a prior owner of the Parcels or any other Entity) which Landlord, Administrative Agent or such Rent Purchaser may incur. Tenant's duty to indemnify Landlord, Administrative Agent or such Rent Purchaser under this Section 22.3 shall survive the expiration or earlier termination of the Lease or applicable Lease Supplement with respect to events occurring during or prior to the Term or after the Term while Landlord has record title to and Tenant is occupying the Parcels.

    22.4  General Indemnity.  Except to the extent of the gross negligence or willful misconduct of the Entity seeking such indemnification, Tenant shall defend, indemnify, and hold Landlord, Administrative Agent and each Rent Purchaser harmless from and against any and all losses, costs, expenses, liabilities, claims, causes of action and damages of all kinds that may result to Landlord, Administrative Agent or any Rent Purchaser, including reasonable attorneys' fees and disbursements incurred by Landlord, Administrative Agent or any Rent Purchaser, in any way relating to or arising out of this Lease or the other Operative Documents executed by Tenant in connection with this Lease or the transactions contemplated hereby or thereby or the enforcement against Tenant of any of the terms hereof or thereof. Tenant's duty to indemnify Landlord, Administrative Agent and each Rent Purchaser under this Lease shall survive the expiration or earlier termination of this Lease.

ARTICLE XXIII
COVENANTS OF LANDLORD

    23.1  Title.  In the event Tenant so requests in writing (and so long as either Tenant agrees to indemnify Landlord to Landlord's satisfaction from any liabilities or obligations in connection therewith, or Landlord does not incur any liabilities or obligations in connection therewith), Landlord shall execute all documents, instruments and agreements reasonably requested by Tenant in order to accomplish any of the following in the manner reasonably requested by Tenant and within the time parameters reasonably requested by Tenant: (1) remove exceptions to title to or affecting the Parcels; (2) create exceptions to title (including, without limitation, easements and rights of way) to or affecting the Parcels; or (3) modify any then-existing exception to title. Tenant shall promptly reimburse Landlord for, or at Landlord's request, pay directly in advance, all reasonable costs, expenses and other amounts incurred or required to be expended by Landlord in order to comply with Tenant's requests made in accordance with the preceding sentence, and the failure of Tenant to reimburse or pay any such amounts shall result in the suspension of Landlord's obligations under such sentence with respect to that particular request until the amounts required to be paid by Tenant under this sentence have been paid.

    23.2  Land Use.  Except where requested by Tenant pursuant to this Section 23.2, Landlord shall not cause or give its written consent to any land use or zoning change affecting the Parcels or any changes of street grade. In the event Tenant so requests in writing (and so long as either Tenant agrees to indemnify Landlord to Landlord's satisfaction, from any liabilities or obligations in connection therewith, or Landlord does not incur any liabilities or obligations in connection therewith), Landlord shall execute all documents, instruments and agreements reasonably requested by Tenant in order to accomplish any of the following in the manner reasonably requested by Tenant and within the time parameters reasonably requested by Tenant: (1) cause a change in any land use restriction or law affecting the Parcels; (2) cause a change in the zoning affecting a Parcels; or (3) cause a change in the street grade with respect to any street in the vicinity of a Parcels. Tenant shall promptly reimburse Landlord for, or at Landlord's request, pay directly in advance, all reasonable costs, expenses and other amounts incurred or required to be expended by Landlord in order to comply with Tenant's requests made in accordance with the preceding sentence, and the failure of Tenant to reimburse or pay any such amounts shall result in the suspension of Landlord's obligations under such sentence with respect to that particular request until the amounts required to be paid by Tenant under this sentence have been paid. In any event, all land usage shall remain subject to the terms of the Ground Lease, if applicable to a particular Lease Supplement.

    23.3  Transfer of Property Interests.  Except as requested by Tenant pursuant to this Lease, Landlord shall not transfer to any third party any rights inuring to or benefits associated with the Parcels (including, without limitation, zoning rights, development rights, air space rights, mineral, oil, gas or water rights). Nothing in this Section 23.3 shall limit Landlord's right to transfer Landlord's interest in this Lease to a third party or its rights to transfer the Parcels, pursuant to Section 14.2; provided that as to a transfer under Section 14.2 any purchaser of Landlord's interest in the Parcels shall be bound by the terms of this Lease, including without limitation the terms of this Section 23.3).

    23.4  No Impairment of Value.  No action shall be taken under Section 23.1, 23.2 or 23.3 which would impair the value, utility or useful life of the Improvements without the prior written consent of Administrative Agent and the Rent Purchasers as provided in the Rent Purchase Agreement.

    23.5  Ground Leases.  Landlord shall not exercise any of its purchase option rights under any Ground Lease affecting any Lease Supplement without Tenant's prior written consent, in Tenant's sole discretion.

    IN WITNESS WHEREOF, the parties hereto have duly executed this Lease as of the day and year first above written.

[Signatures begin on next page.]

    TENANT:   ADOBE SYSTEMS INCORPORATED, a Delaware corporation
 
 		  
 		  
 		  
 		  
By:		  
 		  
/s/ Harold L. Covert
 
 		  
 		  
 		  
 		  
Name:		  
 		  
Harold L. Covert
 
 		  
 		  
 		  
 		  
Its:		  
 		  
Executive Vice President and
Chief Financial Officer
 
 		  
 		  
 		  
 		  
Date:		  
 		  
August 5, 1999
 
 		  
 		  
 		  
 		  
 		  
 		  
 

[Signatures continued on next page.]

 
 		  
 		  
LANDLORD:		  
 		  
SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware corporation
 
 		  
 		  
 		  
 		  
By:		  
 		  
/s/ William M. Ginn
 
 		  
 		  
 		  
 		  
Name:		  
 		  
William M. Ginn
 
 		  
 		  
 		  
 		  
Its:		  
 		  
President
 
 		  
 		  
 		  
 		  
Date:		  
 		  
 
 
 		  
 		  
 		  
 		  
 		  
 		  
 


EXHIBIT A
LEASE SUPPLEMENT NO. 1

    LEASE SUPPLEMENT NO. 1 is dated as of August 11, 1999 and executed by and between SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware corporation ("Landlord"), and ADOBE SYSTEMS INCORPORATED, a Delaware corporation ("Tenant").

    Landlord and Tenant have heretofore entered into that certain Amended, Restated and Consolidated Master Lease of Land and Improvements dated as of August 11, 1999, relating to the lease of certain parcels of real property (herein called the "Lease" and the defined terms therein being hereinafter used with the same meanings). The Lease provides for the execution and delivery from time to time of Lease Supplements for the purpose of leasing individual Parcels under the Lease as and when delivered by Landlord in accordance with the terms thereof.

    The Land and Improvements represented by this Lease Supplement were originally leased by Landlord to Tenant by a lease dated October 12, 1994, and the terms of such lease are amended and restated in their entirety by the Lease.

    NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, Landlord and Tenant hereby agree as follows:

    IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease Supplement to be duly executed on the day and year first above written.

    LANDLORD
 
 		  
 		  
SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware corporation
 
 		  
 		  
By		  
 		  
 
 
 		  
 		  
Name		  
 		  
 
 
 		  
 		  
Its		  
 		  
 

[Signatures continued on next page]

    TENANT
 
 		  
 		  
ADOBE SYSTEMS INCORPORATED, a Delaware corporation
 
 		  
 		  
By		  
 		  
 
 
 		  
 		  
Name		  
 		  
Harold L. Covert
 
 		  
 		  
Its		  
 		  
Executive Vice President and Chief Financial Officer

Schedule 1 to

Lease Supplement No. 1

DESCRIPTION OF PARCELS

    Real property in the City of San Jose, County of Santa Clara, State of California, described as follows:

PARCEL ONE:

Commencing at the point of intersection of the centerline of Park Avenue (60 feet wide) with the centerline of the now vacated Locust Street (80 feet wide) as said point is shown on that certain Map entitled "Record of Survey of Properties Bounded by San Carlos Street, San Fernando Street and Guadalupe River, Market-Almaden Streets", which Map filed for record September 27, 1966 in Book 214 of Maps page 54, Santa Clara County Records; thence from said point of commencement along the said centerline of Locust Street, North 29° 50' 44" West 79.00 feet to the True Point of Beginning of this description; thence South 58° 14' 29" West 153.83 feet; thence South 59° 53' 41" West 102.10 feet to the northeasterly line of the now vacated River Street (60 feet wide) as said River Street is shown on said Record of Survey Map; thence along said northeasterly line of River Street North 37° 11' 35" West 173.10 feet; thence leaving said northeasterly line of River Street South 86° 43' 10" West 22.45 feet; thence North 29° 50' 44" West 129.77 feet; thence North 60° 57' 13" East 258.09 feet to a point on the Southwesterly line of Locust Street; thence along said Southerwesterly line of Locust Street North 29° 50' 44" West 70.00 feet; thence North 60° 57' 13" East 40.00 feet to a point on the said centerline of Locust Street; thence along the said centerline of Locust Street South 29° 50' 44" East 371.74 feet to the True Point of Beginning.

PARCEL TWO:

A non-exclusive easement for pedestrian and vehicular ingress and egress, utilities and construction, maintenance and use of a loading ramp as more particularly described in an instrument recorded October 12, 1994 as Instrument No. 12684586, Official Records, being more particularly described as:

Beginning at the point of intersection of the Southeasterly line of San Fernando Street (60 feet wide) with the Southwesterly line of the now vacated Locust Street (80 feet wide), as said point is shown on that certain map entitled "Record of Survey of Properties bounded by San Carlos Street, San Fernando Street and Guadalupe River, Market-Almaden Streets," which map was filed for record September 27, 1966 in Book 214 of Maps at page 54, Santa Clara County Records; thence along said line of Locust Street South 29° 50' 44" East 27.58 feet to the True Point of Beginning of this description; thence from said True Point of Beginning North 60° 57' 13" East 40.00 feet to a point on the centerline of said Locust Street; thence Southeasterly along said centerline of Locust Street South 29° 50' 44" East 130.01 feet; thence South 60° 57' 13" West 40.00 feet to a point on the said Southwesterly line of Locust Street; thence along said Southwesterly line of Locust Street North 29° 50' 44" West 130.01 feet to the True Point of Beginning.

APN: 259-44-85
ARB: 259-44-x25, 41, 63, 65, 43, 64, X84, 84.01, 67.01, 81, 81.1, 66

Schedule 2 to

Lease Supplement No. 1

PERMITTED TITLE EXCEPTIONS

MEMORANDUM OF AMENDED, RESTATED AND CONSOLIDATED
MASTER LEASE—LEASE SUPPLEMENT NO. 1

Dated as of August 11, 1999

by and between

SUMITOMO BANK LEASING AND FINANCE, INC., as Landlord,

and

ADOBE SYSTEMS INCORPORATED, as Tenant

After recording please return to:
 Graham & James LLP
One Maritime Plaza, Suite 300
San Francisco, CA 94111
Attention: Gary S. Hand, Esq.

MEMORANDUM OF AMENDED, RESTATED AND CONSOLIDATED
MASTER LEASE—LEASE SUPPLEMENT NO. 1

    THIS MEMORANDUM OF AMENDED, RESTATED AND CONSOLIDATED MASTER LEASE ("Memorandum of Master Lease") is executed as of August 11, 1999 by and between SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware corporation ("Landlord"), and ADOBE SYSTEMS INCORPORATED, a Delaware corporation ("Tenant").

RECITALS

    WHEREAS, Landlord and Tenant have executed that certain Amended, Restated and Consolidated Master Lease ("Amended and Restated Master Lease") and a Lease Supplement No. 1 (the "Lease Supplement No. 1") (the Amended and Restated Master Lease and Lease Supplement No. 1 are hereinafter collectively referred to as the "Amended and Restated Master Lease"), which Amended and Restated Master Lease amends, restates and consolidates that certain Lease by and between Landlord and Tenant dated October 12, 1994, a Memorandum of which was recorded October 12, 1994, as Series No. 12684589 in Official Records, Santa Clara County, California, covering a leasehold interest in certain land located on the real property located in the City of San Jose, Santa Clara County, California as more particularly described in Schedule 1attached hereto and incorporated herein by this reference ("Land") and the improvements which are located on said Land (the Land and improvements are referred to herein as the "Parcel"); and

    WHEREAS, Landlord and Tenant desire to record notice of the Lease in the real estate records of Santa Clara County, California:

    NOW, THEREFORE, in consideration of the foregoing, Landlord and Tenant hereby declare as follows:

    IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum of Master Lease as of the date and year first written above.

    TENANT:   ADOBE SYSTEMS INCORPORATED, a Delaware corporation
 
 		  
 		  
 		  
 		  
By:		  
 		  
 
 
 		  
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
 		  
Its:		  
 		  
 

(Signatures continued on next page)

    LANDLORD:   SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware corporation
 
 		  
 		  
 		  
 		  
By:		  
 		  
 
 
 		  
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
 		  
Its:		  
 		  
 


EXHIBIT B
LEASE SUPPLEMENT NO. 2

    LEASE SUPPLEMENT NO. 2 is dated as of August 11, 1999 and executed by and between SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware corporation ("Landlord"), and ADOBE SYSTEMS INCORPORATED, a Delaware corporation ("Tenant").

    Landlord and Tenant have heretofore entered into that certain Amended, Restated and Consolidated Master Lease of Land and Improvements dated as of August 11, 1999, relating to the lease of certain parcels of real property (herein called the "Lease" and the defined terms therein being hereinafter used with the same meanings). The Lease provides for the execution and delivery from time to time of Lease Supplements for the purpose of leasing individual Parcels under the Lease as and when delivered by Landlord in accordance with the terms thereof.

    The Land and Improvements represented by this Lease Supplement were originally leased by Landlord to Tenant by a lease dated August 15, 1996, and the terms of such lease are amended and restated in their entirety by the Lease.

    NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, Landlord and Tenant hereby agree as follows:

    IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease Supplement to be duly executed on the day and year first above written.

    LANDLORD
 
 		  
 		  
SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware corporation
 
 		  
 		  
By		  
 		  
 
 
 		  
 		  
Name		  
 		  
 
 
 		  
 		  
Its		  
 		  
 

[Signatures continued on next page]

    TENANT
 
 		  
 		  
ADOBE SYSTEMS INCORPORATED, a Delaware corporation
 
 		  
 		  
By		  
 		  
 
 
 		  
 		  
Name		  
 		  
Harold L. Covert
 
 		  
 		  
Its		  
 		  
Executive Vice President and Chief Financial Officer

Schedule 1 to

Lease Supplement No. 2

DESCRIPTION OF PARCELS

PARCEL ONE:

Commencing at the intersection of the centerline of Locust Street (now vacated) with the centerline of Park Avenue, as said centerlines are shown on the Record of Survey recorded in Book 214 of Maps, at page 54, Santa Clara County Records; thence North 29° 50' 44" West 79.00 feet along said centerline of Locust Street to the true point of beginning of this description; thence from said true point of beginning North 29° 50' 44" West 501.75 feet along said centerline of Locust Street to a point thereon which bears South 29° 50' 44" East 58.18 feet from the intersection of said Locust Street centerline with the centerline of San Fernando Street, as said centerlines are shown on said Record of Survey; thence leaving said Locust Street centerline North 60° 57' 13" East 25.58 feet; thence South 29° 50' 44" East 13.20 feet; thence at right angles North 60° 09' 16" East 244.61 feet; thence South 29° 53' 36" East 32.91 feet; thence South 30° 40' 51" East 272.06 feet; thence along a tangent curve to the right, having a radius of 50.00 feet, through a central angle of 88° 55' 20" an arc distance of 77.60 feet; thence South 58° 14' 29" West 225.99 feet to the true point of beginning.

PARCEL TWO:

A non-exclusive easement for pedestrian and vehicular ingress and egress, utilities and construction, maintenance and use of a loading ramp as more particularly described in an instrument recorded August 15, 1996 as Instrument No. 13410219, Official Records.

APN: 259-44-69, 79
ARB: 259-44-x25, 25.01

Schedule 2 to

Lease Supplement No. 2

PERMITTED TITLE EXCEPTIONS

MEMORANDUM OF AMENDED, RESTATED AND CONSOLIDATED
MASTER LEASE—LEASE SUPPLEMENT NO. 2

Dated as of August 11, 1999

by and between

SUMITOMO BANK LEASING AND FINANCE, INC., as Landlord,

and

ADOBE SYSTEMS INCORPORATED, as Tenant

After recording please return to:
 Graham & James LLP
One Maritime Plaza, Suite 300
San Francisco, CA 94111
Attention: Gary S. Hand, Esq.

MEMORANDUM OF AMENDED, RESTATED AND CONSOLIDATED
MASTER LEASE—LEASE SUPPLEMENT NO. 2

    THIS MEMORANDUM OF AMENDED, RESTATED AND CONSOLIDATED MASTER LEASE ("Memorandum of Master Lease") is executed as of August 11, 1999 by and between SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware corporation ("Landlord"), and ADOBE SYSTEMS INCORPORATED, a Delaware corporation ("Tenant").

RECITALS

    WHEREAS, Landlord and Tenant have executed that certain Amended, Restated and Consolidated Master Lease ("Amended and Restated Master Lease") and a Lease Supplement No. 2 (the "Lease Supplement No. 2") (the Amended and Restated Master Lease and Lease Supplement No. 2 are hereinafter collectively referred to as the "Amended and Restated Master Lease"), which Amended and Restated Master Lease amends, restates and consolidates that certain Sublease by and between Landlord and Tenant dated August 15, 1996, a Memorandum of which was recorded August 15, 1996, as Series No. 13410224 in Official Records, Santa Clara County, California, covering a leasehold interest in certain land located on the real property located in the City of San Jose, Santa Clara County, California as more particularly described in Schedule 1attached hereto and incorporated herein by this reference ("Land") and the improvements which are located on said Land (the Land and improvements are referred to herein as the "Parcel"); and

    WHEREAS, Landlord and Tenant desire to record notice of the Lease in the real estate records of Santa Clara County, California:

    NOW, THEREFORE, in consideration of the foregoing, Landlord and Tenant hereby declare as follows:

    IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum of Master Lease as of the date and year first written above.

    TENANT:   ADOBE SYSTEMS INCORPORATED, a Delaware corporation
 
 		  
 		  
 		  
 		  
By:		  
 		  
 
 
 		  
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
 		  
Its:		  
 		  
 

(Signatures continued on next page)

    LANDLORD:   SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware corporation
 
 		  
 		  
 		  
 		  
By:		  
 		  
 
 
 		  
 		  
 		  
 		  
Name:		  
 		  
 
 
 		  
 		  
 		  
 		  
Its:		  
 		  
 

EXHIBIT C
PARTICIPATION AGREEMENT

[Included Herewith]

EXHIBIT D
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 E
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.

EXHIBIT F
EXISTING INDEBTEDNESS

1.
Credit Agreement, dated as of August [  ], 1999, among Tenant, as Borrower, certain financial institutions from time to time parties thereto, as Lenders, and ABN AMRO Bank, N.V., as Administrative Agent, providing credit facilities in the aggregate principal amount of $200,000,000

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

EXHIBIT G
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

EXHIBIT H

PRICING GRID

The Applicable Margin will be determined based upon the Lessee's quarterly calculation of Total Funded Debt to EBITDA as follows:

Level
   Total Funded
Debt/EBITDA*
   Rent
Purchaser Rate
   Applicable Base
Rate Margin
   Lessor
Contribution Rate
I   <.45x   75.0 bps   0 bps   162.5 bps
II   >.45x - Less than or equal to .75x   87.5 bps   0 bps   175 bps
III   >.75x - Less than or equal to 1.0x   100.0 bps   0 bps   187.5 bps
IV   >1.0x - Less than or equal to 1.5x   112.5 bps   0 bps   200 bps
V   >1.5x   137.5 bps   0 bps   225 bps
*
Total Funded Debt will include all on and off balance sheet debt (including synthetic leases and capital leases) and all defined contingent liabilities such as guarantees, letters of credit, net interest rate and currency swap liabilities, etc.

**
To be determined

EXHIBIT I

NOTICE OF RENTAL PERIOD SELECTION

[Date]

[as appropriate:]

Sumitomo Bank Leasing and Finance, Inc.
277 Park Avenue
New York, NY 10172
Attn: Chief Credit Officer

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

    1.  Reference is made to (a) that certain Participation Agreement, dated as of August   , 1999 (the "Participation Agreement"), among Adobe Systems Incorporated ("Tenant"), Sumitomo Bank Leasing and Finance, Inc. ("Landlord"), the financial institutions listed in Schedule I to the Participation Agreement (the "Rent Purchasers") and ABN AMRO Bank N.V., as agent for the Rent Purchasers (in such capacity, "Administrative Agent") and (b) that certain Amended, Restated and Consolidated Master Lease of Land and Improvements, dated as of August   , 1999 (the "Lease") between Landlord and Tenant. Unless otherwise indicated, all terms defined in the Participation Agreement or the Lease have the same respective meanings when used herein.

    2.  [Insert one of the following as appropriate]

    [Pursuant to Section 7.1(b) of the Lease, Tenant hereby irrevocably selects a new Rental Period for a Portion of the Lease Investment Balance constituting [the Rent Purchasers Contribution] [the Landlord Contribution] as follows:

    [Pursuant to Section 7.1(b) of the Lease, Tenant hereby irrevocably elects to divide a Portion of the Lease Investment Balance constituting [the Rent Purchasers Contribution] [the Landlord Contribution] into further Portions as follows:

Portion
   Rental Period
$             month[s]
$             month[s]
$             month[s]
$             month[s]]

    [Pursuant to Section 7.1(b) of the Lease, Tenant hereby irrevocably elects to combine into a single Portion certain Portions of the Lease Investment Balance constituting [the Rent Purchasers Contribution] [the Landlord Contribution] as follows:

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

[Signatures begin on next page.]

    ADOBE SYSTEMS INCORPORATED
 
 		  
 		  
 		  
 		  
 
    By:    
       
 
 		  
 		  
Name:		  
 		  
 
       
 
 		  
 		  
Title:		  
 		  
 
       


APPENDIX A

I.  DEFINITIONS

    Acquisition Price.  "Acquisition Price" shall mean, as to any Rent Purchaser an amount equal to such Rent Purchaser's Percentage of the Commitment Amount.

    Actual/360 Basis.  "Actual/360 Basis" shall mean interest calculated on the basis of a 360-day year and charged on the basis of actual days elapsed for any whole or partial month in which interest is being calculated.

    Additional Amount.  "Additional Amount" shall have the meaning set forth in Section 8.4 of the Lease.

    Additional Charges.  "Additional Charges" shall have the meaning set forth in Section 8.4 of the Lease.

    Additional Rent.  "Additional Rent" shall mean any amounts, other than Base Rent, which are payable by Tenant to Landlord, Administrative Agent or any other Entity as required under the Lease, any Lease Supplement or any other Operative Document, specifically including, but without limitation, any rent or other amounts payable by the ground lessee under any Ground Lease, payment of interest on any overdue payments of Tenant to either Landlord or Administrative Agent on behalf of the Rent Purchasers, payment of the Guaranteed Residual Value, the Purchase Price, all indemnification payments payable by Tenant, and all Break Funding Costs.

    Administrative Agent.  "Administrative Agent" shall mean ABN AMRO Bank N.V., as agent for the Rent Purchasers, collectively, and its successors and permitted assigns in interest.

    Administrative Agent's Wire Transfer Instructions.  "Administrative Agent's Wire Transfer Instructions" shall mean the following with respect to payments to be made to Administrative Agent:

    Advance.  "Advance" shall mean, with respect to Lease Supplement No. 1 and Lease Supplement No. 2 executed as of the Date of Lease, the Commitment Amount, which shall include (a) costs incurred in connection with the making of the Lease and paid by Landlord or Administrative Agent (including reasonable attorneys fees and costs in connection with preparation of the Operative Documents, plus all costs required to return the Original Security Deposit and the collateral under the Original Pledge Agreement, to terminate the Original Pledge Agreement and the Original Custodial Agreement and to reconvey the Original Adobe Deed of Trust), transaction costs (including title charges and professional fees and expenses) and other reasonable professional fees, arrangement fees, appraisal fees, inspection, testing and permitting fees, reasonable travel expense for inspections and insurance; and (b) all amounts previously advanced pursuant to the Original Leases.

    Affiliate.  "Affiliate" shall mean, with respect to any Entity, (a) each Entity that, directly or indirectly, owns or controls, whether beneficially or as a trustee, guardian or other fiduciary, ten percent (10%) or more of any class of Equity Securities of such Entity, (b) each Entity that controls, is controlled by or is under common control with such Entity or any Affiliate of such Entity or (c) each of such Entity's officers, directors, general partners and, if such Entity is a joint venture organized as a separate legal entity, joint venturers having powers comparable to a general partner; provided, however, that in no case shall any of the following Entities be deemed to be an Affiliate of Tenant or any of its Subsidiaries for purposes of the Operative Documents: (i) Landlord, Administrative Agent or any Rent Purchaser or (ii) the general partner of any VC Partnership which would otherwise be deemed an Affiliate solely because it acts as general partner and controls such VC Partnership. For the purposes of this definition, "control" of an Entity shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies.

    Amended Deeds of Trust.  "Amended Deeds of Trust" shall mean those certain amended deeds of trust in favor of Landlord, dated July [  ], 1999, executed by Tenant in favor of Landlord, which Amended Deeds of Trust shall amend each of the Original Deeds of Trust.

    Applicable Environmental Law.  "Applicable Environmental Laws" shall have the meaning set forth in Section 10.1(b) of the Lease.

    Appraisal.  "Appraisal" shall have the meaning set forth in Section 1.9 of the Lease.

    Assignee Rent Purchaser.  "Assignee Rent Purchaser" shall have the meaning set forth in Section 7.4(b) of the Rent Purchase Agreement.

    Assignor Rent Purchaser.  "Assignor Rent Purchaser" shall have the meaning set forth in Section 7.4(b) of the Rent Purchase Agreement.

    Assignment.  "Assignment" shall have the meaning set forth in Section 7.4(b) of the Rent Purchase Agreement.

    Assignment Agreement.  "Assignment Agreement" shall have the meaning set forth in Section 7.4(b) of the Rent Purchase Agreement.

    Base Rate.  "Base Rate" shall mean, on any day, the greater of (a) the "Prime Rate," which is the per annum rate publicly announced by ABN AMRO Bank N.V. at its Chicago Office as in effect on such date and is determined by ABN AMRO Bank N.V. from time to time as a means of pricing credit extensions to some customers and is neither directly tied to any external rate of interest or index nor necessarily the lowest rate of interest charged by ABN AMRO Bank N.V. at any given time for any particular class of customers or credit extensions, and (b) one-half percent (0.50%) plus the "Federal Funds Rate" for such day, which Federal Funds Rate for such day is the per annum rate set forth in the weekly statistical release designated as H.15(519), or any successor publication, published by the Board of Governors of the Federal Reserve System (including any such successor publication, "H.15 (519)") for such day opposite the caption "Federal Funds (Effective)" for such day. If on any relevant day, a rate is not yet published in H.15 (519), the Federal Funds Rate for such day shall be the rate set forth in the daily statistical release designated as the Composite 3:30 p.m. Quotations for U.S. Government Securities, or any successor publication, published by the Federal Reserve Bank of New York (including any such successor publication, the "Composite 3:30 p.m. Quotations") for such day under the caption "Federal Funds Effective Rate". If on any relevant day, a rate is not yet published in either H.15 (519) or the Composite 3:30 p.m. Quotations, the Federal Funds Rate for such day shall be the arithmetic mean, as determined by Administrative Agent, of the rates quoted to Administrative Agent for such day by three (3) Federal funds brokers of recognized standing selected by Administrative Agent, and Administrative Agent shall promptly provide written evidence of such calculation to Tenant. Any change in the Base Rate resulting from a change in the Prime Rate shall become effective on the Business Day on which each change in the Prime Rate occurs.

    Base Rent.  "Base Rent" shall mean, as of a Rent Payment Date, that amount equal to the following:

    Break Funding Costs.  "Break Funding Costs" shall mean all costs, losses and expenses of Landlord, Administrative Agent or any Rent Purchaser (including all such costs, losses and expenses in respect of any interest paid or premium or penalty incurred by such Entity to lenders or otherwise), as a result of unscheduled payments or the exercise of the Purchase Option pursuant to Section 20.1 of the Lease, other than on a Rent Payment Date, and which may include losses incurred by Landlord, Administrative Agent or such Rent Purchaser as a result of funding and other contracts entered into by Landlord, Administrative Agent or such Rent Purchaser in connection with the transactions contemplated under the Operative Documents, or such costs, losses and expenses of Landlord resulting from unscheduled payments as such payments relate to any Rate Contracts in effect upon the Date of Lease for the Landlord Contribution.

    Building.  "Building" shall mean any building or buildings, structures and facilities now or hereafter located on the Land covered by a Lease Supplement.

    Business Days.  "Business Days" shall mean every day of the week excepting Saturday and Sunday, and excluding holidays when banks in California, Illinois and New York are generally closed for business, unless otherwise expressly stated and, if such Business Day is relating to the LIBOR Rate or the calculation of the LIBOR Rate, a day that dealings in U.S. Dollar Deposits are carried out in the London Interbank market.

    Capital Leases.  "Capital Leases" shall mean any and all lease obligations that, in accordance with GAAP, are required to be capitalized on the books of a lessee.

    Change of Control.  "Change of Control" shall mean

    Change of Law.  "Change of Law" shall have the meaning set forth in the definition of "Landlord Contribution Rate."

    City.  "City" shall mean the City in which a Parcel is located.

    Commitment Amount.  "Commitment Amount," as of the Date of Lease, shall mean           and no/100 Dollars ($          ).

    Contingent Obligation.  "Contingent Obligation" shall mean, with respect to any Entity, (a) any Guaranty Obligation of that Entity; and (b) any direct or indirect obligation or liability, contingent or otherwise, of that Entity (i) in respect of any Surety Instrument (as defined in the definition of "Indebtedness") issued for the account of that Entity or as to which that Entity is otherwise liable for reimbursement of drawings or payments, (ii) as a partner or joint venturer in any partnership or joint venture, (iii) to purchase any materials, supplies or other property from, or to obtain the services of, another Entity if the relevant contract or other related document or obligation requires that payment for such materials, supplies or other property, or for such services, shall be made regardless of whether delivery of such materials, supplies or other property is ever made or tendered, or such services are ever performed or tendered, (iv) in respect to any Rate Contract that is not entered into in connection with a bona fide hedging operation that provides offsetting benefits to such Entity, or (v) to purchase or sell Equity Securities or other securities of any Entity. The amount of any Contingent Obligation shall (subject, in the case of Guaranty Obligations, to the last sentence of the definition of "Guaranty Obligation") be deemed equal to the maximum reasonably anticipated liability in respect thereof; provided, that (A) in the case of item (b)(v) of this definition, the amount of the Contingent Obligation with respect to the purchase or sale of such Equity Securities or other securities shall be the net settlement amount to be paid in cash or securities, and (B) in the case of item (b)(iv) of this definition, the Contingent Obligation with respect to such Rate Contracts shall be marked to market on a current basis.

    Contractual Obligation.  "Contractual Obligation" of any Entity shall mean, any indenture, note, lease, loan agreement, security, deed of trust, mortgage, security agreement, guaranty, instrument, contract, agreement or other form of contractual obligation or undertaking to which such Entity is a party or by which such Entity or any of its property is bound.

    Debt/EBITDA Ratio.  "Debt/EBITDA Ratio" shall mean, with respect to Tenant for any consecutive four-quarter period, the ratio, determined on a consolidated basis in accordance with GAAP, of:

        to

    Default.  "Default" shall mean an Event of Default or any event or circumstance not yet constituting an Event of Default which, with the giving of any notice or the lapse of any period of time or both, would become an Event of Default.

    Default Amounts.  "Default Amounts" shall mean all amounts paid by Tenant or otherwise realized by Landlord as a result of the exercise of Landlord's remedies during the continuance of an Event of Default under the Lease.

    Default Rate.  "Default Rate" shall mean the per annum rate equal to the sum of two hundred basis points plus (a) in the case of any payment of Base Rent on any Portion of the Lease Investment Balance after an Event of Default, the Landlord Contribution Rate or the Rent Purchasers Contribution Rate applicable to such Portion immediately prior to such Event of Default, or (b) in the case of any other payment, the Base Rate.

    Distribution Formula.  "Distribution Formula" shall have the meaning set forth in Section 16.4 of the Lease.

    EBITDA.  "EBITDA" shall mean, with respect to Tenant for any period, the sum, determined on a consolidated basis in accordance with GAAP, of the following:

        plus

    Eligible Assignee.  "Eligible Assignee" shall mean an Entity that is a commercial bank or another financial institution which is a qualified institutional buyer as defined in Rule 144A under the Securities Act of 1933, as amended; provided that (i) such Entity has a combined capital and surplus of at least $100,000,000 and (ii) such Entity is acting through a branch, agency or office located in the United States.

    Employee Benefit Plan.  "Employee Benefit Plan" shall mean any employee benefit plan within the meaning of section 3(3) of ERISA maintained or contributed to by Tenant or any ERISA Affiliate, other than a Multiemployer Plan.

    Entity.  "Entity" shall mean any person, corporation, partnership (general or limited), joint venture, association, limited liability company, joint stock company, trust or other business entity or organization.

    Equity Securities.  "Equity Securities" of any Entity shall mean (a) all common stock, preferred stock, participations, shares, partnership interests or other equity interests in and of such Entity (regardless of how designated and whether or not voting or non-voting) and (b) all warrants, options and other rights to acquire or sell any of the foregoing.

    ERISA.  "ERISA" shall mean the Employee Retirement Income Security Act of 1974.

    ERISA Affiliate.  "ERISA Affiliate" shall mean any Entity which is treated as a single employer with Tenant under Section 414 of the IRC.

    Estimate Future Value.  "Estimated Future Value" shall have the meaning set forth in Section 1.9 of the Lease.

    Event of Default.  "Event of Default" shall have the meaning set forth in Section 19.1 of the Lease.

    Expiration Date.  "Expiration Date" shall have the meaning set forth in Section 1.7 of the Lease.

    Extension Term.  "Extension Term" shall have the meaning set forth in Section 1.7 of the Lease.

    Federal Funds Rate.  "Federal Funds Rate" shall have the meaning set forth in the definition of "Base Rate."

    Financial Statements.  "Financial Statements" shall mean, with respect to any accounting period for any Entity, statements of income, shareholders' equity and cash flows of such Entity for such period, and a balance sheet of such Entity as of the end of such period, setting forth in each case in comparative form figures for the corresponding period in the preceding fiscal year if such period is less than a full fiscal year or, if such period is a full fiscal year, corresponding figures from the preceding annual audit, all prepared in reasonable detail and in accordance with GAAP.

    Fixed Charge Coverage Ratio.  "Fixed Charge Coverage Rate" shall mean, with respect to Tenant for any consecutive four-quarter period, the ratio, determined on a consolidated basis in accordance with GAAP, of:

        to

    Foreign Plan.  "Foreign Plan" shall mean any employee benefit plan maintained by Tenant or any of its Subsidiaries which is mandated or governed by any Governmental Rule of any Governmental Authority other than the United States.

    Funding.  "Funding" shall mean the payment of the applicable Acquisition Price by any Rent Purchaser on the Funding Date.

    Funding Date.  "Funding Date" shall mean the date upon which the entire Commitment Amount is funded to Tenant by Landlord and each Rent Purchaser pursuant to the terms of the Lease, the Participation Agreement and the Rent Purchase Agreement.

    GAAP.  "GAAP" shall mean generally accepted accounting principles and practices as in effect in the United States of America from time to time, consistently applied.

    Governmental Action.  "Governmental Action" shall mean all permits, authorizations, registrations, consents, approvals, waivers, exceptions, variances, orders, judgments, written interpretations, decrees, licenses, exemptions, publications, filings, notices to and declarations of or with, or required by, any Governmental Authority, or required by any applicable law, and shall include without limitation, all environmental and operating permits and licenses that are required for the full use, occupancy, zoning and operation of the Parcels.

    Governmental Authority.  "Governmental Authority" shall mean any nation or government, any state, county, city or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

    Governmental Charges.  "Governmental Charges" shall mean, with respect to any Entity, all levies, assessments, fees, claims or other charges imposed by any Governmental Authority upon such Entity or any of its property or otherwise payable by such Entity.

    Governmental Rule.  "Governmental Rule" shall mean any law, rule, regulation, ordinance, order, code interpretation, judgment, decree, directive, guidelines, policy or similar form of decision of any Governmental Authority which is made publicly available.

    Granting Rent Purchaser.  "Granting Rent Purchaser" shall have the meaning set forth in Section 7.4(c) of the Rent Purchase Agreement.

    Ground Lease.  "Ground Lease" shall mean any ground lease or other agreement pursuant to which Land described in a Lease Supplement is leased to Landlord, as ground lessee, by a ground lessor.

    Guaranteed Residual Value.  "Guaranteed Residual Value" shall mean an amount which is indicated on each Lease Supplement as of the Date of Lease.

    Guaranty Obligation.  "Guaranty Obligation" shall mean, with respect to any Entity, any direct or indirect liability of that Entity with respect to any indebtedness, lease, dividend, letter of credit or other obligation (the "primary obligations") of another Entity (the "primary obligor"), including any obligation of that Entity, whether or not contingent, (a) to purchase, repurchase or otherwise acquire such primary obligations or any property constituting direct or indirect security therefor, or (b) to advance or provide funds (i) for the payment or discharge of any such primary obligation, or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet item, level of income or financial condition of the primary obligor, or (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, or (d) otherwise to assure or hold harmless the holder of any such primary obligation against loss in respect thereof. The amount of any Guaranty Obligation shall be deemed equal to the stated or determinable amount of the primary obligation in respect of which such Guaranty Obligation is made or, if not stated or if indeterminable, the maximum reasonably anticipated liability in respect thereof.

    Improvements.  "Improvements" shall mean any Building located on any Land described in a Lease Supplement and all related improvements, fixtures and equipment now or hereafter installed in such Building or on the Land on which such Building is located.

    Indebtedness.  "Indebtedness" of any Entity shall mean, without duplication:

    Insurance and Condemnation Payments.  "Insurance and Condemnation Payments" shall mean the portion of all compensation attributable to the Parcels and awarded or paid upon any Taking, as described in Section 16.4 of the Lease, and paid to Landlord pursuant to the Distribution Formula set forth in Section 16.4 of the Lease, plus the portion of all proceeds of insurance paid to Landlord pursuant to the Distribution Formula set forth in Section 16.4 of the Lease, as described in Section 17.3 of the Lease.

    Interest Expenses.  "Interest Expenses" shall mean, with respect to any Entity for any period, the sum, determined on a consolidated basis in accordance with GAAP, of (a) all interest on the Indebtedness of such Entity paid or accrued during such period (including interest attributable to Capital Leases) plus (b) all fees in respect of outstanding letters of credit paid or accrued by such Entity during such period.

    Investment.  "Investment" of any Entity shall mean any loan or advance of funds by such Entity to any other Entity (other than advances to employees of such Entity for moving and travel expenses, drawing accounts and similar expenditures in the ordinary course of business), any purchase or other acquisition of any Equity Securities or Indebtedness of any other Entity, any capital contribution by such Entity to or any other investment by such Entity in any other Entity (including any Guaranty Obligations of such Entity and any indebtedness of such Entity of the type described in clause (h) of the definition of "Indebtedness" on behalf of any other Entity); provided, however, that Investments shall not include (a) accounts receivable or other indebtedness owed by customers of such Entity which are current assets and arose from sales of inventory in the ordinary course of such Entity's business, (b) prepaid expenses of such Entity incurred and prepaid in the ordinary course of business, or (c) acquisitions of Equity Securities subject to Section 21.21(e) of the Lease.

    Invoice.  "Invoice" shall have the meaning set forth in Section 7.1 of the Lease.

    IRC.  "IRC" shall mean the Internal Revenue Code of 1986.

    Land.  "Land" shall have the meaning set forth in Section 1.5 of the Lease.

    Landlord.  "Landlord" shall mean Sumitomo Bank Leasing and Finance, Inc. and its successors and permitted assigns.

    Landlord Affiliate.  "Landlord Affiliate" shall mean any entity which controls, is controlled by or is under the common control of Landlord.

    Landlord's Additional Rent Interest.  "Landlord's Additional Rent Interest" shall mean the respective amount owed to Landlord for Additional Rent, excluding the Purchase Price, the Guaranteed Residual Value, the Termination Amount, Insurance and Condemnation Payments and Default Amounts, but including, without limitation, any Break Funding Costs, Additional Charges and Additional Amounts payable pursuant to Section 8.4 of the Lease, claims for indemnification amounts payable by Tenant under the Operative Documents, and all other fees, costs and expenses payable or reimbursable by Tenant under the Operative Documents.

    Landlord's Base Rent Interest.  "Landlord's Base Rent Interest" shall mean the sum of (a) the portion of each payment of Base Rent attributable to the Landlord Contribution calculated in accordance with clause (b) of the definition of "Base Rent;" plus (b) the same portion of each payment of interest paid by Tenant at the Default Rate on Base Rent.

    Landlord Contribution.  "Landlord Contribution," at the time of the relevant calculation, shall mean Ten Million Seven Hundred and Forty Thousand and No/100 Dollars ($10,740,000.00), less all amounts applied to reduce the Lease Investment Balance which are distributed to Landlord in accordance with the Rent Purchase Agreement.

    Landlord Contribution Rate.  From the Date of Lease to August 15, 2003, the "Landlord Contribution Rate" shall be equal to a fixed rate of seven and one-hundredths of one percent (7.01%), plus the applicable margin set forth in the Pricing Grid; and (b) from and after August 15, 2003, the Landlord Contribution Rate for any Rental Period and Portion applicable to the Landlord Contribution, shall be equal to the per annum rate equal to the sum of the LIBOR Rate for such Rental Period or Portion plus the applicable margin set forth in the Pricing Grid, such rate to change from time to time during such period as the applicable margin shall change. Notwithstanding the foregoing:


    Landlord's Default Interest.  "Landlord's Default Interest" shall mean Landlord's right to receive and retain, in the order of priority set forth in Section 3.2 of the Rent Purchase Agreement, so much of the Default Amounts that does not exceed the Landlord's Purchase Price Interest.

    Landlord's Guaranteed Residual Value Interest.  "Landlord's Guaranteed Residual Value Interest" shall mean Landlord's right to receive and retain, in the order of priority set forth in Section 3.2 of the Rent Purchase Agreement which shall be equal to   % of the Guaranteed Residual Value.

    Landlord's Insurance and Condemnation Interest.  "Landlord's Insurance and Condemnation Interest" shall mean Landlord's right to receive and retain, in the order of priority set forth in Section 3.2 of the Rent Purchase Agreement, so much of the Insurance and Condemnation Payments that does not exceed the sum of Landlord's Percentage of the Insurance and Condemnation Payments.

    Landlord's Interests.  "Landlord's Interests" shall mean, with respect to a Parcel, the Landlord's Base Rent Interest, the Landlord's Default Interest, the Landlord's Insurance and Condemnation Interest, the Landlord's Purchase Price Interest, Landlord's Additional Rent Interest, the Landlord's Guaranteed Residual Value Interest and the Landlord's Termination Option Interest.

    Landlord's Percentage.  "Landlord's Percentage" shall mean the percentage that the Landlord Contribution represents of the Lease Investment Balance, as such amounts are reduced by any payments applied to the Lease Investment Balance.

    Landlord's Purchase Price Interest.  "Landlord's Purchase Price Interest" shall mean Landlord's right to receive and retain, in the order of priority set forth in Section 3.2 of the Rent Purchase Agreement, so much of the Purchase Price payable by Tenant under Section 20.1 of the Lease that exceeds the Rent Purchasers' Purchase Price Interest.

    Landlord Taxes.  "Landlord Taxes" shall have the meaning set forth in Section 8.1(b) of the Lease.

    Landlord's Termination Option Interest.  "Landlord's Termination Option Interest" shall mean Landlord's right to receive and retain, in the order of priority set forth in Section 3.2 of the Rent Purchase Agreement, so much of the Termination Amount that exceeds the Rent Purchasers' Termination Option Interest.

    Landlord's Wire Transfer Instructions.  "Landlord's Wire Transfer Instructions" shall mean the following with respect to payments to be made to the Landlord:

    Lease.  "Lease" shall mean that certain Amended, Restated and Consolidated Master Lease of Land and Improvements dated August   , 1999 by and between Landlord and Tenant.

    Lease Investment Balance.  "Lease Investment Balance" shall mean, for any Lease Supplement, at the time in question, (a) the amount specified in such Lease Supplement as the original Lease Investment Balance; reduced by (b) the following, to the extent that the following relate to the Land and Improvements described in such Lease Supplement: (i) the aggregate of all amounts received by Landlord pursuant to the following provisions of the Lease: Article XVI (Eminent Domain), and Article XVII (Damage or Destruction), Section 19.3 (Landlord's Remedies), Section 20.1 (Option to Purchase Parcels), and/or Section 20.2 (Termination Option); and (ii) the aggregate of all amounts received by Landlord or Administrative Agent in respect of the Lease or any other Operative Document that are not otherwise applied to reduce the Lease Investment Balance relating to such Lease Supplements and which constitute a repayment or reduction of the amounts placed at risk by or through the Landlord, excluding for purposes of this clause amounts paid as Base Rent under the Lease and reimbursement or payment for expenses, fees, indemnification payments and similar items payable by Tenant to Landlord, Administrative Agent, any Rent Purchaser or any other Entity under the Lease, any Lease Supplement, or any other Operative Document.

    Lease Investment Balance Debt.  "Lease Investment Balance Debt" shall mean the portion of the Lease Investment Balance not invested by Landlord,. As of the Date of Lease, the Lease Investment Balance Debt shall not exceed $131,760,000.

    Lease Investment Balance Equity.  "Lease Investment Balance Equity" shall mean the portion of the Lease Investment Balance invested by Landlord. On the Date of Lease, the Lease Investment Balance Equity shall be $10,740,000.

    Lease Supplement.  "Lease Supplement" shall mean either or both of Lease Supplement No. 1 (attached to the Lease as Exhibit A) or Lease Supplement No. 2 (attached to the Lease as Exhibit B).

    Lease Supplement Term.  "Lease Supplement Term" shall have the meaning set forth in each Lease Supplement.

    Legal Requirements.  "Legal Requirements" shall mean all statutes, codes, laws, acts, ordinances, orders, judgments, decrees, injunctions, rules, regulations, permits, licenses, authorizations, directions and requirements of all federal, state, county, municipal and other governments, departments, commissions, boards, courts, authorities, officials and officers, which now or at any time hereafter are applicable to the Lease or applicable to and enforceable against any Parcel or any part thereof, as applicable.

    LIBOR Rate.  "LIBOR Rate" shall mean, with respect to each Rental Period, a rate per annum equal to the quotient (rounded upward if necessary to the nearest 1/100 of one percent) of:

        divided by

    If, for any reason, any Reference Banks do not provide Landlord and Administrative Agent with rates pursuant to clause (a)(ii) after Tenant elects the Reference Bank Rate to determine the LIBOR Rate for any Rental Period, Administrative Agent shall calculate the Reference Bank Rate for such Rental Period based upon the rate or rates provided by the other Reference Banks or Reference Bank; provided, however, that, if no Reference Bank provides Administrative Agent with such a rate, Administrative Agent shall determine the LIBOR Rate for such Rental Period based upon the Telerate Page Rate. If, for any reason, the Telerate Page Rate is not available after Tenant elects the Telerate Page Rate to determine the LIBOR Rate for any Rental Period, Administrative Agent shall determine the LIBOR Rate for such Rental Period based upon the Reference Bank Rate. The LIBOR Rate shall be adjusted automatically as to all outstanding Portions then calculated on the basis of the LIBOR Rate as of the effective date of any change in the Reserve Requirement.

    Lien.  "Lien" shall mean, with respect to any property, any security interest, mortgage, pledge, lien, charge or other encumbrance in, of, or on such property or the income therefrom, including, without limitation, the interest of a vendor or lessor under a conditional sale agreement, Capital Lease or other title retention agreement, or any agreement to provide any of the foregoing, and the filing of any financing statement or similar instrument under the Uniform Commercial Code or comparable law of any jurisdiction other than filings made for notice purposes only in connection with true leases (which would not include "synthetic" leases).

    Majority Entities.  "Majority Entities" shall mean those Entities representing an aggregate interest in the Lease Investment Balance in excess of sixty-six and two thirds percent (662/3%), excluding from the "Lease Investment Balance" that portion thereof attributed to any Entity that is in default under the terms of the Rent Purchase Agreement or the Participation Agreement.

    Majority Rent Purchasers.  "Majority Rent Purchasers" shall mean those Rent Purchasers representing an aggregate interest in the Lease Investment Balance Debt in excess of fivty percent (50%), excluding from the "Lease Investment Balance Debt" that portion thereof attributed to any Rent Purchaser that is in default under the terms of the Rent Purchase Agreement or the Participation Agreement.

    Master Lease Term.  "Master Lease Term" is defined in Section 1.7 of the Lease.

    Material Adverse Effect.  "Material Adverse Effect" shall mean a material adverse effect on (a) the business, assets, operations, or financial condition of Tenant and its Subsidiaries, taken as a whole; (b) the ability of Tenant to pay or perform the Obligations in accordance with the terms of the Lease and the other Operative Documents; or (c) practical realization of the material rights and remedies of Landlord, Administrative Agent or any Rent Purchaser intended to be provided under the Operative Documents.

    Material Subsidiary.  "Material Subsidiary" shall mean any Subsidiary that had revenues during the immediately preceding fiscal year equal to or greater than five percent (5%) of the consolidated gross revenues of Tenant and its Subsidiaries during such year.

    Multiemployer Plan.  "Multiemployer Plan" shall mean any multiemployer plan within the meaning of section 3(37) of ERISA maintained or contributed to by Tenant or any ERISA Affiliate.

    Net Share Repurchases.  "Net Share Repurchases" shall mean, with respect to Tenant for any period, the remainder, calculated on a consolidated basis, of (a) the aggregate consideration paid by Tenant and its Subsidiaries during such period (including Indebtedness incurred) to purchase, redeem, retire, defease or otherwise acquire Equity Securities of Tenant and its Subsidiaries minus (b) the aggregate consideration received by Tenant and its Subsidiaries during such period for Equity Securities issued by Borrower and its Subsidiaries net of the actual amount of the reasonable fees and commissions paid to Entities other than Tenant or its Affiliates, the reasonable legal expenses and the other reasonable costs and expenses directly related to such issuance of Equity Securities that are paid by Tenant and its Subsidiaries; provided, that (i) capital stock of Tenant and its Subsidiaries issued in exchange for other capital stock of Tenant and its Subsidiaries as permitted by Section 21.21(f)(i) of the Lease shall be excluded for purposes of calculating clauses (a) and (b) above, (ii) repurchases of capital stock from employees of Tenant or its Subsidiaries as permitted by Section 21.21(f)(iv) of the Lease shall be excluded for purposes of calculating clause (a) above, and (iii) Equity Securities issued in connection with acquisitions permitted by Section 21.21(d) of the Lease shall be excluded for purposes of calculating clause (b) above.

    Net Worth.  "Net Worth" shall mean, with respect to Tenant at any time, the remainder at such time, determined on a consolidated basis in accordance with GAAP, of (a) the total assets of Tenant and its Subsidiaries at such time, minus (b) the sum (without limitation and without duplication of deductions) of the total liabilities of Tenant and its Subsidiaries at such time and all reserves of Tenant and its Subsidiaries at such time for anticipated losses and expenses (to the extent not deducted in calculating total assets in clause (a) above).

    Notice.  "Notice" shall mean a written advice, request, demand or notification required or permitted by the Lease, as more particularly provided in Section 21.3 of the Lease.

    Obligations.  "Obligations" shall mean and include, with respect to Tenant, all loans, advances, debts, liabilities, and obligations, howsoever arising, owed by Tenant to Landlord, Administrative Agent or any Rent Purchaser of every kind and description (whether or not evidenced by any note or instrument and whether or not for the payment of money), direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising pursuant to the terms of the Lease and the other Operative Documents, including without limitation all interest, fees, charges, expenses, attorneys' fees and accountants' fees chargeable to Tenant or payable by Tenant under the Lease or the other Operative Documents.

    Official Records.  "Official Records" shall mean the official records of the Santa Clara County.

    Operative Documents.  "Operative Documents" shall mean the Lease, the Lease Supplements, the Security Instruments, the Participation Agreement, the Rent Purchase Agreement, the Rent Purchasers' Deed of Trust and all other documents, instruments and agreements delivered to Landlord, Administrative Agent or any Rent Purchaser pursuant to the terms of any of the foregoing documents.

    Original Adobe Deed of Trust.  "Original Adobe Deed of Trust" shall have the meaning set forth in the Recitals to the Lease.

    Original Construction Management Agreements.  "Original Construction Management Agreements" shall have the meaning set forth in the Recitals to the Lease.

    Original Custodial Agreement.  "Original Custodial Agreement" shall have the meaning set forth in the Recitals to the Lease.

    Original Deeds of Trust.  "Original Deeds of Trust" shall have the meaning set forth in the Recitals to the Lease.

    Original Leases.  "Original Leases" shall have the meaning set forth in the Recitals to the Lease.

    Original Pledge Agreement.  "Original Pledge Agreement" shall have the meaning set forth in the Recitals to the Lease.

    Original Security Deposit.  "Original Security Deposit" shall have the meaning set forth in the Recitals to the Lease.

    Participation Agreement.  "Participation Agreement" shall mean that certain Participation Agreement dated as of July [  ], 1999, executed by and among Tenant, Landlord, Administrative Agent and Rent Purchasers in the form attached to the Lease as Exhibit C.

    PBGC.  "PBGC" shall mean the Pension Benefit Guaranty Corporation.

    Percentage Interest.  "Percentage Interest" shall mean Landlord's Percentage or Rent Purchasers' Percentage, respectively.

    Permitted Liens.  "Permitted Liens" shall have the meaning set forth in Section 21.21(b) of the Lease.

    Permitted Title Exceptions.  "Permitted Title Exceptions" shall mean the following: (a) the exceptions set forth in each Lease Supplement; (b) any exceptions created or caused by Tenant or to which Tenant consents in writing; (c) taxes and assessments (excluding Landlord's Taxes as defined in Section 8.1 of the Lease) not yet due and payable; (d) the Security Instruments; (e) all title defects, liens, encumbrances, deeds of trust, mortgages, rights-of-way, and restrictive covenants and conditions affecting the Land except to the extent any of the foregoing arise as a result of Landlord's actions or with Landlord's written consent (unless such actions taken or consent given by Landlord are requested in writing by Tenant); and (f) the Lease and all Lease Supplements.

    Present Value.  "Present Value" shall have the meaning set forth in Section 1.9 of the Lease.

    Portion.  "Portion" shall mean a portion of the Lease Investment Balance for which a Landlord Contribution Rate or a Rent Purchasers Contribution Rate is determined.

    Pricing Grid.  "Pricing Grid" shall mean that certain pricing grid attached to the Lease as Exhibit H.

    Purchase Option.  "Purchase Option" shall have the meaning set forth in Section 20.1(a) of the Lease.

    Purchase Price.  "Purchase Price" shall have the meaning set forth in Section 20.1(a) of the Lease.

    Quick Ratio.  "Quick Ratio" shall mean, with respect to Tenant and its Subsidiaries at any time, the ratio, determined on a consolidated basis in accordance with GAAP, of:

        to

    Rate Contracts.  "Rate Contracts" shall mean swap agreements (as that term is defined in Section 101 of the Federal Bankruptcy Reform Act of 1978, as amended) and any other agreements or arrangements designed to provide protection against fluctuations in interest or currency exchange rates.

    Real Estate Taxes.  "Real Estate Taxes" shall have the meaning set forth in Section 8.1(b) of the Lease.

    Register.  "Register" shall have the meaning set forth in Section 7.4(b)(ii) of the Rent Purchase Agreement.

    Rental Period.  "Rental Period" shall mean, with respect to any Portion, the time period selected by Tenant pursuant to Section 7.1 of the Lease which commences on the first day of such Portion and ends on the last day of such time period, and thereafter, each subsequent time period selected by Tenant pursuant to Section 7.1 of the Lease which commences on the last day of the immediately preceding time period and ends on the last day of that time period.

    Rent Commencement Date.  "Rent Commencement Date" shall have the meaning set forth in the Lease Supplements.

    Rent Payment Date.  "Rent Payment Date" shall have the meaning set forth in Section 7.1 of the Lease.

    Rent Purchase Agreement.  "Rent Purchase Agreement" shall mean that certain Rent Purchase Agreement, dated as of July [  ], 1999, executed by and among Landlord, Administrative Agent and Rent Purchasers and acknowledged by Tenant.

    Rent Purchasers.  "Rent Purchasers" shall have the meaning set forth in the Participation Agreement.

    Rent Purchasers' Additional Rent Interest.  "Rent Purchasers' Additional Rent Interest" shall mean the respective amount owed to each of the Rent Purchasers for Additional Rent, excluding the Purchase Price, the Guaranteed Residual Value, the Termination Amount, Insurance and Condemnation Payments and Default Amounts, but including, without limitation, any Break Funding Costs, Additional Charges and Additional Amounts payable pursuant to Section 8.4 of the Lease, claims for indemnification amounts payable by Tenant under the Operative Documents, and all other fees, costs and expenses payable or reimbursable by Tenant under the Operative Documents.

    Rent Purchasers' Base Rent Interest.  "Rent Purchasers' Base Rent Interest" shall mean the sum of (a) the portion of each payment of Base Rent attributable to the Rent Purchasers Contribution calculated in accordance with clause (a) of the definition of "Base Rent;" plus (b) the same portion of each payment of interest paid by Tenant at the Default Rate on Base Rent.

    Rent Purchaser's Commitment.  "Rent Purchaser's Commitment" shall mean the commitment of any Rent Purchaser as specified in Section 2.2 of the Participation Agreement and on such Rent Purchaser's counterpart signature page of the Participation Agreement.

    Rent Purchasers Contribution.  "Rent Purchasers Contribution," at the time of the relevant calculation, shall mean the Lease Investment Balance as of the date of such calculation, less the Landlord Contribution as of such date.

    Rent Purchasers Contribution Rate.  "Rent Purchasers Contribution Rate" shall mean, for any Rental Period and Portion applicable to the Rent Purchasers Contribution, the per annum rate equal to the sum of the LIBOR Rate for such Rental Period and Portion plus the applicable margin set forth in the Pricing Grid, such rate to change from time to time during such period as the applicable margin shall change. Notwithstanding the foregoing:

    Rent Purchasers' Deed of Trust.  "Rent Purchasers' Deed of Trust" shall mean those certain Deeds of Trust granted by Landlord in favor of Administrative Agent to secure Landlord's obligations to Administrative Agent and the Rent Purchasers pursuant to the Operative Documents.

    Rent Purchasers' Default Interest.  "Rent Purchasers' Default Interest" shall mean the right of the Rent Purchasers to receive, in the order of priority set forth in Section 3.2 of the Rent Purchase Agreement, so much of the Default Amounts that does not exceed the Rent Purchasers' Purchase Price Interest.

    Rent Purchasers' Guaranteed Residual Value Interest.  "Rent Purchasers' Guaranteed Residual Value Interest" shall mean the right of the Rent Purchasers to receive and retain, in the order of priority set forth in Section 3.2 of the Rent Purchase Agreement, so much of any payment of Guaranteed Residual Value that does not exceed the sum of (a) Rent Purchasers' Percentage of the Lease Investment Balance, plus (b) the same portion of each payment of interest paid by Tenant at the Default Rate on such payment of Guaranteed Residual Value.

    Rent Purchasers' Insurance and Condemnation Interest.  "Rent Purchasers' Insurance and Condemnation Interest" shall mean the right of the Rent Purchasers to receive, in the order of priority set forth in Section 3.2 of the Rent Purchase Agreement, so much of the Insurance and Condemnation Payments that does not exceed the sum of Rent Purchasers' Percentage of the Insurance and Condemnation Payments.

    Rent Purchasers' Interests.  "Rent Purchasers' Interests" shall mean, with respect to a Parcel, the Rent Purchasers' Base Rent Interest, the Rent Purchasers' Additional Rent Interest, the Rent Purchasers' Default Interest, the Rent Purchasers' Insurance and Condemnation Interest, the Rent Purchasers' Purchase Price Interest, the Rent Purchasers' Guaranteed Residual Value Interest and the Rent Purchasers' Termination Option Interest with respect to such Parcel.

    Rent Purchasers' Percentage.  "Rent Purchasers' Percentage" shall mean the percentage that the Rent Purchasers Contribution represents of the Lease Investment Balance as such amounts are reduced by any payments applied to the Lease Investment Balance. As to any individual Rent Purchaser, "Rent Purchaser's Percentage" shall mean the percentage that such Rent Purchaser's Commitment represents of the Lease Investment Balance as such amounts are reduced by any payments applied to the Lease Investment Balance.

    Rent Purchasers' Purchase Price Interest.  "Rent Purchasers' Purchase Price Interest" shall mean the right of the Rent Purchasers to receive, in the order of priority set forth in Section 3.2 of the Rent Purchase Agreement, so much of the Purchase Price payable by Tenant to Landlord pursuant to an election under Section 20.1 of the Lease that does not exceed (a) the Rent Purchasers' Percentage of the Purchase Price, plus (b) the same portion of each payment of interest paid by Tenant at the Default Rate on the Purchase Price.

    Rent Purchasers' Termination Option Interest.  "Rent Purchasers' Termination Option Interest" shall mean the right of the Rent Purchasers to receive in the order of priority set forth in Section 3.2 of the Rent Purchase Agreement so much of the Termination Amount that does not exceed (a) the Rent Purchasers' Percentage of the Lease Investment Balance, plus (b) the same portion of each payment of interest paid by Tenant at the Default Rate on the Termination Amount.

    Reportable Event.  "Reportable Event" shall have the meaning given to that term in ERISA and applicable regulations thereunder.

    Required Permits.  "Required Permits" shall mean any governmental or quasi-governmental approvals which must be issued by any governmental authority, department, commission, board, official or officer as a condition precedent to occupancy of any Improvements.

    Reserve Requirement.  "Reserve Requirement" shall mean, with respect to any day in any Rental Period, the aggregate of the reserve requirement rates (expressed as a decimal) in effect on such day for eurocurrency funding (currently referred to as "Eurocurrency liabilities" in Regulation D of the Board of Governors of the Federal Reserve System) maintained by a member bank of the Federal Reserve System. As used herein, the term "reserve requirement" shall include, without limitation, any basic, supplemental or emergency reserve requirements imposed on any Rent Purchaser or Landlord by any Governmental Authority.

    Responsible Officer.  "Responsible Officer" shall mean the chief executive officer, chief operating officer, principal financial officer, principal accounting officer, treasurer or assistant treasurer of Tenant or any other senior executive officer of Tenant involved principally in its financial administration or its controllership function.

    Sales Period.  "Sales Period" shall have the meaning set forth in Section 20.2(a) of the Lease.

    Security Instruments.  "Security Instruments" shall mean the deed of trust, mortgage, financing statement and/or any other security document or instrument in favor of, and in form and substance satisfactory to, Landlord and Administrative Agent, executed by Tenant in favor of Landlord and encumbering the Parcel described in a Lease Supplement or encumbering any other property of Tenant to secure Tenant's obligations to Landlord under the Lease and any other Operative Document, including, without limitation, the Amended Deeds of Trust.

    SPC.  "SPC" shall have the meaning set forth in Section 7.4(b) of the Rent Purchase Agreement.

    Subparticipant.  "Subparticipant" shall have the meaning set forth in Section 7.4(d) of the Rent Purchase Agreement.

    Subsidiary.  "Subsidiary" of any Entity shall mean (a) any corporation of which more than 50% of the issued and outstanding Equity Securities having ordinary voting power to elect a majority of the Board of Directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Entity, by such Entity and one or more of its other Subsidiaries or by one or more of such Entity's other Subsidiaries, (b) any partnership, joint venture, limited liability company or other association of which more than 50% of the equity interest having the power to vote, direct or control the management of such partnership, joint venture or other association is at the time owned and controlled by such Entity, by such Entity and one or more of the other Subsidiaries or by one or more of such Entity's other Subsidiaries or (c) any other Entity whose results of operations are included in the Financial Statements of such Entity on a consolidated basis.

    Taking.  "Taking" shall have the meaning set forth in Section 16.1 of the Lease.

    Tenant.  "Tenant" shall mean Adobe Systems Incorporated, a Delaware corporation and its successors and permitted assigns in interest.

    Tenant's Property.  "Tenant's Property" shall mean any process equipment, fixtures, furniture, furnishings, personal property or trade fixtures located in any Improvements and readily removable therefrom without causing injury to such Improvements.

    Term.  "Term" shall have the meaning set forth in Section 1.7 of the Lease.

    Termination Amount.  "Termination Amount" shall mean the proceeds received in connection with the sale of any Parcel under Section 20.2 of the Lease upon exercise of the Termination Option.

    Termination Option.  "Termination Option" shall have the meaning set forth in Section 20.2(a) of the Lease.

    30/360 Basis.  "30/360 Basis" shall mean on the basis of a 360-day year consisting of 12 months of 30 days each. The 30/360 Basis shall only apply to the calculation of that portion of the Base Rent attributable to the Landlord Contribution during the period that the Landlord Contribution Rate is based upon a fixed rate of 7.01%. That portion representing the applicable margin referenced in the Pricing Grid which is added to the fixed rate of 7.01% shall be calculated using an Actual/360 Basis; after August 15, 2003, the Landlord Contribution portion of any amount shall be calculated using an Actual/360 Basis. All other monthly calculations shall be made using an Actual/360 Basis.

    VC Partnership.  "VC Partnership" shall have the meaning set forth in Section 21.21(e)(x) of the Lease.

    Wire Transfer Instructions.  "Wire Transfer Instructions" shall mean Landlord's Wire Transfer Instructions and Administrative Agent's Wire Transfer Instructions as defined in this Appendix A.

II.  RULES OF CONSTRUCTION

    All personal pronouns used in the Operative Documents shall include all other genders. The singular shall include the plural and the plural shall include the singular. Titles of Articles, Sections and Subsections in the Operative Documents are for convenience only and neither limit nor amplify the provisions of the Operative Documents, and all references in any Operative Document to Articles, Sections or Subsections shall refer to the corresponding Article, Section or Subsection of such Operative Documents unless specific reference is made to the articles, sections or other subdivisions of another document or instrument. Unless otherwise specified in any Operative Document, all accounting terms used in the Operative Documents shall be interpreted, all accounting determinations under the Operative Documents shall be made, and all Financial Statements required to be delivered under the Operative Documents shall be prepared in accordance with GAAP, applied on a basis consistent with the most recent audited consolidated Financial Statements of the Tenant and its Subsidiaries delivered to Landlord or Administrative Agent.

Prepared By
  and
When Recorded Return To:

Sumitomo Bank Leasing and Finance, Inc.
c/o Graham & James LLP
One Maritime Plaza, Suite 300
San Francisco, California 94111-3492
Attention: Gary S. Hand, Esq.

FIRST AMENDMENT TO
DEED OF TRUST, FINANCING STATEMENT, SECURITY AGREEMENT
AND FIXTURE FILING (WITH ASSIGNMENT OF RENTS AND LEASES)

    THIS FIRST AMENDMENT TO DEED OF TRUST, FINANCING STATEMENT, SECURITY AGREEMENT AND FIXTURE FILING (WITH ASSIGNMENT OF RENTS AND LEASES) (this "Amendment") is made and entered into as of August 11, 1999, by and between SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware corporation ("Beneficiary"), and ADOBE SYSTEMS INCORPORATED, a Delaware corporation ("Trustor").

Recitals:

    A.  In connection with that certain Sublease of the Land and Lease of the Improvements dated August 15, 1996, Trustor executed and delivered that certain Deed of Trust, Financing Statement, Security Agreement and Fixture Filing (with Assignment of Rents and Leases) dated as of August 15, 1996, to First American Title Guaranty Company ("Trustee") for the benefit Beneficiary, recorded August 15, 1996, in Official Records of Santa Clara County, California, as Instrument No. 13410223 (the "Deed of Trust"), under which Deed of Trust Trustor assigned to Trustee, as security and collateral for the Obligations more particularly described therein, for the benefit of the Beneficiary, all of Trustor's rights, interests, and privileges in and to that certain real property situated in Santa Clara County, California, and described in Exhibit A attached hereto.

    B.  Beneficiary and Trustor have agreed to amend the Deed of Trust as set forth below.

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

    IN WITNESS WHEREOF, Trustor and Beneficiary have executed this Amendment as of the date and year first written above.

    "TRUSTOR"
 
 		  
 		  
ADOBE SYSTEMS INCORPORATED, a Delaware corporation
 
 		  
 		  
By:		  
/s/ Harold L. Covert
      Name: Harold L. Covert
       
      Its: Executive Vice President and
       
        Chief Financial Officer

(Signatures continue on next page)

(All signatures must be acknowledged)

    "BENEFICIARY"
 
 		  
 		  
SUMITOMO BANK LEASING AND FINANCE, INC.,
a Delaware corporation
 
 		  
 		  
By:		  
/s/ William M. Ginn
      Name: William M. Ginn
       
      Its: President
       

[All Signatures must be acknowledged.]

Exhibit A

LEGAL DESCRIPTION (LEASEHOLD INTEREST)

Prepared By
  and
When Recorded Return To:

Sumitomo Bank Leasing and Finance, Inc.
c/o Graham & James LLP
One Maritime Plaza, Suite 300
San Francisco, California 94111-3492
Attention: Gary S. Hand, Esq.

SECOND AMENDMENT TO
DEED OF TRUST, FINANCING STATEMENT, SECURITY AGREEMENT
AND FIXTURE FILING (WITH ASSIGNMENT OF RENTS AND LEASES)

    THIS SECOND AMENDMENT TO DEED OF TRUST, FINANCING STATEMENT, SECURITY AGREEMENT AND FIXTURE FILING (WITH ASSIGNMENT OF RENTS AND LEASES) (this "Amendment") is made and entered into as of August 11, 1999, by and between SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware corporation ("Beneficiary"), and ADOBE SYSTEMS INCORPORATED, a Delaware corporation ("Trustor").

Recitals:

    A.  In connection with that certain Sublease of the Land and Lease of the Improvements dated October 12, 1994, Trustor executed and delivered that certain Deed of Trust, Financing Statement, Security Agreement and Fixture Filing (with Assignment of Rents and Leases) dated as of October 12, 1994, to First American Title Guaranty Company ("Trustee") for the benefit Beneficiary, recorded October 12, 1994, in Official Records of Santa Clara County, California, as Instrument No. 12684590, as amended by that certain First Amendment thereto dated as of August 15, 1996, and recorded August 15, 1996, in the Official Records of Santa Clara County, California, as Instrument No. 13410225 (as so amended, the "Deed of Trust"), under which Deed of Trust Trustor assigned to Trustee, as security and collateral for the Obligations more particularly described therein, for the benefit of the Beneficiary, all of Trustor's rights, interests, and privileges in and to that certain real property situated in Santa Clara County, California, and described in Exhibit A attached hereto.

    B.  Beneficiary and Trustor have agreed to amend the Deed of Trust as set forth below.

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

    IN WITNESS WHEREOF, Trustor and Beneficiary have executed this Amendment as of the date and year first written above.

    "TRUSTOR"
 
 		  
 		  
ADOBE SYSTEMS INCORPORATED,
a Delaware corporation
 
 		  
 		  
By:		  
/s/ Harold L. Covert
      Name: Harold L. Covert
       
      Its: Executive Vice President and
       
        Chief Financial Officer

(Signatures continue on next page)

(All signatures must be acknowledged)

    "BENEFICIARY"
 
 		  
 		  
SUMITOMO BANK LEASING AND FINANCE, INC.,
a Delaware corporation
 
 		  
 		  
By:		  
/s/ William M. Ginn
      Name: William M. Ginn
       
      Its: President
       

[All Signatures must be acknowledged.]

Exhibit A

LEGAL DESCRIPTION (LEASEHOLD INTEREST)

 
RECORDING REQUESTED BY, AND
WHEN RECORDED, RETURN TO:
 
ABN Amro Bank, N.V.
c/o Orrick Herrington & Sutcliffe, LLP
Old Federal Reserve Bank Building
401 Sansome Street
San Francisco, CA 94111
Attn: Thomas Y. Coleman, Esq.		  
 		  
 

DEED OF TRUST, SECURITY AGREEMENT, FIXTURE FILING AND ASSIGNMENT OF RENTS
(RENT PURCHASERS—LEASE SUPPLEMENT NO. 1)

    THIS DEED OF TRUST, SECURITY AGREEMENT, FIXTURE FILING AND ASSIGNMENT OF RENTS ("Deed of Trust"), is made effective this 11th day of August, 1999, by SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware corporation ("Trustor"), to FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation ("Trustee"), for the use and benefit of ABN AMRO Bank N.V. as Administrative Agent for the Rent Purchasers (as further described below) ("Beneficiary");

    WHEREAS, the Redevelopment Agency of the City of San Jose ("SJRDA"), as ground lessor, and Trustor, as ground lessee, have executed that certain Ground Lease, dated October 12, 1994, a memorandum of which has been recorded with the Santa Clara County Recorder as document number 12684585 (the "Ground Lease");

    WHEREAS, Trustor has entered into that certain Amended, Restated and Consolidated Master Lease dated August   , 1999 ("Lease"), pursuant to which Trustor subleased that certain land leased under the Ground Lease and leased the improvements constructed thereon to Adobe Systems Incorporated ("Tenant"), which land and improvements are located in San Jose, California, as more particularly described in the Lease and Lease Supplement No. 1 thereto and on Exhibit "A" attached hereto and incorporated herein by this reference;

    WHEREAS, concurrently herewith Trustor is entering into that certain Participation Agreement and Rent Purchase Agreement with Beneficiary of even date herewith, for the purpose of selling a portion of the rents and other sums received from Tenant to a number of financial institutions (the "Rent Purchasers") pursuant to the Participation Agreement and the Rent Purchase Agreement;

    WHEREAS, Tenant has executed for the benefit of Trustor that certain Deed of Trust, Financing Statement, Security Agreement and Fixture Filing (with Assignment of Rents and Leases) dated and recorded on October 12, 1994, with the Santa Clara County Recorder as document number 12684590, as amended by that certain First Amendment to Deed of Trust, Financing Statement, Security Agreement and Fixture Filing (with Assignment of Rents and Leases), dated as of August 15, 1996, and record on August 15, 1996, as document number 13410225 and that certain Second Amendment to Deed of Trust, Financing Statement, Security Agreement and Fixture Filing (with Assignment of Rents and Leases) dated and to be recorded on even date herewith with the Santa Clara County Recorder, Official Records (collectively referred to herein as the "SBLF Deed of Trust ");

    WHEREAS, Trustor has agreed to perform certain obligations under the Lease, the Rent Purchase Agreement, the Participation Agreement and other documents delivered in connection therewith (collectively referred to herein as the "Operative Documents"), including the obligation to share funds it receives from Tenant under the Operative Documents with Beneficiary and the Rent Purchasers as provided in the Rent Purchase Agreement, and Beneficiary desires to secure such obligations and agreements of Trustor;

    WHEREAS, it has been agreed that the payment and performance of the Secured Obligations (as defined below) shall be secured by a conveyance of certain property as hereinafter described;

    WHEREAS, unless otherwise indicated in this Deed of Trust each term used but not defined herein shall have the meaning given such term in Appendix A to the Lease; and

    NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to secure the due and punctual payment in full by Trustor, whether at stated maturity, by acceleration or otherwise, and performance of the Secured Obligations, Trustor does hereby, give, grant, bargain, sell, warrant, convey, mortgage, transfer, grant a security interest in, set over, deliver, confirm and convey unto Trustee, in trust, with power of sale and right of entry as hereinbelow provided, upon the terms and conditions of this Deed of Trust, the following "Mortgaged Property" described hereinafter to the extent of Trustor's estate, right, title and interest therein, thereto or thereunder:

[Signatures begin on next page.]

    IN WITNESS WHEREOF, this Deed of Trust has been duly executed and acknowledged by the undersigned as of the day and year first above written.

    "TRUSTOR"
 
 		  
 		  
SUMITOMO BANK LEASING AND FINANCE, INC.,
a Delaware corporation
 
 		  
 		  
By:		  
/s/ William M. Ginn
    Name: William M. Ginn
     
    Its: President
     

EXHIBIT "A"

[to be attached]

 
  		  
 		  
 
RECORDING REQUESTED BY, AND
WHEN RECORDED, RETURN TO:		    
 
ABN Amro Bank, N.V.
c/o Orrick Herrington & Sutcliffe, LLP
Old Federal Reserve Bank Building
401 Sansome Street
San Francisco, CA 94111
Attn: Thomas Y. Coleman, Esq.		  
 		  
 

DEED OF TRUST, SECURITY AGREEMENT, FIXTURE FILING AND ASSIGNMENT OF RENTS
(RENT PURCHASERS—LEASE SUPPLEMENT NO. 2)

    THIS DEED OF TRUST, SECURITY AGREEMENT, FIXTURE FILING AND ASSIGNMENT OF RENTS ("Deed of Trust"), is made effective this 11th day of August, 1999, by SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware corporation ("Trustor"), to FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation ("Trustee"), for the use and benefit of ABN AMRO Bank N.V. as Administrative Agent for the Rent Purchasers (as further described below) ("Beneficiary");

    WHEREAS, the Redevelopment Agency of the City of San Jose ("SJRDA"), as ground lessor, and Trustor, as ground lessee, have executed that certain Ground Lease, dated August 15, 1996, a memorandum of which has been recorded with the Santa Clara County Recorder as document number 13410218 (collectively referred to herein as the "Ground Lease");

    WHEREAS, Trustor has entered into that certain Amended, Restated and Consolidated Master Lease dated August   , 1999 ("Lease"), pursuant to which Trustor subleased that certain land leased under the Ground Lease and leased certain improvements constructed thereon to Adobe Systems Incorporated ("Tenant"), which land and improvements are located in San Jose, California, as more particularly described in the Lease and Lease Supplement No. 2 thereto and on Exhibit "A" attached hereto and incorporated herein by this reference;

    WHEREAS, concurrently herewith Trustor is entering into that certain Participation Agreement and Rent Purchase Agreement with Beneficiary of even date herewith, for the purpose of selling a portion of the rents and other sums received from Tenant to a number of financial institutions (the "Rent Purchasers") pursuant to the Participation Agreement and the Rent Purchase Agreement;

    WHEREAS, Tenant has executed for the benefit of Trustor that certain Deed of Trust, Financing Statement, Security Agreement and Fixture Filing (with Assignment of Rents and Leases) dated and recorded on August 15, 1996, with the Santa Clara County Recorder Official Records as document number 13410223, as amended by that certain First Amendment to Deed of Trust, Financing Statement, Security Agreement and Fixture Filing (with Assignment of Rents and Leases) dated and to be recorded on even date herewith with the Santa Clara County Recorder, Official Records (collectively referred to herein as the "SBLF Deed of Trust");

    WHEREAS, Trustor has agreed to perform certain obligations under the Lease, the Rent Purchase Agreement, the Participation Agreement and other documents delivered in connection therewith (collectively referred to herein as the "Operative Documents"), including the obligation to share funds it receives from Tenant under the Operative Documents with Beneficiary and the Rent Purchasers as provided in the Rent Purchase Agreement, and Beneficiary desires to secure such obligations and agreements of Trustor;

    WHEREAS, it has been agreed that the payment and performance of the Secured Obligations (as defined below) shall be secured by a conveyance of certain property as hereinafter described;

    WHEREAS, unless otherwise indicated in this Deed of Trust each term used but not defined herein shall have the meaning given such term in Appendix A to the Lease; and

    NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to secure the due and punctual payment in full by Trustor, whether at stated maturity, by acceleration or otherwise, and performance of the Secured Obligations, Trustor does hereby, give, grant, bargain, sell, warrant, convey, mortgage, transfer, grant a security interest in, set over, deliver, confirm and convey unto Trustee, in trust, with power of sale and right of entry as hereinbelow provided, upon the terms and conditions of this Deed of Trust, the following "Mortgaged Property" described hereinafter to the extent of Trustor's estate, right, title and interest therein, thereto or thereunder:

    IN WITNESS WHEREOF, this Deed of Trust has been duly executed and acknowledged by the undersigned as of the day and year first above written.

    "TRUSTOR"
 
 		  
 		  
 		  
 		  
 
    SUMITOMO BANK LEASING AND FINANCE, INC.,
a Delaware corporation
 
 		  
 		  
 		  
 		  
 
    By:   /s/ William M. Ginn
    Name:   William M. Ginn
    Its:   President

EXHIBIT "A"

[to be attached]

RENT PURCHASE AGREEMENT

By and Among

SUMITOMO BANK LEASING AND FINANCE, INC.,

a Delaware corporation,

as Landlord,

ABN AMRO BANK N.V.,

as Administrative Agent,

and

Rent Purchasers signatory hereto

RENT PURCHASE AGREEMENT

    THIS RENT PURCHASE AGREEMENT, dated as of August 11, 1999 (this "Rent Purchase Agreement"), is by and among SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware corporation ("Landlord"), ABN AMRO BANK, N.V., as agent for the Rent Purchasers (in such capacity, "Administrative Agent"), and each RENT PURCHASER signatory hereto (together "Rent Purchasers"), and shall be effective and binding upon each party hereto as of the date specified on its counterpart signature page hereof.

RECITALS:

    WHEREAS, Landlord and Adobe Systems Incorporated ("Tenant") are parties to that certain Amended, Restated and Consolidated Master Lease of Land and Improvements, dated August 11, 1999 (the "Lease");

    WHEREAS, in connection with the Lease, Landlord has entered into a Participation Agreement, dated August 11, 1999 (the "Participation Agreement"), with Administrative Agent, Rent Purchasers and Tenant;

    WHEREAS, pursuant to the Lease, Advances will be made to Tenant from Landlord's funds and the funds of Rent Purchasers, as specified in the Participation Agreement and herein;

    WHEREAS, pursuant to the Lease, Landlord will lease the Parcels to Tenant;

    WHEREAS, Administrative Agent is acting as agent for the Rent Purchasers pursuant to the Participation Agreement and this Rent Purchase Agreement.

AGREEMENT:

    NOW, THEREFORE, in consideration of the promises and the mutual covenants herein contained, the parties hereto agree as follows.

SECTION 1.
DEFINITIONS

    All defined terms for the Operative Documents are contained in Appendix A to the Lease.

SECTION 2.
PURCHASE AND SALE OF INTERESTS

    2.1.  Agreement to Purchase and Sell Lease Investment Balance Debt.  

    2.2.  Procedures for Purchase and Sale.  

SECTION 3.
DISTRIBUTIONS

    3.1.  General.  

    3.2.  Priority.  

    3.3  Disproportionate Payments, Etc.  If Landlord, Administrative Agent or any Rent Purchaser shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of setoff, or otherwise) on account of amounts owed to it in excess of its ratable share of payments on account of such amounts obtained by all parties entitled to such payments, such party shall forthwith purchase from the other Entities entitled to such payments such participations in the payments to be made under the Operative Documents as shall be necessary to cause such purchasing party to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing party, such purchase shall be rescinded and each other party shall repay to the purchasing party the purchase price to the extent of such recovery together with an amount equal to such other party's ratable share (according to the proportion of (i) the amount of such other party's required repayment to (ii) the total amount so recovered from the purchasing party) of any interest or other amount paid or payable by the purchasing party in respect of the total amount so recovered. No Entity shall exercise any right of set-off, banker's lien or similar right against Tenant with respect to the Obligations without the prior written consent of Landlord and Administrative Agent.

SECTION 4.
REPRESENTATIONS, WARRANTIES AND COVENANTS

    4.1  Representations and Warranties of Landlord.  Landlord represents and warrants to Administrative Agent and each Rent Purchaser on the date hereof and on the Funding Date as follows:

    4.2  Representations and Warranties of Administrative Agent.  Administrative Agent represents and warrants to each Rent Purchaser and Landlord on the date hereof and on the Funding Date as follows:

    4.3  Representations and Warranties of Rent Purchasers.  Each Rent Purchaser represents and warrants to Landlord and Administrative Agent on the date hereof and on the Funding Date as follows:

    4.4  Covenants.  

SECTION 5.
PROVISIONS RELATING TO ROLE OF PARTIES

    5.1.  Role of Landlord.  Subject to Section 4.4(b) and Section 6, Administrative Agent and Rent Purchasers acknowledge and agree that Landlord shall be responsible for the general administration and servicing of the Lease. In discharging such responsibilities, Landlord shall act in accordance with its customary procedures and practices and using commercially reasonable efforts in the administration and servicing of leases of a type similar to the Lease, exercising the same care and discretion as it would ordinarily exercise for participated leases. Landlord shall retain possession of all of the Operative Documents and all other documents relating to the Lease. Landlord shall provide Administrative Agent with copies of all amendments and supplements to the Operative Documents. Photocopies or duplicate originals of any other Operative Documents, all financial and other information concerning Tenant and/or the Parcels and all other like documents and items prepared or received by Landlord after the date hereof in connection with the Lease shall be supplied by Landlord to Administrative Agent promptly after receipt. Administrative Agent may at all reasonable times at its expense, but subject to reimbursement as provided in Sections 3.2 and 5.10, and upon reasonable prior written notice to Landlord, inspect, copy and audit Landlord's books and records pertaining to the Lease. Administrative Agent shall forward to each Rent Purchaser copies of any document or information supplied to Administrative Agent by Landlord.

    The parties agree that Landlord is not a party hereto in its capacity as Landlord under the Lease and Landlord is not assigning, and neither Administrative Agent nor any Rent Purchaser is obtaining, any of the rights or obligations whatsoever of Landlord under the Operative Documents.

    5.2.  Immunities.  

    5.3.  Reliance.  Landlord and Administrative Agent shall each be entitled to rely upon any certification, notice, or other communication (including any thereof by telephone, telex, facsimile, telegram or cable) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper person and upon advice and statements of legal counsel, independent accountants and other experts selected by it, unless such reliance would constitute gross negligence or willful misconduct. Neither Landlord nor Administrative Agent shall be required in any way to determine the identity or authority or any person delivering or executing the same. Landlord and Administrative Agent shall each in all cases be fully protected in the acting or in refraining from acting hereunder and under the Operative Documents to the extent such action or failure to act does not constitute gross negligence or willful misconduct, and, any action taken or failure to act pursuant to the terms hereof and thereof shall be binding on each other party to such Operative Document.

    5.4.  Injunctions.  If any order, writ, judgment, or decree shall be made or entered by any court affect the rights, duties and obligations of Landlord or Administrative Agent under this Rent Purchase Agreement or any Operative Document, then and in any of such events, Landlord and/or Administrative Agent is authorized, in its sole discretion, to rely upon and comply with such order, writ, judgment, or decree which it is advised by legal counsel of its own choosing is binding upon it under the terms of this Rent Purchase Agreement, the relevant Operative Documents, or otherwise; and, if Landlord and/ or Administrative Agent complies with any such order, writ, judgment, or decree, then it shall not be liable to any other Entity by reason of such compliance even though such order, writ, judgment, or decree may be subsequently reversed, modified, deemed inapplicable, annulled, set aside, or vacated.

    5.5.  Rights of Landlord and Administrative Agent in their Individual Capacities.  Subject to the terms and provisions hereof, Landlord or Administrative Agent may (without having to account therefor to the other or any Rent Purchaser) accept deposits from, lend money to, and generally engage in any kind of banking, financing, leasing, trust, letter of credit, agency or other business with Tenant (and any of its Affiliates) and may accept fees and other consideration from Tenant for services in connection therewith.

    5.6.  Liability.  Except as specifically set forth herein or in the Participation Agreement, neither Landlord nor Administrative Agent or any of their respective affiliates, directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into or verify (a) any statement, warranty or representation made by Tenant in connection with the Operative Documents; (b) the performance or observance of any of the covenants or agreements of Tenant; (c) the satisfaction of any condition specified in the Operative Documents; or (d) the validity, effectiveness or genuineness of any of the Operative Documents or any other instrument or writing furnished in connection herewith or therewith.

    5.7.  Default by Landlord.  Landlord agrees that it will not sell, transfer, convey, assign or delegate any of its rights, title, interests or obligations under the Operative Documents except in accordance with the express provisions of the Operative Documents and that it will perform its obligations under the Operative Documents as such obligations are expressly stated therein. In the event Landlord fails to so perform any such obligation, and if such failure continues after ten (10) Business Days' written notice from Administrative Agent, Administrative Agent may cure such failure to perform by Landlord by performing such obligation on Landlord's behalf, and Landlord shall reimburse Administrative Agent on demand for the reasonable out-of-pocket cost to Administrative Agent of such cure.

    5.8  Successor 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 to Tenant, Landlord and the Rent Purchasers. The Majority Rent Purchasers shall have the right upon thirty (30) days advance written notice to Administrative Agent to remove Administrative Agent from the duties of Administrative Agent under this Rent Purchase Agreement and the Participation Agreement. Upon such resignation or removal the Majority Rent Purchasers shall have the right to appoint a successor Administrative Agent which shall be an Eligible Assignee and shall be reasonably acceptable to Landlord and (if no Event of Default has occurred and is continuing) Tenant. Upon 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 under the Operative Documents. After any retiring Administrative Agent's resignation or removal hereunder as Administrative Agent, the provisions of this Section 5 and any other provision of the Operative Documents which by its terms survives the termination of the Operative Documents shall continue in effect in respect of any action taken or omitted to be taken by it while it was acting as Administrative Agent.

    5.9  Authorization.  Administrative Agent is hereby authorized by the Rent Purchasers to execute, deliver and perform each of the Operative Documents to which Administrative Agent is or is intended to be a party and each Rent Purchaser agrees to be bound by all agreements of Administrative Agent contained in the Operative Documents.

    5.10  Indemnification.  Without limiting the obligations of Tenant under any Operative Document, each Rent Purchaser agrees to indemnify Landlord and Administrative Agent (to the extent not reimbursed by Tenant), ratably in accordance with such Rent Purchaser's Percentage, 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 Landlord or Administrative Agent (other than in their capacity as holders of an interest in the Lease Investment Balance Equity or the Lease Investment Balance Debt) in any way relating to or arising out of the Operative Documents or the transactions contemplated thereby or the enforcement of any of the terms thereof, subject to reimbursement on a pro rata basis if any such payment is subsequently recovered from Tenant; provided, however, that no Rent Purchaser shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the party to be indemnified. Landlord or 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 the Rent Purchasers 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 Rent Purchaser under this Section 5.10 shall survive the payment and performance of the obligations under the Operative Documents, the termination of the Operative Documents and any Rent Purchaser ceasing to be a party to this Rent Purchase Agreement (with respect to events which occurred prior to the time such Rent Purchaser ceased to be a party hereunder).

SECTION 6.
ADMINISTRATIVE AGENT'S AND RENT PURCHASERS' APPROVAL RIGHTS

    6.1.  Amendments; Waivers.  

    6.2.  Lease Extensions.  As provided in Section 4.3 of the Lease, Tenant may request Landlord to extend the Expiration Date of the Lease by giving notice to Landlord and Administrative Agent pursuant to the terms of the Lease (a "Lease Extension Request"). Administrative Agent shall promptly deliver to each Rent Purchaser three (3) copies of each Lease Extension Request received by Administrative Agent. If a Rent Purchaser, in its sole discretion, consents to a Lease Extension Request, such Rent Purchaser shall evidence such consent by executing and returning two (2) copies of such Lease Extension Request to Administrative Agent not later than the last Business Day which is twelve (12) months prior to the then current Expiration Date. Any failure by any Rent Purchaser so to execute and return a Lease Extension Request shall be deemed a denial thereof. If Tenant shall deliver a Lease Extension Request to Landlord and Administrative Agent as provided in Section 4.3 of the Lease, then not later than the last Business Day which is not less than ten (10) months prior to the then current Expiration Date, Administrative Agent shall notify Tenant, Landlord and the Rent Purchasers in writing whether or not Administrative Agent has received a copy of the Lease Extension Request executed by each Rent Purchaser and Landlord shall notify Tenant and Administrative Agent in writing whether Landlord has approved the Lease Extension Request. If such notices indicate that the Lease Extension Request has been executed by each Rent Purchaser and approved by Landlord, the Expiration Date set forth in the Lease shall be deemed extended to the date set forth in the Lease Extension Request (subject to the receipt by Administrative Agent and Landlord of any amounts payable by Tenant in connection with such extension). If such notices indicate that the Lease Extension Request has not been executed by each Rent Purchaser or Landlord has not approved the Lease Extension Request, such Lease Extension Request shall be deemed denied.


SECTION 7.
MISCELLANEOUS

    7.1.  Due Diligence.  Each Rent Purchaser acknowledges that it has, independently and without reliance upon Landlord or Administrative Agent, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Rent Purchase Agreement. Each Rent Purchaser also acknowledges that it will, independently and without reliance upon Landlord or Administrative Agent, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under this Rent Purchase Agreement.

    7.2.  Counterparts.  This Rent Purchase Agreement may be executed by the parties hereto in multiple counterparts and each counterpart, when so executed, shall be deemed an original, but all of which shall be considered as one agreement. Further, in making proof of this Rent Purchase Agreement, it shall not be necessary to produce or account for more than one such counterpart.

    7.3.  Survival.  The representations, warranties, indemnities and agreements of Landlord, Administrative Agent and Rent Purchasers provided for in this Rent Purchase Agreement shall survive the purchase of the Rent Purchasers' Interests by Rent Purchasers.

    7.4.  Successors and Assigns.  

    7.5  Governing Law.  This Rent Purchase Agreement shall in all respects be governed by, and construed in accordance with, the laws of the State of California, including all matters of construction, validity and performance, but excluding the conflict of laws principles thereof.

    7.6  Notices.  Each notice hereunder shall be in writing and shall be sent by personal delivery, overnight courier (charges prepaid or billed to the sender) or by the deposit of such with the United States Postal Service, or any official successor thereto, designated as registered or certified mail, return receipt requested, bearing adequate postage and in each case addressed as provided in the Basic Lease Provisions as to Landlord, Administrative Agent and Tenant, and as provided on its counterpart signature page hereof as to each Rent Purchaser. Each such notice shall be effective upon being personally delivered or actually received. The time period in which a response to any such notice must be given or any action taken with respect thereto shall commence to run from the date of personal delivery to or receipt of the notice by the addressee thereof, as reflected on the return receipt of the notice. Rejection or other refusal to accept shall be deemed to be receipt of the notice sent. By giving to the other parties at least thirty (30) days' prior notice thereof, any party to this Participation Agreement shall have the right from time to time to change the address(es) thereof and to specify as the address(es) thereof any other address(es) within the continental United States of America.

[Signatures begin on next page.]

    IN WITNESS WHEREOF, the parties hereto have caused this Rent Purchase Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.

LANDLORD:   SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware corporation
 
 		  
 		  
By		  
/s/ William M. Ginn
    Name William M. Ginn
    Title President
 
 		  
 		  
277 Park Avenue
New York, New York 10172
Attention: Chief Credit Officer

[Signatures continued on next page]

SECTIONS 4.4(B), 5.7 AND 6
ACKNOWLEDGED AND AGREED BY:
ADOBE SYSTEMS INCORPORATED

 
By:		  
/s/ Harold L. Covert
Name: Harold L. Covert
Title: Executive Vice President and
Chief Financial Officer

ADMINISTRATIVE AGENT:
   ABN AMRO BANK N.V.
 
Date:		  
August 11, 1999
 
 		  
By		  
/s/ Jamie Dillon
      Name Jamie Dillon
      Its Vice President
 
 		  
 		  
 		  
By		  
/s/ Nia M. Miller
      Name Nia M. Miller
      Its Assistant Vice President

Address for Notices:

With a copy to:

(Signatures continued on next page)


RENT PURCHASER:
   ABN AMRO BANK N.V.
 
Date:		  
August 11, 1999
 
 		  
By		  
/s/ Jamie Dillon
      Name Jamie Dillon
  Commitment: 9.25147909%, but
not to exceed $13,183,357.70		   Its Vice President
 
 		  
 		  
 		  
By		  
/s/ Nia M. Miller
      Name Nia M. Miller
      Its Assistant Vice President

Address for Notices:

With a copy to:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:
   BANK OF AMERICA, N.A.
 
Date:		  
 
 
 		  
By		  
/s/ Fred L. Thorne
      Name Fred L. Thorne
  Commitment: 5.25547445%, but
not to exceed $7,489,051.09		   Its Managing Director

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:
   BANK HAPOALIM B.M.
 
Date:		  
 
 
 		  
By		  
/s/ John Rice
      Name John Rice
  Commitment: 2.91970803%, but
not to exceed $4,160,583.94		   Its Vice President and Senior Lending Officer
 
 		  
 		  
 		  
By		  
/s/ Paul Watson
      Name Paul Watson
      Its Vice President and Lending Officer

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:
   BANK OF MONTREAL
 
Date:		  
 
 
 		  
By		  
/s/ Michael P. Joyce
      Name Michael P. Joyce
  Commitment: 8.46715328%, but
not to exceed $12,065,693.43		   Its Managing Director

Address for Notices:

With a copy to:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:
   BANQUE NATIONALE DE PARIS
 
Date:		  
 
 
 		  
By		  
/s/ Gavin S. Holles
      Name Gavin S. Holles
  Commitment: 5.25547445%, but
not to exceed $7,489,051.09		   Its Vice President
 
 		  
 		  
 		  
By		  
/s/ Michael D. McCorriston
      Name Michael D. McCorriston
      Its Vice President

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:
   THE FIRST NATIONAL BANK OF CHICAGO
 
Date:		  
 
 
 		  
By		  
/s/ Stephanie Mack
      Name Stephanie Mack
  Commitment: 8.46715328%, but
not to exceed $12,065,693.43		   Its Associate Underwriter

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)


RENT PURCHASER:
   FIRST UNION NATIONAL BANK
 
Date:		  
 
 
 		  
By		  
/s/ Paul Menconi
      Name Paul Menconi
  Commitment: 8.46715328%, but
not to exceed $12,065,693.43		   Its Vice President

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:
   FLEET NATIONAL BANK
 
Date:		  
 
 
 		  
By		  
/s/ William E. Rurode, Jr.
      Name William E. Rurode, Jr.
  Commitment: 8.46715328%, but
not to exceed $12,065,693.43		   Its Executive Vice President

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:
   THE INDUSTRIAL BANK OF JAPAN, LIMITED
 
Date:		  
 
 
 		  
By		  
/s/ Ken Iwata
      Name Ken Iwata
  Commitment: 5.25547445%, but
not to exceed $7,489,051.09		   Its Senior Vice President & Manager

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:
   KEYBANK NATIONAL ASSOCIATION
 
Date:		  
August 5, 1999
 
 		  
By		  
/s/ Mary K. Young
      Name Mary K. Young
  Commitment: 8.46715328%, but
not to exceed $12,065,693.43		   Its Assistant Vice President

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:
   MELLON BANK, N.A.
 
Date:		  
 
 
 		  
By		  
/s/ Lawrence C. Ivey
      Name Lawrence C. Ivey
  Commitment: 5.25547445%, but
not to exceed $7,489,051.09		   Its Vice President

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:
   THE NORTHERN TRUST COMPANY
 
Date:		  
August 3, 1999
 
 		  
By		  
/s/ David J. Mitchell
      Name David J. Mitchell
  Commitment: 7.29927007%, but
not to exceed $10,401,459.85		   Its Vice President

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)


RENT PURCHASER:
   THE ROYAL BANK OF SCOTLAND PLC
 
Date:		  
August 6, 1999
 
 		  
By		  
/s/ Karen L. Stefancic
      Name Karen L. Stefancic
  Commitment: 5.25547445%, but
not to exceed $7,489,051.09		   Its Vice President

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:
   UBS AG
 
Date:		  
 
 
 		  
By		  
/s/ Robert H. Riley III
      Name Robert H. Riley III
  Commitment: 4.37956204%, but
not to exceed $6,240,875.91		   Its Executive Director
 
 		  
 		  
 		  
By		  
/s/ Paula Mueller
      Name Paula Mueller
      Its Director

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)

EXHIBIT A
ASSIGNMENT AGREEMENT

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

RECITALS

    A.  Adobe Systems Incorporated ("Tenant") and Sumitomo Bank Leasing and Finance, Inc. ("Landlord") have entered into an Amended, Restated and Consolidated Master Lease of Land and Improvements, dated as of August 11, 1999. (Such lease, as amended, supplemented or otherwise modified in accordance with its terms from time to time to be referred to herein as the "Lease").

    B.  Assignor Rent Purchaser is one of the "Rent Purchasers" which is a party to the Rent Purchase Agreement dated as of August 11, 1999, by and among Landlord, Assignor Rent Purchaser and the other institutions parties thereto as "Rent Purchasers" (collectively, the "Rent Purchasers") and ABN AMRO Bank N.V., as agent for the Rent Purchasers (in such capacity, "Administrative Agent"), whereby each Rent Purchaser has purchased from Landlord an interest in the Lease. (Such agreement, as amended, supplemented or otherwise modified in accordance with its terms from time to time to be referred to herein as the "Rent Purchase Agreement").

    C.  Assignor Rent Purchaser wishes to sell, and each Assignee Rent Purchaser wishes to purchase, all or a portion of Assignor Rent Purchaser's rights under the Rent Purchase Agreement and certain other Operative Documents pursuant to Section 7.4(b) of the Rent Purchase Agreement.

AGREEMENT

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

    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 Rent Purchaser
 
 		  
 		  
 		  
 		  
 		  
 		  
 
    By:        
       
        Name:    
           
        Title:    
           
 
 		  
 		  
 		  
 		  
 		  
 		  
 
    , as an
   
    Assignee Rent Purchaser
 
 		  
 		  
 		  
 		  
 		  
 		  
 
    By:        
       
        Name:    
           
        Title:    
           
 
 		  
 		  
 		  
 		  
 		  
 		  
 
    , as an
   
    Assignee Rent Purchaser
 
 		  
 		  
 		  
 		  
 		  
 		  
 
    By:        
       
        Name:    
           
        Title:    
           
 
 		  
 		  
 		  
 		  
 		  
 		  
 
    , as an
   
    Assignee Rent Purchaser
 
 		  
 		  
 		  
 		  
 		  
 		  
 
    By:        
       
        Name:    
           
        Title:    
           


CONSENTED TO AND ACKNOWLEDGED BY:    
 
 		  
 		  
 		  
 		  
 		  
 		  
 
   
as Tenant    
 
 		  
 		  
 		  
 		  
 		  
 		  
 
By:            
   
   
    Name:        
       
   
    Title:        
       
   
 
 		  
 		  
 		  
 		  
 		  
 		  
 
,    
   
as Administrative Agent    
 
 		  
 		  
 		  
 		  
 		  
 		  
 
By:            
   
   
    Name:        
       
   
    Title:        
       
   
 
 		  
 		  
 		  
 		  
 		  
 		  
 
,    
   
as Landlord    
 
 		  
 		  
 		  
 		  
 		  
 		  
 
By:            
   
   
    Name:        
       
   
    Title:        
       
   
 
 		  
 		  
 		  
 		  
 		  
 		  
 
ACCEPTED FOR RECORDATION IN REGISTER:    
 
 		  
 		  
 		  
 		  
 		  
 		  
 
,    
   
as Administrative Agent    
 
 		  
 		  
 		  
 		  
 		  
 		  
 
By:            
   
   
    Name:        
       
   
    Title:        
       
   

ATTACHMENT 1
TO ASSIGNMENT AGREEMENT
PART A

 
    
   Rent Purchaser's Percentages Assigned
   Rent Purchaser's Percentages After Assignment
Assignor Rent Purchaser:        
         .       %      .       %
         .       %      .       %
         .       %      .       %
 
 Assignee Rent Purchasers:		  
 		  
 		  
 		  
 
         .       %      .       %
         .       %      .       %
         .       %      .       %
         .       %      .       %

PART B

[Assignee Rent Purchaser]

Address for Notices:

Tel. No:      
 
   
Fax No:      
 
   
Email:      
 
   

Wiring Instructions:

[Assignee Rent Purchaser]
Address for Notices:

Tel. No:      
 
   
Fax No:      
 
   
Email:      
 
   

Wiring Instructions:

PART C

ASSIGNMENT EFFECTIVE DATE:            ,    

ATTACHMENT 2
TO ASSIGNMENT AGREEMENT

FORM OF
ASSIGNMENT EFFECTIVE NOTICE

    Reference is made to the Rent Purchase Agreement, dated as of August 11, 1999, by and among Sumitomo Bank Leasing and Finance, Inc. ("Landlord"), the financial institutions parties thereto as "Rent Purchasers" (the "Rent Purchasers") and ABN AMRO Bank N.V., as agent for the Rent Purchasers (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, each Assignee Rent Purchaser is required to pay its Purchase Price to Assignor Rent Purchaser 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:  
       

PARTICIPATION AGREEMENT

By and Among

SUMITOMO BANK LEASING AND FINANCE, INC.,

a Delaware corporation,

as Landlord,

ADOBE SYSTEMS INCORPORATED,

a Delaware corporation,

as Tenant,

ABN AMRO BANK N.V.,

as Administrative Agent,

and

Rent Purchasers signatory hereto

PARTICIPATION AGREEMENT

    THIS PARTICIPATION AGREEMENT, dated as of August 11, 1999 (this "Participation Agreement"), is by and among SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware corporation ("Landlord"); ADOBE SYSTEMS INCORPORATED, a Delaware corporation ("Tenant"); ABN AMRO BANK N.V., as agent for the Rent Purchasers (in such capacity, "Administrative Agent"); and each RENT PURCHASER signatory hereto (collectively, the "Rent Purchasers"), and shall be effective and binding on each party hereto as of the date specified on its counterpart signature page hereof.

RECITALS:

    WHEREAS, Landlord and Tenant have entered into an Amended, Restated and Consolidated Master Lease of Land and Improvements, dated as of August 11, 1999 (the "Lease");

    WHEREAS, pursuant to the Lease, Landlord and Rent Purchasers will commit funds to Tenant for the Parcels, as specified herein and in the Rent Purchase Agreement, and pursuant to the Lease, Landlord will lease the Parcels to Tenant; and

    WHEREAS, pursuant to the Rent Purchase Agreement and this Participation Agreement, Rent Purchasers shall purchase from Landlord an interest in the Lease Investment Balance Debt.

AGREEMENT:

    NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, the parties hereto agree as follows.

SECTION 1.
DEFINITIONS

    All defined terms for the Operative Documents are contained in Appendix A to the Lease.

SECTION 2.
COMMITMENTS

    2.1  Landlord's Commitment.  Landlord has funded 100% of the Lease Investment Balance Equity as of the Funding Date.

    2.2  Rent Purchaser's Commitment.  Subject to the terms and conditions of the Rent Purchase Agreement and this Participation Agreement, on the Funding Date, each Rent Purchaser, by delivery to Administrative Agent and Landlord of an original executed version of its counterpart signature page hereof and an original executed version of its counterpart signature page of the Rent Purchase Agreement, agrees to purchase from Landlord its interest in the Lease Investment Balance Debt as of the Funding Date and to accept repayment of such interest such that such Rent Purchaser shall at all times have the undivided percentage interest in the Lease Investment Balance Debt specified on such Rent Purchaser's counterpart signature page of this Participation Agreement.

    2.3  Security.  

SECTION 3.
CONDITIONS

    3.1  Landlord's Conditions Precedent.  The obligation of Landlord to enter into the transactions contemplated by the Operative Documents, as of the Funding Date, is subject to fulfillment to its reasonable satisfaction of the following conditions:

    3.2  Rent Purchaser's Conditions Precedent.  The obligation of Administrative Agent and each Rent Purchaser to enter into the transactions contemplated by the Operative Documents, as of the Funding Date, is subject to fulfillment to their reasonable satisfaction of the following conditions:

    3.3  Conditions Subsequent.  The obligation of Landlord and each Rent Purchaser to maintain their respective interests in the Lease Investment Balance is subject to the delivery by Tenant to Landlord and Administrative Agent, not later than October 15, 1999, of ALTA as-built surveys of the Parcels reasonably satisfactory to Landlord and Administrative Agent.


SECTION 4.
COMMITMENT FEES

    4.1  No Unused Commitment Fee for Funding Date.  As of the Funding Date, the entire Commitment Amount shall be advanced to Tenant, and there shall be no unused portion of the Rent Purchaser's Commitment.

SECTION 5.
DISTRIBUTIONS

    5.1  General.  Tenant is directed to remit to Landlord Landlord's Base Rent Interest and to Administrative Agent the Rent Purchasers' Base Rent Interest in accordance with the terms of this Section 5 and Section 7.1 of the Lease.

    5.2  Base Rent.  Pursuant to Section 7.1 of the Lease, Landlord and Administrative Agent each shall deliver to Tenant an Invoice on a monthly basis for Base Rent due and owing on the next Rent Payment Date. The Invoice provided to Tenant by Administrative Agent shall indicate the exact dollar amount of the Rent Purchasers' Base Rent Interest that is due on such Rent Payment Date. The Invoice provided to Tenant by Landlord shall indicate the exact amount of the Landlord's Base Rent Interest that is due on such Rent Payment Date. If Landlord or Administrative Agent fails to send its respective Invoice, Tenant shall remit such sums for such next Rent Payment Date equal to the amount shown on the previous month's Invoice from the Entity failing to present a timely Invoice for the Rent Payment Date in question. If Tenant's payment of the amount shown on the previous month's Invoice is less than Base Rent due for such month, Tenant shall pay the difference within ten (10) days after receipt of notice from Landlord or Administrative Agent of such shortfall. If Tenant's payment of the amount shown on the previous month's Invoice exceeds the Base Rent due for such month, then (provided that no Event of Default has occurred which is continuing), such excess amount shall be credited to the next installment of Base Rent due to the Entities to which such excess amount was paid. Tenant shall send the amount of Base Rent specified by Landlord in its Invoice as Landlord's Base Rent Interest pursuant to Landlord's Wire Transfer Instructions in accordance with Section 7.1 of the Lease. Tenant shall send the amount of Base Rent specified by the Administrative Agent in its Invoice as Rent Purchasers' Base Rent Interest pursuant to Administrative Agent's Wire Transfer Instructions in accordance with Section 7.1 of the Lease. Tenant shall make all payments of Base Rent in lawful money of the United States and in same day or immediately available funds not later than 12:00 noon (New York Time) on each Rent Payment Date. Administrative Agent shall forward to each Rent Purchaser its pro rata share of the Rent Purchasers' Base Rent Interest received from Tenant.

    5.3  Additional Rent.  Any payment of the Purchase Price, the Guaranteed Residual Value, the Termination Amount, any Insurance and Condemnation Payments and any Default Amounts shall be deposited in escrow as provided in Section 5.4 and distributed in the manner described in Section 3.2 of the Rent Purchase Agreement. Any other amounts claimed by Landlord, Administrative Agent or any Rent Purchaser as Additional Rent, including, without limitation, any Break Funding Costs, any Additional Charges and Additional Amounts claimed by such Entity pursuant to Section 8.4 of the Lease, any claims for indemnification amounts payable by Tenant under the Lease or any other Operative Document, and any fees, costs and expenses payable or reimbursable by Tenant under the Lease or any other Operative Document pursuant to the terms thereof, shall be paid by Tenant to the Entity claiming the same by a Notice delivered to Tenant by Landlord (with respect to any such Additional Rent claimed by Landlord) or by Administrative Agent (with respect to any such Additional Rent claimed by Administrative Agent or any Rent Purchaser). Landlord and Administrative Agent shall simultaneously deliver to each other any Notice delivered by it to Tenant, making a claim for the payment of any Additional Rent described in this Section 5.3. Tenant shall pay any Additional Rent claimed in a Notice delivered by Landlord or Administrative Agent within five (5) Business days of Tenant's receipt of such Notice.

    5.4  Escrow.  All amounts provided in the Lease or Rent Purchase Agreement to be deposited in escrow shall be deposited with a third party mutually acceptable to Landlord and Administrative Agent. Tenant and Landlord shall use their best efforts to arrange for such funds to be deposited directly by the payor into escrow. If such funds are received by Landlord, Landlord shall immediately deposit such funds in escrow and in no case later than one (1) Business Day following receipt of such funds. Funds deposited in escrow shall be distributed according to the terms of this Participation Agreement and of the Rent Purchase Agreement pursuant to joint escrow instructions prepared by Landlord and approved by Administrative Agent.

SECTION 6.
MISCELLANEOUS

    6.1  Relationship.  Neither this Participation Agreement nor any agreement or transaction contemplated hereby shall in any respect be interpreted, deemed or construed as constituting Landlord, Administrative Agent, Tenant and Rent Purchasers, or any combination of any two or more of such parties, as partners or joint venturers, or as creating any partnership, joint venture or association between or among any of such parties, and each of such parties agrees not to make any contrary assertion, contention, claim or counterclaim in any action, suit or other legal proceeding or for any other purpose whatsoever.

    6.2  Benefit of Lease Provisions.  The representations, and warranties, covenants and indemnities provided by Tenant under the Lease shall inure to the benefit of Administrative Agent and each Rent Purchaser.

    6.3  Notices.  Each notice hereunder shall be in writing and shall be sent by personal delivery, overnight courier (charges prepaid or billed to the sender) or by the deposit of such with the United States Postal Service, or any official successor thereto, designated as registered or certified mail, return receipt requested, bearing adequate postage and in each case addressed as provided in the Basic Lease Provisions as to Landlord, Administrative Agent and Tenant, and as provided on its counterpart signature page hereof as to each Rent Purchaser. Each such notice shall be effective upon being personally delivered or actually received. The time period in which a response to any such notice must be given or any action taken with respect thereto shall commence to run from the date of personal delivery to or receipt of the notice by the addressee thereof, as reflected on the return receipt of the notice. Rejection or other refusal to accept shall be deemed to be receipt of the notice sent. By giving to the other parties at least thirty (30) days' prior notice thereof, any party to this Participation Agreement shall have the right from time to time to change the address(es) thereof and to specify as the address(es) thereof any other address(es) within the continental United States of America.

    6.4  Severability of Provisions.  If any term, covenant or condition of this Participation Agreement shall be invalid or unenforceable, the remainder of this Participation Agreement, or the application of such term, covenant or condition to Entities or circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby.

    6.5  Entire Agreement; Amendment.  The Operative Documents constitute the entire agreements of Landlord, Administrative Agent, Tenant and Rent Purchasers, as applicable, with respect to the transactions contemplated hereby and thereby. Neither this Participation Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed as set forth in the Rent Purchase Agreement.

    6.6  Successors and Assigns.  This Participation Agreement shall inure to the benefit of and be binding upon Landlord, Administrative Agent, Tenant and Rent Purchasers and their respective heirs, executors, legal representatives, successors and assigns except that the Tenant may not assign or transfer any of its respective rights or obligations hereunder without the prior written consent of Landlord and Administrative Agent. Whenever in this Participation Agreement a reference to any Entity is made, such reference shall be deemed to include a reference to the heirs, executors, legal representatives, successors and assigns of such Entity.

    6.7  Expenses.  Tenant shall pay on demand, whether or not any Advance is made hereunder, (a) all reasonable fees and expenses, including reasonable attorneys' fees and expenses incurred by Landlord and Administrative Agent in connection with the syndication of the facilities provided under, the preparation, negotiation, execution and delivery of, and the exercise of their duties under, this Participation Agreement and the other Operative 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 Landlord, Administrative Agent and Rent Purchasers in the enforcement or attempted enforcement of any of Tenant's obligations under the Operative Documents or in preserving any of the rights and remedies of Landlord, Administrative Agent or any Rent Purchaser (including all such fees and expenses incurred in connection with any "workout" or restructuring affecting the Operative Documents or Tenant's obligations thereunder or any bankruptcy or similar proceeding involving Tenant or any of its Subsidiaries). As used herein, the term "reasonable attorneys' fees and expenses" shall include, without limitation, allocable costs and expenses of Landlord's, Administrative Agent's and Rent Purchasers' in-house legal counsel and staff. The obligations of Tenant under this Section 6.6 shall survive the payment and performance of the Tenant's obligations under the Operative Documents and the termination of this Participation Agreement.

    6.8  Governing Law.  This Participation Agreement and the obligations of the parties hereunder shall be governed by and interpreted, construed and enforced in accordance with the laws of the State of California, without giving effect to its principles of conflict of laws.

    6.9  Counterparts.  This Participation Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall comprise but a single instrument.

    6.10  Time Is of the Essence.  Time is of the essence of this Participation Agreement, and of each provision hereof.

    6.11  No Third Party Beneficiaries.  This Participation Agreement is entered into by the parties hereto for the sole benefit of such parties. There are no third party beneficiaries of this Participation Agreement.

    6.12  Limitations on Recourse.  The obligations of Landlord, Administrative Agent and Rent Purchasers under this Participation Agreement shall be without recourse to any partner, officer, trustee, beneficiary, shareholder, director or employee of such party. Except for such party's gross negligence or willful misconduct in performing its obligations under the Operative Documents, the liability of Landlord, Administrative Agent and Rent Purchasers to any other party hereto for any default by such party to such other party under this Participation Agreement (a) shall be limited to the amount of such party's commitment hereunder, and (b) shall extend to any actual damages of such other party, but shall not extend to any foreseeable or unforeseeable consequential damages of such other party.

    6.13  Usury Savings Clause.  Nothing contained in this Participation Agreement or any other Operative Documents shall be deemed to require the payment of interest or other charges by Tenant in excess of the amount the applicable party may lawfully charge under applicable usury laws. In the event any party shall collect monies which are deemed to constitute interest which would increase the effective interest rate to a rate in excess of that permitted to be charged by applicable law, all such sums deemed to constitute excess interest shall, upon such determination, at the option of Landlord, be returned to Tenant or credited against other obligations of Tenant under the Operative Documents.

    6.14  Estoppel Certificates.  Within thirty (30) days after request therefor by any party hereto of any other party hereto, the non-requesting party shall deliver, in recordable form, a certificate to any proposed mortgagee, purchaser, sublessee or assignee and to the requesting party, certifying (if such be the case) that this Participation Agreement is in full force and effect, that, to the best of its knowledge, the non-requesting party has no defenses or offsets outstanding, or stating those claimed, and any other information reasonably requested. Failure to deliver said statement in the time allowed shall be conclusive upon the non-requesting party that: (a) this Participation Agreement is in full force and effect, without modification, except as may be represented by the requesting party; (b) there are no uncured defaults in the requesting party's performance and the non-requesting party has no right of offset, counterclaim or deduction against the non-requesting party's obligations hereunder; and (c) any other matters reasonably requested in such certificate.

[signatures begin on next page]

    IN WITNESS WHEREOF, the parties hereto have duly executed this Participation Agreement as of the day and year first above written.

LANDLORD:   SUMITOMO BANK LEASING AND FINANCE, INC., a Delaware corporation
 
 		  
 		  
By		  
 		  
/s/ William M. Ginn
       
        Name   William M. Ginn
           
        Its   President
           

(Signatures continued on next page)

 
 		  
 		  
 		  
 		  
 		  
 		  
 
TENANT:
   ADOBE SYSTEMS INCORPORATED
    a Delaware Corporation
 
 		  
 		  
By		  
 		  
/s/ Harold L. Covert
       
        Name   Harold L. Covert
           
        Its   Executive Vice President and
           
            Chief Financial Officer
           

(Signatures continued on next page)

ADMINISTRATIVE AGENT:   ABN AMRO BANK N.V.
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
Date:       By:   /s/ Jamie Dillon
   
     
            Name:   Jamie Dillon
               
            Its:   Vice President
               
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
        By:   /s/ Nia M. Miller
           
            Name:   Nia M. Miller
               
            Its:   Assistant Vice President
               

Address for Notices:

With a copy to:

(Signatures continued on next page)

RENT PURCHASER:   ABN AMRO BANK N.V.
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
Date:       By:   /s/ Jamie Dillon
   
     
            Name:   Jamie Dillon
               
    Commitment: 9.25147909%, but
not to exceed $13,183,357.70		       Its:   Vice President
 
 		  
 		  
 		  
 		  
By:		  
 		  
/s/ Nia M. Miller
           
            Name:   Nia M. Miller
               
            Its:   Assistant Vice President
               

Address for Notices:

With a copy to:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:   BANK OF AMERICA, N.A.
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
Date:       By:   /s/ Fred L. Thorne
   
     
            Name:   Fred L. Thorne
               
    Commitment: 5.25547445%, but
not to exceed $7,489,051.09		       Its:   Managing Director

Address for Notices:

Wiring Instructions:

RENT PURCHASER:   BANK HAPOALIM B.M.
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
Date:       By:   /s/ John Rice
   
     
            Name:   John Rice
               
    Commitment: 2.91970803%, but       Its:   Vice President and
    not to exceed $4,160,583.94           Senior Lending Officer
 
 		  
 		  
 		  
 		  
By:		  
 		  
/s/ Paul Watson
           
            Name:   Paul Watson
               
            Its:   Vice President and Lending Officer
               

Address for Notices:

Wiring Instructions:

RENT PURCHASER:   BANK OF MONTREAL
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
Date:       By:   /s/ Michael P. Joyce
   
     
            Name:   Michael P. Joyce
               
    Commitment: 8.46715328%, but
not to exceed $12,065,693.43		       Its:   Managing Director

Address for Notices:

With a copy to:

Wiring Instructions:

RENT PURCHASER:   BANQUE NATIONALE DE PARIS
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
Date:       By:   /s/ Gavin S. Holles
   
     
            Name:   Gavin S. Holles
               
    Commitment: 5.25547445%, but
not to exceed $7,489,051.09		       Its:   Vice President
 
 		  
 		  
 		  
 		  
By:		  
 		  
/s/ Michael D. McCorriston
           
            Name:   Michael D. McCorriston
               
            Its:   Vice President
               

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:   THE FIRST NATIONAL BANK OF CHICAGO
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
Date:       By:   /s/ Stephanie Mack
   
     
            Name:   Stephanie Mack
               
    Commitment: 8.46715328%, but
not to exceed $12,065,693.43		       Its:   Associate Underwriter

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:   FIRST UNION NATIONAL BANK
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
Date:       By:   /s/ Paul L. Menconi
   
     
            Name:   Paul L. Menconi
               
    Commitment: 8.46715328%, but
not to exceed $12,065,693.43		       Its:   Vice President

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:   FLEET NATIONAL BANK
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
Date:       By:   /s/ William E. Rurode, Jr.
   
     
            Name:   William E. Rurode, Jr.
               
    Commitment: 8.46715328%, but
not to exceed $12,065,693.43		       Its:   Executive Vice President

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:   THE INDUSTRIAL BANK OF JAPAN, LIMITED
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
Date:       By:   /s/ Ken Iwata
   
     
            Name:   Ken Iwata
               
    Commitment: 5.25547445%, but
not to exceed $7,489,051.09		       Its:   Senior Vice President & Manager

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:   KEYBANK NATIONAL ASSOCIATION
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
Date:   August 5, 1999   By:   /s/ Mary K. Young
   
     
            Name:   Mary K. Young
               
    Commitment: 8.46715328%, but
not to exceed $12,065,693.43		       Its:   Assistant Vice President

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:   MELLON BANK, N.A.
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
Date:       By:   /s/ Lawrence C. Ivey
   
     
            Name:   Lawrence C. Ivey
               
    Commitment: 5.25547445%, but
not to exceed $7,489,051.09		       Its:   Vice President

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:   THE NORTHERN TRUST COMPANY
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
Date:   August 3, 1999   By:   /s/ David J. Mitchell
   
     
            Name:   David J. Mitchell
               
    Commitment: 7.29927007%, but
not to exceed $10,401,459.85		       Its:   Vice President

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:   THE ROYAL BANK OF SCOTLAND PLC
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
Date:   August 6, 1999   By:   /s/ Karen L. Stefancic
   
     
            Name:   Karen L. Stefancic
               
    Commitment: 5.25547445%, but
not to exceed $7,489,051.09		       Its:   Vice President

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)

RENT PURCHASER:   UBS AG
 
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 		  
 
Date:       By:   /s/ Robert H. Riley III
   
     
            Name:   Robert H. Riley III
               
    Commitment: 4.37956204%, but
not to exceed $6,240,875.91		       Its:   Executive Director
 
 		  
 		  
 		  
 		  
By:		  
 		  
/s/ Paula Mueller
           
            Name:   Paula Mueller
               
            Its:   Director
               

Address for Notices:

Wiring Instructions:

(Signatures continued on next page)

Exhibit A

Lease

[included herewith]

Exhibit B

Amended Deeds of Trust

[included herewith]

AMENDMENT NO. 1 TO AMENDED, RESTATED AND CONSOLIDATED
MASTER LEASE OF LAND AND IMPROVEMENTS

    THIS AMENDMENT NO. 1 TO AMENDED, RESTATED AND CONSOLIDATED MASTER LEASE OF LAND AND IMPROVEMENTS (this "Amendment"), dated as of October 8, 1999, is entered into by and between:

RECITALS

    A.  Tenant and Landlord are parties to that certain Amended, Restated and Consolidated Master Lease of Land and Improvements, dated as of August 11, 1999 (the "Lease").

    B.  In connection with the Lease, Landlord entered into a Participation Agreement, dated as of August 11, 1999, with Tenant, certain financial institutions from time to time parties thereto (the "Rent Purchasers") and ABN AMRO Bank N.V., as agent for the Rent Purchasers (in such capacity, "Administrative Agent"), and a Rent Purchase Agreement, dated as of August 11, 1999, with the Rent Purchasers and Administrative Agent, pursuant to which the Rent Purchasers purchased an interest in the Lease from Landlord.

    C.  Tenant has requested that the insurance provisions in the Lease be amended and Landlord is willing so to amend the Lease upon the terms and subject to the conditions set forth in this Amendment.

AGREEMENT

    NOW, THEREFORE, in consideration of the above recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Tenant and Landlord hereby agree as follows:

    1.  Definitions, Interpretation.  All capitalized terms defined above and elsewhere in this Amendment shall be used herein as so defined. Unless otherwise defined herein, all other capitalized terms used herein shall have the respective meanings given to those terms Appendix A to the Lease. The rules of construction set forth in Appendix A to the Lease shall, to the extent not inconsistent with the terms of this Amendment, apply to this Amendment and are hereby incorporated by reference.

    2.  Amendments to Lease.  Subject to the satisfaction of the conditions set forth in Paragraph 5 below, the Lease is hereby amended as follows:

    3.  Waiver.  Subject to the satisfaction of the conditions set forth in Paragraph 5 below, Landlord hereby waives any Event of Default arising out of Tenant's failure to provide earthquake insurance with a deductible of not more than $1,000,000 or a certificate of insurance stating that coverage will not be canceled without thirty (30) days' prior written notice.

    4.  Representations and Warranties.  Tenant hereby represents and warrants to Landlord, the Rent Purchasers and Administrative Agent that the following are true and correct on the date of this Amendment and that, after giving effect to the amendments set forth in Paragraph 2 above, the following will be true and correct on the Effective Date (as defined below):

(Without limiting the scope of the term "Operative Documents," Tenant expressly acknowledges in making the representations and warranties set forth in this Paragraph 4 that, on and after the date hereof, such term includes this Amendment.)

    5.  Effective Date.  The amendments effected by Paragraph 2 above and the waiver effected by Paragraph 3 above shall become effective on the date (the "Effective Date") that Landlord and Administrative Agent receive each of the following, each in form and substance satisfactory to Landlord and Administrative Agent and their respective counsel:

    6.  Effect of this Amendment.  On and after the Effective Date, each reference in the Lease and the other Operative Documents to the Lease shall mean the Lease as amended hereby. Except as specifically amended above, (a) the Lease and the other Operative Documents shall remain in full force and effect and are hereby ratified and affirmed and (b) the execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power, or remedy of Landlord, the Rent Purchasers or Administrative Agent, nor constitute a waiver of any provision of the Lease or any other Operative Document.

    7.  Miscellaneous.  

[Signature pages follow]

    IN WITNESS WHEREOF, Tenant and Landlord have caused this Amendment to be executed as of the day and year first above written.

TENANT:
   ADOBE SYSTEMS INCORPORATED
 
 		  
 		  
 		  
By:		  
/s/ Harold L. Covert
      Name: Harold L. Covert
      Title: Executive Vice President and Chief Financial Officer
 
 LANDLORD:
  
 		  
 SUMITOMO BANK LEASING AND FINANCE, INC.
 
 		  
 		  
 		  
By:		  
/s/ Brett D. Long
      Name: Brett D. Long
      Title: Managing Director

CONSENT TO AMENDMENT

    The undersigned hereby consent to the execution of Amendment No. 1 to Amended, Restated and Consolidated Master Lease of Land and Improvements between Adobe Systems Incorporated, as Tenant, and Sumitomo Bank Leasing and Finance, Inc., as Landlord, in the form attached hereto as Exhibit A and to the amendment and waiver contained therein.

RENT PURCHASERS:
   ABN AMRO BANK N.V.
 
 		  
 		  
 		  
By:		  
 		  
/s/ Jamie Dillon
          Name: Jamie Dillon
          Title: Group Vice President
 
 		  
 		  
 		  
By:		  
 		  
/s/ Nia M. Miller
          Name: Nia M. Miller
          Title: Assistant Vice President
      Date:    
 
 		  
 		  
 		  
 BANK OF AMERICA, N.A.
 
 		  
 		  
 		  
By:		  
 		  
 
          Name:  
          Title:  
      Date:    
 
 		  
 		  
 		  
 BANK HAPOALIM B.M.
 
 		  
 		  
 		  
By:		  
 		  
 
          Name:  
          Title:  
      Date:    

      BANK OF MONTREAL
 
 		  
 		  
 		  
By:		  
 		  
 
          Name:  
          Title:  
      Date:    
 
 		  
 		  
 		  
 BANQUE NATIONALE DE PARIS
 
 		  
 		  
 		  
By:		  
 		  
/s/ Michael D. McCorriston
          Name: Michael D. McCorriston
          Title: Vice President
 
 		  
 		  
 		  
By:		  
 		  
/s/ Jeffrey S. Kajisa
          Name: Jeffrey S. Kajisa
          Title: Vice President
      Date:    
 
 		  
 		  
 		  
 BANK ONE, NA (F/K/A THE FIRST NATIONAL BANK OF CHICAGO)
 
 		  
 		  
 		  
By:		  
 		  
/s/ Mark A. Isley
          Name: Mark A. Isley
          Title: First Vice President
      Date:   October 8, 1999
 
 		  
 		  
 		  
 FIRST UNION NATIONAL BANK
 
 		  
 		  
 		  
By:		  
 		  
/s/ Paul L. Menconi
          Name: Paul L. Menconi
          Title: Vice President
      Date:   October 6, 1999

      FLEET NATIONAL BANK
 
 		  
 		  
 		  
By:		  
 		  
/s/ Matthew M. Gauninger
          Name: Matthew M. Gauninger
          Title: Senior Vice President
      Date:   October 5, 1999
 
 		  
 		  
 		  
 THE INDUSTRIAL BANK OF JAPAN, LIMITED
 
 		  
 		  
 		  
By:		  
 		  
/s/ Ken Iwata
          Name: Ken Iwata
          Title: Senior Vice President & Manager
      Date:   October 8, 1999
 
 		  
 		  
 		  
 KEYBANK NATIONAL ASSOCIATION
 
 		  
 		  
 		  
By:		  
 		  
/s/ Mary K. Young
          Name: Mary K. Young
          Title: Assistant Vice President
      Date:   October 5, 1999
 
 		  
 		  
 		  
 MELLON BANK, N.A.
 
 		  
 		  
 		  
By:		  
 		  
/s/ Lawrence C. Ivey
          Name: Lawrence C. Ivey
          Title: Vice President
      Date:   October 7, 1999

      THE NORTHERN TRUST COMPANY
 
 		  
 		  
 		  
By:		  
 		  
/s/ David J. Mitchell
          Name: David J. Mitchell
          Title: Vice President
      Date:   October 7, 1999
 
 		  
 		  
 		  
 THE ROYAL BANK OF SCOTLAND PLC
 
 		  
 		  
 		  
By:		  
 		  
/s/ Karen L. Stefancic
          Name: Karen L. Stefancic
          Title: Vice President
 
 		  
 		  
 		  
 UBS AG
Stamford Branch
 
 		  
 		  
 		  
By:		  
 		  
/s/ Robert H. Riley III
          Name: Robert H. Riley III
          Title: Executive Director
 
 		  
 		  
 		  
By:		  
 		  
/s/ Wilfred Saint
          Name: Wilfred Saint
          Title: Portfolio Support, US

EXHIBIT A

AMENDMENT NO. 1 TO AMENDED, RESTATED AND CONSOLIDATED
MASTER LEASE OF LAND AND IMPROVEMENTS

    THIS AMENDMENT NO. 1 TO AMENDED, RESTATED AND CONSOLIDATED MASTER LEASE OF LAND AND IMPROVEMENTS (this "Amendment"), dated as of        , 1999, is entered into by and between:

RECITALS

    A.  Tenant and Landlord are parties to that certain Amended, Restated and Consolidated Master Lease of Land and Improvements, dated as of August 11, 1999 (the "Lease").

    B.  In connection with the Lease, Landlord entered into a Participation Agreement, dated as of August 11, 1999, with Tenant, certain financial institutions from time to time parties thereto (the "Rent Purchasers") and ABN AMRO Bank N.V., as agent for the Rent Purchasers (in such capacity, "Administrative Agent"), and a Rent Purchase Agreement, dated as of August 11, 1999, with the Rent Purchasers and Administrative Agent, pursuant to which the Rent Purchasers purchased an interest in the Lease from Landlord.

    C.  Tenant has requested that the insurance provisions in the Lease be amended and Landlord is willing so to amend the Lease upon the terms and subject to the conditions set forth in this Amendment.

AGREEMENT

    NOW, THEREFORE, in consideration of the above recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Tenant and Landlord hereby agree as follows:

    1.  Definitions, Interpretation.  All capitalized terms defined above and elsewhere in this Amendment shall be used herein as so defined. Unless otherwise defined herein, all other capitalized terms used herein shall have the respective meanings given to those terms Appendix A to the Lease. The rules of construction set forth in Appendix A to the Lease shall, to the extent not inconsistent with the terms of this Amendment, apply to this Amendment and are hereby incorporated by reference.

    2.  Amendments to Lease.  Subject to the satisfaction of the conditions set forth in Paragraph 5 below, the Lease is hereby amended as follows:

    3.  Waiver.  Subject to the satisfaction of the conditions set forth in Paragraph 5 below, Landlord hereby waives any Event of Default arising out of Tenant's failure to provide earthquake insurance with a deductible of not more than $1,000,000 or a certificate of insurance stating that coverage will not be canceled without thirty (30) days' prior written notice.

    4.  Representations and Warranties.  Tenant hereby represents and warrants to Landlord, the Rent Purchasers and Administrative Agent that the following are true and correct on the date of this Amendment and that, after giving effect to the amendments set forth in Paragraph 2 above, the following will be true and correct on the Effective Date (as defined below):

(Without limiting the scope of the term "Operative Documents," Tenant expressly acknowledges in making the representations and warranties set forth in this Paragraph 4 that, on and after the date hereof, such term includes this Amendment.)

    5.  Effective Date.  The amendments effected by Paragraph 2 above and the waiver effected by Paragraph 3 above shall become effective on the date (the "Effective Date") that Landlord and Administrative Agent receive each of the following, each in form and substance satisfactory to Landlord and Administrative Agent and their respective counsel:

    6.  Effect of this Amendment.  On and after the Effective Date, each reference in the Lease and the other Operative Documents to the Lease shall mean the Lease as amended hereby. Except as specifically amended above, (a) the Lease and the other Operative Documents shall remain in full force and effect and are hereby ratified and affirmed and (b) the execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power, or remedy of Landlord, the Rent Purchasers or Administrative Agent, nor constitute a waiver of any provision of the Lease or any other Operative Document.

    7.  Miscellaneous.  

[Signature pages follow]

    IN WITNESS WHEREOF, Tenant and Landlord have caused this Amendment to be executed as of the day and year first above written.

TENANT:
   ADOBE SYSTEMS INCORPORATED
 
 		  
 		  
 		  
By:		  
 
      Name:  
      Title:  
 
 LANDLORD:
  
 		  
 SUMITOMO BANK LEASING AND FINANCE, INC.
 
 		  
 		  
 		  
By:		  
 
      Name:  
      Title:  



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