EDWARDS J D & CO, S-1/A, 1997-08-08

EDWARDS J D & CO
S-1/A, 1997-08-08
PREPACKAGED SOFTWARE

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 8, 1997

REGISTRATION NO. 333-30701

================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------

AMENDMENT NO. 1

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
J.D. EDWARDS & COMPANY
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
DELAWARE 7372 84-0728700
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>

8055 EAST TUFTS AVENUE
DENVER, COLORADO 80237

(303) 334-4000

(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
---------------------
RICHARD G. SNOW, JR., ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
J. D. EDWARDS & COMPANY

1601 TECHNOLOGY WAY

DENVER, COLORADO 80237

(303) 334-4000

(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
Copies to:

<TABLE>
<S> <C>
HERBERT P. FOCKLER, ESQ. ROBERT V. GUNDERSON, JR., ESQ.
WILSON SONSINI GOODRICH & ROSATI JAY K. HACHIGIAN, ESQ.
PROFESSIONAL CORPORATION BRIAN K. BEARD, ESQ.
650 PAGE MILL ROAD GUNDERSON DETTMER STOUGH VILLENEUVE
PALO ALTO, CALIFORNIA 94304 FRANKLIN & HACHIGIAN, LLP
(415) 493-9300 155 CONSTITUTION DRIVE
MENLO PARK, CALIFORNIA 94025
(415) 321-2400
</TABLE>

---------------------
Approximate date of commencement of proposed sale to public:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
- ------------

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
- ------------

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(a), MAY
DETERMINE.
================================================================================
<PAGE> 2

EXPLANATORY NOTE

This Registration Statement contains two forms of prospectus: (i) one to be
used in connection with an offering in the United States and Canada (the "U.S.
Prospectus") and (ii) the other to be used in connection with a concurrent
offering outside of the United States and Canada (the "International
Prospectus"). The U.S. Prospectus and the International Prospectus are identical
in all respects except for the front cover page of the International Prospectus,
which is included herein after the final page of the U.S. Prospectus and is
labeled "Alternate Page for International Prospectus." Final forms of each of
the Prospectuses will be filed with the Securities and Exchange Commission under
Rule 424(b).
<PAGE> 3

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may
not be sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective. This prospectus shall not
constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of these securities in any jurisdiction
in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction.

PROSPECTUS (Subject to Completion)

Issued August 8, 1997

LOGO
COMMON STOCK
---------------------

Of the Shares of Common Stock to be offered hereby, Shares are
being offered initially in the United States and Canada by the U.S.
Underwriters, and Shares are being offered initially outside of the
United States and Canada by the International Underwriters. See "Underwriters."
Of the Shares of Common Stock being offered hereby, Shares are
being sold by the Company and Shares are being sold by the Selling
Stockholders. See "Principal and Selling Stockholders." The Company will not
receive any of the proceeds from the sale of Shares by the Selling Stockholders.
Prior to this offering, there has been no public market for the Common Stock of
the Company. It is currently estimated that the initial public offering price
will be between $ and $ per Share. See "Underwriters" for a
discussion of the factors to be considered in determining the initial public
offering price. Application has been made to list the Common Stock on the Nasdaq
National Market under the symbol "JDEC."
---------------------

THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS"

COMMENCING ON PAGE 4 HEREOF.

---------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------

PRICE $ A SHARE
---------------------

<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) STOCKHOLDERS
----------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Per Share...................... $ $ $ $

Total(3)....................... $ $ $ $
</TABLE>

- ---------------

(1) The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriters."

(2) Before deducting expenses payable by the Company estimated at $ .

(3) The Company and certain of the Selling Stockholders have granted to the
U.S. Underwriters an option, exercisable within 30 days from the date
hereof, to purchase up to an aggregate of additional Shares at the
price to public less underwriting discounts and commissions for the
purpose of covering over-allotments, if any. If the U.S. Underwriters
exercise such option in full, the total price to public, underwriting
discounts and commissions, proceeds to Company and proceeds to Selling
Stockholders will be $ , $ , $ and $ ,
respectively. See "Underwriters."

---------------------

The Shares are offered, subject to prior sale, when, as and if accepted by
the Underwriters named herein and subject to approval of certain legal matters
by Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP, counsel for
the Underwriters. It is expected that delivery of the Shares will be made on or
about , 1997, at the office of Morgan Stanley & Co. Incorporated, New
York, N.Y., against payment therefor in immediately available funds.
---------------------

MORGAN STANLEY DEAN WITTER
DEUTSCHE MORGAN GRENFELL
ROBERTSON, STEPHENS & COMPANY

, 1997
<PAGE> 4

NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED IN THIS
PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO
MAKE SUCH OFFERING OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCE IMPLY THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
------------------------

UNTIL , 1997 (25 DAYS AFTER THE COMMENCEMENT OF THIS OFFERING),
ALL DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER
A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Prospectus Summary..................... 3
Risk Factors........................... 4
The Company............................ 16
Use of Proceeds........................ 17
Dividend Policy........................ 17
Capitalization......................... 18
Dilution............................... 19
Selected Consolidated Financial Data... 20
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... 21
Business............................... 31
Management............................. 48
Certain Transactions................... 56

<CAPTION>
PAGE
-----
<S> <C>
Principal and Selling Stockholders..... 58
Description of Capital Stock........... 60
Shares Eligible for Future Sale........ 62
Certain U.S. Federal Income Tax
Considerations for Non-U.S. Holders
of Common Stock...................... 64
Underwriters........................... 66
Legal Matters.......................... 69
Experts................................ 69
Change in Accountants.................. 69
Additional Information................. 70
Index to Consolidated Financial
Statements........................... F-1
</TABLE>

------------------------

J.D. Edwards & Company, J.D. Edwards and WorldVision are registered
trademarks of the Company. WorldSoftware, OneWorld, Genesis and Configurable
Network Computing are trademarks of the Company. All other trade names and
trademarks referred to in this Prospectus are the property of their respective
owners.

------------------------

Unless the context otherwise requires, the "Company" or "J.D. Edwards"
refers to J.D. Edwards & Company and its consolidated subsidiaries. Except as
otherwise noted herein, all information in this Prospectus (i) assumes no
exercise of the Underwriters' over-allotment option and (ii) gives effect to the
Company's reincorporation in Delaware, which will be consummated prior to this
offering and pursuant to which 70 shares of Common Stock of the Delaware
corporation will be issued in exchange for each share of Common Stock of the
predecessor Colorado corporation.
------------------------

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING,
AND MAY BID FOR, AND PURCHASE, SHARES OF COMMON STOCK IN THE OPEN MARKET. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITERS."

2
<PAGE> 5

[GATE FOLD -- SEE APPENDIX A]
<PAGE> 6

- --------------------------------------------------------------------------------

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more
detailed information and the consolidated financial statements and notes
thereto appearing elsewhere in this Prospectus.

THE COMPANY

J.D. Edwards develops, markets and supports highly functional
Enterprise Resource Planning software solutions that operate on multiple
computing platforms and are designed to accelerate customers' time to
benefit, lower customers' cost of ownership and reduce information systems
risks arising from changes in technology and business practices. The
Company's integrated software application suites support manufacturing,
finance, distribution/logistics and human resources operations for
multi-site and multinational organizations. Through its Configurable
Network Computing architecture, the Company's ERP software is specifically
designed to enable customers to change technology and/or business
practices while minimizing costs and business interruptions. The Company
provides implementation, training and support services designed to enable
customers to rapidly achieve the benefits of the Company's ERP solutions.
The Company has developed and marketed ERP solutions for over 20 years,
principally for operation on AS/400 and other IBM mid-range systems and,
more recently, on leading UNIX and Windows NT servers through Windows- and
Internet browser-enabled desktop clients.

The Company's family of application suites is designed to improve most
organizations' core business processes. In addition, the Company extends
its application suites to address certain vertical markets with specific
configurations, templates and additional software features designed to
meet these industries' needs. The Company offers two versions of its
application suites -- WorldSoftware and OneWorld. WorldSoftware operates
in a host-centric environment on the AS/400 platform. OneWorld
incorporates the Company's CNC architecture and operates on leading UNIX
and NT servers, as well as the AS/400 platform. The Company believes its
network-centric CNC architecture provides a valuable extension beyond
traditional client/server architectures by masking complexity, lowering
cost of change and facilitating greater scalability. In addition,
WorldSoftware and OneWorld are capable of operating together in a unified
enterprise-wide environment. The Company also provides WorldSoftware and
OneWorld toolsets to enable rapid implementation, customization and
modification of its application suites.

The Company distributes, implements and supports its products
worldwide through 46 offices and 172 third-party business partners. To
date, the Company has more than 4,000 customers with sites in over 90
countries including Lexmark International, Inc., SmithKline Beecham plc,
Paradyne Corporation and Praxair, Inc.

THE OFFERING

<TABLE>
<S> <C>
U.S. offering....................................... shares
International offering.............................. shares
Total....................................... shares (including shares by the
Company and shares by the Selling Stockholders)
Common Stock to be outstanding after the offering... shares(1)
Use of proceeds..................................... For general corporate purposes, including
working capital. See "Use of Proceeds."
Proposed Nasdaq National Market symbol.............. JDEC
</TABLE>

SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
TEN MONTHS SIX MONTHS ENDED
ENDED YEAR ENDED OCTOBER 31, APRIL 30,
OCTOBER 31, -------------------------------------------- --------------------
1992(2) 1993 1994 1995 1996 1996 1997
----------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF OPERATIONS
DATA:
Total revenue........................... $ 119,513 $196,834 $240,587 $340,766 $478,048 $208,142 $268,675
Total costs and expenses................ 116,154 184,546 223,140 311,888 434,421 198,350 255,745
Operating income........................ 3,359 12,288 17,447 28,878 43,627 9,792 12,930
Net income (loss)....................... (267) 7,380 12,063 18,209 26,326 5,941 7,178
Earnings (loss) per common share(3)..... $ (0.00) $ 0.09 $ 0.15 $ 0.22 $ 0.30 $ 0.07 $ 0.08
Weighted average common shares
outstanding(3)........................ 80,960 81,488 81,755 82,006 87,169 86,489 93,416
</TABLE>

<TABLE>
<CAPTION>
APRIL 30, 1997
---------------------------------------
PRO PRO FORMA AS
ACTUAL FORMA(4) ADJUSTED(5)
-------- -------- -------------
<S> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents........................................................... $ 29,907 $ 29,907 $
Total assets........................................................................ 276,421 289,146
Mandatorily redeemable shares, at redemption value.................................. 99,076 5,500 --
Stockholders' equity (deficit)...................................................... (22,530) 83,462
</TABLE>

---------------------

(1) Based on the number of shares outstanding as of April 30, 1997.
Excludes (i) 22,200,430 shares of Common Stock issuable upon exercise
of outstanding options at April 30, 1997, with a weighted average
exercise price of $ 4.52 per share and (ii) 17,114,790 shares of
Common Stock reserved for issuance under the Company's stock plans as
of April 30, 1997. See "Management -- Employee Benefit Plans" and
Notes 7 and 10 of Notes to Consolidated Financial Statements.

(2) In 1992, the Company changed its fiscal year end from December 31 to
October 31. The consolidated statement of operations data for the
period ended October 31, 1992 reflects 10 months of operating activity
as compared with 12 months for all other fiscal year periods.

(3) See Note 1 of Notes to Consolidated Financial Statements for a
discussion of the computation of earnings (loss) per common share and
weighted average common shares outstanding.

(4) Reflects the elimination of the mandatory redemption feature of the
mandatorily redeemable ESOP shares and the income tax benefits
resulting from the lapse of restrictions on certain shares of the
Company's outstanding Common Stock, both of which will occur
automatically upon the closing of this offering. See Note 1 of Notes
to Consolidated Financial Statements.

(5) Pro forma as adjusted to reflect the receipt by the Company of the
estimated net proceeds from the sale of the shares of Common Stock
offered by the Company hereby at an assumed initial public offering
price of $ per share and after deducting estimated underwriting
discounts and commissions and estimated offering expenses payable by
the Company. See "Capitalization" and "Use of Proceeds."
- --------------------------------------------------------------------------------

3
<PAGE> 7

RISK FACTORS

In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the shares
of Common Stock offered hereby. This Prospectus contains forward-looking
statements that involve risks and uncertainties. Actual results may differ
materially from those indicated in such forward-looking statements. Factors that
may cause such a difference include, but are not limited to, those discussed
below and in the sections entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business."

Variability of Quarterly Operating Results; Seasonality. The Company's
quarterly operating results have fluctuated significantly in the past, and will
likely continue to fluctuate in the future, as a result of a number of factors,
many of which are outside the Company's control. These factors include the
demand for the Company's software products and services; the size and timing of
specific sales; the level of product and price competition that the Company
encounters; the length of sales cycles; the timing of new product introductions
and product enhancements by the Company or its competitors; market acceptance of
new products; changes in pricing policies by the Company or its competitors; the
Company's ability to hire sales and consulting personnel to meet the demand, if
any, for implementations of the OneWorld version of its application suites; the
Company's ability to establish and maintain relationships with third-party
implementation providers; the Company's ability to establish and maintain
relationships with hardware and software suppliers; the announcement of new
hardware platforms that cause delay of customer purchases; variations in the
length of the implementation process for the Company's software products; the
Company's ability to complete fixed-price consulting contracts on budget; the
mix of products and services sold; the mix of distribution channels through
which products are sold; the mix of international and domestic revenue; changes
in the Company's sales incentives; changes in the renewal rate of support
agreements; product life cycles; software defects and other product quality
problems; seasonality of technology purchases; personnel changes; changes in the
Company's strategy; the activities of competitors; the extent of industry
consolidation; expansion of the Company's international operations; general
domestic and international economic and political conditions; and budgeting
cycles of the Company's customers. The timing of large individual sales has been
difficult for the Company to predict, and large individual sales have, in some
cases, occurred in quarters subsequent to those anticipated by the Company.
There can be no assurance that the loss or deferral of one or more significant
sales would not have a material adverse effect on the Company's quarterly
operating results.

The Company's software products are typically shipped when orders are
received, and consequently, license backlog at the beginning of any quarter has
in the past represented only a small portion of that quarter's expected revenue.
As a result, license fee revenue in any quarter is difficult to forecast because
it is substantially dependent on orders booked and shipped in that quarter.
Moreover, the Company typically recognizes a substantial amount of its revenue
in the last month of the quarter, frequently in the last week or even days of
the quarter. Since the Company's operating expenses are based on anticipated
revenue levels and because a high percentage of the Company's expenses are
relatively fixed in the near term, any shortfall from anticipated revenue or a
delay in the recognition of revenue could result in significant variations in
operating results from quarter to quarter. Quarterly license fee revenue is also
difficult to forecast because the Company's sales cycles, from initial
evaluation to delivery of software, vary substantially from customer to
customer. If revenue falls below the Company's expectations in a particular
quarter, the Company's operating results could be materially adversely affected.
See "-- Lengthy Sales Cycle."

4
<PAGE> 8

quarter, any shortfall from anticipated revenue, particularly license fee
revenue, in the fourth quarter would have a disproportionately large adverse
effect on the Company's operating results for the fiscal year. In addition, the
Company's total revenue, license fee revenue, service revenue and net income in
its first fiscal quarter have historically been lower than those in the
immediately preceding fourth quarter. For example, total revenue, license fee
revenue, service revenue and net income in the first quarter of fiscal 1997
decreased 20%, 41%, 3% and 87%, respectively, from the fourth quarter of fiscal
1996. The Company's first quarter revenue has historically slowed during the
holiday season in November and December.

Based on all of the foregoing, the Company believes that future revenue,
expenses and operating results are likely to vary significantly from quarter to
quarter. As a result, quarter to quarter comparisons of operating results are
not necessarily meaningful or indicative of future performance. Furthermore, the
Company believes it is likely that in some future quarter the Company's
operating results will be below the expectations of public market analysts or
investors. In such event, or in the event that adverse conditions prevail, or
are perceived to prevail, with respect to the Company's business or generally,
the market price of the Company's Common Stock would likely be materially
adversely affected. See "Selected Consolidated Financial Data" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

Limited Deployment of OneWorld Version; Entering New Markets. The Company
first shipped the OneWorld version of its application suites in late calendar
1996. The Company's future revenue growth is substantially dependent upon the
market acceptance of these OneWorld application suites and the ability of the
Company to license OneWorld application suites to new customers who are not
currently users of the Company's WorldSoftware. The Company does not expect to
generate substantial OneWorld license fee revenue from its existing installed
base of WorldSoftware users. The Company expects that it will take a longer time
to implement the OneWorld version of its application suites than it takes to
implement the WorldSoftware version, which typically takes six to 18 months. To
date, only a limited number of the Company's customers have licensed the
OneWorld version of its application suites, and, due to the lengthy
implementation process, only a few have completed implementation of some or all
of the licensed OneWorld applications suites. Potential and existing customers
may find it difficult, or be unable, to successfully implement OneWorld
application suites, or may not purchase OneWorld application suites for a number
of reasons, including a lack of implementation experience by the Company or its
third-party implementation providers in complex multi-platform environments; a
customer's lack of the necessary hardware, software or networking
infrastructure; an absence of required functionality in OneWorld application
suites; excessive time and cost of implementation; the failure of the OneWorld
version to be competitive with other products on the market; defects or "bugs"
in OneWorld application suites; and a failure to meet customer expectations. In
addition, because the Company is using OneWorld application suites to target
potential customers in new markets, the Company must overcome certain
significant obstacles, including new competitors who have significantly more
experience and name recognition with open systems customers, implementations and
platforms; the Company's limited relationships with third-party implementation
providers; the limited experience of the Company's sales and consulting
personnel in the open systems environment; and the Company's limited existing
reference accounts in the open systems market. If, for any reason, the Company
is unable to successfully sell or implement OneWorld in the UNIX or NT markets,
the Company's reputation would be damaged, and such failure would have a
material adverse effect on the Company's business, operating results and
financial condition. Moreover, if the Company fails to meet the expectations of
market analysts or investors with regard to sales or implementations of OneWorld
application suites, the market price of the Company's Common Stock would likely
be materially adversely affected.

Dependence on IBM AS/400 Platform. Although the Company has recently
released the OneWorld version of its application suites to run on leading UNIX
and NT servers, the Company is and, for an extended period, expects to remain
substantially dependent upon the market for software products for the IBM AS/400
platform. All of the Company's revenue in fiscal 1994, 1995 and 1996 and
substantially all of the Company's revenue in the first six months of 1997 was
derived from its software products and related services for the AS/400 market.
The market for the AS/400 platform is expected to grow at a minimal rate;
however, there can be no assurance that the AS/400 market will grow at all in
the future. Similarly, there can be no assurance that AS/400 customers or
prospective customers will respond favorably to the Company's future or enhanced

5
<PAGE> 9

software products or that the Company will continue to be successful in selling
its software products or services in the AS/400 market. The Company's future
growth will depend in part on its ability to gain market share in the AS/400
market; however, there can be no assurance that the Company will be able to
achieve any such market share gains or maintain its current market share.
Moreover, the Company's goal of gaining market share in the AS/400 market will
be more difficult to achieve since the Company is also focusing on the UNIX and
NT markets. See "-- Management of Growth; Need for Additional Qualified
Personnel." If the Company's AS/400 installed customer base erodes, resulting in
a decline in recurring support and other service revenue, the Company's
business, operating results and financial condition will be materially adversely
affected.

Competition. The market for ERP software solutions is intensely
competitive, subject to rapid technological change and significantly affected by
new product introductions and other market activities of industry participants.
The Company's products are designed and marketed for the AS/400 market and, more
recently, for leading UNIX and NT servers. The Company's primary competition
comes from a large number of independent software vendors including: (i)
companies offering products that run on the AS/400 platform and other mid-range
computers, including System Software Associates, Inc., Marcam Corporation,
Infinium Software, Inc. (formerly Software 2000) and JBA Holdings plc; (ii)
companies offering products that run on UNIX or NT servers in a client/server
environment, such as SAP Aktiengesellschaft ("SAP"), Baan Company N.V. ("Baan"),
PeopleSoft, Inc. ("PeopleSoft") and Oracle Corporation ("Oracle"); and (iii)
companies offering either standard or fully customized products that run on
mainframe computer systems, such as SAP. Additionally, the Company faces
indirect competition from suppliers of custom-developed business application
software that focus mainly on proprietary mainframe and mid-range computer-based
systems, such as systems consulting groups of major accounting firms, and from
IT departments of potential customers that develop systems internally. The
Company's competitors currently offer products that run on the AS/400 platform
and/or UNIX and NT servers or have announced their intent to introduce such
products in the near future. As a result, the Company will experience increased
competition. There can be no assurance that the Company will be able to
successfully compete with new or existing competitors or that such competition
will not have a material adverse effect on the Company's business, operating
results or financial condition. See "Business -- Competition."

Many of the Company's competitors, and SAP and Oracle in particular, have
significantly greater financial, technical, marketing and other resources than
the Company, as well as wider name recognition and larger installed customer
bases. Moreover, the Company has traditionally competed only in the AS/400
market, which primarily consists of mid-sized organizations, and has only
recently entered the UNIX and NT markets. In contrast, each of SAP, Baan,
PeopleSoft and Oracle has significantly more experience with UNIX and NT
implementations and platforms, name recognition with potential UNIX and NT
customers, and reference accounts with UNIX and NT customers. Accordingly, such
competitors have significantly more customers in the UNIX and NT markets to use
as references when competing against the Company. Additionally, several of the
Company's competitors have well-established relationships with current and
potential customers of the Company. These relationships may prevent the Company
from competing effectively in divisions or subsidiaries of such customers. Many
of the Company's competitors, such as SAP, Baan, PeopleSoft and Oracle, also
offer, or have announced their intention to offer, vertical applications
targeted to mid-sized organizations, which market comprises a substantial
portion of the Company's revenue. Further, several of the Company's competitors
regularly and significantly discount prices on their products. If these
competitors continue to discount or increase the amount or frequency of such
discounts in response to increased competition or other factors, the Company may
be required to similarly discount its products, which could have an adverse
effect on the Company's margins. There can be no assurance that the Company will
be able to compete successfully against any of these competitors.

The Company relies, and expects to increase its reliance, on a number of
third-party implementation providers and other customer support services, as
well as for recommendations of its products during the evaluation stage of the
purchase process. A number of the Company's competitors, including SAP, Baan,
PeopleSoft, and Oracle, have significantly more well-established relationships
with such providers and, as a result, such firms may be more likely to recommend
competitors' products rather than the Company's

6
<PAGE> 10

products. Furthermore, there can be no assurance that these third parties, many
of which have significantly greater financial, technical, marketing and other
resources than the Company, will not market software products in competition
with the Company in the future. If the Company is unable to maintain or increase
the number and quality of its relationships with providers who recommend,
implement or support ERP software, the Company's business, operating results and
financial condition will be materially adversely affected.

Lengthy Sales Cycle. The Company's software is generally used for division-
or enterprise-wide, business-critical purposes and involves significant capital
commitments by customers. Potential customers generally commit significant
resources to an evaluation of available enterprise software and require the
Company to expend substantial time, effort and money educating them about the
value of the Company's solutions. Sales of the Company's software products
require an extensive sales effort throughout a customer's organization because
decisions to license such software generally involve the evaluation of the
software by a significant number of customer personnel in various functional and
geographic areas, each often having specific and conflicting requirements. A
variety of factors, including factors over which the Company has little or no
control, may cause potential customers to favor a particular supplier or to
delay or forego a purchase. As a result of these or other factors, the sales
cycle for the Company's products is long, typically ranging between six and 15
months. Moreover, the Company expects that the sales cycle for the recently
released OneWorld version of its application suites may be longer than that of
the WorldSoftware version, at least until the Company's sales force becomes
familiar with the needs of customers operating on UNIX and NT servers. As a
result of the length of the sales cycle for its software products, the Company's
ability to forecast the timing and amount of specific sales is limited, and the
delay or failure to complete one or more large license transactions could have a
material adverse effect on the Company's business, operating results or
financial condition and cause the Company's operating results to vary
significantly from quarter to quarter. See "-- Variability of Quarterly
Operating Results; Seasonality."

Lengthy Implementation Process. The Company's software products are complex
and perform or directly affect business-critical functions across many different
functional and geographic areas of the enterprise. Consequently, implementation
of the Company's software is a complex, lengthy process that involves a
significant commitment of resources by the Company's customers and that is
subject to a number of significant risks over which the Company has little or no
control. The Company expects that implementation of the OneWorld version of its
application suites on UNIX and NT servers is likely to be more complex and
require more time than implementation on the AS/400 platform. In addition, the
Company's lack of experience in implementing the OneWorld version of its
application suites may contribute to the length of the implementation process.
Delays in the completion of implementations of any of its application suites
whether by the Company or its business partners, may result in customer
dissatisfaction or damage to the Company's reputation and could have a material
adverse effect on the Company's business, operating results or financial
condition.

Reliance on Third Parties and Development of Certain Relationships. The
Company intends to rely primarily on third-party implementation providers for
the implementation of the OneWorld version of its application suites. Although
the Company has historically subcontracted a portion of its implementation
services to third parties, the Company has adopted a strategy in which an
increasing number of OneWorld implementations will be performed by third parties
that will contract directly with the Company's customers to provide such
services. Executing this strategy will require that third-party implementation
providers with which the Company has existing relationships allocate additional
resources to OneWorld implementations and that the Company enter into new
relationships with additional third-party implementation providers to provide
such services. Due to the limited resources and capacities of many third-party
implementation providers and the reluctance of such providers to switch partners
or enter into new relationships with additional suppliers, there can be no
assurance that the Company will be able to establish or maintain relationships
with third parties having sufficient resources to provide the necessary
implementation services to support demand, if any, for the OneWorld version. If
such resources are unavailable, the Company will be required to perform such
services internally, and there can be no assurance that the Company will have
sufficient resources available for such purposes. In addition, there can be no
assurance that any third-party implementation provider with which the Company
has, or intends to establish, such a relationship will provide the level and
quality of service

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<PAGE> 11

required to meet the needs and expectations of the Company's customers. If the
Company is unable to establish and maintain effective, long-term relationships
with such providers, or if such providers do not meet customer needs, the
Company's business, operating results or financial condition will be materially
adversely affected.

The Company has established a number of relationships with third parties,
including consulting and systems integration firms, hardware suppliers, and
database, operating system and other independent software vendors, in order to
enhance its sales, marketing and customer service efforts. Many of these third
parties have better established relationships with one or more of the Company's
competitors and may, in specific instances, select or recommend ERP software
offerings of the Company's competitors rather than the Company's software. In
addition, certain of these third parties, including Oracle, compete with the
Company in developing and marketing ERP software applications. Competition
between the Company and these third parties may cause a deterioration in or
termination of such relationships, which could have a material adverse effect on
the Company's business, operating results or financial condition. See
"-- Competition."

Dependence on Service Revenue. The Company licenses software under
non-cancelable license agreements and provides related services, which consist
of support, training, consulting and implementation. Total revenue from license
fees and services has increased from year to year. As a percentage of total
revenue, service revenue has increased from 55.3% of total revenue in fiscal
1994 to 62.3% of total revenue in fiscal 1996 primarily as a result of the
Company's continued emphasis on providing consulting and training services that
complement its software products and increased support revenue resulting from
the Company's growing installed base of customers. Furthermore, the Company has
historically subcontracted a portion of its consulting and training services to
third parties, and, in fiscal 1996, such subcontracted services accounted for
approximately 40% of services revenue. However, the Company is currently
pursuing a strategy of relying on third-party implementation providers to
contract directly with its customers for OneWorld implementation and related
services. See "Business -- Strategy" and "Business -- Implementation Services
and Training." To the extent the Company is successful in implementing this
strategy and the OneWorld version of the Company's application suites achieves
market acceptance in future periods, revenue from subcontracted services and
total service revenue as a percentage of revenue will likely decrease. If such
revenue decreases more than anticipated, the Company's operating results will be
materially adversely affected. There can be no assurance that the Company will
be successful in implementing its strategy or that such products will achieve
market acceptance, which failure could have a material adverse effect on its
business, operating results and financial condition. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

Management of Growth; Need for Additional Qualified Personnel. Although the
Company has experienced significant revenue growth in past years, such growth is
not necessarily indicative of future revenue growth. This growth has resulted in
new and increased responsibilities for management personnel and has placed, and
continues to place, a significant strain upon the Company's management,
operating and financial resources. There can be no assurance that such strain
will not have a material adverse effect on the Company's business, operating
results or financial condition. The rapid growth of the Company's business has
required the Company to make significant recent additions in personnel,
particularly in product development and sales and marketing. The Company
believes that its future operating results depend in significant part on its
ability to attract and retain highly skilled technical, managerial, sales,
marketing, service and support personnel. Although the Company has increased the
number of its sales, services and support personnel in recent years, the Company
has experienced, and expects to continue to experience, difficulty in recruiting
such personnel. The Company anticipates that it will need to continue to
increase the size of its direct sales, services and support personnel in future
periods. If the Company is unable to hire qualified personnel on a timely basis,
the Company's business, operating results and financial condition will be
materially adversely affected.

To manage its operations, the Company must continuously evaluate the
adequacy of its management structure and its existing procedures, including,
among others, its financial and internal controls. There can be no assurance
that management will adequately anticipate all of the changing demands that
growth may impose on the Company's procedures and structure. Any failure to
adequately anticipate and respond to such changing demands may have a material
adverse effect on the Company's business, operating results or

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<PAGE> 12

financial condition. As a result of the Company's development and release of the
OneWorld version of its application suites, a significant amount of the
Company's resources has been focused on the UNIX and NT markets. To maintain a
focus on the AS/400 market, as well as on the UNIX and NT markets, the Company
is considering implementation of certain internal changes to its organization.
If the Company's efforts to maintain a focus on both markets are unsuccessful,
the Company's business, operating results and financial condition may be
materially adversely affected.

Fixed-Price Service Contracts. The Company offers a combination of ERP
software, implementation and support services to its customers. Typically, the
Company enters into service agreements with its customers that provide for
consulting and implementation services on a "time and materials" basis. Certain
customers have asked for, and the Company has from time to time entered into,
fixed-price service contracts. These contracts specify certain milestones to be
met by the Company regardless of actual costs incurred by the Company in
fulfilling those obligations. The Company believes that fixed-price service
contracts may increasingly be offered by its competitors to differentiate their
product and service offerings. As a result, the Company may enter into more
fixed-price contracts in the future. There can be no assurance that the Company
can successfully complete these contracts on budget, and the Company's inability
to do so could have a material adverse effect on its business, operating results
and financial condition.

Year 2000 Compliance. Many currently installed computer systems and
software products are coded to accept only two digit entries in the date code
field. Beginning in the year 2000, these date code fields will need to accept
four digit entries to distinguish 21st century dates from 20th century dates. As
a result, in less than three years, computer systems and/or software used by
many companies may need to be upgraded to comply with such "Year 2000"
requirements. Significant uncertainty exists in the software industry concerning
the potential effects associated with such compliance. Although the Company
currently offers software products that are designed to be Year 2000 compliant,
there can be no assurance that the Company's software products contain all
necessary date code changes.

The Company believes that the purchasing patterns of customers and
potential customers may be affected by Year 2000 issues in a variety of ways.
Many companies are expending significant resources to correct or patch their
current software systems for Year 2000 compliance. These expenditures may result
in reduced funds available to purchase software products such as those offered
by the Company. In addition, it is possible that certain of the Company
customers are purchasing support contracts only to ensure that they become Year
2000 compliant and that, once such customers believe they are Year 2000
compliant, they will not renew support contracts. If a significant number of the
Company's customers do not renew support contracts for this or other reasons,
the Company's business, operating results and financial condition would be
adversely affected. Many potential customers may also choose to defer purchasing
Year 2000 compliant products until they believe it is absolutely necessary, thus
resulting in potentially stalled market sales within the industry. Conversely,
Year 2000 issues may cause other companies to accelerate purchases, thereby
causing an increase in short-term demand and a consequent decrease in long-term
demand for software products. Additionally, Year 2000 issues could cause a
significant number of companies, including current Company customers, to
reevaluate their current ERP system needs, and as a result consider switching to
other systems or suppliers. Moreover, the Company believes that some customers
may be purchasing the Company's products as an interim solution to their Year
2000 needs until their current suppliers reach compliance. There can be no
assurance that such customers will purchase support services from the Company or
that they will upgrade beyond their current version of the Company's software
once their current software suppliers reach compliance. Any of the foregoing
could result in a material adverse effect on the Company's business, operating
results and financial condition.

International Operations and Currency Fluctuations. International revenue
as a percentage of total revenue ranged between 35% and 37% from fiscal 1994
through the first half of fiscal 1997, and the Company expects that revenue from
international customers will continue to account for a significant portion of
the Company's total revenue. The Company currently has 27 international sales
offices located throughout Canada, Europe, Asia, Latin America and Africa. To
service the needs of its customers with international operations, the Company
and its support partners must provide worldwide product support services. One of
the Company's strategies is to continue to expand its existing international
operations and enter additional

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<PAGE> 13

international markets, which will require significant management attention and
financial resources. Traditionally, international operations are characterized
by higher operating expenses and lower operating margins. As a result, if
international revenue increases as a percentage of total revenue, operating
margins may be adversely affected. Costs associated with international expansion
include the establishment of additional foreign offices, the hiring of
additional personnel, the localization and marketing of its products for
particular foreign markets, and the development of relationships with additional
international service providers. If international revenue is not adequate to
offset the expense of expanding foreign operations, the Company's business,
operating results or financial condition could be materially adversely affected.

A significant portion of the Company's revenue is received in currencies
other than U.S. dollars and, in the past, the Company has engaged in minimal
hedging activities. As a result, the Company is subject to risks associated with
foreign exchange rate fluctuations. In the first half of fiscal 1997 and fiscal
1996, the Company incurred foreign exchange losses of approximately $1.3 million
and $1.7 million, respectively. Accordingly, due to the substantial volatility
of foreign exchange rates, there can be no assurance that foreign exchange rate
fluctuations will not have a material adverse effect on the Company's business,
operating results or financial condition.

The Company's international operations are subject to other risks inherent
in international business activities, such as the imposition of governmental
controls, export license requirements, restrictions on the export of certain
technology, cultural and language difficulties associated with servicing
customers, the impact of a recessionary environment in economies outside the
United States, reduced protection for intellectual property rights in some
countries, the potential exchange and repatriation of foreign earnings,
political instability, trade restrictions, tariff changes, localization and
translation of products for foreign countries, difficulties in staffing and
managing international operations, difficulties in collecting accounts
receivable and longer collection periods, and the impact of local economic
conditions and practices. The Company's success in expanding its international
business will be dependent, in part, on its ability to anticipate and
effectively manage these and other risks. There can be no assurance that these
and other factors will not have a material adverse effect on the Company's
business, operating results or financial condition.

Risks Associated with New Versions and New Products; Rapid Technological
Change; Risks of Software Defects. The market for the Company's products is
characterized by rapid technological change, evolving industry standards in
computer hardware and software technology, changes in customer requirements and
frequent new product introductions and enhancements. The introduction of
products embodying new technologies and the emergence of new industry standards
can render existing products obsolete and unmarketable. The life cycles of the
Company's software products are difficult to estimate. As a result, the
Company's future success will depend, in part, upon its ability to continue to
enhance existing products and develop and introduce in a timely manner new
products that keep pace with technological developments, satisfy customer
requirements and achieve market acceptance. There can be no assurance that the
Company will successfully identify new product opportunities and develop and
bring new products to market in a timely and cost-effective manner, or that
products, capabilities or technologies developed by others will not render the
Company's products or technologies obsolete or noncompetitive or shorten the
life cycles of the Company's products. See "-- Competition." Although the
Company has addressed the need to develop new products and enhancements
primarily through its internal development efforts, the Company has also
addressed this need through the licensing of third-party technology. Licensing
third-party technology involves numerous risks. See "-- Limited Protection of
Proprietary Technology; Risks of Infringement." If the Company is unable to
develop on a timely and cost-effective basis new software products or
enhancements to existing products, or if such new products or enhancements do
not achieve market acceptance, the Company's business, operating results and
financial condition may be materially adversely affected.

10
<PAGE> 14

can be no assurance that such delays will not be experienced in the future. The
Company recently released OneWorld, the network-centric version of its
application suites. Because the development of enhancements in network-centric
environments is more complex than in host-centric systems, there can be no
assurance that the introduction of future enhancements will not be delayed. See
"Business -- Products."

Complex software products such as those offered by the Company frequently
contain undetected errors or "bugs" when first introduced or as new versions are
released that, despite testing by the Company, are discovered only after a
product has been installed and used by customers. The Company has in the past
discovered software errors in new versions of its ERP software after their
release. To date, the Company's business, operating results or financial
condition have not been materially adversely affected by the release of products
containing errors. There can be no assurance, however, that errors will not be
found in the Company's products or that such errors will not result in delay or
loss of revenue, diversion of development resources, damage to the Company's
reputation, increased service and warranty costs, or impaired market acceptance
of these products, any of which could result in a material adverse effect on the
Company's business, operating results or financial condition. See
"Business -- Products."

Dependence on Key Personnel. The Company's success depends to a significant
extent upon a limited number of members of senior management and other key
employees. The loss of one or more key employees could have a material adverse
effect on the Company. Although the Company currently maintains key man life
insurance on C. Edward McVaney, Chairman, President and Chief Executive Officer,
such insurance is minimal and is not maintained on other key personnel. The
Company does not have employment agreements with its executive officers. In
addition, the Company believes that its future success will depend in part on
its ability to attract and retain highly skilled technical, managerial, sales
and marketing personnel. Competition for such personnel in the computer software
industry is intense. There can be no assurance that the Company will be
successful in attracting and retaining such personnel, and the failure to do so
could have a material adverse effect on the Company's business, operating
results or financial condition.

Limited Protection of Proprietary Technology; Risks of Infringement. The
Company's ability to compete is dependent in part upon its internally developed,
proprietary intellectual property. Although the Company currently has no
patents, it has five patent applications pending on various aspects of its
application suites. In addition, the Company has applied to register the
trademarks "WorldSoftware" and "OneWorld." The Company also relies on general
trademark and copyright protection for its technology, although it generally
does not register such intellectual property. Furthermore, the Company relies on
trade secret law, confidentiality procedures and licensing arrangements to
establish and protect its rights in its technology. Nevertheless, the Company
believes that factors such as the technological and creative skills of its
personnel, new product developments, frequent product enhancements, name
recognition, customer training and reliable product support, are more essential
to protect its market position. There can be no assurance that others will not
develop technologies that are similar or superior to the Company's technology.
The Company typically enters into confidentiality or license agreements with its
employees, consultants and suppliers, and typically controls access to and
distribution of its software, documentation and other proprietary information.
Despite these precautions, it may be possible for a third party to copy or
otherwise obtain and use the Company's products or technology without
authorization, or to develop similar technology independently through reverse
engineering or other means. In addition, the laws of some foreign countries do
not protect the Company's proprietary rights as fully as do the laws of the
United States. There can be no assurance that the Company's means of protecting
its proprietary rights in the United States or abroad will be adequate or that
competitors will not independently develop similar technology. Preventing or
detecting unauthorized use of the Company's products is difficult. There can be
no assurance that the steps taken by the Company will prevent misappropriation
of its technology or that its license agreements will be enforceable. In
addition, litigation may be necessary in the future to enforce the Company's
intellectual property rights, to protect the Company's trade secrets, to
determine the validity and scope of the proprietary rights of others, or to
defend against claims of infringement or invalidity. Such litigation could
result in substantial costs and diversion of resources and could have a material
adverse effect on the Company's business, operating results or financial
condition.

The Company typically licenses its products to end users under the
Company's standard license agreements, although each license is individually
negotiated and may contain variations. The Company's

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<PAGE> 15

products are licensed not only to end users, but also to independent,
third-party distributors with a right to sublicense. Although the Company seeks
to establish the conditions under which the Company's products are licensed by
such distributors to end users, the Company cannot ensure that its distributors
do not deviate from such conditions. Moreover, in order to facilitate the
customization required by most of the Company's customers, the Company generally
licenses its software products to end users in both object code
(machine-readable) and source code (human-readable) format. Although this
practice facilitates customization, making software available in source code
also makes it easier for third parties to copy or modify the Company's software
for non-permitted purposes.

In the future, the Company may receive notice of claims of infringement of
other parties' proprietary rights. Although the Company does not believe that
its products infringe the proprietary rights of third parties, there can be no
assurance that infringement or invalidity claims (or claims for indemnification
resulting from infringement claims) will not be asserted or prosecuted against
the Company or that any such assertions or prosecutions will not materially
adversely affect the Company's business, operating results or financial
condition. Regardless of the validity or the successful assertion of such
claims, defending against such claims could result in significant costs and
diversion of resources with respect to the defense thereof, which could have a
material adverse effect on the Company's business, operating results or
financial condition. In addition, the assertion of such infringement claims
could result in injunctions preventing the Company from distributing certain
products, which would have a material adverse effect on the Company's business,
operating results and financial condition. If any claims or actions are asserted
against the Company, the Company may seek to obtain a license to such
intellectual property rights. There can be no assurance, however, that such a
license would be available on reasonable terms or at all.

The Company also relies on certain other technology which it licenses from
third parties, including software that is integrated with internally developed
software and used in the Company's products to perform key functions. Most
notably, the Company licenses the graphical user interface to the WorldSoftware
version of its application suites (which the Company markets as WorldVision).
There can be no assurance that these third-party technology licenses will
continue to be available to the Company on commercially reasonable terms. The
loss of, or inability to maintain, any of these technology licenses,
particularly that for WorldVision's graphical user interface, would result in
delays or reductions in product shipments until equivalent technology could be
identified, licensed or developed, and integrated. Any such delays or reductions
in product shipments could materially adversely affect the Company's business,
operating results or financial condition. Moreover, although the Company is
generally indemnified by third parties against claims that such third parties'
technology infringes the proprietary rights of others, such indemnification is
not always available for all types of intellectual property rights (for example,
patents may be excluded) and in some cases the geographic scope of
indemnification is limited. The result is that the indemnity that the Company
receives against such claims is often less broad than the indemnity that the
Company provides to its customers. Even in cases in which the indemnity that the
Company receives from a third-party licensor is as broad as the indemnity that
the Company provides to its customers, the third-party licensors from whom the
Company would be receiving indemnity are often not well-capitalized and may not
be able to indemnify the Company in the event that such third-party technology
infringes the proprietary rights of others. Accordingly, the Company could have
substantial exposure in the event that technology licensed from a third party
infringes another party's proprietary rights. The Company currently does not
have any liability insurance to protect against the risk that licensed
third-party technology infringes the proprietary rights of others. There can be
no assurance that infringement or invalidity claims arising from the
incorporation of third-party technology, and claims for indemnification from the
Company's customers resulting from such infringement claims, will not be
asserted or prosecuted against the Company or that any such assertions or
prosecutions will not materially adversely affect the Company's business,
operating results or financial condition. Regardless of the validity or
successful assertion of such claims, the Company could incur significant costs
and diversion of resources with respect to the defense thereof, in addition to
potential product redevelopment costs and delays, all of which could have a
material adverse effect on the Company's business, operating results or
financial condition.

Security; Product Liability. The Company has included security features in
certain of its Internet browser-enabled products that are intended to protect
the privacy and integrity of customer data. Despite the

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<PAGE> 16

existence of these security features, the Company's software products may be
vulnerable to break-ins and similar disruptive problems caused by Internet
users. Such computer break-ins and other disruptions may jeopardize the security
of information stored in and transmitted through the computer systems of the
Company's customers. Break-ins often involve hackers bypassing firewalls and
misappropriating confidential information. Addressing problems caused by such
third parties may require significant expenditures of capital and resources by
the Company, which may have a material adverse effect on the Company's business,
operating results or financial condition.

Although the Company's license agreements with its customers typically
contain provisions designed to limit the Company's exposure to potential
liability for damages arising out of use of or defects in the Company's
products, it is possible that such limitation of liability provisions may not be
effective as a result of existing or future federal, state or local laws or
ordinances or unfavorable judicial decisions. Although the Company has not
experienced any such product liability claims to date, there can be no assurance
that the Company will not be subject to such claims in the future. Because the
Company's software products may be used in business-critical applications, a
successful product liability claim brought against the Company could have a
material adverse effect on the Company's business, operating results or
financial condition. Moreover, defending such a suit, regardless of its merits,
could entail substantial expense and require the time and attention of key
management personnel, either of which could have a material adverse effect on
the Company's business, operating results or financial condition.

General Economic and Market Conditions. Segments of the software industry
have experienced significant economic downturns characterized by decreased
product demand, price erosion, work slowdowns and layoffs. The Company's
operations may in the future experience substantial fluctuations from period to
period as a consequence of general economic conditions affecting the timing of
orders from major customers and other factors affecting capital spending.
Although the Company has a diverse client base, it has targeted certain vertical
markets. Therefore, any economic downturns in general or in the targeted
vertical segments in particular would have a material adverse effect on the
Company's business, operating results and financial condition.

Control by Existing Stockholders. Immediately after the closing of this
offering, % of the outstanding Common Stock ( % if the Underwriter's
over-allotment option is exercised in full) will be held by the directors and
executive officers of the Company, together with certain entities affiliated
with them, assuming no exercise of outstanding stock options. As a result, these
stockholders, if acting together, would be able to control substantially all
matters requiring approval by the stockholders of the Company, including the
election of all directors and approval of significant corporate transactions.
See "Management -- Executive Officers and Directors" and "Principal and Selling
Stockholders." In addition, C. Edward McVaney, Robert C. Newman and Jack L.
Thompson (the "Founders") are expected to enter into an Amended and Restated
Stockholders Agreement (as defined herein) with the Company, which provides,
among other things, that the Founders must vote their shares in accordance with
the provisions of such agreement. See "Certain Transactions."

Antitakeover Effects of Certificate of Incorporation, Bylaws and Delaware
Law. Certain provisions of the Company's Amended and Restated Certificate of
Incorporation and Bylaws and certain provisions of Delaware law could delay or
make difficult a merger, tender offer or proxy contest involving the Company.
The authorized but unissued capital stock of the Company includes 5,000,000
shares of preferred stock. The Board of Directors is authorized to provide for
the issuance of such preferred stock in one or more series and to fix the
designations, preferences, powers and relative, participating, optional or other
rights and restrictions thereof. Accordingly, the Company may in the future
issue a series of preferred stock, without further stockholder approval, that
will have preference over the Common Stock with respect to the payment of
dividends and upon liquidation, dissolution or winding-up of the Company. See
"Description of Capital Stock -- Preferred Stock." In addition, the Company's
Amended and Restated Certificate of Incorporation includes provisions that
create a classified board of directors. See "Management -- Board of Directors."
Further, Section 203 of the General Corporation Law of the State of Delaware (as
amended from time to time, the "DGCL"), which is applicable to the Company,
prohibits certain business combinations with certain stockholders for a period
of three years after they acquire 15% or more of the outstanding voting stock of
a corporation. See "Description of Capital Stock -- Antitakeover Effects of
Delaware Law and Certain

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<PAGE> 17

Provisions of the Company's Certificate of Incorporation and Bylaws." Any of the
foregoing could adversely affect holders of the Common Stock or discourage or
make difficult any attempt to obtain control of the Company.

Shares Eligible for Future Sale. Sales of a substantial number of shares of
Common Stock (including shares issued upon the exercise of outstanding options)
in the public market after this offering could materially adversely affect the
market price of the Common Stock. Such sales also might make it more difficult
for the Company to sell equity securities or equity-related securities in the
future at a time and price that the Company deems appropriate. Upon completion
of this offering (based on shares outstanding at April 30, 1997), the Company
will have outstanding an aggregate of shares of Common Stock, assuming no
exercise of the Underwriters' over-allotment option and no exercise of
outstanding options. Of these shares, all of the shares sold in this offering
will be freely tradeable without restriction or further registration under the
Securities Act, unless such shares are purchased by "affiliates" of the Company
as that term is defined in Rule 144 under the Securities Act (the "Affiliates").
The remaining shares of Common Stock held by existing shareholders
are "restricted securities" as that term is defined in Rule 144 under the
Securities Act ("Restricted Shares"). Restricted Shares may be sold in the
public market only if registered or if they qualify for an exemption from
registration under Rules 144 or 701 promulgated under the Securities Act. As a
result of the contractual restrictions described below and the provisions of
Rules 144 and 701, the Restricted Shares will be available for sale in the
public market as follows: (i) shares in addition to the shares offered
hereby will be eligible for immediate sale on the date of this Prospectus; (ii)
shares will be eligible for sale beginning 90 days after the date of this
Prospectus; and (iii) shares will be eligible for sale upon expiration
of the lock-up agreements 180 days after the date of this Prospectus. All
officers and directors and certain stockholders and certain option holders of
the Company have agreed not to offer, pledge, sell, contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly (or enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of), any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for shares of Common Stock, for a period of 180 days
after the date of this Prospectus, without the prior written consent of Morgan
Stanley & Co. Incorporated. The Company intends to file a registration statement
on Form S-8 which would allow shares issuable upon exercise of options
previously granted to be freely tradeable following release of such lock-up
obligations, subject to compliance with Rule 144 in the case of Affiliates of
the Company. See "Management -- Employee Benefit Plans," "Shares Eligible for
Future Sale" and "Underwriters."

No Prior Public Market; Possible Stock Price Volatility. Prior to this
offering, there has been no public market for the Company's Common Stock, and
there can be no assurance that an active public market for the Common Stock will
develop or be sustained after this offering. The initial public offering price
will be determined by negotiations among the Company, the Selling Stockholders,
and the representatives of the Underwriters based on several factors and may not
be indicative of the future market price of the Common Stock after this
offering. The market price of the Company's Common Stock is likely to be highly
volatile and may be subject to significant fluctuations in response to actual or
anticipated variations in quarterly operating results and other factors, such as
announcements of technological innovations, new products or new contracts by the
Company or its competitors, conditions and trends in the software and other
technology industries, adoption of new accounting standards affecting the
software industry, changes in earning estimates or recommendations by securities
analysts, general market conditions or other events. In addition, equity markets
have also experienced extreme volatility that has particularly affected the
market prices of equity securities of many high technology companies and that
has often been unrelated or disproportionate to the operating performance of
such companies. Broad market fluctuations, as well as economic conditions
generally and in the software industry specifically, may result in material
adverse effects on the market price of the Company's Common Stock. There can be
no assurance that the market price for the Company's Common Stock will not
decline below the initial public offering price. In the past, following periods
of volatility in the market price of a particular company's securities,
securities class action litigation has often been brought against that company.
There can be no assurance that such litigation will not occur in the future with
respect to the Company. Such litigation could result in substantial costs and a
diversion of management's attention and

14
<PAGE> 18

resources, which could have a material adverse effect upon the Company's
business, operating results or financial condition. See "Underwriters."

Dilution; Dividend Policy. Investors participating in this offering will
incur immediate and substantial dilution of pro forma net tangible book value
per share of $ from the initial public offering price. To the extent
outstanding options to purchase the Company's Common Stock are exercised, there
will be further dilution. There can be no assurance that the Company will not
require additional funds to support its working capital requirements or for
other purposes, in which case the Company may seek to raise such additional
funds through public or private equity financing or from other sources. There
can be no assurance that such additional financing will be available or that, if
available, such financing will be obtained on terms favorable to the Company and
would not result in additional dilution to the Company's stockholders. See
"Dilution." The Company has never paid or declared any cash dividends on the
Common Stock or other securities and does not anticipate paying cash dividends
in the foreseeable future. Additionally, the Company's bank line of credit
contains covenants which restrict the Company's ability to pay cash dividends.
See "Dividend Policy."

15
<PAGE> 19

THE COMPANY

J.D. Edwards develops, markets and supports highly functional Enterprise
Resource Planning ("ERP") software solutions that operate on multiple computing
platforms and are designed to accelerate customers' time to benefit, lower
customers' cost of ownership and reduce information systems risks arising from
changes in technology and business practices. The Company's integrated software
application suites support manufacturing, finance, distribution/logistics and
human resources operations for multi-site and multinational organizations.
Through its Configurable Network Computing ("CNC") architecture, the Company's
ERP software is specifically designed to enable customers to change technology
and/or business practices while minimizing costs and business interruptions. The
Company provides implementation, training and support services designed to
enable customers to rapidly achieve the benefits of the Company's ERP solutions.
The Company has developed and marketed ERP solutions for over 20 years,
principally for operation on the IBM AS/400 platform and other IBM mid-range
systems and, more recently, on leading UNIX and Windows NT ("NT") servers
through Windows- and Internet browser-enabled desktop clients.

ERP systems are designed to enhance an organization's ability to manage and
execute business functions such as manufacturing, finance,
distribution/logistics and human resources. These systems manage and store large
amounts of diverse business information, providing continuous and simultaneous
availability of data to geographically dispersed employees, customers and
suppliers. According to Advanced Manufacturing Research (AMR), an industry
consulting firm, the worldwide market for ERP software license revenue was
approximately $3.5 billion in 1996, and it is expected to reach $16.2 billion by
2001, a compound annual growth rate of 36%.

Historically, ERP solutions have primarily consisted of host-centric
systems that operate on mainframes or mid-range computers. These systems,
developed over many years and representing considerable investments by
customers, provide high levels of performance, scalability, data security and
reliability. In addition, host-centric ERP systems designed as single-vendor
environments offer reduced complexity in implementation and management. In
recent years, ERP systems have been developed with client/server architectures.
These distributed systems generally offer users easier access to information, as
well as multi-site processing capabilities. In addition, as compared to
host-centric systems, client/server environments are better able to accommodate
diverse hardware, software and network technology changes that can result from
rapid organizational growth, acquisitions and consolidations. Both host-centric
and client/server systems require extensive initial implementation and ongoing
modifications to support an organization's current and continuously changing
business practices. The implementation of a new ERP system may in some cases
require an organization to subordinate or re-engineer its established business
practices to accommodate system or architectural constraints. These requirements
can increase the cost of ownership of an ERP system and overwhelm organizations
with limited internal information technology ("IT") staffs, particularly rapidly
growing and resource-constrained mid-sized organizations. In addition, the
difficulties associated with implementation and modification can put
organizations at risk of costly interruptions to normal business operations.

The Company's family of application suites is designed to improve most
organizations' core business processes. In addition, the Company extends its
application suites to address certain vertical markets with specific
configurations, templates and additional software features designed to meet
these industries' needs. The Company offers two versions of its application
suites -- WorldSoftware and OneWorld. WorldSoftware operates in a host-centric
environment on the AS/400 platform. With the addition of the WorldVision thin
client interface, WorldSoftware applications can be operated through a
Windows-based graphical user interface. OneWorld incorporates the Company's CNC
architecture and operates on leading UNIX and NT servers, as well as the AS/400
platform. The Company believes its network-centric CNC architecture provides a
valuable extension beyond traditional client/server architectures by masking
complexity, lowering cost of change and facilitating greater scalability. In
addition, WorldSoftware and OneWorld are capable of operating together in a
unified enterprise-wide environment. The Company also provides WorldSoftware and
OneWorld toolsets to enable rapid implementation, customization and modification
of its application suites.

The Company distributes, implements and supports its products worldwide
through 46 offices and 172 third-party business partners. To date, the Company
has more than 4,000 customers with sites in over 90 countries including Lexmark
International,Inc., SmithKline Beecham plc, Paradyne Corporation and Praxair,
Inc.

The Company was incorporated in Colorado in March 1977 and will be
reincorporated in Delaware in August 1997. The Company's principal executive
office is located at 1601 Technology Way, Denver, Colorado 80237, and its
telephone number is (303) 334-4000.

16
<PAGE> 20

USE OF PROCEEDS

The net proceeds to the Company from the sale of the shares of
Common Stock offered by the Company hereby are estimated to be approximately
$ million (approximately $ million if the Underwriters' over-allotment
option is exercised in full), at an assumed initial public offering price of
$
per share and after deducting estimated underwriting discounts and commissions
and estimated offering expenses payable by the Company. The Company will not
receive any proceeds from the sale of the Common Stock by the Selling
Stockholders. The primary purposes of this offering are to obtain additional
equity capital, create a public market for the Company's Common Stock,
facilitate future access by the Company to public equity markets, provide
liquidity to existing stockholders and provide increased visibility for the
Company in the marketplace.

The Company intends to use the net proceeds of this offering primarily for
general corporate purposes, including working capital. The Company may also use
a portion of the proceeds to acquire businesses, products or technologies that
are complementary to those of the Company, although no specific acquisitions are
currently planned and no portion of the net proceeds has been allocated for any
acquisition. Pending such uses, the Company intends to invest the net proceeds
from this offering in investment grade, short-term, interest-bearing securities.

DIVIDEND POLICY

The Company has never paid or declared any cash dividends on its Common
Stock or other securities and does not anticipate paying cash dividends in the
foreseeable future. Under the terms of the Company's bank line of credit, the
Company's ability to pay dividends is restricted.

17
<PAGE> 21

CAPITALIZATION

The following table sets forth the consolidated capitalization of the
Company (i) as of April 30, 1997; (ii) on a pro forma basis, giving effect to
the elimination of the mandatory redemption feature of the mandatorily
redeemable J.D. Edwards & Company Employee Stock Ownership Plan (the "ESOP")
shares and the income tax benefits resulting from the lapse of restrictions on
certain outstanding shares of Common Stock, both of which will occur
automatically upon the closing of the offering; and (iii) on a pro forma as
adjusted basis, giving effect to the receipt by the Company of the estimated net
proceeds from the sale of shares of Common Stock offered by the
Company hereby at an assumed initial public offering price of $ per
share and after deducting estimated underwriting discounts and commissions and
estimated offering expenses payable by the Company:

<TABLE>
<CAPTION>
AS OF APRIL 30, 1997
------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
-------- --------- -----------
(IN THOUSANDS EXCEPT SHARE
AND PER SHARE DATA)
<S> <C> <C> <C>
Mandatorily redeemable shares, at redemption value.......... $ 99,076 $ 5,500 $ --
Stockholders' equity (deficit):
Preferred stock, $.001 par value; 5,000,000 shares
authorized; none outstanding........................... -- -- --
Common stock, $.001 par value; 300,000,000 shares
authorized; 79,128,420 shares outstanding actual and
pro forma, and shares pro forma as
adjusted(1)............................................ 89 89
Additional paid-in capital................................ 11,175 23,591
Retained earnings......................................... 72,806 72,806
Treasury stock, at cost; 9,453,080 shares actual, pro
forma and pro forma as adjusted........................ (6,590) (6,590)
Cumulative translation adjustments and other, net......... (934) (934)
Adjustment for mandatorily redeemable shares.............. (99,076) (5,500) --
-------- --------- -----------
Total stockholders' equity (deficit)................. (22,530) 83,462
-------- --------- -----------
Total capitalization.............................. $ 76,546 $ 88,962 $
======== ======== =========
</TABLE>

- ---------------

(1) Excludes (i) 22,200,430 shares of Common Stock issuable upon exercise of
outstanding options as of April 30, 1997 with a weighted average exercise
price of $4.52 per share and (ii) 17,114,790 shares of Common Stock reserved
for issuance under the Company's stock plans as of April 30, 1997. See
"Management -- Employee Benefit Plans" and Notes 7 and 10 of Notes to
Consolidated Financial Statements.

18
<PAGE> 22

DILUTION

The pro forma net tangible book value of the Company's Common Stock as of
April 30, 1997 was $64.4 million or $.81 per share. Pro forma net tangible book
value per share is equal to the Company's total tangible assets less its total
liabilities (adjusted to reflect the removal of the mandatory redemption feature
of the ESOP shares and the realization of income tax benefits from the lapse of
restrictions on certain of the Company's outstanding common stock), divided by
the pro forma shares of Common Stock outstanding as of April 30, 1997. After
giving effect to the issuance and sale of the shares of Common Stock
offered by the Company (based upon an assumed initial public offering price of
$ per share and after deducting estimated underwriting discounts and
commissions and estimated offering expenses payable by the Company), the
Company's as adjusted net tangible book value as of April 30, 1997 would have
been $ or $ per share. This represents an immediate increase
in the pro forma net tangible book value of $ per share to existing
stockholders and an immediate dilution of $ per share to new investors.
The following table illustrates the per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share................ $
Pro forma net tangible book value per share as of April 30,
1997...................................................... $ .81
Increase in pro forma net tangible book value per share
attributable to new investors.............................
--------
As adjusted net tangible book value per share after offering...
--------
Dilution per share to new public investors..................... $
========
</TABLE>

The following table summarizes on an as adjusted basis as of April 30,
1997, the difference between the existing stockholders and the purchasers of
shares of Common Stock in this offering (at an assumed initial public offering
price of $ per share and before deducting estimated underwriting discounts and
commissions and estimated offering expenses) with respect to the number of
shares of Common Stock purchased from the Company, the total consideration paid
and the average price paid per share.

<TABLE>
<CAPTION>
TOTAL
SHARES PURCHASED CONSIDERATION AVERAGE
--------------------- ------------------ PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ------- ------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders(1)..................... 79,128,420 % $38,455 % $ .00
New public investors(1)......................
---------- ------- ------- -------
Total.............................. 100.0% $ 100.0%
========= ===== ======= =====
</TABLE>

- ---------------

(1) Sales by the Selling Stockholders will reduce the number of shares of Common
Stock held by existing stockholders to shares or % of the
total number of shares of Common Stock outstanding after this offering
( or % assuming the Underwriters' over-allotment option is
exercised in full), and will increase the number of shares of Common Stock
held by new investors to shares or % of the total number of
shares of Common Stock outstanding after this offering ( shares or
% assuming the Underwriters' over-allotment option is exercised in
full). See "Principal and Selling Stockholders."

The foregoing discussion and tables assume no exercise of any stock options
outstanding as of April 30, 1997. As of April 30, 1997, (i) 22,200,430 shares of
Common Stock were issuable upon the exercise of outstanding options at a
weighted average exercise price of $4.52 per share and (ii) 17,114,790 shares of
Common Stock reserved for issuance under the Company's stock plans. To the
extent that any of these options are exercised, there will be further dilution
to new investors. See "Management -- Employee Benefit Plans" and Notes 7 and 10
of Notes to the Consolidated Financial Statements.

19
<PAGE> 23

SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data of the Company should be
read in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations," the consolidated financial statements and
notes thereto and other financial information included elsewhere in this
Prospectus. The consolidated statements of operations data set forth below for
the years ended October 31, 1994, 1995 and 1996 and the consolidated balance
sheet data as of October 31, 1995 and 1996 are derived from, and are qualified
by reference to, the Company's consolidated financial statements audited by
Price Waterhouse LLP, independent accountants, which are included elsewhere in
this Prospectus. The consolidated statements of operations data for the ten
months ended October 31, 1992 and the year ended October 31, 1993 and the
consolidated balance sheet data as of October 31, 1992, 1993 and 1994 are
derived from consolidated financial statements audited by Price Waterhouse LLP,
independent accountants, which are not included in this Prospectus. The
consolidated statements of operations data for the six months ended April 30,
1996 and 1997 and the consolidated balance sheet data as of April 30, 1997 are
derived from unaudited consolidated financial statements included in this
Prospectus and which have been prepared on the same basis as the audited
consolidated financial statements and, in the opinion of the Company, include
all adjustments (consisting of normal recurring adjustments) necessary for a
fair presentation of such information. Historical results are not necessarily
indicative of results for any future period. See "Consolidated Financial
Statements."

<TABLE>
<CAPTION>
TEN MONTHS
ENDED SIX MONTHS
OCTOBER ENDED
31, YEAR ENDED OCTOBER 31, APRIL 30,
---------- ----------------------------------------- -------------------
1992(1) 1993 1994 1995 1996 1996 1997
---------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF OPERATIONS DATA:
Revenue:
License fees............................... $ 64,117 $ 94,518 $107,561 $134,138 $180,366 $ 72,278 $ 92,063
Services................................... 55,396 102,316 133,026 206,628 297,682 135,864 176,612
---------- -------- -------- -------- -------- -------- --------
Total revenue........................ 119,513 196,834 240,587 340,766 478,048 208,142 268,675
---------- -------- -------- -------- -------- -------- --------
Costs and expenses:
Cost of license fees....................... 6,861 10,401 12,832 18,461 27,443 12,855 17,084
Cost of services........................... 35,984 65,511 87,826 128,144 184,846 84,989 109,306
Sales and marketing........................ 49,874 70,662 76,169 102,310 128,759 57,601 73,735
General and administrative................. 15,188 22,488 27,377 38,677 53,052 24,712 31,087
Research and development................... 8,247 15,484 18,936 24,296 40,321 18,193 24,533
---------- -------- -------- -------- -------- -------- --------
Total costs and expenses............. 116,154 184,546 223,140 311,888 434,421 198,350 255,745
---------- -------- -------- -------- -------- -------- --------
Operating income............................. 3,359 12,288 17,447 28,878 43,627 9,792 12,930
Other income (expense):
Interest income............................ 232 214 483 1,697 629 266 163
Interest expense........................... (163) (142) (101) (576) (899) (347) (500)
Foreign currency losses and other, net..... (148) (687) (486) (411) (1,403) (134) (1,154)
---------- -------- -------- -------- -------- -------- --------
Income before income taxes................... 3,280 11,673 17,343 29,588 41,954 9,577 11,439
Provision for income taxes(2).............. 3,547 4,293 5,280 11,379 15,628 3,636 4,261
---------- -------- -------- -------- -------- -------- --------
Net income (loss)............................ $ (267) $ 7,380 $ 12,063 $ 18,209 $ 26,326 $ 5,941 $ 7,178
=========== ======== ======== ======== ======== ======== ========
Earnings (loss) per common share(3).......... $ (0.00) $ 0.09 $ 0.15 $ 0.22 $ 0.30 $ 0.07 $ 0.08
=========== ======== ======== ======== ======== ======== ========
Weighted average common shares
outstanding(3)............................. 80,960 81,488 81,755 82,006 87,169 86,489 93,416
</TABLE>

<TABLE>
<CAPTION>
APRIL 30, 1997
OCTOBER 31, -------------------
-------------------------------------------------- PRO
1992 1993 1994 1995 1996 ACTUAL FORMA(4)
------- ------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents......................... $ 3,654 $12,636 $ 28,615 $ 34,897 $ 25,554 $ 29,907 $ 29,907
Total assets...................................... 59,937 86,077 127,131 175,191 243,786 276,421 289,146
Mandatorily redeemable shares, at redemption
value........................................... 7,126 12,441 14,290 19,973 47,024 99,076 5,500
Stockholders' equity (deficit).................... (1,513) 1,814 13,612 22,972 22,902 (22,530) 83,462
</TABLE>

- ---------------

(1) In 1992, the Company changed its fiscal year end from December 31 to October
31. The consolidated statement of operations data for the period ended
October 31, 1992 reflects 10 months of operating activity as compared with
12 months for all other fiscal year periods.

(2) The provision for income taxes for the 10 months ended October 31, 1992
included a valuation allowance provided against foreign tax loss
carryforwards totaling $2.4 million. This valuation allowance was eliminated
in the year ended October 31, 1994 as a result of the Company's
determination that it would likely realize these benefits.

(3) See Note 1 of Notes to Consolidated Financial Statements for a discussion of
the computation of earnings (loss) per common share and weighted average
common shares outstanding.

(4) Reflects the elimination of the mandatory redemption feature of the
mandatorily redeemable ESOP shares and the income tax benefits resulting
from the lapse of restrictions on certain shares of the Company's
outstanding Common Stock, both of which will occur automatically upon the
closing of this offering. See Note 1 of Notes to Consolidated Financial
Statements.

20
<PAGE> 24

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Prospectus contains forward-looking statements that involve risks and
uncertainties. Actual results may differ materially from those indicated in such
forward-looking statements. Factors that may cause such a difference include,
but are not limited to, those discussed below and in the sections entitled "Risk
Factors" and "Business."

OVERVIEW

The Company's software application suites have historically been designed
to operate exclusively on certain mid-range computing platforms, most recently
the IBM AS/400 platform. The Company commenced shipment of the WorldSoftware
version of its application suites for use on the AS/400 platform in 1988, and
sales of such applications and related services have accounted for substantially
all of the Company's revenue in recent years. To take advantage of potential
opportunities in the UNIX and NT markets, as well as to enhance its position as
a leader in the AS/400 market, the Company released in late calendar 1996 the
OneWorld version of its application suites. The Company expects to continue to
generate a substantial portion of its revenue, for the foreseeable future, from
customers using the AS/400 platform; however, the Company does not expect to
generate substantial OneWorld license fee revenue from its existing installed
base of WorldSoftware users. The Company's future revenue growth will be
substantially dependent upon the market acceptance of OneWorld and the Company's
ability to license OneWorld applications to new customers.

The Company recognizes revenue in accordance with the provisions of
Statement of Position 91-1, "Software Revenue Recognition." The Company licenses
software under non-cancelable license agreements and provides related services,
including support, training, consulting and implementation. Training, consulting
and implementation services are not essential to the functionality of the
Company's software products, are separately priced and are available from a
number of suppliers. Accordingly, revenue from these services is recorded
separately from the license fee. License fee revenue is recognized when a
non-cancelable license agreement has been signed, the product has been
delivered, collection is probable and all significant contractual obligations
relating to this license have been satisfied. Revenue on all software license
transactions in which there are significant outstanding obligations is deferred
and recognized once such obligations are fulfilled. Typically, the Company's
software licenses do not include significant post-delivery obligations to be
fulfilled by the Company, and payments are due within a 12-month period from
date of delivery. Where software license contracts call for payment terms in
excess of 12 months from date of delivery, revenue is recognized as payments
become due and all other conditions for revenue recognition have been satisfied.
Revenue from training, and consulting and implementation services is recognized
as services are performed. Revenue from agreements for supporting and providing
periodic upgrades to licensed software is recorded as deferred revenue and is
recognized ratably over the support service period, and includes a portion of
the related license fee equal to the fair value of any bundled support services.

Total revenue from license fees and services has increased from year to
year. As a percentage of total revenue, service revenue has increased from year
to year primarily as a result of the Company's continued emphasis on providing
consulting and training services that complement its software products and
increased support revenue resulting from the Company's growing installed base of
customers. Gross margins on license fee revenue are generally higher than gross
margins on service revenue. The mix between license fee and service revenue may
change in future periods depending upon a number of factors, particularly the
Company's success in penetrating the UNIX and NT markets with the OneWorld
version of its application suites.

21
<PAGE> 25

Furthermore, the Company has historically subcontracted a portion of its
consulting and training services to third parties and in fiscal 1996, such
subcontracted services accounted for 40% of this revenue. However, the Company
is currently pursuing a strategy of relying on third-party implementation
providers to contract directly with its customers for OneWorld implementations
and related services. See "Business -- Strategy" and "Business -- Implementation
Services and Training." To the extent the Company is successful in implementing
this strategy and the OneWorld version of the Company's application suites
achieves market acceptance in future periods, revenue from subcontracted
services and total service revenue as a percentage of revenue will likely
decrease; however, there can be no assurance that the Company will be successful
in implementing its strategy or that such products will achieve market
acceptance. See "Risk Factors -- Limited Deployment of OneWorld Version;
Entering New Markets," "Risk Factors -- Reliance On Third Parties and
Development of Certain Relationships" and "Risk Factors -- Dependence on Service
Revenue."

The Company has experienced, and is expected to continue to experience, a
high degree of seasonality, with a disproportionately greater amount of the
Company's revenue for any fiscal year being recognized in its fourth fiscal
quarter and an even greater proportion of net income being recognized in such
quarter. For example, in fiscal 1996, 32% of total revenue, 39% of license fee
revenue, 28% of service revenue and 67% of net income were recognized in the
fourth fiscal quarter. In addition, because the Company's operating expenses are
relatively fixed in the near term, the Company's operating margins have
historically been significantly higher in its fourth fiscal quarter than in its
other quarters. The Company believes that such seasonality is primarily the
result of both the efforts of the Company's direct sales force to meet or exceed
fiscal year-end sales quotas and the tendency of certain customers to finalize
sales contracts at or near the Company's fiscal year end. Because total revenue,
operating margins and net income are greater in the fourth quarter, any
shortfall from anticipated revenue, particularly license fee revenue, in the
fourth quarter would have a disproportionately large adverse effect on the
Company's operating results for the fiscal year. In addition, the Company's
total revenue, license fee revenue, service revenue and net income in its first
fiscal quarter have historically been lower than those in the immediately
preceding fourth quarter. For example, total revenue, license fee revenue,
service revenue and net income in the first quarter of fiscal 1997 decreased
20%, 41%, 3% and 87%, respectively, from the fourth quarter of fiscal 1996. The
Company's first quarter revenue has historically slowed during the holiday
season in November and December.

The Company distributes its products and services through both direct and
indirect channels. Currently, the Company has 46 direct sales and consulting
offices located throughout the world. The first international office was
established in Europe in 1989, and the Company has since added offices
throughout Canada, Europe, Asia, Latin America and Africa, investing significant
resources in the start-up of these operations. The Company also utilizes 172
outside sales and consulting partners with offices throughout the world as an
indirect distribution channel to penetrate certain vertical markets or
geographic areas. Generally, operating margins are higher on domestic revenue
than on international revenue. International revenue as a percentage of total
revenue ranged between 35% and 37% from fiscal 1994 through the first half of
fiscal 1997.

Total costs and operating expenses have increased in general due to the
overall growth of the Company, primarily as a result of an increase in headcount
and related costs. The Company's total employees expanded from 934 at the
beginning of calendar 1992 to 3,167 as of April 30, 1997. In addition, the
Company opened new offices and expanded existing offices during this period,
which increased total facilities costs.

22
<PAGE> 26

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain items
from the Company's consolidated statements of income as a percentage of total
revenue (except for gross margin data):

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED OCTOBER 31, APRIL 30,
----------------------- ----------------
1994 1995 1996 1996 1997
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Revenue:
License fees.............................. 44.7% 39.4% 37.7% 34.7% 34.3%
Services.................................. 55.3 60.6 62.3 65.3 65.7
----- ----- ----- ----- -----
Total revenue..................... 100.0 100.0 100.0 100.0 100.0
----- ----- ----- ----- -----
Costs and expenses:
Cost of license fees...................... 5.3 5.4 5.7 6.2 6.4
Cost of services.......................... 36.5 37.6 38.7 40.8 40.7
Sales and marketing....................... 31.6 30.0 27.0 27.7 27.4
General and administrative................ 11.4 11.4 11.1 11.9 11.6
Research and development.................. 7.9 7.1 8.4 8.7 9.1
----- ----- ----- ----- -----
Total costs and expenses.......... 92.7 91.5 90.9 95.3 95.2
----- ----- ----- ----- -----
Operating income............................ 7.3 8.5 9.1 4.7 4.8
Other income (expense), net................. (0.1) 0.2 (0.3) (0.1) (0.5)
----- ----- ----- ----- -----
Income before income taxes.................. 7.2 8.7 8.8 4.6 4.3
Provision for income taxes................ 2.2 3.4 3.3 1.7 1.6
----- ----- ----- ----- -----
Net income.................................. 5.0% 5.3% 5.5% 2.9% 2.7%
===== ===== ===== ===== =====
Gross margin on license fee revenue......... 88.1% 86.2% 84.8% 82.2% 81.4%
Gross margin on service revenue............. 34.0% 38.0% 37.9% 37.4% 38.1%
</TABLE>

SIX MONTHS ENDED APRIL 30, 1997 AND 1996

Revenue. Total revenue increased to $268.7 million for the first half of
fiscal 1997 from $208.1 million for the first half of fiscal 1996, representing
an increase of 29%. This increase was primarily a result of greater acceptance
of the Company's software products by mid-sized organizations in key domestic
and international markets, together with new releases of the Company's
application suites, and enhanced services, support and custom programming
capabilities. International revenue as a percentage of total revenue was 37.2%
of total revenue in the first half of fiscal 1997 and 38.1% in the first half of
fiscal 1996.

License fee revenue increased to $92.1 million for the first half of fiscal
1997 from $72.3 million for the first half of fiscal 1996, representing an
increase of 27%. The increase was primarily due to a greater volume of license
transactions and an increase in average transaction size. For the first half of
fiscal 1996, all license fee revenue was generated from customers operating on
the AS/400 platform. For the first half of fiscal 1997, substantially all
license fee revenue was generated from customers operating on the AS/400
platform.

Service revenue increased to $176.6 million for the first half of fiscal
1997 from $135.9 million for the first half of fiscal 1996, representing an
increase of 30%. This increase was primarily due to higher revenue from
consulting, which is the largest component of services, although support and
training revenue also increased. Total service revenue is dependent upon the
amount and size of consulting engagements, the number of Company and business
partner consultants available to staff engagements, the number of customers on
support and the related fees, billing rates for consulting services and training
courses, and average training course sizes. Service revenue as a percentage of
total revenue was 65.7% for the first half of fiscal 1997 compared to 65.3% for
the first half of fiscal 1996. The Company has experienced increased demand for
services resulting from its continued emphasis on providing consulting and
training services that complement its software products and the growth in its
installed base of customers. However, to the extent the Company is

23
<PAGE> 27

successful in implementing its strategy of relying on third parties to contract
directly with the Company's customers for implementation of its OneWorld version
of its application suites and related services, service revenue is likely to
decrease as a percentage of total revenue.

Cost of license fees. Cost of license fees includes royalties, business
partner commissions, amortization of capitalized software development costs,
documentation costs and software delivery expenses. Cost of license fees
increased to $17.1 million for the first half of fiscal 1997 from $12.9 million
for the first half of fiscal 1996. Gross margin on license fee revenue declined
to 81.4% for the first half of fiscal 1997 from 82.2% for the first half of
fiscal 1996. The decline in gross margins was primarily a result of increased
amortization of capitalized software development costs, as well as higher
royalties on complementary products and increased business partner commissions.

Amortization of capitalized software development costs increased to $2.6
million for the first half of fiscal 1997 compared to $1.3 million for the first
half of fiscal 1996. This increase was the result of the amortization of
capitalized OneWorld development costs, which began upon the release of the
OneWorld version of the Company's application suites in late calendar 1996.
OneWorld development costs will be amortized through fiscal 1999. The Company
offers certain complementary software products that are subject to royalties.
License fees subject to royalties were higher during the first half of fiscal
1997 compared to the first half of fiscal 1996 primarily due to increased
license fee revenue from application suites incorporating WorldVision, a
graphical user interface for WorldSoftware that utilizes technology licensed
from third parties. Gross margin on license fee revenue varies, in part,
depending upon the proportion of the Company's software products that are
subject to royalty payments. Business partner commissions increased during the
first half of fiscal 1997 from the first half of fiscal 1996 due primarily to an
increase in license fee revenue from the Company's Genesis version of its
application suites, which is offered exclusively through business partners.

Cost of services. Cost of services includes the personnel and related
overhead costs for training and customer support services, together with fees
paid to third parties for subcontracted services. Cost of services increased to
$109.3 million for the first half of fiscal 1997 from $85.0 million for the
first half of fiscal 1996. This increase was due to increased personnel and
subcontracted services to support the growing demand for implementation and
consulting services. Gross margin on service revenue was relatively stable at
38.1% and 37.4% for the first half of fiscal 1997 and 1996, respectively.
Generally, gross margin on support revenue is higher than gross margin on
consulting and training revenue, and any change in the mix in services will
affect the gross margin on service revenue. In particular, the extent to which
the Company is successful in implementing its strategy of relying on third
parties to contract directly with the Company's customers for OneWorld
implementations and related services will affect gross margin on service
revenue.

Sales and marketing. Sales and marketing expense consists of personnel and
related overhead costs, including commissions, for the sales and marketing
activities of the Company, together with advertising and promotion costs. Sales
and marketing expense increased to $73.7 million for the first half of fiscal
1997 from $57.6 million for the first half of fiscal 1996, representing 27.4%
and 27.7% of total revenue, respectively. The increasing dollar amounts were
primarily the result of an increase in the direct sales personnel necessary to
support the Company's selling efforts, especially the OneWorld version of its
application suites.

General and administrative. General and administrative expense includes
personnel and related overhead costs for the support and administration
functions of the Company. General and administrative expense increased to $31.1
million for the first half of fiscal 1997 from $24.7 million for the first half
of fiscal 1996, representing 11.6% and 11.9% of total revenue. Total expense was
higher in the first half of fiscal 1997 primarily due to an increase in
personnel to support the growth in the Company's operations.

Research and development. Research and development expense includes
personnel and related overhead costs for product development, enhancements,
upgrades, quality assurance and testing. Research and development expense
increased to $24.5 million for the first half of fiscal 1997 from $18.2 million
for the first half of fiscal 1996. In addition, capitalized software development
costs were $2.4 million for the first half of fiscal 1997, down from $3.8
million for the first half of fiscal 1996. Total research and development
expenditures, which includes capitalized software development costs, were higher
in the 1997 period primarily due to a 29% increase in personnel, together with
increases in related facilities and equipment costs. During

24
<PAGE> 28

each period, development resources were devoted to continued enhancements of the
Company's application suites. Capitalized software development costs for both
periods primarily consisted of OneWorld development costs. Due to the release of
the OneWorld version in late calendar 1996, the Company ceased capitalizing
OneWorld development costs during the first half of fiscal 1997. The Company
anticipates that research and development expense will increase in subsequent
quarters.

While research and development expenditures, which include capitalized
software development costs, increased in the first half of 1997 from the first
half of 1996, these expenditures as a percentage of total revenue remained
relatively constant at 10.0% in the first half of fiscal 1997 and 10.6% in the
first half of fiscal 1996. As a percentage of license fee revenue, these
expenditures were 29.3% in the first half of fiscal 1997 and 30.4% in the first
half of fiscal 1996.

Other income (expense). Other income (expense) includes interest expense on
the Company's bank line of credit, interest income on cash and cash equivalents
and foreign currency gains and losses. Interest expense increased to $500,000
for the first half of fiscal 1997 from $347,000 for the first half of fiscal
1996, due to higher borrowings on the Company's line of credit during the 1997
period. Interest income decreased to $163,000 for the first half of fiscal 1997
from $266,000 for the first half of fiscal 1996 primarily due to lower cash and
cash equivalent balances. Foreign currency losses increased to $1.3 million for
the 1997 period from $315,000 for the 1996 period, primarily due to the
strengthening of the U.S. dollar against most of the European currencies.

Provision for income taxes. The Company's effective income tax rate
decreased to 37.2% for the first half of fiscal 1997 from 38.0% for the first
half of fiscal 1996, primarily as a result of a reorganization of the Company's
domestic operations.

FISCAL YEARS ENDED OCTOBER 31, 1996, 1995 AND 1994

Revenue. Total revenue increased to $478.0 million in fiscal 1996 from
$340.8 million in fiscal 1995 and $240.6 million in fiscal 1994, representing
increases of 40% in fiscal 1996 and 42% in fiscal 1995. These increases were
primarily a result of greater acceptance of the Company's software products by
mid-sized organizations in key domestic and international markets, together with
new releases of the Company's application suites, and enhanced services, support
and custom programming capabilities. International revenue as a percentage of
total revenue ranged from 34.9% to 36.8% during the last three fiscal years.

License fee revenue increased to $180.4 million in fiscal 1996 from $134.1
million in fiscal 1995 and $107.6 million in fiscal 1994, representing increases
of 34% in fiscal 1996 and 25% in fiscal 1995. These increases were primarily due
to the expansion of the Company's domestic and international direct and indirect
sales organizations, a greater volume of license transactions and an increase in
average transaction size. All of the license fee revenue recognized during the
fiscal years 1996, 1995 and 1994 were generated from customers that operate on
the AS/400 platform.

Service revenue increased to $297.7 million in fiscal 1996 from $206.6
million in fiscal 1995 and $133.0 million in fiscal 1994, representing increases
of 44% in fiscal 1996 and 55% in fiscal 1995. The increases were primarily due
to higher revenue from consulting and support, although training revenue also
increased. In fiscal 1995, the Company raised prices for support contracts
which, in addition to the increase in new support contracts, resulted in higher
support revenue. Service revenue as a percentage of total revenue was 62.3%,
60.6% and 55.3% in fiscal 1996, 1995 and 1994, respectively. These increases
were primarily a result of the Company's continued emphasis on providing
consulting and training services that complement its software products and the
growth in the Company's installed base of customers.

Cost of license fees. Cost of license fees increased to $27.4 million in
fiscal 1996 from $18.5 million in fiscal 1995 and $12.8 million in fiscal 1994.
Gross margin on license fee revenue declined to 84.8% for fiscal 1996 from 86.2%
for fiscal 1995 and 88.1% for fiscal 1994. These declines were primarily due to
higher royalties on complementary products, in particular royalties incurred in
connection with increased licenses of applications with WorldVision.

25
<PAGE> 29

Cost of services. Cost of services increased to $184.8 million in fiscal
1996 from $128.1 million in fiscal 1995 and $87.8 million in fiscal 1994. Gross
margin on service revenue was 37.9%, 38.0% and 34.0% in fiscal 1996, 1995 and
1994, respectively. Generally, gross margin on support revenue is higher than
gross margin on consulting and training revenue, and any change in the mix in
services will affect the gross margin on service revenue. Gross margin in fiscal
1996 as compared to fiscal 1995 remained relatively consistent. The increase in
gross margin in fiscal 1995 as compared to fiscal 1994 was primarily a result of
the Company raising prices for support contracts, as well as an increase in new
support contracts, which together resulted in increased support revenue as a
percentage of service revenue.

Sales and marketing. Sales and marketing expense increased to $128.8
million for fiscal 1996 from $102.3 million for fiscal 1995 and $76.2 million
for fiscal 1994, representing 27.0%, 30.0% and 31.6% of total revenue,
respectively. The increase in dollar amounts was primarily the result of an
increase in sales and marketing personnel and related costs, together with
increased advertising and promotion costs. The decline in sales and marketing
expense as a percentage of total revenue was primarily the result of growing
service revenue, increased productivity from the direct sales force and an
increase in the average transaction size.

General and administrative. General and administrative expense increased to
$53.1 million for fiscal 1996 from $38.7 million for fiscal 1995 and $27.4
million for fiscal 1994, representing 11.1%, 11.4% and 11.4% of total revenue,
respectively. The increase in dollar amounts was primarily the result of
additional support and administration personnel hired throughout this period to
support the expansion of the Company's operations.

Research and development. Research and development expense increased to
$40.3 million for fiscal 1996 from $24.3 million for fiscal 1995 and $18.9
million for fiscal 1994. In addition, capitalized software development costs
were $7.3 million for fiscal 1996 compared to $9.8 million for fiscal 1995 and
$2.1 million for fiscal 1994. Total research and development expenditures, which
include capitalized software development costs, rose 40% in fiscal 1996 and 62%
in fiscal 1995 primarily due to increases in personnel, facilities, equipment
costs and professional contract services. During fiscal 1996 and 1995, the
Company increased resources devoted to the development of the OneWorld version
of its application suites as well as continued enhancements of the WorldSoftware
version, including Genesis. Capitalized software development costs for fiscal
1996 primarily represented OneWorld development costs while, for fiscal 1995,
such costs primarily represented OneWorld and, to a lesser extent, Genesis
development costs.

Although research and development expenditures, including capitalized
software development costs, increased in the first half of 1997 from the first
half of 1996, as a percentage of total revenue these expenditures remained
relatively stable at 10.0% for fiscal 1996 and 1995 compared to 8.7% for fiscal
1994. As a percentage of license fee revenue, these expenditures were 26.4%,
25.4% and 19.6% for fiscal 1996, 1995 and 1994, respectively.

Other income (expense). Interest income was $629,000 for fiscal 1996
compared to interest income of $1.7 million for fiscal 1995 and $483,000 for
fiscal 1994. During fiscal 1996, the Company had lower cash and cash equivalent
balances and related interest income than in prior fiscal years due to a $19.4
million investment in land in early fiscal 1996. Interest expense was $899,000,
$576,000 and $101,000 for fiscal years 1996, 1995 and 1994, respectively.
Interest expense increased in each fiscal year due to higher borrowings on the
Company's bank line of credit. Foreign currency losses increased to $1.7 million
in fiscal 1996 from $237,000 for fiscal 1995 and $223,000 for fiscal 1994. This
increase was primarily due to the strengthening of the U.S. dollar against the
Japanese yen and certain European currencies.

Provision for income taxes. The Company's effective income tax rate was
37.3% in fiscal 1996, 38.5% in fiscal 1995 and 30.4% in fiscal 1994. The
effective income tax rate decreased in fiscal 1996 from fiscal 1995 primarily
due to a reorganization of the Company's domestic operations. The effective
income tax rate in fiscal 1994 was lower than the rates for subsequent fiscal
years due to the elimination of a valuation allowance for foreign tax loss
carryforwards as a result of the Company's determination that it would fully
utilize these benefits.

26
<PAGE> 30

QUARTERLY RESULTS OF OPERATIONS

The following table sets forth certain unaudited consolidated statements of
income data, both in absolute dollars and as a percentage of total revenue
(except for gross margin data), for each of the Company's last six quarters.
This data has been derived from unaudited consolidated financial statements that
have been prepared on the same basis as the audited consolidated financial
statements and, in the opinion of the Company, include all adjustments
(consisting of normal recurring adjustments) necessary for a fair presentation
of such information. These unaudited quarterly results should be read in
conjunction with the consolidated financial statements and notes thereto
appearing elsewhere in this Prospectus. The consolidated results of operations
for any quarter are not necessarily indicative of the results for any future
period.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------------------------------------------------------------
JANUARY 31, APRIL 30, JULY 31, OCTOBER 31, JANUARY 31, APRIL 30,
1996 1996 1996 1996 1997 1997
----------- --------- -------- ----------- ----------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF INCOME DATA:
Revenue:
License fees.......................... $35,201 $ 37,077 $ 38,220 $ 69,868 $ 40,934 $ 51,129
Services.............................. 62,731 73,133 77,421 84,397 81,887 94,725
----------- --------- -------- ----------- ----------- ---------
Total revenue................... 97,932 110,210 115,641 154,265 122,821 145,854
----------- --------- -------- ----------- ----------- ---------
Costs and expenses:
Cost of license fees.................. 6,705 6,150 6,942 7,646 7,698 9,386
Cost of services...................... 40,257 44,732 48,184 51,673 51,493 57,813
Sales and marketing................... 27,674 29,927 33,236 37,922 34,706 39,029
General and administrative............ 11,858 12,854 12,407 15,933 14,772 16,315
Research and development.............. 8,207 9,986 9,635 12,493 10,142 14,391
----------- --------- -------- ----------- ----------- ---------
Total costs and expenses........ 94,701 103,649 110,404 125,667 118,811 136,934
----------- --------- -------- ----------- ----------- ---------
Operating income........................ 3,231 6,561 5,237 28,598 4,010 8,920
Other income (expense), net............. 414 (629) (827) (631) (313) (1,178)
----------- --------- -------- ----------- ----------- ---------
Income before income taxes.............. 3,645 5,932 4,410 27,967 3,697 7,742
Provision for income taxes............ 1,370 2,266 1,679 10,313 1,368 2,893
----------- --------- -------- ----------- ----------- ---------
Net income.............................. $ 2,275 $ 3,666 $ 2,731 $ 17,654 $ 2,329 $ 4,849
========== ======== ======== ========== ========== ========
Earnings per common share............... $ 0.03 $ 0.04 $ 0.03 $ 0.20 $ 0.03 $ 0.05
========== ======== ======== ========== ========== ========
Weighted average common shares
outstanding........................... 85,009 87,969 87,883 87,815 92,838 93,994
AS A PERCENTAGE OF TOTAL REVENUE:
Revenue:
License fees.......................... 35.9% 33.6 % 33.1% 45.3% 33.3% 35.1 %
Services.............................. 64.1 66.4 66.9 54.7 66.7 64.9
----------- --------- -------- ----------- ----------- ---------
Total revenue................... 100.0 100.0 100.0 100.0 100.0 100.0
----------- --------- -------- ----------- ----------- ---------
Costs and expenses:
Cost of license fees.................. 6.8 5.6 6.0 5.0 6.3 6.4
Cost of services...................... 41.1 40.5 41.7 33.5 41.9 39.6
Sales and marketing................... 28.3 27.1 28.8 24.6 28.2 26.8
General and administrative............ 12.1 11.7 10.7 10.3 12.0 11.2
Research and development.............. 8.4 9.1 8.3 8.1 8.3 9.9
----------- --------- -------- ----------- ----------- ---------
Total costs and expenses........ 96.7 94.0 95.5 81.5 96.7 93.9
----------- --------- -------- ----------- ----------- ---------
Operating income........................ 3.3 6.0 4.5 18.5 3.3 6.1
Other income (expense), net............. 0.4 (0.6) (0.7) (0.4) (0.3) (0.8)
----------- --------- -------- ----------- ----------- ---------
Income before income taxes.............. 3.7 5.4 3.8 18.1 3.0 5.3
Provision for income taxes............ 1.4 2.1 1.4 6.7 1.1 2.0
----------- --------- -------- ----------- ----------- ---------
Net income.............................. 2.3% 3.3 % 2.4% 11.4% 1.9% 3.3 %
========== ======== ======== ========== ========== ========
Gross margin on license fee revenue..... 81.0% 83.4 % 81.8% 89.1% 81.2% 81.6 %
Gross margin on service revenue......... 35.8% 38.8 % 37.8% 38.8% 37.1% 39.0 %
</TABLE>

In the last six quarters, expenses and operating income as a percentage of
total revenue have varied primarily due to seasonality, which has resulted in
disproportionately higher license fee revenue in the fourth

27
<PAGE> 31

fiscal quarter. Expenses have decreased as a percentage of revenue in the fourth
quarter due to seasonally higher license fee revenue. Gross margin on license
fee revenue has varied quarterly from 81.0% to 89.1% within the last six
quarters due to fluctuations in license volume and the mix of fixed and variable
cost of licenses. Gross margin on service revenue has remained stable except for
the first quarters of fiscal 1996 and fiscal 1997 due to lower service revenue
during the holiday season in November and December.

The Company's quarterly operating results have fluctuated significantly in
the past, and will likely continue to fluctuate in the future, as a result of a
number of factors, many of which are outside the Company's control. These
factors include the demand for the Company's software products and services; the
size and timing of specific sales; the level of product and price competition
that the Company encounters; the length of sales cycles; the timing of new
product introductions and product enhancements by the Company or its
competitors; market acceptance of new products; changes in pricing policies by
the Company or its competitors; the Company's ability to hire sales and
consulting personnel to meet the demand, if any, for implementations of
OneWorld; the Company's ability to establish and maintain relationships with
third-party implementation providers; the Company's ability to establish and
maintain relationships with hardware and software suppliers; the announcement of
new hardware platforms that cause delay of customer purchases; variations in the
length of the implementation process of the Company's software products; the
Company's ability to complete fixed-price consulting contracts on budget; the
mix of products and services sold; the mix of distribution channels through
which products are sold; the mix of international and domestic revenue; changes
in the Company's sales incentives; changes in the renewal rate of support
agreements; product life cycles; software defects and other product quality
problems; seasonality of technology purchases; personnel changes; changes in the
Company's strategy; the activities of competitors; the extent of industry
consolidation; expansion of the Company's international operations; general
domestic and international economic and political conditions; and budgeting
cycles of the Company's customers. The timing of large individual sales has been
difficult for the Company to predict, and large individual sales have, in some
cases, occurred in quarters subsequent to those anticipated by the Company.
There can be no assurance that the loss or deferral of one or more significant
sales would not have a material adverse effect on the Company's quarterly
operating results.

The Company's software is generally used for division- or enterprise-wide,
business-critical purposes and involves significant capital commitments by
customers. Potential customers generally commit significant resources to an
evaluation of available enterprise software and require the Company to expend
substantial time, effort and money educating them about the value of the
Company's solutions. As a result, sales of the Company's software products
require an extensive sales effort throughout the customer's organization because
decisions to license such software generally involve the evaluation of the
software by a significant number of customer personnel in various functional and
geographical areas, each often having specific and conflicting requirements. A
variety of factors, including factors over which the Company has little or no
control, may cause potential customers to delay or forego a purchase. As a
result of these or other factors, the sales cycle for the Company's products is
long, typically ranging between six and 15 months. Moreover, the Company expects
that the sales cycle for the recently released OneWorld version of its
application suites may be longer than that of the WorldSoftware version, at
least until the Company's sales force becomes familiar with the needs of
customers operating on UNIX and NT servers. As a result of the length of the
sales cycle for its software products, the Company's ability to forecast the
timing and amount of specific sales is limited, and the delay or failure to
complete one or more large license transactions could have a material adverse
effect on the Company's business, operating results or financial condition and
cause the Company's operating results to vary significantly from quarter to
quarter. See "Risk Factors -- Variability of Quarterly Operating Results;
Seasonality."

28
<PAGE> 32

anticipated revenue or a delay in the recognition of revenue could result in
significant variations in operating results from quarter to quarter. Quarterly
license fee revenue is also difficult to forecast because the Company's sales
cycles, from initial evaluation to delivery of software, varies substantially
from customer to customer. If revenue falls below the Company's expectations in
a particular quarter, the Company's operating results could be materially
adversely affected. See "Risk Factors -- Lengthy Sales Cycle."

Based on all of the foregoing, the Company believes that future revenue,
expenses and operating results are likely to vary significantly from
quarter-to-quarter. As a result, quarter-to-quarter comparisons of operating
results are not necessarily meaningful or indicative of future performance.
Furthermore, the Company believes it is likely that in some future quarter the
Company's operating results will be below the expectations of public market
analysts or investors. In such event, or in the event that adverse conditions
prevail, or are perceived to prevail, with respect to the Company's business or
generally, the market price of the Company's Common Stock would likely be
materially adversely affected.

LIQUIDITY AND CAPITAL RESOURCES

The Company has funded its operations and growth to date primarily through
cash generated from operating activities. As of April 30, 1997, the Company's
principal sources of liquidity consisted of $29.9 million of cash and cash
equivalents, and a $50 million, unsecured, revolving line of credit that it
borrows against for working capital requirements and other general corporate
purposes. As of April 30, 1997, no amounts were outstanding under the Company's
bank line of credit. As of April 30, 1997, the Company had working capital of
$28.7 million. Included in such amounts is a short-term deferred revenue
liability of $75.0 million. Short-term deferred revenue primarily represents
annual support payments billed to customers and is recognized ratably as revenue
over the support service period. Without the short-term deferred revenue,
working capital would have been $103.7 million.

The Company generated operating cash flow of $7.5 million for the first
half of fiscal 1997 and $42.4 million, $41.3 million and $27.2 million for
fiscal 1996, 1995 and 1994, respectively. Operating cash flow is affected by
seasonality, among other factors, and is disproportionately higher in the second
half of the fiscal year than the first half of such fiscal year. The increases
in operating cash flow from year to year were due primarily to increasing net
income. During these periods growth in operating assets such as accounts
receivable has been funded by similar growth in operating liabilities, primarily
deferred revenue and accrued liabilities.

The Company utilized cash for investing activities of $2.7 million for the
first half of fiscal 1997 and $51.2 million, $29.2 million and $10.9 million for
fiscal 1996, 1995 and 1994, respectively. During these periods, the Company
experienced significant growth and invested funds in the purchase of furniture,
fixtures and equipment that were necessary to support its expanding operations.
In the first half of 1997, the Company's cash utilized for investing activities
was offset in part by $8.6 million of proceeds from the sale of assets. In
fiscal 1996, the Company invested $19.4 million in the purchase of land in
Denver, Colorado, a portion of which is being used by the Company for a
headquarters facility.

The Company did not have significant net financing activities for the first
half of fiscal 1997 or for fiscal 1996, 1995 or 1994. The Company utilized its
bank line of credit for working capital and other general corporate purposes but
repaid all amounts borrowed within each of these periods.

Management believes the net proceeds from this offering, together with its
cash and cash equivalents balance, amounts available under existing credit
facilities and funds generated from operations, will be sufficient to meet its
cash needs through fiscal 1998. However, there can be no assurance that the
Company will not require additional funds to support its working capital
requirements or for other purposes, in which case the Company may seek to raise
such additional funds through public or private equity financing or from other
sources. There can be no assurance that such additional financing will be
available or that, if available, such financing will be obtained on terms
favorable to the Company and would not result in additional dilution to the
Company's stockholders.

29
<PAGE> 33

RECENT ACCOUNTING PRONOUNCEMENTS

The Company has determined that the adoption of the recently issued
Statements of Financial Accounting Standards ("SFAS") No. 128, "Earnings per
Share," and No. 129, "Disclosure of Information about Capital Structure," will
not have a material impact on its financial condition or results of operations.
The pro forma effect of SFAS No. 128 is disclosed in the notes to the
consolidated financial statements included herein.

30
<PAGE> 34

BUSINESS

J.D. Edwards develops, markets and supports highly functional Enterprise
Resource Planning ("ERP") software solutions that operate on multiple computing
platforms and are designed to accelerate customers' time to benefit, lower
customers' cost of ownership and reduce information systems risks arising from
changes in technology and business practices. The Company's integrated software
application suites support manufacturing, finance, distribution/logistics and
human resources operations for multi-site and multinational organizations.
Through its Configurable Network Computing ("CNC") architecture, the Company's
ERP software is specifically designed to enable customers to change technology
and/or business practices while minimizing costs and business interruptions. The
Company provides implementation, training and support services designed to
enable customers to rapidly achieve the benefits of the Company's ERP solutions.
The Company has developed and marketed ERP solutions for over 20 years,
principally for operation on AS/400 and other IBM mid-range systems and, more
recently, on leading UNIX and Windows NT ("NT") servers through Windows- and
Internet browser-enabled desktop clients.

The Company's family of application suites is designed to improve most
organizations' core business processes. In addition, the Company extends its
application suites to address certain vertical markets with specific
configurations, templates and additional software features designed to meet
these industries' needs. The Company offers two versions of its application
suites -- WorldSoftware and OneWorld. WorldSoftware operates in a host-centric
environment on the AS/400 platform. With the addition of the WorldVision thin
client interface, WorldSoftware applications can be operated through a
Windows-based graphical user interface. OneWorld incorporates the Company's CNC
architecture and operates on leading UNIX and NT servers, as well as the AS/400
platform. The Company believes its network-centric CNC architecture provides a
valuable extension beyond traditional client/server architectures by masking
complexity, lowering cost of change and facilitating greater scalability. In
addition, WorldSoftware and OneWorld are capable of operating together in a
unified enterprise-wide environment. The Company also provides WorldSoftware and
OneWorld toolsets to enable rapid implementation, customization and modification
of its application suites.

The Company distributes, implements and supports its products worldwide
through 46 offices and through 172 third-party business partners. To date, the
Company has more than 4,000 customers with sites in over 90 countries including
Lexmark International, Inc., SmithKline Beecham plc, Paradyne Corporation and
Praxair, Inc.

INDUSTRY BACKGROUND

ERP systems are designed to enhance an organization's ability to manage and
execute business functions such as manufacturing, finance,
distribution/logistics and human resources. These systems manage and store large
amounts of diverse business information, providing continuous and simultaneous
availability of information to geographically dispersed employees, customers and
suppliers. According to Advanced Manufacturing Research (AMR), an industry
consulting firm, the worldwide market for ERP software license revenue was
approximately $3.5 billion in 1996, and is expected to reach $16.2 billion by
2001, a compound annual growth rate of 36%.

In recent years, ERP systems have been developed with client/server
architectures. These distributed systems generally offer users easier access to
information, as well as multi-site processing capabilities. In addition, as
compared to host-centric systems, client/server environments are better able to
accommodate diverse hardware, software and network technology changes that can
result from rapid organizational growth,

31
<PAGE> 35

acquisitions and consolidations. However, such systems are inherently complex
and generally require lengthy and costly implementation efforts, extensive user
training and substantial ongoing support.

Both host-centric and client/server systems require extensive initial
implementation and ongoing modifications to support an organization's current
and continuously changing business practices. The implementation of a new ERP
system may in some cases require an organization to subordinate or re-engineer
its established business practices to accommodate system or architectural
constraints. These requirements can increase the cost of ownership of an ERP
system and overwhelm organizations with limited internal IT staffs, particularly
rapidly growing and resource-constrained mid-sized organizations. In addition,
the difficulties associated with implementation and modification can put
organizations at risk of costly interruptions to normal business operations.
Accordingly, the Company believes there is a substantial market opportunity for
ERP solutions that offer faster time to benefit, reduce risks associated with
implementation and modification and lower overall cost of ownership. These
solutions should consist of an integrated suite of ERP applications and services
that offer the reliable performance, ease of implementation and ease of
management available in host-centric systems as well as the flexibility to
support multi-site, multi-supplier, multi-platform environments found in
client/server systems. At the same time, these solutions should mask the
complexities of the underlying hardware, software and network technologies.

THE J.D. EDWARDS SOLUTION

J.D. Edwards develops, markets and supports highly functional ERP software
solutions that operate on multiple computing platforms and are designed to
accelerate customers' time to benefit, lower customers' cost of ownership and
reduce information systems risks arising from changes in technology and business
practices. The Company's integrated software application suites support
manufacturing, finance, distribution/logistics and human resources operations
for multi-site and multinational organizations. Through its CNC architecture,
the Company's ERP software is specifically designed to enable customers to
change technology and/or business practices while minimizing costs and business
interruptions. The Company provides implementation, training and support
services designed to enable customers to rapidly achieve the benefits of the
Company's ERP solutions. The Company has developed and marketed ERP solutions
for over 20 years, principally for operation on AS/400 and other IBM mid-range
systems and, more recently, on leading UNIX and NT servers through Windows- and
Internet browser-enabled desktop clients.

The Company's ERP solutions are designed to offer the following customer
benefits:

DELIVER AND SUPPORT COMPREHENSIVE SOLUTIONS FOR GLOBAL ENTERPRISES. The
Company's ERP software supports an organization's core business processes
through a family of application suites, including manufacturing, finance,
distribution/logistics and human resources. These application suites are
designed to enable a customer to integrate business information across its
organization and throughout its entire supply chain; accommodate diverse
business practices across a geographically dispersed organization; and support
multiple languages, currencies and jurisdictions. The Company's experienced
service organization provides training, support and a tested methodology to
enable rapid implementation of its ERP solutions.

FACILITATE CHANGES IN TECHNOLOGY AND BUSINESS PRACTICES. The Company's CNC
architecture is designed to mask the complexities of underlying platform
technologies, thus enhancing flexibility and simplifying software modification.
Using the Company's highly flexible software toolset, customers can modify the
Company's application suites to accommodate their business practices without
regard to the underlying hardware, software and network technologies. By masking
the complexity of the underlying technology, the Company's CNC architecture
facilitates the incorporation of new technologies and enables customers to
modify business practices without extensive low-level software code modification
or support.

OFFER TECHNOLOGY CHOICES FOR DIFFERENT MARKET SEGMENTS. Customers can
select between two versions of the Company's application suites. The Company
offers its WorldSoftware version to customers who seek the reliable performance
and lower cost of ownership associated with host-centric systems. The Company
provides its OneWorld version to customers who want the accessibility of
information and ease of use typically associated with client/server systems,
without the burdens often associated with these complex systems. OneWorld's
object-based technology is designed to enhance programmer productivity,
facilitate modification

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of business practices and leverage network scalability. OneWorld, introduced in
late 1996, operates on leading UNIX and NT servers, in addition to the AS/400
platform. By offering two versions of its software, the Company addresses
different market segments and allows customers to maintain consistent business
functionality while combining different technologies to meet their specific
requirements.

PRESERVE AND EXTEND CUSTOMER INVESTMENT. The Company designed OneWorld to
provide customers with a migration path to a network-centric architecture, while
preserving the customers' existing investments in AS/400 platforms. The
Company's CNC architecture enables OneWorld and WorldSoftware application suites
to co-exist on the AS/400 platform, allowing customers to incorporate the new
technologies of OneWorld while maintaining consistent functionality with their
WorldSoftware systems. This architecture minimizes disruptions and reduces the
overall cost of change for customers.

LOWER COST OF OWNERSHIP. The Company's ERP solutions are designed to reduce
overall cost of ownership through a combination of advanced technology and
comprehensive service and support. The Company's CNC architecture is
specifically designed to enable customers to change business practices or
technology environments without significant costs or business interruptions. In
addition, the Company's OneWorld software version is platform independent,
allowing customers to select the best price and performance solutions from
multiple hardware and software suppliers. The Company also offers implementation
services and support enabling more rapid deployment of the Company's ERP
solutions, thus reducing customers' overall cost of ownership.

ESTABLISH LONG-TERM CUSTOMER RELATIONSHIPS. The Company has designed its
ERP software solutions with broad business functionality and flexibility to
reduce the need for significant custom modifications. By minimizing custom
modifications, the customer's ability to benefit from subsequent releases is
enhanced, as is the Company's ability to support the software as implemented.
The Company believes its investment in worldwide customer support services and
user groups facilitates customer communication and feedback, enhancing customer
satisfaction. The Company believes this focus on standard software functionality
and flexibility, and its investment in customer support and user groups,
contribute to long-term customer relationships.

STRATEGY

J.D. Edwards' objective is to strengthen and expand its position as a
leading supplier of ERP software and services. The key elements of the Company's
strategy are as follows:

LEVERAGE LEADERSHIP POSITION IN MIDDLE MARKET. The Company believes that
its ERP solutions address the needs of a broad spectrum of organizations,
ranging from organizations with revenue in the tens of millions to the largest
global enterprises. The Company has principally targeted mid-sized
organizations, including divisions and business units of larger companies, with
annual revenues between $100 million and $2 billion. The Company believes the
ease of implementation and lower cost of ownership associated with its
application suites meet important needs of rapidly growing and
resource-constrained mid-sized organizations. The Company's ERP solutions
provide robust functionality, reduced implementation time and ease of use.
Although the Company expects to devote a significant amount of its resources to
further penetrate this market, the Company also intends to leverage its
extensive ERP experience with mid-sized organizations to address the needs of
larger global enterprises.

LEVERAGE DEVELOPMENT RESOURCES THROUGH ADVANCED TECHNOLOGIES. The Company
uses advanced technologies to develop highly functional, integrated ERP
solutions in a rapid and efficient manner. The Company's OneWorld toolset is
specifically designed for rapid creation of business functionality and
incorporation of new technologies. The Company uses the OneWorld toolset to
develop OneWorld application suites, thus leveraging the Company's development
resources. Using its OneWorld toolset, the Company has been able to recreate
business functionality in OneWorld application suites in substantially less time
than it took to develop the same application suites for WorldSoftware. The
Company believes that this ability to rapidly create business functionality and
incorporate new technologies is an important competitive advantage in its
market.

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EXPAND VERTICAL MARKET FOCUS. Over the last 20 years, the Company has
acquired significant vertical market experience and expertise through
developing, selling and deploying ERP solutions for over 4,000 customers across
a variety of industries. The Company has leveraged this experience into the
development of customized application suites for a number of vertical markets.
These application suites include configurations and templates designed to
provide more rapid customization, implementation and time to benefit for
customers in these industries. In addition, the Company believes that the
ability to focus its development and sales personnel on the needs of specific
industries has made its sales and marketing efforts more efficient and effective
in these vertical markets. To date, the Company has developed customized
application suites for three vertical markets: (1) architecture, engineering,
construction, mining and real estate; (2) energy and chemical systems; and (3)
public sector. The Company is developing additional customized application
suites in vertical markets in which it has significant experience and expertise,
including automotive supply, consumer packaged goods, electronics, fabricated
metals and pharmaceuticals.

PROVIDE HIGH QUALITY SERVICES DIRECTLY AND THROUGH THIRD PARTIES. The
Company believes that its high-quality consulting, implementation, support and
training services enable the Company to achieve a high level of customer
satisfaction, strong customer references and long-term relationships, as well as
facilitate software improvement based on customer feedback. The Company is
committed to providing efficient, high-quality service. To this end, the Company
offers extensive worldwide implementation, training and support services for its
AS/400 customers directly through its customer service personnel and through
third-party implementation providers to whom the Company subcontracts such
services. The Company intends to rely primarily on third-party implementation
providers to contract directly with customers for the implementation of the
OneWorld version of its application suites. These relationships will enable the
Company to provide implementation services through third-party personnel with
extensive client/server expertise, while concentrating its own service resources
on those activities it can perform most efficiently. The Company believes that
this direct and third-party customer service strategy will enable it to deliver
comprehensive and timely services worldwide.

EXPAND STRATEGIC RELATIONSHIPS. The Company intends to expand its existing,
and develop new, strategic relationships with leading hardware and software
suppliers, such as IBM, Hewlett-Packard, Digital Equipment Corporation, Oracle
and Microsoft, as well as with third-party implementation providers, including
global accounting and consulting firms. The Company believes these activities
will provide greater access to a wider variety of potential customers and
leverage the technical expertise of such third parties, allowing the Company to
devote additional resources to product development and marketing activities.

EXTEND GLOBAL PRESENCE. The Company plans to extend its already significant
commitment to international sales and support to take advantage of worldwide ERP
market opportunities. The Company's ERP solutions have been designed to meet the
special requirements of multi-site and multinational organizations. Currently,
the Company employs over 1,600 international sales and customer service
representatives in 27 international offices. The Company also relies upon its
indirect channel of 172 consulting and sales partners with offices throughout
the world. The Company believes that further expansion of its direct and
indirect sales channels will enhance its competitive position, increase market
penetration and achieve greater name recognition.

PRODUCTS

The Company's family of application suites is designed to improve most
organizations' core business processes. In addition, the Company extends its
application suites to address certain vertical markets with specific
configurations, templates and additional software features designed to meet
these industries' needs. The Company offers two versions of its application
suites -- WorldSoftware and OneWorld. WorldSoftware operates in a host-centric
environment on the AS/400 platform. With the addition of the WorldVision thin
client interface, WorldSoftware applications can be operated through a
Windows-based graphical user interface. OneWorld incorporates the Company's CNC
architecture and operates on leading UNIX and NT servers, as well as the AS/400.
The Company believes its network-centric CNC architecture provides a valuable
extension beyond traditional client/server architectures by masking complexity,
lowering cost of change and facilitating greater scalability. In addition,
WorldSoftware and OneWorld are capable of operating

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together in a unified enterprise-wide environment. The Company also provides
WorldSoftware and OneWorld toolsets to enable rapid implementation,
customization and modification of its application suites.

APPLICATION SUITES

The Company's family of application suites includes manufacturing, finance,
distribution/logistics and human resources. The Company's application suites
accommodate different business practices across a geographically dispersed
organization, as well as multiple languages, currencies and jurisdictions. Each
suite can operate on a stand-alone basis, or can be integrated with other
Company suites and selected third-party applications and systems. The majority
of the Company's customers deploy multiple application suites.

MANUFACTURING

The Company's manufacturing application suite is designed to enable
organizations to optimize their manufacturing operations resources within a
single plant or across multiple locations and to provide information links to
other departments within the organization. The following describes the principal
functionality of the manufacturing application suite and its primary customer
benefits:

<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------
PRINCIPAL FUNCTIONALITY PRIMARY CUSTOMER BENEFITS
- --------------------------------------------------------------------------------------------
- Requirements Planning - Tracks product variances in costs,
- Product Data Management margins, and quantity
- Engineering Change Management - Monitors inventory
- Configuration Management - Facilitates multi-site integration
- Shop Floor Management - Provides process and discrete
- Maintenance Management manufacturing capabilities in a single
plant environment
- Supports multi-mode manufacturing for
purposes of mass customization
- Manages tracking and communication of
engineering change orders from initial
modification through final approval
- Matches shop floor operations and
procedures with reporting needs
- --------------------------------------------------------------------------------------------
</TABLE>

FINANCE

The Company's finance application suite is designed to provide structure,
security and the ability to audit a customer's financial systems without
limiting the customer's ability to respond to operational and market changes.
The application suite provides a central repository of financial information
with simplified transaction processing. The following describes the principal
functionality of the finance application suite and its primary customer
benefits:

<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------
PRINCIPAL FUNCTIONALITY PRIMARY CUSTOMER BENEFITS
- --------------------------------------------------------------------------------------------
- Cost-based Accounting - Offers flexible accounting and management
- Financial Modeling and Budgeting report formats
- General Accounting Functions - Provides real-time access to remote
- Accounts Receivable locations
- Accounts Payable - Facilitates forecasting through modeling
- Financial Reporting and budgeting functions
- Fixed Assets - Provides flexibility to accommodate
- Enterprise-wide Consolidations changing organizational structures
- --------------------------------------------------------------------------------------------
</TABLE>

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DISTRIBUTION/LOGISTICS

The Company's distribution/logistics application suite is designed to
provide enterprise-wide distribution chain, supply chain and logistics
management. The following describes the principal functionality of the
distribution/logistics application suite and its primary customer benefits:

<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------
PRINCIPAL FUNCTIONALITY PRIMARY CUSTOMER BENEFITS
- --------------------------------------------------------------------------------------------
- Demand Management - Manages multi-site inventory, materials
- Forecasting and supplies through the supply chain
- Supplier Management - Simplifies planning for future demand and
- Inventory Management inventory deployment
- Warehouse Automation - Improves management of purchases and
- Electronic Data Interchange sales order processes
- Tailors order fulfillment process to
customer and item level
- --------------------------------------------------------------------------------------------
</TABLE>

HUMAN RESOURCES

The Company's human resources application suite is designed to address the
unique needs of human resource and payroll managers and offers close integration
with the Company's other application suites. The following describes the
principal functionality of the human resources application suite and its primary
customer benefits:

<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------
PRINCIPAL FUNCTIONALITY PRIMARY CUSTOMER BENEFITS
- --------------------------------------------------------------------------------------------
- Applicant and Requisition Management - Reduces payroll administration cost
- Salary and Wage Administration - Complies with and responds to regulatory
- Benefits Administration requirements
- Legislative and Regulatory Compliance and - Allows HR/payroll team to reduce clerical
Reporting time
- Payroll - Manages complex payrolls including
- Labor Distribution multiple unions, contractors,
- Budgeting and Recruiting subcontractors, step progressions
- --------------------------------------------------------------------------------------------
</TABLE>

VERTICAL MARKET APPLICATION SUITES

Over the last 20 years, the Company has acquired significant vertical
market experience and expertise through developing, selling and deploying ERP
solutions for over 4,000 customers across a variety of industries. The Company
has leveraged this experience into the development of customized application
suites for a number of vertical markets. To date, the Company has developed
customized application suites for three vertical markets: (1) architecture,
engineering, construction, mining and real estate ("AEC"); (2) energy and
chemical systems; and (3) public sector. These industry-specific configurations
are designed to provide more rapid customization and implementation,
accelerating time to benefit for customers in these industries. Moreover, the
Company believes its vertical market strategy has improved the efficiency and
effectiveness of its own sales and service operations. Each of the current
targeted vertical markets is described below:

Architecture, Engineering, Construction, Mining and Real Estate. The
Company's AEC application suite includes templates for such common tasks as job
costing, work order management, contract and service billing and equipment
management, among others, while offering additional industry-specific functions
for each market.

Energy and Chemical Systems. The Company's energy and chemical application
suite enables customers to manage all phases of energy and chemical product and
process flow, which is particularly critical given the regulatory controls and
competitive environment of these industries. This template is used for equipment

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<PAGE> 40

management, load and delivery management, procurement planning, bulk inventory
management and other related functions.

Public Sector. The Company provides its public sector application suite for
use by organizations and agencies such as government entities, school districts
and utilities. In addition to providing such organizations and agencies with
common functions, including financial administration, budgeting and reporting,
and human resources administration, this application suite provides
functionality specific to the needs of each sector.

The Company has significant expertise in the following additional vertical
markets: automotive supply, consumer packaged goods, electronics, fabricated
metals and pharmaceuticals. The Company plans to continue its strategy of
customizing application suites and templates for these vertical markets. As with
its existing vertical markets, the Company also plans to offer industry specific
training and services to these new markets. In addition to its vertical market
focus, the Company has developed Genesis, a version of WorldSoftware with
simplified implementation features for the small business market. Genesis is
designed to enable small businesses to obtain many of the benefits of
WorldSoftware while streamlining the implementation and training process.

The Company's application suites are licensed under perpetual, fully paid
licenses. The prices for such licenses are based on the functionality of the
application suite and the number and type of licensed users. Customers pay a
base amount per application suite plus a per user amount. For global
enterprises, the base price per application suite ranges from $16,500 to $38,800
and includes supported languages and localizations. The price per user is
dependent upon volume and type of user and for global enterprises generally
begins at $7,900 per user.

TECHNOLOGY ARCHITECTURE

The Company offers two versions of its application suites -- WorldSoftware
and OneWorld. WorldSoftware operates in a host-centric environment on the AS/400
platform. OneWorld incorporates the Company's CNC architecture and operates on
leading UNIX and NT servers, as well as the AS/400. In addition, WorldSoftware
and OneWorld are capable of operating together in a unified enterprise-wide
environment.

SUITES AND ARCHITECTURE GRAPH

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<PAGE> 41

WorldSoftware is a well established, procedural-based technology designed
to take advantage of the security, integrity and easily maintained architecture
of the AS/400 platform. Unlike many host-centric ERP systems, WorldSoftware
provides flexibility to make run-time changes in application suites without the
need to recompile software. WorldSoftware also incorporates features such as an
active data dictionary, user defined codes and a variety of run-time options.
With the addition of the WorldVision thin client interface, WorldSoftware
applications can be operated through a Windows-based graphical user interface.

OneWorld is an object-based, event-driven technology designed to provide
the information access and other user benefits of traditional client/server
systems while masking complexity and accommodating future change. OneWorld's CNC
architecture enables the deployment of a single version of an application across
a network, regardless of the underlying technologies. The CNC architecture
consists of three components: (1) the application layer; (2) the toolset layer;
and (3) the technology layer.

The OneWorld application layer contains the specific business functionality
of the OneWorld manufacturing, finance, distribution/logistics and human
resources application suites. OneWorld application suites are composed of up to
3,000 reusable objects. The applications are distributed by the OneWorld
deployment server in object form to individual platforms where they are compiled
and executed. A customer changes the application logic by modifying the objects
or creating new objects using the OneWorld toolset. Applications containing the
modified or newly created objects are then redistributed to individual
platforms. The Company believes that this single-point-of-change architecture
significantly reduces the cost of change compared to traditional client/server
architectures.

The OneWorld toolset is used to create or modify OneWorld objects, allowing
customers or the Company's developers to quickly create new application
functionality. The toolset also insulates users from lower level technologies.
For example, OneWorld objects exist independent of any specific computer
language. Currently, the OneWorld toolset can generate objects in three computer
languages -- C, C++ and Java. The Company believes it can readily incorporate
new languages in the future as market requirements dictate. The Company also
believes that this unified toolset approach significantly reduces customers'
cost of ownership when compared to traditional client/server systems that
require a variety of tools.

The OneWorld technology layer is designed to mask the differences between
underlying platforms and provide a uniform interface for OneWorld applications.
This uniformity allows a single object to execute on a wide variety of
platforms, a "write once, run anywhere" capability. The technology layer
currently supports IBM's AS/400 and S/390 platforms; Digital Equipment
Corporation's Alpha- and Intel-based NT servers; IBM's RS/6000,
Hewlett-Packard's 9000, as well as other UNIX servers from Siemens/Nixdorf; and
NT servers from NEC and Fujitsu. Supported clients include personal computers
running Windows 95 and Windows NT or any desktop system running an Internet
browser. Supported databases include Oracle databases, the IBM DB2 family and
Microsoft's SQL Server. The Company intends to continue to integrate additional
platforms, servers and software as necessary to meet market demands.

The technology layer also integrates a variety of components not typically
integrated in traditional client/server architectures, including an object
request broker, a transaction processing monitor, a workflow engine, a C/C++
generator and a Java generator. In traditional client/server implementations,
customers often have to integrate these components obtained from multiple
suppliers. The Company believes that its architecture and high degree of
integration reduce the cost of ownership and facilitate change when compared to
traditional client/server implementations.

TOOLSETS

The Company's software application suites were developed with the Company's
WorldSoftware and OneWorld toolsets. These toolsets are also used for the
ongoing enhancement and modification of the Company's products. The Company
believes the advantages of these toolsets include increased productivity,
increased code consistency, self-documenting code and improved quality.

The WorldSoftware and OneWorld toolsets are bundled with the WorldSoftware
and OneWorld applications, providing customers the same productivity,
consistency and quality benefits enjoyed by the

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<PAGE> 42

Company's own developers, thus reducing the complexities typically associated
with upgrades to new releases. Since modifications made by customers to conform
the applications to local business practice and modifications made by the
Company in the course of creating new releases are made with the same toolset,
it is easier and faster to upgrade to new releases while preserving the
customers' modifications. The Company believes that this capability enables
customers to incorporate new functionality more rapidly, while also reducing the
Company's support costs, since fewer customers remain on older releases.

The Company's WorldSoftware toolset provides a high-level architecture,
allowing the Company's development staff to express business practices as an
abstract model. The toolset then uses the model to generate RPG code that runs
on an AS/400 platform in a host-centric, procedural architecture. The Company
continues to use this toolset to add new functionality to the WorldSoftware
application suites.

The Company's OneWorld toolset incorporates more advanced technologies,
including object-based methods and event-driven models. The OneWorld toolset
generates code in C, C++ and Java for a multi-platform, network-centric
environment. Because the OneWorld toolset rigorously separates business logic
from underlying technologies, it also facilitates the incorporation of new
technologies. For example, in 1996, the Company incorporated a Java generator
into the OneWorld technology layer and then regenerated and released
approximately 1,000 existing OneWorld objects in Java in approximately three
months. This process was completed without rewriting the application code. The
Company believes that the ability to incorporate new technologies by
regenerating, rather than rewriting, applications provides a competitive
advantage.

IMPLEMENTATION SERVICES AND TRAINING

The Company believes that delivery of its ERP software together with high
quality consulting, implementation, support and training services enables the
Company to achieve a high level of customer satisfaction, strong customer
references and long-term relationships, as well as facilitate software
improvement based on customer feedback. The Company offers extensive
implementation and training services directly and through third parties to
assist customers in rapidly achieving benefits from its ERP solutions. As of
April 30, 1997, the Company had 1,075 employees in its customer services and
training departments, located worldwide, and had relationships with 172 business
partners with offices throughout the world.

IMPLEMENTATION SERVICES

The Company has designed an implementation process called the REP
methodology ("Rapidly, Economically and Predictably"), which offers a balance of
structure and flexibility for organizations implementing the Company's ERP
solutions. The goal of REP is to accelerate customers' time to benefit by taking
advantage of the Company's technology, business know-how and experience in the
ERP market. REP is a nine-step process designed to enable on-time and on-budget
implementation of the Company's ERP solutions. The nine steps are illustrated in
the following chart:

NINE-STEP GRAPH

In addition to its standard implementation services, the Company also
offers a full range of custom implementation services, including conversion
programs, upgrade assistance, custom modifications and interfaces, and technical
documentation. Implementation services are generally provided on a time and
materials basis.

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<PAGE> 43

THIRD-PARTY IMPLEMENTATION PROVIDERS

The Company seeks to provide its customers with high quality implementation
services in the most efficient and effective manner. In cases where the Company
does not provide implementation services itself, it subcontracts such services
through third parties. The Company also has relationships with a limited number
of third-party implementation providers that contract directly with customers to
assist in the implementation of the Company's software. The Company selects
these third-party providers carefully to ensure that they have the ability and
knowledge to represent the Company and implement its ERP solutions properly.
Providers receive intensive training regarding the Company's application suites
and its REP implementation process. In addition, the Company evaluates these
providers on a regular basis to ensure quality service and support to its
customers. In the future, the Company intends to rely primarily on third-party
implementation providers to contract directly with customers for the
implementation of the OneWorld version of its applications suites. These
relationships will enable the Company to provide implementation services through
third-party personnel with extensive client/server expertise, while
concentrating its own service resources on those activities it can perform most
efficiently. The Company believes that this direct and third-party customer
service strategy will enable it to deliver comprehensive and timely services
worldwide.

EDUCATION AND TRAINING

The Company offers a comprehensive education and training program to its
customers and to the Company's third party implementation providers. Classes are
offered at in-house facilities located throughout the world, as well as at
customer locations. The Company's instructors are certified for each course they
teach, and their backgrounds generally include cross-functional experience in
product testing, customer support and implementation services.

SUPPORT

The Company believes that providing business solutions along with a high
level of on-going support to its customers is a critical element in establishing
long-term relationships and maintaining a high level of customer satisfaction.
The Company provides support services for an annual fee, which entitles the
customer to receive telephone customer support, as well as enhancements and
updates to its implemented version of the Company's software. The Company
provides customer support through three customer support centers located in
Denver, London and Singapore, which are connected to each other through a wide
area network. Customer support from these centers is provided in nine languages
on a 12-hour-per-day, five-day-per-week basis, and in English-only on a
24-hour-per-day, seven-day-per-week basis. Customer support personnel have the
ability to access customer systems remotely to diagnose and resolve problems. As
of April 30, 1997, the Company had 335 employees in its customer support
department.

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<PAGE> 44

CUSTOMERS

As of April 30, 1997, the Company had licensed its application suites to
approximately 4,000 customers. During each of the last three fiscal years, no
customer accounted for more than 10% of total revenue. The following is a
representative sample of current customers across various industry groups:

ARCHITECTURE, ENGINEERING, CONSTRUCTION,
MINING AND REAL ESTATE

Benderson Development Company, Inc.
CBI Industries, Inc.
David Weekley Homes
Foster Wheeler Corporation
Gilbane Building Company
Hensel Phelps Construction Company
Hoffman Corporation
Hubbard Construction Company
Koll Construction Company
Sundt Corporation
Walt Disney Imagineering

AUTOMOTIVE

ASC, Inc.
Champion Laboratories, Inc.
Dana Corporation
Lectron Products, Inc.
Simpson Industries, Inc.

CONSUMER PRODUCTS

Bacardi Imports, Inc.
Estee Lauder International, Inc.
Prestone Products Corporation
Robert Mondavi Winery
Tambrands, Inc.

ELECTRONICS

Emerson Electric Company
General Instrument Corporation
Lexmark International, Inc.
Medtronic, Inc.
Paradyne Corporation
Philips Electronics Ireland Limited

ENERGY AND CHEMICAL SYSTEMS

Albright & Wilson Americas, Inc.
LaRoche Industries, Inc.
Praxair, Inc.
Sandoz Technology Limited

FABRICATED METALS

Electrolux AB
Ford New Holland
Krones, Inc.
Parker Hannifin Corporation
Zexel USA Corporation

PHARMACEUTICALS

Mallinckrodt Group, Inc.
Sanofi
SmithKline Beecham plc
Sterling Winthrop, Inc.
Warner Lambert Company

PUBLIC SECTOR

City of Troy, Michigan
Colorado Housing & Finance Authority
Idaho Housing Agency
Louisiana Employees' Retirement System
Manchester Airport (UK) plc

McCarran Airport, Las Vegas (Clark County)

Missouri Department of Corrections
New Jersey Natural Gas
Texas Department of Criminal Justice

SALES AND MARKETING

Selling the Company's software to multinational organizations typically
requires the Company to engage in a lengthy sales cycle, generally between six
and 15 months, and to expend substantial time, effort and money educating
prospective customers regarding the use and benefits of the Company's products.
See "Risk Factors -- Lengthy Sales Cycles." The Company sells its software and
services through direct sales and business partner channels throughout the
world. As of April 30, 1997, the Company's direct sales force consisted of 507
employees based at the Company's 46 offices, including 19 offices in the United
States and 27 offices located throughout the rest of the world. In addition, the
Company utilizes 172 sales and consulting business partners worldwide as an
indirect distribution channel to penetrate certain vertical markets and

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geographic areas, in particular those areas in which the Company has not
invested resources to establish a direct presence. The Company expects to
increasingly rely on indirect channels in order to enhance its market
penetration and implementation capabilities. See "Risk Factors -- Management of
Growth; Need For Additional Qualified Personnel." International revenue as a
percentage of total revenue ranged between 35% and 37% from fiscal 1994 through
the first half of fiscal 1997, and the Company expects that revenue from
international customers will continue to account for a significant portion of
the Company's total revenue.

The Company's marketing strategy is to position the Company as a premier
provider of ERP solutions and to increase recognition of the J.D. Edwards name.
In support of this strategy, the Company's marketing programs include developing
and maintaining industry analyst and public relations, developing databases of
targeted customers, conducting advertising and direct mail campaigns, and
maintaining a World Wide Web home page.

Typically, the Company's software products are shipped when orders are
received and customer service agreements for consulting and implementation
services are billed on a "time and materials" basis as services are performed.
Consequently, license and service backlog at the beginning of any quarter has in
the past represented only a small portion of that quarter's expected revenue.
See "Risk Factors -- Variability of Quarterly Operating Results; Seasonality"
and "Risk Factors -- Fixed Price Service Contracts."

PRODUCT DEVELOPMENT

The Company has invested and expects to continue to invest substantial
resources in research and product development. The research and product
development department is organized into three groups that work closely
together -- the development technologies group; the application development
group; and the documentation, localization and translations group. The efforts
of these groups is enhanced by cross-functional product management teams,
frequent solicitation of customer feedback and close contact with customers
through the Company's implementation services. As of April 30, 1997, the
Company's research and product development operations included 553 employees,
primarily located in Denver, Colorado. Research and development expenditures,
which include capitalized software development costs, were $26.9 million, $47.6
million, $34.1 million and $21.0 million for the six months ended April 30, 1997
and for the fiscal years ended October 31, 1996, 1995 and 1994, respectively.
The Company anticipates that research and development expenditures will increase
in the future.

The Company's development technologies group is responsible for both the
toolsets and underlying technologies of WorldSoftware and OneWorld. The
WorldSoftware development technologies team is primarily focused on maintaining
and enhancing the toolset and underlying technologies for WorldSoftware. The
OneWorld development technologies team focuses on enhancing the flexibility,
simplicity and performance of the OneWorld toolset, as well as OneWorld's CNC
technology layer. Both development technologies teams share responsibility for
cross-functional coordination with sales and support, as well as with hardware
and software suppliers with which the Company has relationships, to identify,
analyze, prioritize and schedule new features and functionalities. As of April
30, 1997, the development technologies group consisted of 144 employees, the
substantial majority of whom are assigned to the OneWorld team.

The application development group is responsible for developing, enhancing
and maintaining the WorldSoftware and OneWorld application suites, including the
vertical market application suites. Separate application development teams use
the toolsets developed by the development technologies group to create and
enhance each application suite. The Company has designed its toolsets to enable
application programming to be performed by nonprogrammers responsible for
business practices. These application development teams also work with customers
and third-party implementation providers to identify, analyze, prioritize and
schedule new functionality in the Company's existing application suites, as well
as to establish specifications and priorities for new vertical markets. As of
April 30, 1997, the application development group consisted of 287 employees.

The Company's documentation, localization and translations group is
responsible for the documentation and the localization and translation of the
Company's application suites for particular foreign markets, as well as the
vertical market application suites and templates, for both WorldSoftware and
OneWorld. The

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<PAGE> 46

documentation, localization and translations group works closely with domestic
and international customers and third-party implementation providers, as well as
cross-functional Company teams of development, implementation, support and
training professionals, to ensure that appropriate enhancements are incorporated
into products, documentation and implementation processes. This group also
develops and maintains a single database for documentation, which is currently
translated into 15 languages. The Company intends to offer additional language
translations in the future. As of April 30, 1997, the documentation,
localization and translation group consists of 122 employees.

The market for the Company's products is characterized by rapid
technological change, evolving industry standards in computer hardware and
software technology, changes in customer requirements and frequent new product
introductions and enhancements. The introduction of products embodying new
technologies and the emergence of new industry standards can render existing
products obsolete and unmarketable. The life cycles of the Company's ERP
software are difficult to estimate. As a result, the Company's future success
will depend, in part, upon its ability to continue to enhance existing products
and develop and introduce in a timely manner new products that keep pace with
technological developments, satisfy customer requirements and achieve market
acceptance. There can be no assurance that the Company will successfully
identify new product opportunities and develop and bring new products to market
in a timely and cost-effective manner, or that products, capabilities or
technologies developed by others will not render the Company's products or
technologies obsolete or noncompetitive or shorten the life cycles of the
Company's products. See "-- Competition." Although the Company has addressed the
need to develop new products and enhancements primarily through its internal
development efforts, the Company has also addressed this need through the
licensing of third-party technology. Licensing third-party technology involves
numerous risks. See "-- Proprietary Rights and Licensing." If the Company is
unable to develop on a timely and cost-effective basis new software products or
enhancements to existing products, or if such new products or enhancements do
not achieve market acceptance, the Company's business, operating results and
financial condition may be materially adversely affected.

Historically, the Company has issued significant new releases of its family
of software products periodically, with interim releases issued even more
frequently. As a result of the complexities inherent in software development,
and in particular for multi-platform environments, and the broad functionality
and performance demanded by customers for ERP products, major new product
enhancements and new products can require long development and testing periods
before they are commercially released. The Company has on occasion experienced
delays in the scheduled introduction of new and enhanced products and there can
be no assurance that such delays will not be experienced in the future. The
Company recently released OneWorld, the network-centric version of its
application suites. Because the development of enhancements in network-centric
environments are more complex than in host-centric systems, there can be no
assurance that the introduction of future enhancements will not be delayed.

COMPETITION

The market for ERP software solutions is intensely competitive, subject to
rapid technological change and significantly affected by new product
introductions and other market activities of industry participants. The
Company's products are designed and marketed for the AS/400 market and, more
recently, for leading UNIX and NT servers. The Company's primary competition
comes from a large number of independent

43
<PAGE> 47

software vendors including: (i) companies offering products that run on
the AS/400 platform and other mid-range computers, including System Software
Associates, Inc., Marcam Corporation, Infinium Software, Inc. (formerly
Software 2000) and JBA Holdings plc; (ii) companies offering products that run
on UNIX- or Windows NT-based systems in a client/server environment, such as
SAP, Baan, PeopleSoft and Oracle; and (iii) companies offering either standard
or fully customized products that run on mainframe computer systems, such as
SAP. Additionally, the Company faces indirect competition from suppliers of
custom developed business applications software that focus mainly on
proprietary mainframe and mid-range computer-based systems, such as systems
consulting groups of major accounting firms and from IT departments of
potential customers that develop systems internally. The Company's competitors
currently offer products that run on the AS/400 platform and UNIX and NT
servers or have announced their intent to introduce such products in the near
future. As a result, the Company will experience increased competition. There
can be no assurance that the Company will be able to successfully compete with
new or existing competitors or that such competition will not have a material
adverse effect on the Company's business, operating results or financial
condition.

Many of the Company's competitors, and SAP and Oracle in particular, have
significantly greater financial, technical, marketing and other resources than
the Company, as well as wider name recognition and a larger installed customer
bases. Moreover, the Company has traditionally competed only in the AS/400
market, which primarily consists of mid-sized organizations, and has only
recently entered the UNIX and NT markets. In contrast, each of SAP, Baan,
PeopleSoft and Oracle, has significantly more experience and name recognition
with UNIX and NT, implementations and platforms, name recognition with potential
UNIX and NT customers, and reference accounts with UNIX and NT customers.
Accordingly, such competitors have significantly more customers in the UNIX and
NT markets to use as references when competing against the Company.
Additionally, several of the Company's competitors have well-established
relationships with current and potential customers of the Company. These
relationships may prevent the Company from competing effectively in divisions or
subsidiaries of such customers. Many of the Company's competitors, such as SAP,
Baan, PeopleSoft and Oracle, also offer, or have announced their intention to
offer, vertical applications targeted to mid-sized organizations, which market
comprises a substantial portion of the Company's revenue. Further, several of
the Company's competitors regularly and significantly discount prices on their
products. If these competitors continue to discount or increase the amount or
frequency of such discounts in response to increased competition or other
factors, the Company may be required to similarly discount its products, which
could have an adverse effect on the Company's margins. There can be no assurance
that the Company will be able to compete successfully against any of these
competitors.

The Company relies, and expects to increase its reliance, on a number of
systems consulting and systems integration firms for implementation and other
customer support services, as well as for recommendations of its products during
the evaluation stage of the purchase process. A number of the Company's
competitors, including SAP, Baan, PeopleSoft, and Oracle, have significantly
more well-established relationships with such firms and, as a result, such firms
may be more likely to recommend competitors' products rather than the Company's
products. Furthermore, there can be no assurance that these third parties, many
of which have significantly greater financial, technical, marketing and other
resources than the Company, will not market software products in competition
with the Company in the future. If the Company is unable to maintain or increase
the number and quality of its relationships with third parties who recommend,
implement or support ERP software, the Company's business, operating results and
financial condition will be materially adversely affected.

The Company believes that the principal competitive factors affecting the
market for the Company's software products are responsiveness to customer needs,
product architecture, functionality, speed of implementation, ease of use,
performance and features, quality and reliability, breadth of distribution,
vendor and product reputation, quality of customer support and price. The
Company believes that it competes favorably with respect to these factors. In
order to be successful in the future, the Company must continue to respond
promptly and effectively to the challenges of technological change and its
competitors' innovations by continually enhancing its own product offerings.
There can be no assurance, however, that the Company's products will continue to
compete favorably or that the Company will be successful in the face of
increasing

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<PAGE> 48

competition from new products and enhancements introduced by existing
competitors or by new companies entering this market.

PROPRIETARY RIGHTS AND LICENSING

The Company's ability to compete is dependent in part upon its internally
developed, proprietary intellectual property. Although the Company currently has
no patents, it has five patent applications pending on various aspects of its
application suites. In addition, the Company has applied to register the
trademarks "WorldSoftware" and "OneWorld." The Company also relies on general
trademark and copyright protection for its technology, although it generally
does not register such intellectual property. Furthermore, the Company relies on
trade secret law, confidentiality procedures and licensing arrangements to
establish and protect its rights in its technology. Nevertheless, the Company
believes that factors such as the technological and creative skills of its
personnel, new product developments, frequent product enhancements, name
recognition, customer training and support and reliable product support are more
essential to protect a technology leadership position. There can be no assurance
that others will not develop technologies that are similar or superior to the
Company's technology. The Company typically enters into confidentiality or
license agreements with its employees, consultants and vendors, and typically
controls access to and distribution of its software, documentation and other
proprietary information. Despite these precautions, it may be possible for a
third party to copy or otherwise obtain and use the Company's products or
technology without authorization, or to develop similar technology independently
through reverse engineering or other means. In addition, the laws of some
foreign countries do not protect the Company's proprietary rights as fully as do
the laws of the United States. There can be no assurance that the Company's
means of protecting its proprietary rights in the United States or abroad will
be adequate or that competitors will not independently develop similar
technology. Despite the Company's efforts to protect its proprietary rights,
unauthorized parties may attempt to copy aspects of the Company's products or to
obtain and use information that the Company regards as proprietary. Preventing
or detecting unauthorized use of the Company's products is difficult. There can
be no assurance that the steps taken by the Company will prevent
misappropriation of its technology or that its license agreements will be
enforceable. In addition, litigation may be necessary in the future to enforce
the Company's intellectual property rights, to protect the Company's trade
secrets, to determine the validity and scope of the proprietary rights of
others, or to defend against claims of infringement or invalidity. Such
litigation could result in substantial costs and diversion of resources and
could have a material adverse effect on the Company's business, operating
results or financial condition.

The Company typically licenses its products to end users under the
Company's standard license agreements, although each license is individually
negotiated and may contain variations. The Company's products are not only
licensed to end users, but also to independent, third-party distributors with a
right to sublicense. Although the Company seeks to establish the conditions
under which the Company's products are licensed by such distributors to end
users, the Company cannot ensure that its distributors do not deviate from such
conditions. Moreover, in order to facilitate the customization required by most
of the Company's customers, the Company generally licenses its software products
to end users in both object code (machine-readable) and source code
(human-readable) format. Although this practice facilitates customization,
making software available in source code also makes it easier for third parties
to copy or modify the Company's software for non-permitted purposes.

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<PAGE> 49

financial condition. If any claims or actions are asserted against the Company,
the Company may seek to obtain a license to such intellectual property rights.
There can be no assurance, however, that such a license would be available on
reasonable terms or at all.

The Company also relies on certain other technology which it licenses from
third parties, including software that is integrated with internally developed
software and used in the Company's products to perform key functions. Most
notably, the Company licenses the graphical user interface to its WorldSoftware
version of its application suites (which the Company markets as WorldVision).
There can be no assurance that these third-party technology licenses will
continue to be available to the Company on commercially reasonable terms. The
loss of, or inability to maintain, any of these technology licenses,
particularly for WorldVision's graphical user interface, would result in delays
or reductions in product shipments until equivalent technology could be
identified, licensed or developed, and integrated. Any such delays or reductions
in product shipments could materially adversely affect the Company's business,
operating results or financial condition. Moreover, although the Company is
generally indemnified by third parties against claims that such third parties'
technology infringes the proprietary rights of others, such indemnification is
not always available for all types of intellectual property rights (for example,
patents may be excluded) and in some cases the geographical scope of
indemnification is limited. The result is that the indemnity that the Company
receives against such claims is often less broad than the indemnity that the
Company provides to its customers. Even in cases in which the indemnity that the
Company receives from a third-party licensor is as broad as the indemnity that
the Company provides to its customers, the third-party licensors from whom the
Company would be receiving indemnity are often not well-capitalized and may not
be able to indemnify the Company in the event that such third-party technology
infringes the proprietary rights of others. Accordingly, the Company could have
substantial exposure in the event that technology licensed from a third party
infringes another party's proprietary rights. The Company currently does not
have any liability insurance to protect against the risk that licensed
third-party technology infringes the proprietary rights of others. There can be
no assurance that infringement or invalidity claims arising from the
incorporation of third-party technology, and claims for indemnification from the
Company's customers resulting from such infringement claims, will not be
asserted or prosecuted against the Company or that any such assertions or
prosecutions will not materially adversely affect the Company's business,
operating results or financial condition. Regardless of the validity or
successful assertion of such claims, the Company could incur significant costs
and diversion of resources with respect to the defense thereof, in addition to
potential product redevelopment costs and delays, all of which could have a
material adverse effect on the Company's business, operating results or
financial condition.

EMPLOYEES

As of April 30, 1997, the Company had 3,167 full-time employees: 505 in
management and administration; 553 in research and development; 699 in sales and
marketing; 1,075 in implementation services and training; and 335 in customer
support. The Company believes that its continuing success will depend, in part,
on its ability to retain a limited number of key employees and other members of
senior management, as well as its ability to attract and retain highly skilled
technical, marketing and management personnel, who are in great demand. See
"Risk Factors -- Management of Growth; Need for Additional Qualified Personnel."
The Company has not had a work stoppage, and no employees are represented under
collective bargaining agreements. The Company considers its employee relations
to be good.

PROPERTIES

The Company's corporate headquarters and executive offices are in Denver,
Colorado, where the Company leases approximately 527,000 square feet of space in
multiple facilities. The leases on these facilities expire in 1998 through 2012.
The Company also leases approximately 215,000 square feet of space, primarily
for regional sales and support offices, elsewhere in the United States.
Additionally, the Company leases approximately 125,000 square feet of office
space in countries outside the United States, used primarily for sales and
support offices. Expiration dates on material sales and support office leases
range from fiscal 1998 to 2010. The Company believes that its current domestic
and international facilities will be sufficient to meet its

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needs for at least the next twelve months. See Note 8 of Notes to Consolidated
Financial Statements and "Certain Transactions" for information regarding the
Company's obligations under its facilities leases.

LEGAL PROCEEDINGS

From time to time, the Company is involved in legal proceedings and
litigation arising in the ordinary course of business. While the outcome of
these matters cannot be predicted with certainty, in the opinion of management,
the adverse outcome of any such current legal proceedings would not have a
material adverse effect on the Company's results of operations or financial
condition.

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<PAGE> 51

MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information regarding the executive
officers and directors of the Company as of April 30, 1997.

<TABLE>
<CAPTION>
NAME AGE POSITION(S)
- -------------------------- --- ---------------------------------------------------------
<S> <C> <C>
C. Edward McVaney......... 56 Chairman, President and Chief Executive Officer
Douglas S. Massingill..... 39 Executive Vice President and Chief Operating Officer
Richard E. Allen(1)(2).... 40 Vice President, Finance and Administration, Chief
Financial Officer and Director
Paul E. Covelo............ 42 Vice President of International Operations
David E. Girard........... 42 Vice President and General Manager of the East Area
David M. Neal............. 36 Vice President and General Manager of the West Area
Pamela L. Saxton.......... 44 Vice President of Finance, Controller and Chief
Accounting Officer
Jack D. Schneider......... 52 Vice President and General Manager of the South Area
Richard G. Snow, Jr....... 51 Vice President, General Counsel and Secretary
Daniel B. Snyder.......... 39 Vice President and General Manager of the Midwest Area
Robert C. Newman(1)(2).... 53 Director
Jack L. Thompson.......... 48 Director
Gerald Harrison(2)(3)..... 65 Director
Delwin D. Hock............ 62 Director
Harry T. Lewis, 64 Director
Jr.(1)(3)...............
Michael J. Maples(4)...... 54 Director
Trygve E. Myhren(1)(4).... 60 Director
</TABLE>

- ---------------

(1) Member of the Finance Committee
(2) Member of the Governance Committee
(3) Member of the Audit Committee
(4) Member of the Compensation Committee

C. Edward McVaney is Chairman of the Board of Directors, President and
Chief Executive Officer of the Company, which he co-founded. He has held these
positions since the Company's inception, except that Mr. McVaney was not
President of the Company from September 1987 through September 1991. Prior to
founding the Company, he was partner-in-charge of information technology and
consulting services for the Denver, Colorado office of Alexander, Grant &
Company, a public accounting firm. Mr. McVaney holds a B.S. in mechanical
engineering from the University of Nebraska and an M.B.A. from Rutgers
University.

Douglas S. Massingill has been Executive Vice President and Chief Operating
Officer of the Company since March 1997. From February 1994 to March 1997, he
was Executive Vice President of Worldwide Operations, and from January 1993 to
March 1994, Mr. Massingill was Vice President and General Manager of the South
Area. Mr. Massingill joined the Company in June 1990 as Account Executive for
the Large Accounts Program. Prior to joining the Company, Mr. Massingill was
Regional Sales Vice President for Integral Systems, an applications software
company. Mr. Massingill holds a B.A. in accounting from Shorter College and an
M.B.A. from Georgia Southern University.

Richard E. Allen has been a member of the Board of Directors since
September 1991. He has been Chief Financial Officer, Vice President, Finance and
Administration, Treasurer and Assistant Secretary since January 1990. From
August 1985 to September 1994, Mr. Allen served as Controller of the Company and
as Secretary from March 1986 to January 1990. Prior to joining the Company, he
worked as Controller for Luff Exploration Company, an oil and gas exploration
and production company, and as a senior accountant with Coopers & Lybrand,
L.L.P. Mr. Allen holds a B.S. in business administration from Colorado State
University.

Paul E. Covelo has been Vice President of International Operations since
August 1994. Prior to that, he served as Vice President and General Manager of
the West Area from January 1992 to September 1994 and Manager of the Newport
Beach Region from July 1988 to January 1992. Prior to joining the Company in

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<PAGE> 52

1988, Mr. Covelo held various positions at IBM including Account Executive and
Advisory Executive. Mr. Covelo holds a B.A. in marketing from Loyola Marymount
University.

David E. Girard has been Vice President and General Manager of the East
Area since joining the Company in May 1994. From July 1992 to November 1993, Mr.
Girard served as Vice President and General Manager of the Northeastern Region
of Dun & Bradstreet Software. From March 1990 to July 1992, he served as Vice
President of Product Development, Client Services and Corporate Operations for
Information Associates, Inc., a division of Dun & Bradstreet Software. Mr.
Girard holds a B.S. in marketing from University of Connecticut and attended the
Columbia Executive Marketing Management Program at Columbia University.

David M. Neal has been Vice President and General Manager of the West Area
since January 1997. From December 1994 to December 1996, he served as Director
of Sales of the West Area. Prior to that, he served as Branch Manager of the
Southwest region from August 1992 to November 1994, Sales Manager from June 1990
to July 1992 and Account Executive of the Northwest region from March 1986 to
May 1990. Prior to joining the company, Mr. Neal was an Account Executive for
New Generation Software. He holds a B.S. in Management Information Systems from
Sacramento State University.

Pamela L. Saxton has been Vice President of Finance, Controller and Chief
Accounting Officer since joining the Company in September 1994. From 1989 to
1994, she was Vice President, Controller and Secretary for Amax Gold, Inc., a
mining company, and Assistant Controller for Cyprus Amax Minerals Company, a
mining company. Ms. Saxton holds a B.S. in accounting from University of
Colorado.

Jack D. Schneider has been Vice President and General Manager of the South
Area and the Energy and Chemical Systems Business Unit since October 1995. From
April 1994 to September 1995, he served as Vice President and General Manager of
the Energy and Chemical Systems and Architecture, Engineering, Construction,
Mining and Real Estate Business Units. From May 1993 to March 1994, Mr.
Schneider served as Vice President of Worldwide Operations, and from January
1993 to April 1993, he served as Vice President of European Sales. Prior to
that, he served as Director of Large Account Sales and European Support from
January 1992 to December 1992. Prior to joining the Company in January 1992, Mr.
Schneider held various management positions in sales and marketing at IBM.

Richard G. Snow, Jr. has been Vice President, General Counsel and Secretary
since joining the Company in January 1990. From February 1986 to January 1990,
Mr. Snow was Corporate Counsel and Secretary for Hathaway Corporation, a
manufacturer of computer components and power utility monitoring devices. Prior
to that, he was Vice President, General Counsel and Secretary for
Global-Ultimacc Systems, Inc., a systems integrator, and Senior Counsel for
Storage Technology Corporation, a manufacturer of computer storage devices. He
holds a B.S. in business administration from the University of California,
Berkeley and a J.D. from California Western University Law School.

Daniel B. Snyder has been Vice President and General Manager of the Midwest
Area since March 1992, and from January 1992 to March 1992, he served as
Director of Large Accounts for the Midwest Area. From June 1979 to January 1992,
Mr. Snyder held various positions at IBM, including marketing, field positions
and staff management positions. Mr. Snyder holds a B.S. in business
administration from Arizona State University, and an M.B.A. in finance from
University of Southern California.

Robert C. Newman is one of the co-founders of the Company and has been a
member of the Board of Directors since August 1978. He is currently a professor
at the University of Denver and manages private investments. From August 1978
until June 1997, he served in a number of management roles with the Company,
including Vice President of Complementary Technologies and Managing Director of
J.D. Edwards & Company, Ltd. (U.K.). Prior to joining the Company, he was a
programmer or consultant at Deloitte & Touche, Motorola Inc. and Rockwell
International. Dr. Newman holds a B.S. in industrial engineering from the
University of California, Berkeley, an M.B.A. from the University of California,
Los Angeles, and a Ph.D. in management from Golden Gate University.

Jack L. Thompson is a member of the Board of Directors and one of the
co-founders of the Company. Mr. Thompson has been a member of the Board since
the Company's inception in March 1977. He served as Vice President of Technical
Foundations from the Company's inception to March 1996. Prior to joining the
Company, Mr. Thompson was a consultant at Alexander Grant & Company, a public
accounting firm, and a programmer for National Farmers Union Life, an insurance
company.

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<PAGE> 53

Gerald Harrison has been a member of the Board of Directors since January
1997. He currently engages in private research and writing. From 1982 to 1984,
he was President and Chief Executive Officer of Stearns-Roger World Corporation,
an engineering and construction firm, and for 14 years prior to that, he served
in various other positions. Mr. Harrison holds an L.L.B. from the University of
Colorado School of Law.

Delwin D. Hock has been a member of the Board of Directors since March
1997. He retired from his position as Chief Executive Officer of Public Service
Co. of Colorado, a utility services company, in January 1996 and as Chairman of
the Board of Directors in July 1997. From September 1962 to January 1996, Mr.
Hock held various positions at Public Service Co. Mr. Hock received his B.S. in
accounting from the University of Colorado. He serves as a director of
Serv-Tech, Inc., Hathaway Corporation and American Century Investors.

Harry T. Lewis, Jr. has been a member of the Board of Directors since March
1995. Since April 1988, Mr. Lewis has been self-employed as a private investor
and financial consultant. From January 1981 to March 1988, he was Senior Vice
President for Dain Bosworth Incorporated, an investment banking firm. Prior to
that, Mr. Lewis was employed by Boettcher & Company, an investment banking firm.
Mr. Lewis has an A.B. from Dartmouth College and an M.B.A. from the Amos Tuck
School of Business Administration at Dartmouth College. He serves as a director
of The Berger Mutual Funds.

Michael J. Maples has been a member of the Board of Directors since January
1997. He is currently a consultant to Microsoft Corporation. From April 1988 to
July 1995, Mr. Maples held various management positions at Microsoft
Corporation, most recently as Executive Vice President of the Worldwide Products
Group. Prior to that, he served as a Director of Software Strategy for IBM. Mr.
Maples holds a B.S. in electrical engineering from Oklahoma University and an
M.B.A. from Oklahoma City University. He serves as a director of Lexmark
International, Inc. and PSW Technologies.

Trygve E. Myhren has been a member of the Board of Directors since January
1997. He is currently President of Myhren Media, Inc., which invests in and
advises media, telecommunications and consumer products companies. From November
1990 to March 1996, he served as President of The Providence Journal Company, a
company that owns and manages newspapers, broadcast television stations,
programming networks and interactive and multimedia ventures. During this same
time, he was Chief Executive Officer of King Holdings, an owner and manager of
broadcast and cable television properties. From 1981 to 1988, Mr. Myhren served
as Chairman and Chief Executive Officer of American Television and
Communications Corporation, a publicly traded subsidiary of Time, Inc. From 1986
to 1987, Mr. Myhren served as Chairman of the National Cable Television
Association. Mr. Myhren has a B.S. in political science and philosophy from
Dartmouth College, and an M.B.A. from the Amos Tuck School of Business
Administration at Dartmouth College. He serves on the boards of Peapod, Ltd.,
Advanced Marketing Systems, University of Denver, VERIO, Inc. and Founders Funds
Inc.

BOARD OF DIRECTORS

The Company currently has authorized nine directors. Currently, each
director holds office until the next annual meeting of the stockholders or until
his or her successor is duly elected and qualified. The Company's Amended and
Restated Certificate of Incorporation provides for a classified Board of
Directors upon the effective date of this offering. In accordance with the terms
of the Amended and Restated Certificate of Incorporation, the terms of office of
the Board of Directors will be divided into three classes: Class I will expire
at the annual meeting of stockholders to be held in 1998; Class II will expire
at the annual meeting of stockholders to be held in 1999; and Class III will
expire at the annual meeting of stockholders to be held in 2000. At each annual
meeting of stockholders beginning with the 1998 annual meeting, the successors
to directors whose terms will then expire will be elected to serve from the time
of election and qualification until the third annual meeting following election
and until their successors have been duly elected and qualified. Any additional
directorships resulting from an increase in the number of directors will be
distributed among the three classes so that, as nearly as possible, each class
will consist of an equal number of directors.

COMMITTEES. The Company's Board of Directors has an Audit Committee,
Compensation Committee, Finance Committee and Governance Committee.

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<PAGE> 54

The Audit Committee is responsible for reviewing and reporting to the Board
on the quality and performance of internal and external accountants and
auditors, the reliability of its financial information, and the adequacy of its
financial controls and policies, initiating and/or approving appropriate changes
in any or all of these areas when necessary.

The Compensation Committee is responsible for reviewing and reporting to
the Board on compensation and personnel policies, programs and plans, including
management development and succession plans, and to approve employee
compensation and benefits and to administer the Company's stock plans. See
"-- Employee Benefit Plans."

The Finance Committee is responsible for the review of the Company's
capital structure, capital expenditures, financing arrangements, risk management
and long range financial planning.

The Governance Committee is responsible for acting on behalf of the Board
during intervals between meetings of the Board and then reporting to the Board
at its next regular meeting on any actions taken. Actions of the Governance
Committee may generally be limited to handling legal formalities and
technicalities concerning administrative operations, however, the Governance
Committee has the power to act on major matters where it deems action
appropriate.

DIRECTOR COMPENSATION. In January 1997, the Board approved compensation
guidelines for directors who are not officers or employees of the Company or any
of its subsidiaries ("Eligible Directors"). Eligible Directors receive $15,000
as an annual retainer, a fee of $1,000 for attendance at each meeting of the
Board of Directors, and a fee of $1,000 for attendance at each meeting of a
committee of the Board of Directors. After this offering, Eligible Directors may
elect to receive, in lieu of such cash compensation, options to purchase shares
having a fair market value of the foregone cash compensation. Eligible Directors
are reimbursed for expenses incurred in attending any Board of Directors or
committee meetings. Directors who are officers of or employed by the Company or
any of its subsidiaries do not receive additional compensation for serving as
directors of the Company or attending Board of Directors or committee meetings.

The compensation guidelines also provide that Eligible Directors will
automatically be granted under the Company's 1992 Nonqualified Stock Option Plan
an option to purchase 35,000 shares of Common Stock (the "First Option") on the
date on which each such person becomes an Eligible Director. After the First
Option has been granted to the Eligible Director, such director will
automatically be granted an option to purchase 7,000 shares on an annual basis.
The foregoing option provisions terminate upon completion of this offering.

Effective upon the date of this offering, Eligible Directors will be
eligible to participate in the Company's 1997 Equity Incentive Plan. Each
Eligible Director will automatically receive a grant of an option to purchase
25,000 shares of Common Stock on the date on which such person becomes an
Eligible Director. Additionally, beginning at the Company's annual meeting of
stockholders for the fiscal year ending October 31, 1997 and at each successive
annual stockholder meeting, each Eligible Director will receive an option to
purchase 5,000 shares of Common Stock. The options will become fully exercisable
over a four year period at the rate of 25% per year. The exercise price per
share for all options automatically granted to directors under the 1997 Plan
will be equal to the market price of the Common Stock on the date of grant.
Directors are also eligible to receive discretionary grants under the 1997 Plan.
See "Management -- Stock Plans."

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Company's Compensation Committee was formed to review and recommend to
the Board the compensation and benefits for the Company's executive officers,
administer the Company's stock purchase and stock option plans and make
recommendations to the Board of Directors regarding such matters. Prior to
January 1997, the Committee was composed of Jay S. Horowitz, a former member of
the Board. The Committee is currently composed of Mr. Myhren and Mr. Maples. No
interlocking relationship exists between any member of the Company's Board or
Compensation Committee and the board of directors or compensation committee of
any other company, nor has any such interlocking relationship existed in the
past.

51
<PAGE> 55

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE. The following table sets forth certain
information concerning total compensation received by the Company's Chief
Executive Officer and each of the Company's four most highly compensated
executive officers during the last fiscal year (collectively, the "Named
Officers") for services rendered to the Company in all capacities during the
fiscal year ended October 31, 1996.

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES
--------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION SALARY BONUS OPTIONS COMPENSATION
- ----------------------------------------- -------- -------- ------------ ------------
<S> <C> <C> <C> <C>
C. Edward McVaney........................ $300,000 $404,500 -- --
Chairman, President and
Chief Executive Officer
Douglas S. Massingill.................... 253,333 206,764(1) 112,000 $ 66(2)
Executive Vice President and Chief
Operating Officer
Paul E. Covelo........................... 204,700 170,035(3) 112,000 24(2)
Vice President of International
Operations
David E. Girard.......................... 179,500 171,500 112,000 466(2)
Vice President and General Manager of
the East Area
Daniel B. Snyder......................... 162,366 203,500 112,000 714(2)
Vice President and General Manager of
the Midwest Area
</TABLE>

- ---------------

(1) Includes reimbursement of $31,647 for relocation expenses.

(2) Represents payment for insurance premiums.

(3) Includes reimbursement of $26,035 for relocation expenses.

OPTION GRANTS IN LAST FISCAL YEAR. The following table sets forth, as to
the Named Officers, information concerning stock options granted during the
fiscal year ended October 31, 1996.

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------------------- VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERM(4)
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION ----------------------
NAME GRANTED(1) FISCAL YEAR(2) PER SHARE DATE(3) 5% 10%
- ----------------------- ---------- --------------- -------------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
C. Edward McVaney...... -- -- -- -- -- --
Douglas S.
Massingill........... 112,000 2% $ 6.24 02/01/06 $439,381 $1,113,478
Paul E. Covelo......... 112,000 2% 6.24 02/01/06 439,381 1,113,478
David E. Girard........ 112,000 2% 6.24 02/06/06 439,381 1,113,478
Daniel B. Snyder....... 112,000 2% 6.24 02/01/06 439,381 1,113,478
</TABLE>

- ---------------

(1) The options in this table are incentive stock options or nonqualified stock
options granted under the 1992 Incentive Stock Option Plan or the 1992
Nonqualified Stock Option Plan and have exercise prices equal to the fair
market value of the Company's Common Stock on the date of grant. All such
options have 10-year terms and vest over a period of 5 years at a rate of
20% of the shares per year.

(2) The Company granted options to purchase 5,572,560 shares of Common Stock to
employees in fiscal 1996.

(3) The options in this table may terminate before their expiration as a result
of the termination of optionee's status as an employee or consultant or upon
the optionee's disability or death.

(4) Under rules promulgated by the Securities and Exchange Commission (the
"SEC"), the amounts in these two columns represent the hypothetical gain or
"option spread" that would exist for the options in this table based on
assumed stock price appreciation from the date of grant until the end of
such options' ten-year term at assumed annual rates of 5% and 10%. The 5%
and 10% assumed annual rates of

52
<PAGE> 56

appreciation are specified in SEC rules and do not represent the Company's
estimate or projection of future stock price growth. There can be no
assurance that the actual stock price appreciation over the 10-year option
term will be at the assumed 5% and 10% annual rates of compounded stock
appreciation or at any other defined rate.

AGGREGATE OPTION EXERCISES IN THE LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION VALUES. The following table sets forth, as to the Named Officers, certain
stock option information concerning the number of shares subject to both
exercisable and unexercisable stock options and the value of unexercised options
as of October 31, 1996. No options were exercised by Named Officers in the
fiscal year ended October 31, 1996.

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END($)(1)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
C. Edward McVaney............................ -- -- -- --
Douglas S. Massingill........................ 350,770 621,180 $ 2,797,555 $ 4,536,587
Paul E. Covelo............................... 410,620 646,030 3,279,527 4,736,704
David E. Girard.............................. 152,600 372,400 1,210,412 2,546,241
Daniel B. Snyder............................. 281,260 504,840 2,243,023 3,607,549
</TABLE>

- ---------------

(1) Based on the deemed fair market value of the Company's Common Stock at
fiscal year end, as determined by the Company's Board of Directors less the
exercise price payable for such shares.

EMPLOYEE BENEFIT PLANS

Corporate Plan for Retirement/The Profit Sharing/401(k) Plan

The Company's Corporate Plan for Retirement/The Profit Sharing/401(k) Plan
(the "401(k) Plan") was adopted in 1988, restated in its entirety in July 1994
and amended in June 1996. The 401(k) Plan is designed to enable eligible
employees to save for retirement. All employees who have completed six months of
consecutive service with the Company and have attained the age of 21 are
eligible to participate in the 401(k) Plan. Currently, the Company matches 50%
of an employee's eligible contributions up to a maximum match of 2% of eligible
compensation. The trustee under the 401(k) Plan invests the assets of the 401(k)
Plan in any of several investment options at the direction of each beneficiary.
The 401(k) Plan is intended to qualify under Section 401 of the Internal Revenue
Code of 1986, as amended (the "Code").

Employee Stock Ownership Plan

In 1989, the Company adopted the J.D. Edwards & Company Employee Stock
Ownership Plan (the "ESOP") and restated the ESOP in 1996. The ESOP is a stock
bonus plan designed to invest primarily in the Company's Common Stock for the
benefit of the Company's employees. With certain limitations, employees who work
for the Company within the United States, or in Canada prior to 1995, and
employees who are United States citizens who work outside the United States and
receive United States source pay are eligible to participate in the ESOP at the
first enrollment date after one year of service.

Company contributions to the ESOP, as determined by the Board of Directors,
are discretionary and, if made, may be in the form of cash or Company stock. An
ESOP committee, appointed by the Board of Directors, administers the ESOP and
directs the trustees with respect to ESOP investments. As of April 30, 1997, the
ESOP trustees were Mr. Allen, Mr. Thompson and Greg A. Dixon. The ESOP committee
generally directs the trustees with respect to the voting of Company stock held
by the ESOP, except that each participant has the right to direct the voting of
the stock with respect to the approval or disapproval of a merger or
consolidation, recapitalization, liquidation, dissolution, asset sale or similar
transaction. Once the Company's stock is publicly traded, the right to direct
the vote with respect to shares allocated to participant accounts must be passed
through to participants with respect to all corporate matters. As of April 30,
1997, the ESOP owned 8,706,040 shares of the Company's Common Stock.

53
<PAGE> 57

Company contributions and forfeitures for a plan year are allocated among
the accounts of eligible employees. Allocations are made in the proportion that
each participant's annual base salary (not to exceed $150,000) bears to the
aggregate base salary of all participants. After three years of employment, each
participating employee's interest in the ESOP begins to vest at a rate of 20%
per year of additional employment.

The Company anticipates continuing to make contributions to the ESOP
through the end of fiscal 1997 and that such contributions will be in the form
of the Company's Common Stock. The Company also anticipates merging the ESOP
into the 401(k) Plan during fiscal 1998 and thereafter may continue to make
contributions of Company Common Stock to the 401(k).

1992 Incentive Stock Option Plan

The Company's 1992 Incentive Stock Option Plan (the "1992 ISO Plan")
provides for the granting of incentive stock options to key employees. An
aggregate of 35,000,000 shares of Common Stock has been reserved for issuance
under the 1992 ISO Plan and the 1992 NSO Plan described below. As of April 30,
1997, there were options to purchase 13,267,730 shares of Common Stock
outstanding under the 1992 ISO Plan. The Company does not anticipate granting
additional options under the 1992 ISO Plan after this offering.

1992 Nonqualified Stock Option Plan

The Company's 1992 Nonqualified Stock Option Plan (the "1992 NSO Plan")
provides for the granting of nonqualified stock options to key employees,
consultants and nonemployee directors. An aggregate of 35,000,000 shares of
Common Stock has been reserved for issuance under the 1992 ISO Plan and the 1992
NSO Plan. As of April 30, 1997, there were options to purchase 8,932,700 shares
of Common Stock outstanding under the 1992 NSO Plan. The Company does not
anticipate granting additional options under the 1992 NSO Plan after this
offering.

Restricted Stock Grant Plan

The Company's 1990 Restricted Stock Grant Plan (the "1990 Plan") provides
for the issuance of a maximum of 3,141,110 shares of Common Stock to certain
employees of the Company. As of April 30, 1997, there were 2,135,000 shares of
Common Stock outstanding under the 1990 Plan. The Company has not issued any
shares under this plan since 1992 and does not anticipate issuing additional
shares under this plan.

Stock Plan for Employees

The Company's Stock Plan for Employees (the "Employee Stock Plan") provides
for the issuance of a maximum of 6,997,200 shares of Common Stock to certain
employees of the Company. As of April 30, 1997, there were 1,715,000 shares of
Common Stock outstanding under the Employee Stock Plan. The Company has not
issued any shares under this plan since 1986 and does not anticipate issuing
additional shares under this plan.

Employee Stock Purchase Plan

The Company's 1997 Employee Stock Purchase Plan (the "Purchase Plan") is
expected to be adopted by the Board of Directors and the stockholders in August
1997, to take effect upon the date of the offering. A total of 2,000,000 shares
of Common Stock has been reserved for issuance under the Purchase Plan, less the
number of shares of Common Stock issued under the Company's 1997 Employee Stock
Purchase Plan for Non-U.S. Employees. However, an annual increase will be made
to the Purchase Plan on each anniversary date of the adoption of the Plan, in an
amount equal to the lesser of the number of shares of Common Stock required to
restore the maximum number of shares of Common Stock reserved for issuance to
2,000,000, or a lesser amount determined by the Board. The Purchase Plan, which
is intended to qualify under Section 423 of the Internal Revenue Code, is
implemented by an initial offering period of approximately 15 months, commencing
on the first trading day on or after the effective date of this offering and
ending on the last trading day in the period ending December 31, 1998, and a
second offering period of approximately 12 months,

54
<PAGE> 58

commencing on the first trading day on or after January 1, 1998, and ending on
the last trading day in the period ending December 31, 1998. The first offering
period will contain three purchase periods during which payroll deductions will
be accumulated and shares of Common Stock purchased for participants. The second
offering period will contain two purchase periods. Subsequent offering periods
will last approximately six months and will commence on the first trading day on
or after January 1 and July 1 of each year during which the Purchase Plan is in
effect. The Purchase Plan is administered by the Board of Directors or by a
committee appointed by the Board. Employees are eligible to participate if they
are customarily employed by the Company or any participating subsidiary for at
least 20 hours per week and more than five months in any calendar year. The
Purchase Plan permits eligible employees to purchase Common Stock through
payroll deductions of up to 10% of an employee's compensation (including
commissions, bonuses, overtime and shift premium), except that no participant's
rights to purchase shares of Common Stock may accrue at a rate which exceeds
$25,000 per calendar year. The price of stock purchased under the Purchase Plan
is 85% of the lower of the fair market value of the Common Stock at the
beginning of the offering period or the end of the relevant purchase period or
offering period. Employees may end their participation at any time during an
offering period, and they will be paid their payroll deductions to date.
Participation ends automatically upon termination of employment with the
Company.

Rights granted under the Purchase Plan are not transferable by a
participant other than by will, the laws of descent and distribution, or as
otherwise provided under the Purchase Plan. The Purchase Plan provides that, in
the event of a merger of the Company with or into another corporation or a sale
of all or substantially all of the Company's assets, each participant's right to
purchase Common Stock will be assumed or an equivalent right substituted by the
successor corporation. If the successor corporation refuses to undertake such an
assumption or substitution, the Board of Directors shall shorten the purchase
and offering periods then in progress (so that employees' rights to purchase
stock under the Plan are exercised prior to the merger or sale of assets). The
Purchase Plan will terminate in 2007. The Board of Directors has the authority
to amend or terminate the Purchase Plan, except that no such action may
adversely affect any outstanding rights to purchase stock under the Purchase
Plan.

1997 Employee Stock Purchase Plan for Non-U.S. Employees

The Company's 1997 Employee Stock Purchase Plan for Non-U.S. Employees (the
"Foreign Purchase Plan") is expected to be adopted by the Board of Directors and
the stockholders in August 1997, to take effect upon the date of the offering.
The number of shares reserved for issuance under the Foreign Purchase Plan
equals the number of shares reserved for issuance under the Purchase Plan, but
not yet issued. The terms of the Foreign Purchase Plan are substantially similar
to those of the Purchase Plan, except that employees need not be customarily
employed by the Company or a participating subsidiary for at least 20 hours per
week and more than five months per calendar year to participate. The Foreign
Purchase Plan is not intended to qualify under Section 423 of the Code.

1997 Equity Incentive Plan

The Company's 1997 Equity Incentive Plan (the "1997 Plan") is expected to
be approved by the Board of Directors and by the stockholders in August 1997. A
total of 10,000,000 shares of Common Stock has been reserved for issuance under
the 1997 Plan, which number will be increased on each anniversary date of the
adoption of the 1997 Plan, beginning in 1998, by a number of shares equal to the
lesser of (i) the number of shares needed to restore the maximum aggregate
number of shares reserved for issuance under the 1997 Plan to 10,000,000, or
(ii) a lesser amount determined by the Board of Directors. The purposes of the
1997 Stock Plan are to attract and retain the best available personnel to serve
the Company and to provide additional incentive to the Company's key personnel.

The 1997 Plan provides for the granting of incentive stock options to
employees and the granting of nonstatutory stock options and stock purchase
rights ("SPRs") to employees, directors and consultants. The 1997 Plan also
provides for an automatic grant of an option to purchase 35,000 shares of Common
Stock (the "First Option") to each person who first becomes a non-employee
director following the effective date of the 1997 Plan on the date on which such
person first becomes a non-employee director. After the First Option is

55
<PAGE> 59

granted to the non-employee director, he or she will automatically be granted an
option to purchase 7,000 shares (a "Subsequent Option") on the date of the first
Board of Directors meeting in each subsequent year, provided he or she is then a
non-employee director and, provided further, that on such date he or she has
served on the Board at least six months. Each First Option and each Subsequent
Option will have a term of eight years. Twenty-five percent of the shares
subject to each First Option and each Subsequent Option will vest on the first
anniversary of their date of grant, and 1/48th of the shares subject to each
First Option and each Subsequent Option will vest each month thereafter. The
exercise price of each First Option and each Subsequent Option will be 100% of
the fair market value per share of the Company's Common Stock on the date of the
grant of the option.

The 1997 Plan will be administered by the Board of Directors or a committee
designated by the Board (the "Administrator"). Options and SPRs under the 1997
Plan are not generally transferable by the optionee except by will or by the
laws of descent and distribution, and are exercisable during the lifetime of the
optionee only by such optionee. Options granted to employees and consultants
under the 1997 Plan must generally be exercised within one month of the end of
an optionee's status as an employee or consultant of the Company, or within 12
months after such optionee's termination by death or disability, but in no event
later than the expiration of the option term. Options granted to non-employee
directors under the 1997 Plan may generally be exercised, to the extent vested,
at any time during their eight year term, notwithstanding the director's
cessation of service to the Company. The exercise price of all nonstatutory
stock options granted under the 1997 Plan (except First and Subsequent Options)
will be determined by the Administrator. With respect to any participant who
owns stock possessing more than ten percent (10%) of the voting power of all
classes of the Company's outstanding capital stock (a "10% Stockholder"), the
exercise price of any incentive stock option granted must equal at least 110% of
the fair market value on the grant date. The exercise price of incentive stock
options for all other employees will be no less than 100% of the fair market
value per share on the date of grant.

The maximum term of an incentive stock option granted under the 1997 Plan
may not exceed eight years from the date of grant, or five years from the date
of grant in the case of an incentive stock option granted to a 10% Stockholder.
In the case of SPRs, unless the Administrator determines otherwise, the Company
will have a repurchase option exercisable upon the voluntary or involuntary
termination of the purchaser's employment with the Company for any reason
(including death or disability). Such repurchase option lapses at a rate
determined by the Administrator. The purchase price for shares repurchased by
the Company will be the original price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The repurchase
option will lapse at a rate determined by the Administrator.

CERTAIN TRANSACTIONS

In March 1997, C. Edward McVaney, Chairman, President and Chief Executive
Officer, sold a total of 46,200 shares of Common Stock of the Company from his
personal holdings to an employee of the Company and to Trygve E. Myhren, Harry
T. Lewis, Jr., Michael J. Maples and Gerald Harrison, each a director of the
Company, for an aggregate purchase price of approximately $500,000. Each of the
individuals purchased 9,240 shares. Additionally, in April 1997, Mr. McVaney
sold 9,240 shares to Delwin D. Hock, a director of the Company, for a purchase
price of approximately $100,000.

In January 1996, the Company was notified of a contractual arrangement
whereby two founders, Robert C. Newman and Jack L. Thompson, directors of the
Company, proposed to sell 3,500,000 shares of their Company stock holdings to
certain identified third parties. Under the terms of an Old Shareholder
Agreement, described below, such stock was required to be offered to the Company
at the pending sales price prior to the sale to third parties. The Company
assigned its right to purchase these shares to the ESOP, which purchased the
3,500,000 shares of Common Stock from Messrs. Newman and Thompson for $10.4
million. Mr. Newman sold 875,000 shares, and Mr. Thompson sold 2,625,000 shares.

In December 1995, the Company loaned $120,000 to Jack D. Schneider, an
executive officer of the Company. The loan bore no interest and was paid in full
in June 1996.

56
<PAGE> 60

In May 1995, the Company loaned $150,000 to Mr. McVaney. The loan bore
interest at 2% over the prime lending rate and was collateralized by shares of
the Company's Common Stock owned by Mr. McVaney. The loan plus accrued interest
was paid in full in August 1995.

In November 1994, Mr. Thompson exercised his right under the Old
Shareholder Agreement, described below, to require the Company to purchase
176,260 shares of Common Stock. Such shares were purchased by the ESOP for a
purchase price of $200,000.

In November 1994, Mr. McVaney sold 1,112,020 shares of Common Stock to the
Company for a purchase price of $2,838,828, Mr. Thompson sold 487,760 shares of
Common Stock to the Company for a purchase price of $1,245,181, and Mr. Newman
sold 358,820 shares of Common Stock to the Company for a purchase price of
$916,016.

In July 1994, the Company loaned $195,000 to Mr. Thompson who was also an
executive officer and director of the Company at the time of the loan and
currently a director of the Company. The loan bore interest at a rate of 2% over
the prime lending rate and was collateralized by shares of the Company's Common
Stock owned by Mr. Thompson. The loan plus accrued interest was paid in full in
November 1994.

In November 1993, the Company loaned $350,000 to Mr. McVaney. The loan bore
interest at 2% over the prime lending rate and was collateralized by shares of
the Company's Common Stock owned by Mr. McVaney. The loan plus accrued interest
was paid in full in December 1993.

In February 1993, the Founders (Messrs. McVaney, Thompson and Newman) and
the Company entered into a Shareholder Agreement, which was amended in January
1996 (the "Old Shareholder Agreement"). The Old Shareholder Agreement sets
forth, among other things, certain voting covenants and transfer restrictions on
the shares beneficially owned by the Founders. The Founders and the Company are
expected to amend and restate the Old Shareholder Agreement (the "Amended and
Restated Stockholders Agreement"), which will provide, among other things, that
the Founders must vote their shares in accordance with the provisions of such
agreement.

In the past, the Company has granted options to certain of its executive
officers. The Company intends to continue to grant options to its officers in
the future. See "Management -- Option Grants in Last Fiscal Year" and "Principal
and Selling Stockholders."

The Company believes that each of the transactions involving the Company
described above were on terms no less favorable to the Company than could have
been obtained from unaffiliated third parties. All future transactions between
the Company and any director or executive officer will be subject to approval by
a majority of the disinterested members of the Board.

The Company's Amended and Restated Certificate of Incorporation limits the
liability of its directors for monetary damages arising from a breach of their
fiduciary duty as directors, except to the extent otherwise required by the
General Corporation Law of Delaware. Such limitation of liability does not
affect the availability of equitable remedies such as injunctive relief or
rescission. The Company's Bylaws provide that the Company shall indemnify its
directors and officers to the fullest extent permitted by Delaware law,
including in circumstances in which indemnification is otherwise discretionary
under Delaware law. The Company intends to enter into indemnification agreements
with each of its officers and directors containing provisions that requires the
Company, among other things, to indemnify such officers and directors against
certain liabilities that may arise by reason of their status or service as
directors or officers (other than liabilities arising from willful misconduct of
a culpable nature), to advance their expenses incurred as a result of any
proceeding against them as to which they could be indemnified, and to cover its
directors and officers under any Company liability insurance policies applicable
to its directors and officers.

57
<PAGE> 61

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information concerning the beneficial
ownership of the Company's Common Stock as of April 30, 1997, and as adjusted to
reflect the sale of shares offered by this Prospectus, for the following: (i)
each person or entity who is known by the Company to own beneficially more than
five percent of the outstanding shares of the Company's Common Stock, (ii) each
of the Company's current directors, (iii) each of the Named Officers, (iv) all
directors and executive officers as a group, and (v) each Selling Stockholder.
Unless otherwise indicated, the J.D. Edwards & Company ESOP, officers and
directors can be reached at the principal offices of the Company.

<TABLE>
<CAPTION>
SHARES
SHARES BENEFICIALLY BENEFICIALLY
OWNED PRIOR TO OWNED AFTER
OFFERING(1) SHARES OFFERING(1)
---------------------- BEING -----------------
NAME NUMBER PERCENT OFFERED NUMBER PERCENT
- --------------------------------------------- ----------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
DIRECTORS, NAMED OFFICERS AND 5%
STOCKHOLDERS:
C. Edward McVaney(2)....................... 36,890,840 46.6%
Jack L. Thompson(3)........................ 12,924,520 16.3
Robert C. Newman(4)........................ 10,988,530 13.9
Douglas S. Massingill(5)................... 545,160 *
Richard E. Allen(6)........................ 744,030 *
Paul C. Covelo(7).......................... 625,030 *
David E. Girard(8)......................... 257,600 *
David M. Neal(9)........................... 50,400 *
Pamela L. Saxton(10)....................... 82,600 *
Jack D. Schneider(11)...................... 293,160 *
Richard G. Snow, Jr.(12)................... 54,810 *
Daniel B. Snyder(13)....................... 438,480 *
Gerald Harrison............................ 9,240 *
Delwin D. Hock............................. 9,240 *
Harry T. Lewis, Jr.(14).................... 16,240 *
Michael J. Maples.......................... 9,240 *
Trygve E. Myhren........................... 9,240 *
J.D. Edwards & Company ESOP(15)............ 8,706,040 11.0
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A
GROUP (17 PERSONS)(16)..................... 63,948,360 78.0%
OTHER SELLING STOCKHOLDERS:
James P. Bessey(17)........................ 256,900 *
Edward W.Bettencourt(18)................... 138,880 *
William J. Bovaird III(19)................. 799,330 1.0
Mary E. Collison(20)....................... 838,530 1.1
Treasure Diehl(21)......................... 106,750 *
James L. Foos(22).......................... 436,170 *
Michael C. Heber........................... 105,000 *
Micheal Iiams(23).......................... 609,630 *
Idella Kercher(24)......................... 493,500 *
Leo LaCascia(25)........................... 218,960 *
Rod N. McDonald(26)........................ 933,030 1.2
R. Howard Miller(27)....................... 277,900 *
James L. Parish(28)........................ 86,800 *
Robert W. Siefker(29)...................... 120,400 *
Perry Stensland(30)........................ 183,120 *
Peter F. Sullivan(31)...................... 363,720 *
David L. Swank............................. 77,000 *
Charles H. Williams(32).................... 84,070 *
</TABLE>

- ---------------

58
<PAGE> 62

* Less than 1% of the Company's outstanding Common Stock.

(1) Assumes no exercise of the Underwriters' over-allotment option. The number
and percentage of shares beneficially owned is determined in accordance
with Rule 13d-3 of the Exchange Act, and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under such rule,
beneficial ownership includes any shares as to which the individual or
entity has voting power or investment power and any shares which the
individual has the right to acquire within 60 days of April 30, 1997
through the exercise of any stock option or other right. Unless otherwise
indicated in the footnotes, each person or entity has sole voting and
investment power (or shares such powers with his or her spouse) with
respect to the shares shown as beneficially owned.

(2) Includes 8,118,950 shares held by the C. Edward McVaney Trust, 14,000,000
shares held by the C. Edward McVaney R.A.T., 466,690 shares held of record
by Mr. McVaney's wife, Carole L. McVaney, 14,000,000 held of record by the
Carole L. McVaney, R.A.T. and 305,200 held of record by the McVaney Family
Foundation.

(3) Excludes 8,706,040 shares owned by the ESOP. Mr. Thompson is a co-trustee
of the ESOP, and shares voting and dispositive power of the shares owned by
the ESOP, but has no pecuniary interest therein.

(4) Includes 157,500 shares held of record by the Jennifer A. Newman Trust.

(5) Includes 545,160 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(6) Includes 499,030 shares subject to stock options exercisable within 60 days
of April 30, 1997 and 14,000 shares held of record by Mr. Allen's children.
Excludes 8,706,040 shares owned by the ESOP. Mr. Allen is a co-trustee of
the ESOP, and shares voting and dispositive power of the shares owned by
the ESOP, but has no pecuniary interest therein.

(7) Includes 625,030 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(8) Includes 257,600 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(9) Includes 50,400 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(10) Includes 82,600 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(11) Includes 293,160 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(12) Includes 54,810 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(13) Includes 438,480 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(14) Includes 7,000 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(15) Excludes shares owned by Messrs. Allen, Dixon and Thompson, the trustees of
the ESOP.

(16) Includes 2,853,270 shares subject to stock options exercisable within 60
days of April 30, 1997.

(17) Includes 29,400 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(18) Includes 19,880 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(19) Includes 361,830 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(20) Includes 499,030 shares subject to stock options exercisable within 60 days
of April 30, 1997, 64,750 shares held of record by the Stephanie Ann Moore
Irrevocable Trust and 64,750 shares held of record by the Donavan Vincent
Rossi Irrevocable Trust.

(21) Includes 29,750 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(22) Includes 331,170 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(23) Includes 476,630 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(24) Includes 274,960 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(25) Includes 113,960 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(26) Includes 499,030 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(27) Includes 50,400 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(28) Includes 9,800 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(29) Includes 50,400 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(30) Includes 43,120 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(31) Includes 66,220 shares subject to stock options exercisable within 60 days
of April 30, 1997.

(32) Includes 14,070 shares subject to stock options exercisable within 60 days
of April 30, 1997.

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<PAGE> 63

DESCRIPTION OF CAPITAL STOCK

Upon the closing of this offering, the authorized capital stock of the
Company will consist of 300,000,000 shares of Common Stock, $0.001 par value,
and 5,000,000 shares of Preferred Stock, $0.001 par value.

COMMON STOCK

As of April 30, 1997, there were 79,128,420 shares of Common Stock
outstanding, held of record by 107 stockholders. The holders of Common Stock are
entitled to one vote per share on all matters to be voted upon by the
stockholders. Holders of Common Stock are entitled to receive ratably such
dividends as may be declared by the Board out of funds legally available
therefor, subject to any preferences that may be applicable to any outstanding
Preferred Stock. See "Dividend Policy." In the event of liquidation, dissolution
or winding up of the Company, holders of Common Stock are entitled to share
ratably in all assets remaining after payment of liabilities, subject to any
prior liquidation rights of any outstanding Preferred Stock. The Common Stock
has no preemptive, subscription or conversion rights. There are no redemption or
sinking fund provisions applicable to the Common Stock. All the outstanding
shares of Common Stock are, and the shares of Common Stock offered hereby will
be, when issued, fully paid and nonassessable.

PREFERRED STOCK

Upon the closing of this offering, 5,000,000 shares of Preferred Stock will
be authorized and no shares will be outstanding. The Board has the authority,
without any further vote or action by the stockholders, to issue 5,000,000
shares of Preferred Stock in one or more series and to fix the price, powers,
designations, preferences and relative, participating, optional or other rights
thereof, including dividend rights, conversion rights, voting rights, redemption
terms, liquidation preferences and the number of shares constituting any series
and the designations of such series. The issuance of Preferred Stock in certain
circumstances may have the effect of delaying, deferring or preventing a change
of control of the Company without further action by the stockholders, may
discourage bids for the Company's Common Stock at a premium over the market
price of the Common Stock and may adversely affect the market price of, and the
voting and other rights of, the holders of Common Stock. The Company has no
present plans to issue any shares of Preferred Stock.

ANTITAKEOVER EFFECTS OF DELAWARE LAW AND CERTAIN PROVISIONS OF THE COMPANY'S
CERTIFICATE OF INCORPORATION AND BYLAWS

The Company is subject to Section 203 of the Delaware General Corporation
Law ("Section 203"), which, subject to certain exceptions, prohibits a Delaware
corporation from engaging in any business combination with any interested
stockholder for a period of three years following the date that such stockholder
became an interested stockholder, unless: (i) prior to such date, the board of
directors of the corporation approved either the business combination or the
transaction which resulted in the stockholder becoming an interested
stockholder; (ii) upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the interested stockholder owned
at least 85% of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding for purposes of determining the number of
shares outstanding those shares owned (x) by persons who are directors and also
officers and (y) by employee stock plans in which employee participants do not
have the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer; or (iii) on or subsequent
to such date, the business combination is approved by the board of directors and
authorized at an annual or special meeting of stockholders, and not by written
consent, by the affirmative vote of at least 66 2/3% of the outstanding voting
stock which is not owned by the interested stockholder.

Section 203 defines business combination to include: (i) any merger or
consolidation involving the corporation and the interested stockholder; (ii) any
sale, transfer, pledge or other disposition involving the interested stockholder
of 10% or more of the assets of the corporation; (iii) subject to certain
exceptions, any transaction that results in the issuance or transfer by the
corporation of any stock of the corporation to the interested stockholder; (iv)
any transaction involving the corporation that has the effect of increasing the
proportionate share of the stock of any class or series of the corporation
beneficially owned by the interested

60
<PAGE> 64

stockholder; or (v) the receipt by the interested stockholder of the benefit of
any loans, advances, guarantees, pledges or other financial benefits provided by
or through the corporation. In general, Section 203 defines an interested
stockholder as any entity or person beneficially owning 15% or more of the
outstanding voting stock of the corporation and any entity or person affiliated
with or controlling or controlled by such entity or person.

The Company's Amended and Restated Certificate of Incorporation provides
that, upon the effective date of this offering, the Company's Board of Directors
will be classified into three classes of directors. See "Management -- Board of
Directors." In addition, the Company's Bylaws will not permit stockholders of
the Company to call a special meeting of stockholders. Only the Company's Board
of Directors, Chairman of the Board or President may call a special meeting of
stockholders.

These and other provisions could have the effect of making it more
difficult to acquire the Company by means of a tender offer, proxy contest or
otherwise or to remove the incumbent officers and directors of the Company.
These provisions may discourage certain types of coercive takeover practices and
encourage persons seeking to acquire control of the Company to first negotiate
with the Company.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Company's Common Stock is Harris
Trust Company of California.

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<PAGE> 65

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no market for the Common Stock of
the Company. Future sales of substantial amounts of Common Stock in the public
market could adversely affect prevailing market prices from time to time.
Furthermore, since only a limited number of shares will be available for sale
shortly after this offering because of certain contractual and legal
restrictions on resale (as described below), sales of substantial amounts of
Common Stock of the Company in the public market after the restrictions lapse
could adversely affect the prevailing market price and the ability of the
Company to raise equity capital in the future.

Upon completion of this offering, the Company will have outstanding an
aggregate of shares of Common Stock, assuming no exercise of the
Underwriters' over-allotment option and no exercise of outstanding options. Of
these shares, the shares sold in this offering will be freely
tradeable without restriction or further registration under the Securities Act,
unless such shares are purchased by an existing "affiliate" of the Company as
that term is defined in Rule 144 under the Securities Act (an "Affiliate"). The
remaining shares of Common Stock held by existing stockholders are
"restricted securities" as that term is defined in Rule 144 under the Securities
Act ("Restricted Shares"). Restricted Shares may be sold in the public market
only if registered or if they qualify for an exemption from registration under
Rules 144, 144(k) or 701 promulgated under the Securities Act, which rules are
summarized below. As a result of the contractual restrictions described below
and the provisions of Rules 144, 144(k) and 701, additional shares will be
available for sale in the public market as follows: (i) shares will be
eligible for immediate sale on the date of this Prospectus, (ii)
shares will be eligible for sale 90 days after the date of this Prospectus,
(iii) shares will be eligible for sale upon expiration of the lock-up
agreements 180 days after the date of this Prospectus and (iv) shares
will be eligible for sale upon expiration of their respective one-year holding
periods.

All officers and directors and certain stockholders and option holders of
the Company have agreed not to offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, or otherwise transfer, lend or dispose
of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or enter into
any swap or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the Common Stock for a period
of 180 days after the date of this Prospectus, without the prior written consent
of Morgan Stanley & Co. Incorporated, subject to certain limited exceptions.
Morgan Stanley & Co. Incorporated currently has no plans to release any portion
of the securities subject to lock-up agreements. When determining whether or not
to release shares from the lock-up agreements, Morgan Stanley & Co. Incorporated
will consider, among other factors, the stockholder's reasons for requesting the
release, the number of shares for which the release is being requested and
market conditions at the time.

In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this Prospectus, a person (or persons whose shares are aggregated)
who has beneficially owned Restricted Shares for at least one year (including
the holding period of any prior owner except an Affiliate) would be entitled to
sell within any three-month period a number of shares that does not exceed the
greater of (i) one percent of the number of shares of Common Stock then
outstanding (which will equal approximately shares immediately after this
offering); or (ii) the average weekly trading volume of the Common Stock on the
Nasdaq National Market during the four calendar weeks preceding the filing of a
notice on Form 144 with respect to such sale. Sales under Rule 144 are also
subject to certain manner of sale provisions, notice requirements and the
availability of current public information about the Company. Under Rule 144(k),
a person who is not deemed to have been an Affiliate of the Company at any time
during the 90 days preceding a sale, and who has beneficially owned the shares
proposed to be sold for at least two years (including the holding period of any
prior owner except an Affiliate), is entitled to sell such shares without
complying with the manner of sale, public information, volume limitation or
notice provisions of Rule 144. Accordingly, unless otherwise restricted, "144(k)
shares" may therefore be sold immediately upon the completion of this offering.

Subject to certain limitations on the aggregate offering price of a
transaction and other conditions, Rule 701 may be relied upon with respect to
the resale of securities originally purchased from the Company by its employees,
directors, officers, consultants or advisors prior to the date the issuer
becomes subject to the

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<PAGE> 66

reporting requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), pursuant to written compensatory benefit plans or written
contracts relating to the compensation of such persons. In addition, the SEC has
indicated that Rule 701 will apply to typical stock options granted by an issuer
before it becomes subject to the reporting requirements of the Exchange Act,
along with the shares acquired upon exercise of such options (including
exercises after the date of this offering). Securities issued in reliance on
Rule 701 are restricted securities and, subject to the contractual restrictions
described above, beginning 90 days after the date of this Prospectus, may be
sold (i) by persons other than Affiliates, subject only to the manner of sale
provisions of Rule 144 and (ii) by Affiliates, under Rule 144 without compliance
with its one-year minimum holding period requirements.

The Company has agreed not to offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, or otherwise transfer, lend or
dispose of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or enter into
any swap or similar agreement that transfers, in whole or in part, the economic
risk of ownership of the Common Stock, for a period of 180 days after the date
of this Prospectus, without the prior written consent of Morgan Stanley & Co.
Incorporated, subject to certain limited exceptions.

Following the offering, the Company intends to file registration statements
under the Securities Act covering approximately shares of Common Stock
issued and outstanding, subject to outstanding options or reserved for issuance
under the Company's stock plans. See "Management -- Employee Benefit Plans."
Accordingly, shares registered under such registration statement will, subject
to Rule 144 volume limitations applicable to Affiliates, be available for sale
in the open market, except to the extent that such shares are subject to vesting
restrictions with the Company or the contractual restrictions described above.

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<PAGE> 67

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
FOR NON-U.S. HOLDERS OF COMMON STOCK

The following discussion concerns the material United States federal income
tax consequences of the ownership and disposition of shares of Common Stock
applicable to Non-U.S. Holders of such shares of Common Stock. In general, a
"Non-U.S. Holder" is any holder other than (i) a citizen or an individual
considered under the United States tax laws to be a resident of the United
States, (ii) a corporation or partnership created or organized in the United
States or under the laws of the United States or any State, (iii) an estate
whose income is includible in gross income for United States federal income tax
purposes regardless of its source or (iv) a trust for which a court within the
United States is able to exercise primary supervision over the administration of
the trust, and for which one or more United States fiduciaries has the authority
to control all substantial decisions of the trust. The discussion is based on
current law, which is subject to change retroactively or prospectively, and is
for general information only. The discussion does not address all aspects of
federal income taxation and does not address any aspects of federal estate
taxation or of state, local or foreign tax laws. The discussion does not
consider any specific facts or circumstances that may apply to a particular
Non-U.S. Holder (including the fact that in the case of a Non-U.S. Holder that
is a partnership, the United States tax consequences of holding and disposing of
shares of Common Stock may be affected by certain determinations made at the
partner level). Accordingly, prospective investors are urged to consult their
tax advisors regarding the United States federal, state, local and non-U.S.
income, estate and other tax consequences of holding and disposing of shares of
Common Stock.

Dividends. Dividends, if any (see "Dividend Policy"), paid to a Non-U.S.
Holder generally will be subject to United States withholding tax at a 30% rate
(or a lower rate as may be prescribed by an applicable tax treaty) unless the
dividends are effectively connected with a trade or business of the Non-U.S.
Holder within the United States. Dividends effectively connected with a trade or
business will generally not be subject to withholding (if the Non-U.S. Holder
complies with applicable United States Internal Revenue Service ("IRS")
reporting requirements) and generally will be subject to United States federal
income tax on a net income basis at regular graduated rates. In the case of a
Non-U.S. Holder which is a corporation, such effectively connected income also
may be subject to the branch profits tax (which is generally imposed on a
foreign corporation on the repatriation from the United States of effectively
connected earnings and profits) at a 30% rate or, if available, a lower treaty
rate. Under current U.S. Treasury regulations, dividends paid to an address
outside the United States in a foreign country are presumed to be paid to a
resident of such country for purposes of the withholding tax. Under current
interpretations of U.S. Treasury regulations, the same presumption applies to
determine the applicability of a reduced rate of withholding under a tax treaty.
Thus, non-U.S. holders receiving dividends at addresses outside the United
States are not currently required to file tax forms to obtain the benefit of an
applicable treaty rate. Under U.S. Treasury regulations that are proposed to be
effective for distributions after 1997 (the "Proposed Regulations"), to claim
the benefits of a tax treaty a non-U.S. holder of Common Stock would be required
to satisfy applicable certification requirements. In addition, under the
Proposed Regulations, in the case of Common Stock held by a foreign partnership,
(x) the certification requirement would generally be applied to the partners of
the partnership and (y) the partnership would be required to provide certain
information. The Proposed Regulations also provide look-through rules for tiered
partnerships as well as rules for payments to so-called "hybrid entities." It is
not certain whether, or in what form, the Proposed Regulations will be adopted
as final regulations.

Sale of Common Stock. Generally, a Non-U.S. Holder will not be subject to
United States federal income tax on any gain realized upon the disposition of
such holder's shares of Common Stock unless (i) the gain is effectively
connected with a trade or business carried on by the Non-U.S. Holder with the
United States (in which case the branch profits tax may also apply); (ii) the
Non-U.S. Holder is an individual who holds the shares of Common Stock as a
capital asset and is present in the United States for 183 days or more in the
taxable year of the disposition and to whom such gain is United States source;
(iii) the Non-U.S. Holder is subject to tax pursuant to the provisions of U.S.
tax law applicable to certain former United States citizens or residents; or
(iv) the Company is or has been a "U.S. real property holding corporation" for
federal income tax purposes (which the Company does not believe that it is or is
likely to become) at any time during the five year period ending on the date of
disposition (or such shorter period that such shares were held).

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<PAGE> 68

BACKUP WITHHOLDING AND INFORMATION REPORTING

Dividends. The Company must report annually to the IRS and to each Non-U.S.
Holder the amount of dividends paid to and the tax withheld, if any, with
respect to such holder. These information reporting requirements apply
regardless of whether withholding was reduced by an applicable tax treaty.
Copies of these information returns may also be available under the provisions
of a specific treaty or agreement with the tax authorities in the country in
which the Non-U.S. Holder resides. Dividends that are subject to United States
withholding tax at the 30% statutory rate or at a reduced tax treaty rate and
dividends that are effectively connected with the conduct of a trade or business
in the United States (if certain certification and disclosure requirements are
met) are exempt from backup withholding of U.S. federal income tax. In general,
backup withholding at a rate of 31% and information reporting will apply to
other dividends paid on shares of Common Stock to holders that are not "exempt
recipients" and fail to provide in the manner required certain identifying
information (such as the holder's name, address and taxpayer identification
number). Generally, individuals are not exempt recipients, whereas corporations
and certain other entities generally are exempt recipients.

Disposition of Common Stock. The payment of the proceeds from the
disposition of shares of Common Stock through the United States office of a
broker will be subject to information reporting and backup withholding unless
the holder, under penalties of perjury, certifies, among other things, its
status as a Non-U.S. Holder, or otherwise establishes an exemption. Generally,
the payment of the proceeds from the disposition of shares of Common Stock to or
through a non-U.S. office of a broker will not be subject to backup withholding
and will not be subject to information reporting. In the case of the payment of
proceeds from the disposition of shares of Common Stock through a non-U.S.
office of a broker that is a U.S. person or a "U.S.-related person," existing
regulations require information reporting (but not backup withholding) on the
payment unless the broker receives a statement from the owner, signed under
penalties of perjury, certifying, among other things, its status as a Non-U.S.
Holder, or the broker has documentary evidence in its files that the owner is a
Non-U.S. Holder, the broker has no actual knowledge to the contrary and certain
other requirements are satisfied. For tax purpose, a "U.S.-related person" is
(i) a "controlled foreign corporation" for United States federal income tax
purposes or (ii) a foreign person 50% or more of whose gross income from all
sources for the three year period ending with the close of its taxable year
preceding the payment (or for such part of the period that the broker has been
in existence) is derived form activities that are effectively connected with the
conduct of a United States trade or business.

Any amounts withheld from a payment to a Non-U.S. Holder under the backup
withholding rules will be allowed as a credit against such holder's United
States federal income tax liability and may entitle such holder to a refund,
provided that the required information is furnished to the IRS. Non-U.S. Holders
should consult their tax advisors regarding the application of these rules to
their particular situations, the availability of an exemption therefrom and the
procedures for obtaining such an exemption, if available.

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<PAGE> 69

UNDERWRITERS

Under the terms and subject to the conditions in an Underwriting Agreement
dated the date hereof (the "Underwriting Agreement"), the U.S. Underwriters
named below for whom Morgan Stanley & Co. Incorporated, Deutsche Morgan Grenfell
Inc. and Robertson, Stephens & Company LLC are acting as U.S. Representatives,
and the International Underwriters named below for whom Morgan Stanley & Co.
International Limited, Morgan Grenfell & Co. Limited and Robertson, Stephens &
Company LLC are acting as International Representatives, have severally agreed
to purchase, and the Company has agreed to sell to them, severally, the
respective number of shares of Common Stock set forth opposite the names of such
Underwriters below:

<TABLE>
<CAPTION>
NUMBER
NAME OF SHARES
---------------------------------------------------------------- ----------
<S> <C>
U.S. Underwriters:
Morgan Stanley & Co. Incorporated.............................
Deutsche Morgan Grenfell Inc..................................
Robertson, Stephens & Company LLC.............................

----------
Subtotal...................................................
----------
International Underwriters:
Morgan Stanley & Co. International Limited....................
Morgan Grenfell & Co. Limited.................................
Robertson, Stephens & Company LLC.............................

----------
Subtotal...................................................
----------
Total.................................................
========
</TABLE>

The U.S. Underwriters and the International Underwriters, and the U.S.
Representatives and the International Representatives, are collectively referred
to as the "Underwriters" and the "Representatives," respectively. The
Underwriting Agreement provides that the obligations of the several Underwriters
to pay for and accept delivery of the shares of Common Stock offered hereby are
subject to the approval of certain legal matters by their counsel and to certain
other conditions. The Underwriters are obligated to take and pay for all of the
shares of Common Stock offered hereby (other than those covered by the U.S.
Underwriters' over-allotment option described below) if any such shares are
taken.

Pursuant to the Agreement between U.S. and International Underwriters, each
U.S. Underwriter has represented and agreed that, with certain exceptions: (i)
it is not purchasing any Shares (as defined herein) for the account of anyone
other than a United States or Canadian Person (as defined herein) and (ii) it
has not offered or sold, and will not offer or sell, directly or indirectly, any
Shares or distribute any prospectus relating to the Shares outside the United
States or Canada or to anyone other than a United States or Canadian Person.
Pursuant to the Agreement between U.S. and International Underwriters, each
International Underwriter has represented and agreed that, with certain
exceptions: (i) it is not purchasing any Shares for the account of any United
States or Canadian Person and (ii) it has not offered or sold, and will not
offer or sell, directly or indirectly, any Shares or distribute any prospectus
relating to the Shares in the United States or Canada or to any United States or
Canadian Person. With respect to any Underwriter that is a U.S. Underwriter and
an International Underwriter, the foregoing representations and agreements (i)
made by it in its capacity as a U.S. Underwriter apply only to it in its
capacity as a U.S. Underwriter and (ii) made by it in its capacity as an
International Underwriter apply only to it in its capacity as an International
Underwriter.

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<PAGE> 70

The foregoing limitations do not apply to stabilization transactions or to
certain other transactions specified in the Agreement between U.S. and
International Underwriters. As used herein, "United States or Canadian Person"
means any national or resident of the United States or Canada, or any
corporation, pension, profit-sharing or other trust or other entity organized
under the laws of the United States or Canada or of any political subdivision
thereof (other than a branch located outside the United States and Canada of any
United States or Canadian Person), and includes any United States or Canadian
branch of a person who is otherwise not a United States or Canadian Person. All
shares of Common Stock to be purchased by the Underwriters under the
Underwriting Agreement are referred to herein as the "Shares."

Pursuant to the Agreement between U.S. and International Underwriters,
sales may be made between the U.S. Underwriters and International Underwriters
of any number of Shares as may be mutually agreed. The per share price of any
Shares sold shall be the public offering price set forth on the cover page
hereof, in United States dollars, less an amount not greater than the per share
amount of the concession to dealers set forth below.

Pursuant to the Agreement between U.S. and International Underwriters, each
U.S. Underwriter has represented that it has not offered or sold, and has agreed
not to offer or sell, any Shares, directly or indirectly, in any province or
territory of Canada or to, or for the benefit of, any resident of any province
or territory of Canada in contravention of the securities laws thereof and has
represented that any offer or sale of Shares in Canada will be made only
pursuant to an exemption from the requirement to file a prospectus in the
province or territory of Canada in which such offer or sale is made. Each U.S.
Underwriter has further agreed to send to any dealer who purchases from it any
of the Shares a notice stating in substance that, by purchasing such Shares,
such dealer represents and agrees that it has not offered or sold, and will not
offer or sell, directly or indirectly, any of such Shares in any province or
territory of Canada or to, or for the benefit of, any resident of any province
or territory of Canada in contravention of the securities laws thereof and that
any offer or sale of Shares in Canada will be made only pursuant to an exemption
from the requirement to file a prospectus in the province or territory of Canada
in which such offer or sale is made, and that such dealer will deliver to any
other dealer to whom it sells any of such Shares a notice containing
substantially the same statement as is contained in this sentence.

Pursuant to the Agreement between U.S. and International Underwriters, each
International Underwriter has represented and agreed that (i) it has not offered
or sold and, prior to the date six months after the closing date for the sale of
the Shares to the International Underwriters, will not offer or sell, any Shares
to persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the Shares in, from or otherwise involving
the United Kingdom; and (iii) it has only issued or passed on and will only
issue or pass on in the United Kingdom any document received by it in connection
with the offering of the Shares to a person who is of a kind described in
Article 11(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1996 or is a person to whom such document may otherwise
lawfully be issued or passed on.

Pursuant to the Agreement between U.S. and International Underwriters, each
International Underwriter has further represented that it has not offered or
sold, and has agreed not to offer or sell, directly or indirectly, in Japan or
to or for the account of any resident thereof, any of the Shares acquired in
connection with the distribution contemplated hereby, except for offers or sales
to Japanese International Underwriters or dealers and except pursuant to any
exemption from the registration requirements of the Securities and Exchange Law
and otherwise in compliance with applicable provisions of Japanese law. Each
International Underwriter has further agreed to send to any dealer who purchases
from it any of the Shares a notice stating in substance that, by purchasing such
Shares, such dealer represents and agrees that it has not offered or sold, and
will not offer or sell, any of such Shares, directly or indirectly, in Japan or
to or for the account of any resident thereof except for offers or sales to
Japanese International Underwriters or dealers and except pursuant to any
exemption from the registration requirements of the Securities and Exchange Law
and otherwise in compliance with applicable provisions of Japanese law, and that
such dealer will send to any other dealer to

67
<PAGE> 71

whom it sells any of such Shares a notice containing substantially the same
statement as is contained in this sentence.

The Underwriters initially propose to offer part of the shares of Common
Stock directly to the public at the public offering price set forth on the cover
page hereof and part to certain dealers at a price that represents a concession
not in excess of $ a share under the public offering price. Any
Underwriter may allow, and such dealers may reallow, a concession not in excess
of $ a share to other Underwriters or to certain dealers. After the
initial offering of the shares of Common Stock, the offering price and other
selling terms may from time to time be varied by the Representatives.

The Company and certain Selling Shareholders have granted to the U.S.
Underwriters an option, exercisable for 30 days from the date of this
Prospectus, to purchase up to an aggregate of additional shares
of Common Stock at the public offering price set forth on the cover page hereof,
less underwriting discounts and commissions. The U.S. Underwriters may exercise
such option to purchase solely for the purpose of covering over-allotments, if
any, made in connection with the offering of the shares of Common Stock offered
hereby. To the extent such option is exercised, each U.S. Underwriter will
become obligated, subject to certain conditions, to purchase approximately the
same percentage of such additional shares of Common Stock as the number set
forth next to such U.S. Underwriter's name in the preceding table bears to the
total number of shares of Common Stock set forth next to the names of all U.S.
Underwriters in the preceding table.

The Underwriters have informed the Company that they do not intend sales to
discretionary accounts to exceed five percent of the total number of shares of
Common Stock offered by them.

The Common Stock has been approved for quotation, subject to official
notice of issuance, on the Nasdaq National Market under the symbol "JDEC."

Each of the Company and the directors, executive officers and certain other
stockholders of the Company has agreed that, without the prior written consent
of Morgan Stanley & Co. Incorporated on behalf of the Underwriters, it will not
during the period ending 180 days after the date of this Prospectus (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer, lend or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise, except under certain limited
circumstances.

In order to facilitate the offering of the Common Stock, the Underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the Common Stock. Specifically, the Underwriters may over-allot in
connection with the offering, creating a short position in the Common Stock for
their own account. In addition, to cover over-allotments or to stabilize the
price of the Common Stock, the Underwriters may bid for, and purchase, shares of
Common Stock in the open market. Finally, the underwriting syndicate may reclaim
selling concessions allowed to an Underwriter or a dealer for distributing the
Common Stock in the offering, if the syndicate repurchases previously
distributed Common Stock in transactions to cover syndicate short positions, in
stabilization transactions or otherwise. Any of these activities may stabilize
or maintain the market price of the Common Stock above independent market
levels. The Underwriters are not required to engage in these activities, and may
end any of these activities at any time. The Underwriters and dealers may engage
in passive market making transactions in the Common Stock in accordance with
Rule 103 of Regulation M promulgated by the SEC. In general, a passive market
maker may not bid for, or purchase, the Common Stock at a price that exceeds the
highest independent bid. In addition, the net daily purchases made by any
passive market maker generally may not exceed 30% of its average daily trading
volume in the Common Stock during a specified two month prior period, or 200
shares, whichever is greater. A passive market maker must identify passive
market making bids as such on the Nasdaq electronic inter-dealer reporting
system. Passive market making may stabilize or maintain the market price of the
Common Stock above independent market levels. Underwriters and dealers are not
required to engage in passive market making and may end passive market making
activities at any time.

68
<PAGE> 72

The Company and the Underwriters have agreed to indemnify each other
against certain liabilities, including liabilities under the Securities Act.

PRICING OF THE OFFERING

Prior to this offering, there has been no public market for the Common
Stock. The initial public offering price will be determined by negotiations
between the Company and the U.S. Representatives. Among the factors to be
considered in determining the initial public offering price will be the future
prospects of the Company and its industry in general, sales, earnings and
certain other financial operating information of the Company in recent periods,
and the price-earnings ratios, price-sales ratios, market prices of securities
and certain financial and operating information of companies engaged in
activities similar to those of the Company. The estimated initial public
offering price range set forth on the cover page of this Preliminary Prospectus
is subject to change as a result of market conditions and other factors.

LEGAL MATTERS

The validity of the issuance of the shares of Common Stock offered hereby
will be passed upon for the Company by Wilson Sonsini Goodrich & Rosati,
Professional Corporation, Palo Alto, California. Certain matters will be passed
upon for the Underwriters by Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP, Menlo Park, California.

EXPERTS

The consolidated financial statements and financial statement schedule of
J.D. Edwards & Company as of October 31, 1995 and 1996 and for the years ended
October 31, 1994, 1995 and 1996, included in this Prospectus have been so
included in reliance on the report of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as experts in accounting and
auditing.

CHANGE IN ACCOUNTANTS

Effective May 1995, Price Waterhouse LLP was engaged as the Company's
independent accountants and replaced Arthur Andersen LLP who were dismissed as
the Company's independent accountants. The decision to change independent
accountants was approved by the Company's Board of Directors. In the period from
November 1, 1991 to May 1995, Arthur Andersen LLP issued no audit report which
was qualified or modified as to uncertainty, audit scope or accounting
principles, no adverse opinions or disclaimers of opinion on any of the
Company's financial statements, and there were no disagreements with Arthur
Andersen LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedures. Arthur Andersen LLP has
not audited or reported on any of the financial statements or information
included in this Prospectus. Prior to May 1995, the Company had not consulted
with Price Waterhouse LLP on items which involved the Company's accounting
principles or the form of audit opinion to be issued on the Company's financial
statements.

69
<PAGE> 73

ADDITIONAL INFORMATION

The Company has filed with the SEC a Registration Statement (of which this
Prospectus is a part and which term shall encompass any amendments thereto) on
Form S-1 pursuant to the Securities Act with respect to the Common Stock offered
hereby. This Prospectus does not contain all the information set forth in the
Registration Statement and the exhibits and schedules thereto, certain portions
of which are omitted as permitted by the rules and regulations of the SEC.
Statements made in this Prospectus as to the contents of any contract, agreement
or other document referred to are not necessarily complete. With respect to any
such contract, agreement or other document filed as an exhibit to the
Registration Statement, reference is made to the exhibit for a more complete
description of the matters involved, and each such statement shall be deemed
qualified in its entirety by such reference.

Upon completion of this offering, the Company will be subject to the
information requirements of the Exchange Act, and, in accordance therewith, will
file reports and other information with the SEC. The Registration Statement, the
exhibits and schedules forming a part thereof and the report and other
information filed by the Company with the SEC in accordance with the Exchange
Act may be inspected and copied at the public reference facilities maintained by
the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549; 7 World Trade Center, 13th Floor, New York, New York 10048; and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material can also be obtained at prescribed
rates from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such material may also be accessed electronically by
means of the SEC's home page on the Internet at http://www.sec.gov.

The Company intends to furnish its stockholders with annual reports
containing audited financial statements and to make available quarterly reports
containing unaudited summary financial information for the first three fiscal
quarters of each fiscal year.

70
<PAGE> 74

J.D. EDWARDS & COMPANY

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants..................................................... F-2
Consolidated Balance Sheets........................................................... F-3
Consolidated Statements of Income..................................................... F-4
Consolidated Statements of Changes in Stockholders' Equity (Deficit).................. F-5
Consolidated Statements of Cash Flows................................................. F-6
Notes to Consolidated Financial Statements............................................ F-7
</TABLE>

F-1
<PAGE> 75

REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders and Board of Directors of
J. D. Edwards & Company

The stock split and reincorporation described in Note 1 to the consolidated
financial statements has not been consummated at August 8, 1997. When they have
been consummated, we will be in a position to furnish the following report:

"In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of income, of changes in stockholders'
equity (deficit) and of cash flows present fairly, in all material
respects, the financial position of J.D. Edwards & Company at October 31,
1995 and 1996, and the results of their operations and their cash flows for
each of the three years in the period ended October 31, 1996, in conformity
with generally accepted accounting principles. These financial statements
are the responsibility of the Company's management; our responsibility is
to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally
accepted auditing standards which require that we plan and perform the
audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above."

PRICE WATERHOUSE LLP

Boulder, Colorado
November 22, 1996

F-2
<PAGE> 76

J.D. EDWARDS & COMPANY

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
PRO FORMA
OCTOBER 31, STOCKHOLDERS'
------------------- APRIL 30, EQUITY
1995 1996 1997 APRIL 30,
-------- -------- ----------- 1997
(UNAUDITED) --------------
(NOTE 1)
(UNAUDITED)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents....................... $ 34,897 $ 25,554 $ 29,907
Accounts receivable, net of allowance for
doubtful accounts of $5,700, $5,600 and
$6,700 at October 31, 1995 and 1996 and April
30, 1997 (unaudited), respectively........... 85,136 120,736 157,669
Prepaid and other current assets................ 4,192 13,172 5,302
Current portion of deferred income taxes........ 7,729 7,122 7,061
-------- -------- -----------
Total current assets.................... 131,954 166,584 199,939
Property and equipment, net....................... 28,507 51,355 50,635
Software development costs, net................... 10,905 15,657 15,439
Non-current portion of deferred income taxes...... 1,819 4,282 4,911
Deposits and other assets......................... 2,006 5,908 5,497
-------- -------- -----------
$175,191 $243,786 $ 276,421
======== ======== =========

LIABILITIES, MANDATORILY REDEEMABLE SHARES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable................................ $ 20,386 $ 32,321 $ 27,852
Unearned revenue and customer deposits.......... 35,206 44,327 75,040
Accrued liabilities............................. 54,629 69,367 68,300
-------- -------- -----------
Total current liabilities............... 110,221 146,015 171,192
Unearned revenue, net of current portion, and
other noncurrent liabilities.................... 22,025 27,845 28,683
-------- -------- -----------
Total liabilities....................... 132,246 173,860 199,875
-------- -------- -----------
Commitments and contingencies (Notes 5 and 8)..... -- -- --
Mandatorily redeemable shares, at redemption
value........................................... 19,973 47,024 99,076 $ 5,500
-------- -------- ----------- --------------
Stockholders' equity (deficit):
Preferred stock, $.001 par value; 5,000,000
shares authorized; none outstanding.......... -- -- -- --
Common stock, $.001 par value; 300,000,000
shares authorized and 88,581,500 shares
issued; 79,038,820 and 79,093,070 outstanding
as of October 31, 1995 and 1996,
respectively, and 79,128,420 (unaudited)
outstanding as of April 30, 1997 and pro
forma........................................ 89 89 89 89
Additional paid-in capital...................... 10,100 10,273 11,175 23,591
Retained earnings............................... 39,302 65,628 72,806 72,806
Treasury stock, at cost; 9,542,680, and
9,488,430, at October 31, 1995 and 1996,
respectively, and 9,453,080 (unaudited) at
April 30, 1997 and pro forma................. (6,517) (6,614) (6,590) (6,590)
Cumulative translation adjustments and other,
net.......................................... (29) 550 (934) (934)
Adjustment for mandatorily redeemable shares.... (19,973) (47,024) (99,076) (5,500)
-------- -------- ----------- --------------
Total stockholders' equity (deficit).... 22,972 22,902 (22,530) $ 83,462
-------- -------- ----------- --------------
$175,191 $243,786 $ 276,421
======== ======== =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-3
<PAGE> 77

J.D. EDWARDS & COMPANY

CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

The accompanying notes are an integral part of these consolidated financial
statements.

F-4
<PAGE> 78

J.D. EDWARDS & COMPANY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
COMMON STOCK
(INCLUDING ADJUSTMENT
MANDATORILY FOR
REDEEMABLE SHARES) ADDITIONAL TREASURY STOCK MANDATORILY
------------------- PAID-IN RETAINED ------------------- REDEEMABLE
SHARES AMOUNT CAPITAL EARNINGS SHARES AMOUNT OTHER SHARES
---------- ------ ---------- -------- --------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, October 31, 1993.......... 88,581,500 $ 89 $ 6,713 $ 9,030 7,528,360 $ (276) $(1,301) $ (12,441)
Purchase of common stock........... -- -- -- 568,610 (255) -- --
Shares issued to ESOP.............. -- 1,600 -- (608,230) 40 -- (1,640)
Increase in share redemption value
of mandatorily redeemable ESOP
shares........................... -- -- -- -- -- -- -- (209)
Net income......................... -- -- -- 12,063 -- -- -- --
Change in cumulative translation
adjustment and other, net........ -- -- -- -- -- -- 199 --
---------- ------ ---------- -------- --------- ------- ------- -----------
Balance, October 31, 1994.......... 88,581,500 89 8,313 21,093 7,488,740 (491) (1,102) (14,290)
Purchase of common stock........... -- -- -- -- 2,706,690 (6,453) -- --
Shares issued to ESOP.............. -- -- 1,777 -- (647,570) 424 -- (2,201)
Increase in share redemption value
of mandatorily redeemable ESOP
shares........................... -- -- -- -- -- -- -- (3,682)
Purchase of founders' stock by
ESOP............................. -- -- -- -- -- -- -- 200
Net income......................... -- -- -- 18,209 -- -- -- --
Change in cumulative translation
adjustment and other, net........ -- -- 10 -- (5,180) 3 1,073 --
---------- ------ ---------- -------- --------- ------- ------- -----------
Balance, October 31, 1995.......... 88,581,500 89 10,100 39,302 9,542,680 (6,517) (29) (19,973)
Purchase of common stock........... -- -- -- -- 25,200 (152) -- 152
Increase in share redemption value
of mandatorily redeemable ESOP
shares........................... -- -- -- -- -- -- -- (23,903)
Increase in founders' stock
purchase obligation.............. -- -- -- -- -- -- -- (3,300)
Stock option exercises............. -- -- 173 -- (79,450) 55 -- --
Net income......................... -- -- -- 26,326 -- -- -- --
Change in cumulative translation
adjustment and other, net........ -- -- -- -- -- -- 579 --
---------- ------ ---------- -------- --------- ------- ------- -----------
Balance, October 31, 1996.......... 88,581,500 89 10,273 65,628 9,488,430 (6,614) 550 (47,024)
Increase in share redemption value
of mandatorily redeemable ESOP
shares (unaudited)............... -- -- -- -- -- -- -- (52,052)
Stock option exercises
(unaudited)...................... -- -- 97 -- (35,350) 24 -- --
Net income (unaudited)............. -- -- -- 7,178 -- -- -- --
Change in cumulative translation
adjustment and other, net
(unaudited)...................... -- -- 805 -- -- -- (1,484) --
---------- ------ ---------- -------- --------- ------- ------- -----------
Balance, April 30, 1997
(unaudited)...................... 88,581,500 $ 89 $ 11,175 $72,806 9,453,080 $(6,590) $ (934) $ (99,076)
========== ======= ========= ======== ========= ======== ======== ============
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-5
<PAGE> 79

J.D. EDWARDS & COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED OCTOBER 31, APRIL 30,
------------------------------ -------------------
1994 1995 1996 1996 1997
-------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income.................................. $ 12,063 $ 18,209 $ 26,326 $ 5,941 $ 7,178
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation.............................. 6,143 7,978 13,166 6,355 7,378
Amortization of software development
costs.................................. 2,139 2,193 2,568 1,266 2,617
Provision for deferred income taxes....... (4,840) (3,588) (1,854) 888 568
Other..................................... 38 1,195 2,216 673 (37)
Changes in operating assets and liabilities:
Accounts receivable, net.................. (15,228) (21,365) (35,975) (21,042) (38,814)
Prepaid and other current assets.......... (1,307) 2,886 (2,065) (6,304) 599
Accounts payable.......................... 3,917 5,480 12,138 2,923 (3,983)
Unearned revenue and customer deposits.... 11,142 13,313 13,655 33,320 32,874
Accrued liabilities....................... 13,170 15,039 12,185 (2,022) (903)
-------- -------- -------- -------- --------
Net cash from operating
activities...................... 27,237 41,340 42,360 21,998 7,477
-------- -------- -------- -------- --------
INVESTING ACTIVITIES:
Purchase of property and equipment.......... (8,837) (19,454) (41,135) (29,026) (8,863)
Proceeds from sale of assets................ -- -- -- -- 8,557
Capitalized software development costs...... (2,103) (9,763) (7,320) (3,795) (2,399)
Other....................................... -- -- (2,695) (2,695) --
-------- -------- -------- -------- --------
Net cash used for investing
activities...................... (10,940) (29,217) (51,150) (35,516) (2,705)
-------- -------- -------- -------- --------
FINANCING ACTIVITIES:
Proceeds from bank line of credit........... 3,000 -- 85,100 45,950 81,950
Repayment of bank line of credit............ (3,000) -- (85,100) (43,450) (81,950)
Purchase of common stock.................... (136) (6,452) (152) -- --
Other....................................... (205) 514 83 (136) 120
-------- -------- -------- -------- --------
Net cash provided by (used for)
financing activities............ (341) (5,938) (69) 2,364 120
-------- -------- -------- -------- --------
Effect of exchange rate changes on cash..... 23 97 (484) (754) (539)
-------- -------- -------- -------- --------
Net increase (decrease) in cash and cash
equivalents............................... 15,979 6,282 (9,343) (11,908) 4,353
Cash and cash equivalents at beginning of
period.................................... 12,636 28,615 34,897 34,897 25,554
-------- -------- -------- -------- --------
Cash and cash equivalents at end of
period.................................... $ 28,615 $ 34,897 $ 25,554 $ 22,989 $ 29,907
======== ======== ======== ======== ========
SUPPLEMENTAL DISCLOSURE OF OTHER CASH AND
NON-CASH INVESTING AND FINANCING
TRANSACTIONS
Interest paid............................. $ 94 $ 576 $ 899 $ 347 $ 500
Income taxes paid......................... 5,532 13,452 8,061 1,924 10,151
ESOP contribution funded with common
stock.................................. 1,640 2,201 -- -- --
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-6
<PAGE> 80

J.D. EDWARDS & COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Operation

J. D. Edwards & Company and Subsidiaries (the "Company") develops, markets
and supports highly functional Enterprise Resource Planning ("ERP") software
solutions that operate on multiple computing platforms and are designed to
accelerate customers' time to benefit, lower customers' cost of ownership and
reduce information systems risks arising from changes in technology and business
practices. The Company's integrated software application suites support
manufacturing, finance, distribution/logistics and human resources operations
for multi-site and multinational organizations. The Company provides
implementation, training and support services designed to enable customers to
rapidly achieve the benefits of the Company's ERP solutions. The Company has
developed and marketed ERP solutions for over 20 years, principally for
operation on AS/400 and other IBM mid-range systems and, more recently, on
leading UNIX and Windows NT servers through Windows- and Internet
browser-enabled desktop clients. The Company operates primarily in the United
States, Canada, Europe, Asia, Latin America and Africa.

Principles of Consolidation and Basis of Presentation

The accounts of the Company have been consolidated. All intercompany
accounts and transactions have been eliminated. The consolidated financial
statements are stated in United States dollars and are prepared under United
States generally accepted accounting principles.

Reincorporation and Stock Split

The Company intends to reincorporate in Delaware prior to completion of its
initial public offering. In connection therewith, the Company intends to effect
a 70-for-one stock split with 300.0 million authorized shares of $.001 par value
common stock and 5.0 million authorized shares of $.001 par value preferred
stock. All references in the consolidated financial statements to shares, share
prices, and per share amounts have been adjusted retroactively for all periods
presented.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenue in accordance with the provisions of
Statement of Position 91-1, "Software Revenue Recognition." The Company licenses
software under non-cancelable license agreements and provides related services,
including support, training, consulting and implementation. Training, consulting
and implementation services are not essential to the functionality of the
Company's software products, are separately priced and are available from a
number of suppliers. Accordingly, revenue from these services is recorded
separately from the license fee. License fee revenue is recognized when a
non-cancelable license agreement has been signed, the product has been
delivered, collection is probable and all significant contractual obligations
relating to this license have been satisfied. Revenue on all software license
transactions in which there are significant outstanding obligations is deferred
and recognized once such obligations are fulfilled. Typically, the Company's
software licenses do not include significant post-delivery obligations to be
fulfilled by the Company and payments are due within a twelve-month period from
date of delivery. Where software license contracts call for payment terms in
excess of twelve months from date of delivery, revenue is

F-7
<PAGE> 81

J.D. EDWARDS & COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

recognized as payments become due and all other conditions for revenue
recognition have been satisfied. Revenue from training, consulting and
implementation services is recognized as services are performed. Revenue from
agreements for supporting and providing periodic upgrades to the licensed
software is recorded as deferred revenue and is recognized ratably over the
support service period, and includes a portion of the related license fee equal
to the fair value of any bundled support services. The Company does not require
collateral for its receivables and reserves are maintained for potential losses.

Software Research and Development Costs

The Company capitalizes internally developed software costs in accordance
with Statement of Financial Accounting Standards ("SFAS") No. 86, "Accounting
for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed."
Capitalization of development costs of software products begins once the
technological feasibility of the product is established. Based on the Company's
product development process, technological feasibility is established upon
completion of a detailed program design. Capitalization ceases when such
software is ready for general release, at which time amortization of the
capitalized costs begins.

Amortization of capitalized internally developed software costs is computed
as the greater of: (a) the amount determined by ratio of the product's current
revenue to its total expected future revenue or (b) the straight-line method
over the product's estimated useful life of three years. During all periods
presented herein, the Company has used the straight-line method to amortize such
capitalized costs.

Research and development costs relating principally to the design and
development of products (exclusive of costs capitalized under SFAS No. 86) are
expensed as incurred. The cost of developing routine enhancements are expensed
as research and development costs as incurred because of the short time between
the determination of technological feasibility and the date of general release
of related products.

Foreign Currency Translation

The functional currency of each subsidiary is the local currency.
Translation of balance sheet amounts to U.S. dollars is based on exchange rates
as of each balance sheet date. Income statement and cash flow statement amounts
are translated at the average exchange rates for the period. Cumulative currency
translation adjustments, net of related deferred taxes, are presented in a
separate component of stockholders' equity (deficit). Transaction gains and
losses and unrealized gains and losses on short-term intercompany receivables
and payables are included in income as incurred.

Cash and Cash Equivalents

All highly liquid investments with a maturity of three months or less when
purchased are considered to be cash equivalents. All cash equivalents are
carried at cost, which approximates fair value.

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to
concentrations of credit risk, consist primarily of cash investments and trade
receivables. The Company has cash investment policies that limit investments to
investment grade securities. The Company believes the risk with respect to trade
receivables is mitigated, to some extent, by the fact that the Company's
customer base is widespread geographically and is highly diversified. No single
customer accounted for ten percent or more of revenue for fiscal 1994, 1995 or
1996 or for the six-month period ended April 30, 1997, or of accounts receivable
at October 31, 1995 or 1996 or at April 30, 1997.

F-8
<PAGE> 82

J.D. EDWARDS & COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Fair Value of Financial Instruments

The carrying amounts of the Company's financial instruments, including cash
and accounts receivable and payable, approximate their fair values.

Property and Equipment

Property and equipment are stated at cost and are depreciated over their
estimated useful lives using the straight-line method. The estimated useful
lives are as follows:

<TABLE>
<S> <C>
Furniture and fixtures................................... 5-7 years
Computer equipment....................................... 3 years
</TABLE>

Stock-based Compensation

SFAS No. 123, "Accounting for Stock-Based Compensation" was issued in
October 1995. This accounting standard permits the use of either a fair value
based method or the method defined in Accounting Principles Board Opinion 25,
"Accounting for Stock Issued to Employees" ("APB No. 25") to account for
stock-based compensation arrangements. Companies that elect to use the method
provided in APB No. 25 are required to disclose the pro forma net income and
earnings per share that would have resulted from the use of the fair value based
method. The Company has elected to continue to determine the value of
stock-based compensation arrangements under the provisions of APB No. 25, and
accordingly, it has included the pro forma disclosures required under SFAS No.
123 in Note 7.

Income Taxes

Deferred tax assets and liabilities are recorded for the estimated future
tax effects of temporary differences between the tax bases of assets and
liabilities and amounts reported in the accompanying consolidated balance
sheets, as well as operating loss and tax credit carryforwards. Deferred tax
assets may be reduced by a valuation allowance if current evidence indicates
that it is considered likely that these benefits will not be realized.

Earnings Per Common Share

Earnings per common share ("EPS") are computed using the weighted average
number of common and common equivalent shares outstanding during the period.
Common equivalent shares consist of stock options, and the weighted average
shares outstanding for each period have been adjusted to include all common
shares issuable under stock options using the treasury stock method. Pursuant to
the Securities and Exchange Commission Staff Accounting Bulletin No. 83, such
computations include all common and common equivalent shares issued within the
twelve months preceding the initial filing date of the Company's Registration
Statement as if they were outstanding for all periods presented, using the
treasury stock method and an assumed initial public offering price. All shares
owned by the J.D. Edwards & Company Employee Stock Ownership Plan (the "ESOP")
are included in the weighted average common shares outstanding.

F-9
<PAGE> 83

J.D. EDWARDS & COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

SFAS No. 128, "Earnings per Share," was issued in February of 1997. The
Company will be required to apply this statement in its consolidated financial
statements for fiscal 1998. This pronouncement establishes new standards for
computing and presenting EPS on a basis that is more comparable to international
standards and provides for the presentation of basic and diluted EPS, replacing
the currently required primary and fully-diluted EPS. The basic EPS will be
computed by dividing net income by the weighted average number of shares
outstanding during the period. Diluted EPS will be computed in a manner similar
to the current method for calculating fully-diluted EPS. Prior period EPS will
be restated to conform with the new statement. The pro forma effect of applying
SFAS No. 128 on the Company's historical consolidated financial statements is as
follows (in thousands, except per share data):

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED OCTOBER 31, APRIL 30,
-------------------------- ----------------
1994 1995 1996 1996 1997
------ ------ ------ ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
EPS AS REPORTED
Primary EPS..................................... $ 0.15 $ 0.22 $ 0.30 $ 0.07 $ 0.08
Weighted average common shares outstanding...... 81,755 82,006 87,169 86,489 93,416
PRO FORMA EPS
Basic EPS Computation:
Basic EPS.................................... $ 0.15 $ 0.23 $ 0.33 $ 0.08 $ 0.09
Weighted average common shares outstanding... 80,872 79,139 79,044 79,039 79,102
Diluted EPS Computation:
Diluted EPS.................................. $ 0.15 $ 0.22 $ 0.30 $ 0.07 $ 0.08
Weighted average common shares outstanding
assuming dilution.......................... 81,755 82,006 87,169 86,489 93,416
</TABLE>

Unaudited Pro Forma Stockholders' Equity

The Board of Directors has authorized management of the Company to file a
registration statement with the Securities and Exchange Commission ("SEC")
permitting the Company to sell shares of its common stock to the public. If the
Company's initial public offering ("IPO") is consummated under the terms
presently anticipated, the mandatory redemption feature of the Mandatorily
Redeemable ESOP Shares will be removed and restrictions on certain of the
Company's outstanding Common Stock will lapse, resulting in income tax benefits
to the Company. Such benefits will arise from tax deductions available to the
Company upon the lapse of the stock restrictions. Because these tax deductions
did not result from any corresponding charges to income for financial statement
purposes, the tax benefit will be credited to additional paid-in capital in
accordance with SFAS No. 109, "Accounting for Income Taxes." Unaudited pro forma
stockholders' equity as of April 30, 1997, as set forth on the accompanying
consolidated balance sheets, is adjusted for the aforementioned events based on
an assumed public offering price.

Interim Financial Statements

The accompanying interim consolidated financial statements as of April 30,
1997 and for the six-month periods ended April 30, 1996 and 1997 are unaudited.
In the opinion of the Company, the interim consolidated financial statements
have been prepared on the same basis as the audited consolidated financial
statements and reflect all adjustments, which include only normal recurring
adjustments, necessary to present fairly the financial position of the Company
as of April 30, 1997, and the results of its operations and its cash flows for
the six-month periods ended April 30, 1996 and 1997.

F-10
<PAGE> 84

J.D. EDWARDS & COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(2) BALANCE SHEET COMPONENTS

Certain balance sheet components are as follows (in thousands):

<TABLE>
<CAPTION>
OCTOBER 31,
--------------------- APRIL 30,
1995 1996 1997
-------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
PROPERTY AND EQUIPMENT:
Furniture and fixtures.......................... $ 24,739 $ 34,519 $ 33,400
Computer equipment.............................. 22,589 30,469 36,978
Land............................................ -- 16,321 16,418
-------- -------- -----------
47,328 81,309 86,796
Less: accumulated depreciation.................. (18,821) (29,954) (36,161)
-------- -------- -----------
$ 28,507 $ 51,355 $ 50,635
======== ======== =========
SOFTWARE DEVELOPMENT COSTS:
Software development costs...................... $ 17,072 $ 24,392 $ 26,791
Less: accumulated amortization.................. (6,167) (8,735) (11,352)
-------- -------- -----------
$ 10,905 $ 15,657 $ 15,439
======== ======== =========
ACCRUED LIABILITIES:
Accrued compensation and related expenses....... $ 34,893 $ 36,462 $ 41,992
Income taxes payable............................ 5,044 13,869 7,108
Other accrued expenses.......................... 14,692 19,036 19,200
-------- -------- -----------
$ 54,629 $ 69,367 $ 68,300
======== ======== =========
</TABLE>

(3) BANK LINE OF CREDIT

The Company has a $50 million, unsecured, revolving line of credit (the
"Revolver") with a syndication of banks. The Revolver expires on July 31, 1999.
Borrowings under the Revolver are for working capital requirements and other
general corporate purposes and bear interest up to the bank's prime rate plus
.50% or LIBOR plus 1.75% at the option of the Company. The credit agreement
associated with the Revolver requires that the Company remain in compliance with
certain affirmative and negative covenants and representations and warranties.
The financial covenants include liquidity, leverage, and coverage ratios,
capital expenditure limitations and profitability requirements. Non-financial
covenants include, but are not limited to, certain restrictions on additional
indebtedness, contingent liabilities, dividends, mergers and acquisitions and
investments. At October 31, 1995 and 1996 and April 30, 1997 (unaudited), the
Company was in full compliance with all covenants under the credit agreement in
place at the time. There were no borrowings outstanding under any credit
agreement at October 31, 1995 and 1996 and April 30, 1997 (unaudited).

(4) ESOP AND ESOP MANDATORILY REDEEMABLE SHARES

Effective January 1, 1989, the Company established the ESOP, subject to the
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). The
Company makes discretionary contributions of cash and/or shares of common stock
of the Company to the ESOP trust fund. The trust fund is maintained in the form
of individual participant accounts that vest over a seven-year period.
Allocations to these accounts are made on the basis of each participant's
proportionate share of total compensation paid by the Company to all ESOP
participants. At the discretion of the Company, unvested shares forfeited by a
terminated participant may be used to offset future Company contributions to the
ESOP or may be reallocated to the remaining participants of the ESOP. With
certain limitations, Company employees in the United States who are at least 21
years old and have completed one year of service are eligible ESOP participants.

Upon termination of employment, a participant may elect to receive a
distribution of Company common stock for shares vested or require the Company to
purchase such vested shares. In the event the Company is

F-11
<PAGE> 85

J.D. EDWARDS & COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

required to purchase such shares from a terminating employee, the Company will
purchase the vested shares at the appraised value for the shares. The Company
engages an independent appraiser to perform an annual valuation of the Company's
common stock for this purpose.

The ESOP provides that once the Company's common stock is publicly traded,
a terminating employee will only be allowed to receive his or her vested shares
and will no longer be able to require the Company to purchase such vested
shares. In accordance with the requirements of the SEC, which provide that the
total redemption value of the ESOP shares be excluded from stockholders' equity,
the redemption value of shares held by the ESOP, based upon the last annual
valuation, has been reflected in the accompanying balance sheets as mandatorily
redeemable shares with the offsetting adjustments included as a reduction of
stockholders' equity. Upon completion of the IPO, the Company's obligation to
purchase the ESOP shares will terminate and the amount related to the
mandatorily redeemable shares will be reclassified to stockholders' equity.
Accordingly, the pro forma balance sheet presentation gives effect to the
removal of the option of terminating employees requiring the Company to purchase
such vested shares.

Compensation cost is measured as the estimated fair value of shares
contributed to or committed to be contributed to the ESOP plus the cash
contributed to or committed to be contributed to the ESOP. For the years ended
October 31, 1994, 1995 and 1996, the Company recognized as compensation cost
$3.0 million, $4.5 million and $5.9 million, respectively. For the six months
ended April 30, 1997, the Company recognized $3.5 million as compensation costs
(unaudited). The ESOP owned 5,231,450, 6,718,040, and 8,706,040 (unaudited) at
October 31, 1995 and 1996 and April 30, 1997, respectively. All shares owned by
the ESOP have been allocated to participants.

(5) FOUNDERS' STOCK

The founders of the Company currently own or control a majority of the
Company's issued and outstanding common stock. The Company and the founders have
a shareholder agreement (the "Shareholder Agreement") whereby the Company has
agreed to purchase a limited amount of the founders' stock in the event of their
deaths. This purchase obligation is limited to proceeds of life insurance
policies owned by the Company on the lives of the founders. Under the
Shareholder Agreement, a founder may also require the Company to purchase a
limited number of shares up to an aggregate amount of $2.2 million at October
31, 1995 and $5.5 million at October 31, 1996 and April 30, 1997 (unaudited).
This purchase obligation is at a price equal to 40% of fair value, as determined
by the Company's Board of Directors. Additionally, if a founder proposes to sell
any of his shares, he must first offer the shares to the Company and the
Company, at its option, may purchase such shares at the lesser of fair value or
the price offered by a third party. The Company may allow the ESOP to purchase
any shares sold pursuant to the Shareholder Agreement.

In accordance with the requirements of the SEC, the share redemption
obligations were reflected in the accompanying balance sheets as mandatorily
redeemable shares with the offsetting adjustment included as a reduction of
stockholders' equity. The Company and the founders intend to amend the current
Shareholder Agreement in July 1997. This amended agreement is expected to
eliminate any Company share repurchase obligations upon the completion of the
IPO. Upon the completion of both the amendment of the Shareholder Agreement and
the IPO, the Company's purchase obligation will be eliminated and the
mandatorily redeemable amount will be reclassified to stockholders' equity.

During the year ended October 31, 1995, the three founders sold 2.0 million
shares of common stock to the Company for $5.0 million under the terms of the
Shareholder Agreement. These shares have been retained by the Company as
treasury shares.

Additionally, during the year ended October 31, 1995 one of the founders
exercised his option under the Shareholder Agreement to require the Company to
purchase 176,260 shares of common stock. The Company allowed such shares to be
purchased by the ESOP for $200,000.

F-12
<PAGE> 86

J.D. EDWARDS & COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

During the year ended October 31, 1996, the Company was notified of a
contractual arrangement whereby two founders would sell 3.5 million shares of
stock to certain identified third parties. Under the terms of the Shareholder
Agreement, such stock was required to be offered to the Company at the pending
sales price prior to the sale to the third parties. The Company assigned its
right-to-purchase these shares to the ESOP, which purchased the 3.5 million
shares of common stock from the founders for $10.4 million.

During the six months ended April 30, 1997, one of the founders sold 55,440
shares of common stock to certain members of the Board of Directors and one
employee. The Company recognized as compensation expense $223,000 which
represented the difference between the sales price and the estimated fair value
of the Company's common stock on the date of the sale.

(6) INCOME TAXES

Income before income taxes consists of the following (in thousands):

Components of the provision for income taxes are as follows (in thousands):

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED OCTOBER 31, ENDED APRIL 30,
--------------------------- ---------------
1994 1995 1996 1996 1997
------- ------- ------- ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Current provision:
U.S. Federal............................. $ 6,226 $ 7,829 $ 8,737 $ 346 $1,104
State.................................... 1,591 2,044 1,259 78 248
Foreign.................................. 2,303 5,094 7,486 2,324 2,341
------- ------- ------- ------ ------
10,120 14,967 17,482 2,748 3,693
------- ------- ------- ------ ------
Deferred provision (benefit):
U.S. Federal............................. (2,970) (1,134) (4,951) 837 696
State.................................... (608) (425) -- -- 48
Foreign.................................. (1,262) (2,029) 3,097 51 (176)
------- ------- ------- ------ ------
(4,840) (3,588) (1,854) 888 568
------- ------- ------- ------ ------
Total provision for income
taxes.......................... $ 5,280 $11,379 $15,628 $3,636 $4,261
======= ======= ======= ====== ======
</TABLE>

F-13
<PAGE> 87

J.D. EDWARDS & COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The provisions for income taxes are different from the amounts computed by
applying the federal statutory rate to income before income taxes. The amounts
are reconciled as follows (in thousands):

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED OCTOBER 31, APRIL 30,
--------------------------- ----------------
1994 1995 1996 1996 1997
------- ------- ------- ------ -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Statutory rate............................ $ 6,070 $10,356 $14,684 $3,352 $ 4,004
Reversal of valuation allowance for
foreign subsidiaries' loss
carryforwards........................... (2,352) -- -- -- --
Foreign income taxed at higher rates...... 1,646 1,887 3,018 (174) 3,284
Non-deductible expenses................... 662 1,007 1,676 385 433
State income taxes, net of federal
benefit................................. 612 1,052 818 51 192
Income tax credits........................ (1,593) (2,774) (3,844) -- (4,017)
Other..................................... 235 (149) (724) 22 365
------- ------- ------- ------ -------
Provision for income taxes................ $ 5,280 $11,379 $15,628 $3,636 $ 4,261
======= ======= ======= ====== =======
</TABLE>

Deferred tax assets and liabilities are comprised of the following (in
thousands):

<TABLE>
<CAPTION>
OCTOBER 31,
------------------- APRIL 30,
1995 1996 1997
------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Deferred tax assets:
Revenue deferred for book purposes................ $ 5,059 $ 6,743 $ 7,755
Foreign tax credit carryforwards.................. -- 4,639 3,843
Allowance for doubtful accounts................... 2,032 1,677 1,856
Vacation and other accruals....................... 1,796 2,412 3,002
Unrealized currency losses........................ 797 112 (17)
Foreign subsidiaries' loss carryforwards.......... 2,546 -- --
Foreign income currently subject to U.S. tax...... -- 1,986 1,986
Other............................................. 2,308 1,216 928
------- ------- -----------
Total deferred tax assets................. 14,538 18,785 19,353
------- ------- -----------
Deferred tax liabilities:
Capitalized software development costs............ (4,185) (5,503) (5,423)
Previously taxed revenue.......................... -- (1,546) (1,546)
Other............................................. (805) (332) (412)
------- ------- -----------
Total deferred tax liabilities............ (4,990) (7,381) (7,381)
------- ------- -----------
Net deferred tax asset.............................. $ 9,548 $11,404 $11,972
======= ======= =========
Current portion of deferred taxes................... $ 7,729 $ 7,122 $ 7,061
Non-current portion of deferred taxes............... 1,819 4,282 4,911
------- ------- -----------
Net deferred tax asset.............................. $ 9,548 $11,404 $11,972
======= ======= =========
</TABLE>

The Company has available approximately $3.8 million of foreign tax credit
carryforwards generated by certain foreign subsidiaries, which will expire in
2001.

At October 31, 1996 and April 30, 1997, the unremitted earnings of the
foreign subsidiaries were $7.5 million and $3.8 million (unaudited),
respectively. The unrecognized deferred tax liability for such earnings is
immaterial.

F-14
<PAGE> 88

J.D. EDWARDS & COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(7) EMPLOYEE RETIREMENT SAVINGS PLAN AND STOCK OPTIONS

Employee Retirement Savings Plan

In 1988, the Company established the J.D. Edwards & Company Retirement
Savings Plan (the "401(k) Plan") subject to the provisions of ERISA. The 401(k)
Plan is an Internal Revenue Code Section 401(k) plan, commonly known as a salary
reduction retirement plan. Employees with a minimum of six months of service are
eligible to participate in the 401(k) Plan.

The Company generally matches 50% of an employee's eligible contributions
to the 401(k) Plan, up to a maximum match of 2% of eligible compensation. Both
matching and discretionary contributions are determined in connection with the
determination of contributions to the ESOP. The Company's matching contributions
are fully vested to all participants completing 1,000 hours of service and
employed by the Company on the last day of the calendar year. Discretionary
contributions are subject to a vesting schedule based on number of years of
service with the Company. The Company recognized expense for matching
contributions of $1.1 million, $1.8 million, $200,000 and $150,000 (unaudited)
for fiscal 1994, 1995 and 1996, and the six months ended April 30, 1997,
respectively. There have been no discretionary contributions made by the Company
since the inception of the 401(k) Plan.

Stock Options

In November 1992, the Company established an Incentive Stock Option Plan
and a Nonqualified Stock Option Plan (the "Option Plans"). A total of 35,000,000
shares of common stock are authorized for issuance under the Option Plans, of
which 14,980,490 shares and 12,679,590 (unaudited) shares are available for
grant as of October 31, 1996 and April 30, 1997, respectively. Options vest over
a period of time ranging from four to five years with a term of not more than
ten years.

The Company records compensation expense related to stock options using the
intrinsic value based method and includes a pro forma disclosure in the
footnotes for compensation value measured using the fair value accounting
treatment. Generally, stock options are granted with an exercise price equal to
the fair value at the date of grant, and accordingly no compensation expense was
recognized during fiscal 1994, 1995, or 1996. During the six months ended April
30, 1997, the Company recorded $581,000 (unaudited) as deferred compensation
representing the excess of the estimated fair value of the Company's common
stock over the exercise price of such options. Such deferred compensation cost
is being amortized over the five-year vesting period of the options. Of the
total amount, $60,000 (unaudited) was recognized during the six months ended
April 30, 1997.

For the fair value disclosure below, compensation value is estimated for
each option grant under the Option Plans on the date of grant using a minimum
value option pricing model with the following assumptions used for grants in
fiscal 1996 and the six months ended April 30, 1997, respectively: risk-free
rates ranging from 5.1% to 5.8% in fiscal 1996 and 5.8% to 6.1% in the six
months ended April 30, 1997 and corresponding to government securities with
original maturities similar to the expected option lives; expected dividend
yield of 0% for both periods; and expected lives of one year beyond vest dates
for both periods.

F-15
<PAGE> 89

J.D. EDWARDS & COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Based on calculations using the minimum value option-pricing model, the
weighted-average grant date fair value of options was $1.12 and $2.34
(unaudited), in fiscal 1996 and the six months ended April 30, 1997,
respectively. The pro forma impact on the Company's net income and net income
per share had compensation cost been recorded as determined under the fair value
method is shown below (in thousands, except per share data).

<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
OCTOBER 31, 1996 APRIL 30, 1997
---------------- ----------------
<S> <C> <C>
Net income:
As reported........................... $ 26,326 $7,178
Pro forma............................. 24,735 5,467
Net income per share:
As reported........................... 0.30 0.08
Pro forma............................. 0.28 0.06
</TABLE>

The status of total stock options outstanding and exercisable under the
Option Plans as of April 30, 1997 follows:

<TABLE>
<CAPTION>
STOCK OPTIONS OUTSTANDING
- ------------------------------------------------------------------------
WEIGHTED AVERAGE STOCK OPTIONS EXERCISABLE
REMAINING ------------------------------
RANGE OF NUMBER CONTRACTUAL WEIGHTED AVERAGE NUMBER WEIGHTED AVERAGE
EXERCISE PRICES OF SHARES LIFE (YEARS) EXERCISE PRICE OF SHARES EXERCISE PRICE
- --------------- ---------- ---------------- ---------------- --------- ----------------
<S> <C> <C> <C> <C> <C>
$2.66-2.84 10,870,720 6.51 $ 2.70 7,094,360 $ 2.70
3.44 3,761,660 7.79 3.44 1,474,900 3.44
6.24 5,144,300 8.76 6.24 1,016,400 6.24
10.71 2,423,750 9.58 10.71 -- 10.71
---------- ---------
2.66-10.71 22,200,430 7.59 4.52 9,585,660 3.19
========= ========
</TABLE>

F-16
<PAGE> 90

J.D. EDWARDS & COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Activity of the Option Plans is summarized in the following table:

<TABLE>
<CAPTION>
WEIGHTED WEIGHTED
AVERAGE AVERAGE
NUMBER OF EXERCISE OPTIONS EXERCISE
SHARES PRICE EXERCISABLE PRICE
---------- -------- ----------- --------
<S> <C> <C> <C> <C>
Options outstanding, October 31, 1993................. 3,675,210 $ 2.66 -- $--
Options granted..................................... 8,065,260 2.72
Less: options forfeited............................. (343,350) 2.66
----------
Options outstanding, October 31, 1994................. 11,397,120 2.70 728,910 2.66
Options granted..................................... 4,011,000 3.44
Less: options forfeited............................. (262,570) 2.86
Less: options exercised............................. (5,180) 2.69
----------
Options outstanding, October 31, 1995................. 15,140,370 2.89 3,046,750 2.70
Options granted..................................... 5,572,560 6.18
Less: options forfeited............................. (698,600) 4.01
Less: options exercised............................. (79,450) 2.87
----------
Options outstanding, October 31, 1996................. 19,934,880 3.77 5,895,960 2.79
Options granted (unaudited)......................... 2,439,500 10.71
Less: options forfeited (unaudited)................. (138,600) 5.95
Less: options exercised (unaudited)................. (35,350) 3.45
----------
Options outstanding, April 30, 1997 (unaudited)....... 22,200,430 4.52 9,585,660 3.19
==========
</TABLE>

(8) COMMITMENTS AND CONTINGENCIES

Leases

The Company leases equipment and office space under various long-term
non-cancelable operating leases. Rent expense on these leases for fiscal 1994,
1995 and 1996 and the six months ended April 30, 1997 was $13.3 million, $14.7
million and $21.6 million, and $12.8 million (unaudited), respectively.

Minimum future non-cancelable commitments under these leases as of April
30, 1997 (unaudited), are as follows (in thousands):

<TABLE>
<CAPTION>
FISCAL
YEAR AMOUNT
------------------------------------------------------------------ --------
<S> <C>
1997.............................................................. $ 13,274
1998.............................................................. 23,379
1999.............................................................. 15,305
2000.............................................................. 11,715
2001.............................................................. 9,495
Thereafter........................................................ 41,738
--------
$114,906
========
</TABLE>

Legal Matters

The Company is involved in certain disputes and legal actions as a result
of its normal operations. In management's opinion, none of these disputes and
legal actions are expected to have a material impact on the Company's
consolidated financial position, results of operations or cash flows.

F-17
<PAGE> 91

J.D. EDWARDS & COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(9) GEOGRAPHICAL INFORMATION

The following is an analysis of the Company's operations by geographical
region (in thousands):

<TABLE>
<CAPTION>
ASIA,
EUROPE, LATIN
MIDDLE EAST AMERICA
DOMESTIC AND AFRICA AND CANADA TOTAL
-------- ----------- ---------- --------
<S> <C> <C> <C> <C>
YEAR ENDED OCTOBER 31, 1994
Total revenue...................................... $155,068 $51,442 $ 34,077 $240,587
Operating income................................... 5,670 1,744 10,033 17,447
Total assets....................................... 72,732 25,809 28,590 127,131
YEAR ENDED OCTOBER 31, 1995
Total revenue...................................... 215,201 77,853 47,712 340,766
Operating income................................... 24,916 1,004 2,958 28,878
Total assets....................................... 108,817 43,176 23,198 175,191
YEAR ENDED OCTOBER 31, 1996
Total revenue...................................... 311,238 99,021 67,789 478,048
Operating income................................... 22,307 14,123 7,197 43,627
Total assets....................................... 199,489 23,354 20,943 243,786
SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
Total revenue...................................... 168,750 52,906 47,019 268,675
Operating income................................... 5,249 4,575 3,106 12,930
Total assets....................................... 231,626 22,748 22,047 276,421
</TABLE>

Total revenue for each geographic region represents revenue from
unaffiliated customers only. Operating income includes intercompany royalty and
cost allocation arrangements that were in effect for each year. Total revenue
shown above for the Company's foreign regions includes software that was shipped
from the United States. The total amount of these export sales was $22.2
million, $30.5 million, $36.9 million and $16.8 million (unaudited) for Europe,
Middle East, and Africa and $24.4 million, $23.5 million, $27.2 million and
$23.2 million (unaudited) for Asia, Latin America, and Canada for fiscal 1994,
1995, 1996 and the six months ended April 30, 1997, respectively.

(10) SUBSEQUENT EVENTS (UNAUDITED)

The Board of Directors and stockholders are expected to approve the
Company's 1997 Equity Incentive Plan (the "1997 Plan") and 1997 Employee Stock
Purchase Plan (the "Purchase Plan") during the last quarter of fiscal 1997.

The 1997 Plan is expected to provide for the granting to employees,
including officers and directors, of incentive stock options, nonstatutory stock
options, stock purchase rights and long-term performance awards. A total of 10.0
million shares of common stock is expected to be reserved for issuance under the
1997 Plan.

The Purchase Plan, which is intended to qualify under Section 423 of the
Internal Revenue Code is expected to permit eligible employees to purchase
common stock through payroll deductions. The price of common stock to be
purchased will be 85% of the lower of the fair market value of the common stock
on the first or last day of each six month purchase period. The Company is
expected to reserve a total of 2.0 million shares of common stock for issuance
under the Purchase Plan.

F-18
<PAGE> 92

J.D. EDWARDS & COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(11) QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The Company's quarterly financial information for fiscal 1995 and 1996, and
the first six months of fiscal 1997 is as follows (in thousands, except per
share data):

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
-------- -------- -------- --------
<S> <C> <C> <C> <C>
YEAR ENDED OCTOBER 31, 1995:
Total revenue........................... $ 64,577 $ 78,746 $ 90,501 $106,942
Less: costs and expenses.............. 63,386 74,166 83,001 91,335
-------- -------- -------- --------
Operating income........................ 1,191 4,580 7,500 15,607
-------- -------- -------- --------
Income before income taxes.............. 1,788 4,345 8,455 15,000
Net income.............................. 1,100 2,674 5,204 9,231
Earnings per common share............... $ 0.01 $ 0.03 $ 0.06 $ 0.11
YEAR ENDED OCTOBER 31, 1996:

Total revenue........................... $ 97,932 $110,210 $115,641 $154,265
Less: costs and expenses.............. 94,701 103,649 110,404 125,667
-------- -------- -------- --------
Operating income........................ 3,231 6,561 5,237 28,598
-------- -------- -------- --------
Income before income taxes.............. 3,645 5,932 4,410 27,967
Net income.............................. 2,275 3,666 2,731 17,654
Earnings per common share............... $ 0.03 $ 0.04 $ 0.03 $ 0.20
SIX MONTHS ENDED APRIL 30, 1997:
Total revenue........................... $122,821 $145,854
Less: costs and expenses.............. 118,811 136,934
-------- --------
Operating income........................ 4,010 8,920
-------- --------
Income before income taxes.............. 3,697 7,742
Net income.............................. 2,329 4,849
Earnings per common share............... $ 0.03 $ 0.05
</TABLE>

F-19
<PAGE> 93

[J.D. EDWARDS LOGO]
<PAGE> 94
Appendix A--Description of Graphics

Gatefold

The graphic heading starts with the J.D. Edwards logo, then reads
"Software and Service Solutions for a Changing World." In the center of the
gatefold there is a box with the following lead-in text: "The J.D. Edwards
corporate culture relies on three fundamental tenets -- Solutions,
Relationships, and Value -- to ensure the Company retains a customer-centric,
business oriented focus." Beneath the lead-in text are the following three
bullet points: (1) "Solutions -- J.D. Edwards provides customers with complete
enterprise solutions -- functionally rich software and the services needed to
realize benefits quickly and continuously."; (2) "Relationships -- An emphasis
on customer satisfaction combined with a program of continual product
enhancements provide the foundation for long-term relationships."; (3) "Value
- -- J.D. Edwards offers better value up front with a streamlined implementation
methodology and over time through flexible, adaptable technology." Four arrows
emanate from the corners of this box, directing the reader to four separate
text and graphic sub-sections.

The upper left hand subsection carries the graphic heading
"Comprehensive Family of ERP Software Solutions." Beneath this heading is a
graphic depicting three cresting waves, each progressively higher, beneath
which are two captions: "WorldSoftware" and "OneWorld". Above the lowest wave
is a sub-heading "Host-centric," and the following bullet points: (1) "high
reliability"; (2) "low cost of ownership"; and (3) "departmental applications."
Above the middle wave is a sub-heading "Client/Server," and the following
bullet points: (1) "easier access"; (2) "more user-friendly"; and (3)
"enterprise applications." Above the highest wave is the sub-heading
"Network-centric" and the following bullet points: (1) "mask complexity"; (2)
"reduce cost of change"; (3) "leverage network scalability"; (4) "reduce time
to benefit"; and (5) "inter-enterprise applications." Beneath the graphic is
the following text: "J.D. Edwards ERP solutions offer continuity through
successive waves of technology. WorldSoftware provides a highly functional,
host-centric solution with a smooth transition to client-server computing.
OneWorld offers the advantages of client/server while masking the complexity in
a network-centric environment."

The lower left hand subsection carries the graphic heading "Integrated
Applications Suite and Technology Architecture." Beneath this heading is a
multi-layered graphic depicting the interrelationship of the software
applications and the systems platforms, the left panel of which depicts "World
Software," while the right depicts "OneWorld." An overarching layer is labeled
"Application Suites," with four separate sub-headings: (1) "Manufacturing"; (2)
"Finance"; (3) "Distribution/Logistics"; and (4) "Human Resources." The left
panel shows a solid bar labeled "Toolset," beneath which are two interlocking
pieces, the upper labeled "Technology Layer" and the lower "AS/400." The right
panel shows a solid bar labeled "Toolset," beneath which are four interlocking
pieces, the topmost labeled "Technology Layer," and the bottom three labeled,
from left to right as (1) "AS/400"; (2) "UNIX"; and (3) "NT." Beneath this
graphic is the following text: "The Company's comprehensive family of
integrated ERP application suites address customer requirements for improving
productivity and effectiveness of their manufacturing, finance,
distribution/logistics and human resources organizations. J.D. Edwards'
advanced architecture allows different generations of technology --host-centric
WorldSoftware and network-centric OneWorld-- to coexist in a single
environment. The architecture also masks the complexities of a mixed platform
network-centric environment. The OneWorld toolset provides a single point of
change for all platforms on the network. Developers use one toolset and users
work in a consistent environment, regardless of the unique characteristics of
the underlying platform."

<PAGE> 95

The upper right hand subsection carries the graphic heading
"Structured Implementation Methodology and Services." To the right of this
heading is a graphic depicting a flow chart with nine boxes. The topmost box is
labeled "Agree on Expectations," beneath which are two boxes, the left labeled
"Train the Client Project Team" and the right "Analyze Client Requirements."
Below these boxes are another two, the left labeled "Conduct Conference Room
Pilot" and the right labeled "Develop Technical Solutions." Below these boxes
is a single box labeled "Tune the Environment, Train, and Test." Below this box
is another, labeled "Go Live." The final two boxes are beneath this one, the
left labeled "Upgrade to the Latest Version" and the right labeled "Perform
Periodic Systems Audit." Beneath the graphic heading and to the left of the
flow chart is the following text: "J.D. Edwards offers clients a complete suite
of software implementation, maintenance and support services either directly or
through third-party business partners. In particular, the Company believes its
nine-step Rapid, Economic and Predictable (REP) methodology contributes to the
ability to accelerate client time to benefit and lower lifetime total cost of
ownership."

The lower right subsection carries the graphic heading "Global
Presence, Local Support." Beneath this heading is a graphic depicting the
globe, upon which are superimposed the following three lines of text: (1) "Over
4,000 customers installed in 90 countries"; (2) "Software available in 18
languages"; and (3) "24 hour-per-day, 7 day-per-week support available
worldwide." Beneath this graphic is the following text: "J.D. Edwards' 3,167
employees are located in 46 offices throughout the world. The Company provides
customer support through these offices and through a network of 172 business
partners. The result is uniform implementations and consistent support
worldwide."

Graphic--Page 36

This graphic carries the heading "Integrated Applications Suite and
Technology Architecture." Beneath this heading is a multi-layered graphic
depicting the interrelationship of the software applications and the systems
platforms, the left panel of which depicts "World Software," while the right
depicts "OneWorld." An overarching layer is labeled "Application Suites," with
four separate sub-headings: (1) "Manufacturing"; (2) "Financials"; (3)
"Distribution/Logistics"; and (4) "Human Resources." The left panel shows a
solid bar labeled "Toolset," beneath which are two interlocking pieces, the
upper labeled "Technology Layer" and the lower "AS/400". The right panel shows
a solid bar labeled "Toolset," beneath which are four interlocking pieces, the
topmost labeled "Technology Layer," and the bottom three labeled, from left to
right as (1) "AS/400"; (2) "UNIX"; and (3) "NT". Beneath this graphic is the
following text: "The Company's comprehensive family of integrated ERP
application suites address customer requirements for improving productivity and
effectiveness of their manufacturing, finance, distribution/logistics and human
resources organizations. J.D. Edwards' advanced architecture allows different
generations of technology --host-centric WorldSoftware and network-centric
OneWorld-- to coexist in a single environment. The architecture also masks the
complexities of a mixed platform network-centric environment. The OneWorld
toolset provides a single point of change for all platforms on the network.
Developers use one toolset and users work in a consistent environment,
regardless of the unique characteristics of the underlying platform."

Graphic--Page 38

This graphic consists of a flow chart with nine boxes. The leftmost
box is labeled "Agree on Expectations," to the right of which are two boxes,
the top labeled "Train the Client Project Team" and the bottom "Analyze Client
Requirements." To the right of these boxes are another two, the top labeled
"Conduct Conference Room Pilot" and the bottom labeled "Develop Technical
Solutions." To the right of these boxes is a single box labeled "Tune the
Environment, Train, and Test." To the right of this box is another, labeled

<PAGE> 96

"Go Live." The final two boxes are to the right of this one, the top labeled
"Upgrade to the Latest Version" and the bottom labeled "Perform Periodic
Systems Audit."

<PAGE> 97

[Alternative Page for International Prospectus]
PROSPECTUS (Subject to Completion)

Issued August 8, 1997

LOGO
COMMON STOCK
---------------------

Of the Shares of Common Stock being offered hereby, Shares are
being offered initially outside of the United States and Canada by the
International Underwriters, and Shares are being offered initially in
the United States and Canada by the U.S. Underwriters. See "Underwriters." Of
the Shares of Common Stock being offered hereby, Shares are
being sold by the Company and Shares are being sold by the Selling
Stockholders. See "Principal and Selling Stockholders." The Company will not
receive any proceeds from the sale of Shares by the Selling Stockholders. Prior
to this offering, there has been no public market for the Common Stock of the
Company. It is currently estimated that the initial public offering price will
be between $ and $ per share. See "Underwriters" for a discussion of the
factors considered in determining the initial public offering price. Application
has been made for the Common Stock to be listed on the Nasdaq National Market
under the symbol "JDEC."
---------------------

THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS"

COMMENCING ON PAGE 4 HEREOF.

---------------------

PRICE $ A SHARE
---------------------

<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) STOCKHOLDERS
-------- -------------- ----------- -----------
<S> <C> <C> <C> <C>
Per Share....................... $ $ $ $

Total(3)........................ $ $ $ $
</TABLE>

- ---------------

(2) Before deducting expenses payable by the Company estimated at $ .

(3) The Company and certain of the Selling Stockholders have granted to the
U.S. Underwriters an option, exercisable within 30 days from the date
hereof, to purchase up to an aggregate of additional Shares at the
price to public less underwriting discounts and commissions, for the
purpose of covering over-allotments, if any. If the U.S. Underwriters
exercise such option in full, the total price to public, underwriting
discounts and commissions, proceeds to Company and proceeds to Selling
Stockholders will be $ , $ , $ and $ ,
respectively. See "Underwriters."
---------------------

MORGAN STANLEY DEAN WITTER
DEUTSCHE MORGAN GRENFELL
ROBERTSON, STEPHENS & COMPANY
, 1997
<PAGE> 98

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following is an itemized statement of the costs and expenses, other
than underwriting discounts and commissions, incurred and to be incurred by the
Registrant in connection with the issuance and distribution of the securities
registered hereby. All amounts are estimates except the Securities and Exchange
Commission ("SEC") registration fee and the National Association of Securities
Dealers, Inc. ("NASD") filing fee.

<TABLE>
<CAPTION>
AMOUNT TO BE
PAID BY
REGISTRANT
------------
<S> <C>
SEC registration fee................................................... $ 90,910
NASD filing fee........................................................ 30,500
Nasdaq National Market listing fee..................................... *
Printing............................................................... *
Legal fees and expenses................................................ *
Accounting fees and expenses........................................... *
Director and officer liability insurance............................... *
Blue sky fees and expenses............................................. *
Custodial fees......................................................... *
Transfer agent and registrar fees...................................... *
Miscellaneous.......................................................... *
------------
Total........................................................ $ *
===========
</TABLE>

- ---------------

* To be disclosed by amendment

The Registrant intends to pay all expenses of registration, issuance and
distribution with respect to the securities being offered for the account of the
Selling Stockholders, except for underwriter's discounts and commissions and
stock transfer taxes.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the General Corporation Law of Delaware (the "DGCL")
provides that a Delaware corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation) by
reason of the fact that any such person is or was a director, officer, employee
or agent of such corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise. The indemnity may include
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, provided that such officer or director acted in
good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. A Delaware corporation may indemnify officers and
directors against expenses (including attorneys' fees) in connection with the
defense or settlement of an action by or in the right of the corporation under
the same conditions, except that no indemnification is permitted without
judicial approval if the officer or director is adjudged to be liable to the
corporation. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify him or her against the expenses (including attorneys' fees) which such
officer or director actually and reasonably incurred. The foregoing description
is qualified in its entirety by reference to the more detailed provisions of
Section 145 of the DGCL.

II-1
<PAGE> 99

Section 102 of the DGCL allows a Delaware corporation to eliminate or limit
the personal liability of a director to the corporation or to any of its
stockholders for monetary damage for a breach of fiduciary duty as a director,
except in the case where the director (i) breaches such person's duty of loyalty
to the corporation or its stockholders, (ii) fails to act in good faith, engages
in intentional misconduct or knowingly violates a law, (iii) authorizes the
payment of a dividend or approves a stock purchase or redemption in violation of
Section 174 of the DGCL or (iv) obtains an improper personal benefit.

In accordance with the DGCL, the Registrant's Amended and Restated
Certificate of Incorporation contains a provision to limit the personal
liability of its directors for monetary damages for breach of their fiduciary
duty to the fullest extent permitted by the DGCL now, or as it may hereafter be
amended.

In addition, as permitted by the DGCL, the Registrant's Bylaws provide that
(i) the Registrant is required to indemnify its directors and officers and
persons serving in such capacities in other business enterprises at the
Registrant's request, to the fullest extent permitted by Delaware law; (ii) the
Registrant may indemnify its employees and agents to the maximum extent
permitted by Delaware law; (iii) the Registrant is required to advance expenses
incurred by its directors and officers in connection with defending a proceeding
(except that a director or officer must undertake to repay any advances if it
should ultimately be determined that the director or officer is not entitled to
indemnification); (iv) the rights conferred in the Bylaws are not exclusive; and
(v) the Registrant may not retroactively amend the Bylaw provisions in a way
that adversely affects any director or officer.

The Registrant maintains insurance covering its directors and officers
against certain liabilities incurred by them in their capacities as such,
including among other things, certain liabilities under the Securities Act of
1933, as amended (the "Securities Act"). The Registrant also intends to enter
into indemnification agreements with its directors and officers prior to the
closing of this offering that provide the maximum indemnity allowed to directors
and officers by the DGCL and the Registrant's Bylaws.

The Underwriting Agreement provides for indemnification by the Underwriters
of the Registrant and its directors and officers who sign this Registration
Statement against certain liabilities, including liabilities under the
Securities Act.

Reference is made to the following documents filed as exhibits to this
Registration Statement regarding relevant indemnification provisions described
above and elsewhere herein:

<TABLE>
<CAPTION>
EXHIBIT
DOCUMENT NUMBER
------------------------------------------------------------------ ------
<S> <C>
Form of Underwriting Agreement.................................... 1.1
Amended and Restated Certificate of Incorporation of Registrant... 3.1 (i)
Bylaws of Registrant.............................................. 3.1 (ii)
Form of Indemnification Agreement to be entered into by the
Registrant with each of its directors and officers.............. 10.13
</TABLE>

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Since July 3, 1994, the Registrant has issued and sold 133,350 shares of
its Common Stock to employees for an aggregate amount of $409,102 pursuant to
the exercise of options under its 1992 Incentive Stock Option Plan.

The share amounts set forth above take into account the 70-for-1 stock
split that will be effective prior to the closing of the offering contemplated
by the Registration Statement.

The sales of such securities were deemed to be exempt from registration
under the Securities Act in reliance on Section 4(2) of the Securities Act or
Rule 701 promulgated under Section 3(b) of the Securities Act, as transactions
by an issuer not involving a public offering or transactions pursuant to
compensatory benefit plans and contracts relating to compensation as provided
under such Rule 701.

The recipients of securities in each such transaction represented their
intention to acquire the securities for investment only and not with a view to
or for sale in connection with any distribution thereof and

II-2
<PAGE> 100

appropriate legends were affixed to the share certificates issued in such
transactions. All recipients had adequate access, through their relationships
with the Company, to information about the Registrant.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- -------------------- ------------------------------------------------------------------------
<C> <S>
*1.1 Form of Underwriting Agreement.
3.1(i) Amended and Restated Certificate of Incorporation of Registrant.
(ii) Bylaws of Registrant.
*4.1 Specimen stock certificate of Registrant's Common Stock.
*5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation.
+10.1 Original Software Vendor Marketing and License Agreement between Seagull
Business Software and J.D. Edwards & Company dated August 19, 1994.
10.2 Amended and Restated Credit Agreement by and Between Wells Fargo Bank
(Colorado), N.A., as Lender and as Agent Bank, Harris Trust and
Savings Bank, as a Lender, Key Bank of Colorado, as Lender, and J.D.
Edwards & Company, as a Borrower, J.D. Edwards World Solutions
Company, as a Borrower, J.D. Edwards World Source Company, as a
Borrower dated as of July 25, 1997.
+10.3 Sublease Agreement dated September 13, 1990 between Green Holdings,
Inc., Sublessor, and J.D. Edwards & Company, Sublessee for an office
suite located on the 6th Floor of Stanford Place I Building.
+10.4 Lease Agreement dated September 20, 1990 between Phillips Petroleum
Company, Lessor, and J.D. Edwards & Company, Lessee, for office suite
on the 6th Floor of the Stanford Place I Building, as amended.
+10.5 Lease Agreement dated December 20, 1991 between Samuel Zell, Lessor, and
J.D. Edwards & Company, Lessee, for office Floors 3, 4, 6 and 7 and
office space on Floor 1 for the Denver Corporate Center III located
at 7900 East Union Avenue, as amended.
+10.6 Sublease Agreement dated July 15, 1993 between Green Holdings, Inc.,
Sublessor, and J.D. Edwards & Company, Sublessee, for office suite
located on the 8th Floor of Stanford Place I Building.
+10.7 Lease Agreement dated August 23, 1993 between Phillips Petroleum
Company, Lessor, and J.D. Edwards & Company, Lessee for office suite
on the 8th Floor of Stanford Place I Building.
+10.8 Sublease Agreement dated October 25, 1993 between Green Holdings, Inc.,
as sublessor and J.D. Edwards & Company, Sublessee for an office
suite located on the 7th Floor of the Stanford Place I Building.
+10.9 Sublease Agreement dated June 12, 1995 between Microsolutions Tech Inc.,
Sublessor and J.D. Edwards & Company, Sublessee, for office suite
located on the 8th Floor of Stanford Place I Building.
+10.10 Agreement of Purchase and Sale between J.D. Edwards & Company and
CarrAmerica Realty, L.P. dated as of December 11, 1996.
+10.11 Supplement to Lease Agreement between CarrAmerica Realty, L.P. and J.D.
Edwards & Company dated as of December 30, 1996.
+10.12 Build-to-Suit Lease Agreement between CarrAmerica Realty, L.P. and J.D.
Edwards & Company dated as of December 30, 1996.
</TABLE>

II-3
<PAGE> 101

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- -------------------- ------------------------------------------------------------------------
<C> <S>
10.13 Form of Indemnification Agreement to be entered into between the
Registrant and each of its officers and directors.
+10.14 Corporate Plan for Retirement, The Profit Sharing/401(k) Plan.
+10.15 Employee Stock Ownership Plan and Trust Agreement of J.D. Edwards &
Company, as amended and restated effective January 1, 1996.
10.16 J.D. Edwards & Company 1992 Incentive Stock Option Plan.
+10.17 J.D. Edwards & Company 1992 Nonqualified Stock Option Plan.
+10.18 Restricted Stock Grant Plan for Employees of J.D. Edwards & Company.
+10.19 Stock Plan for Employees of J.D. Edwards & Company.
10.20 J.D. Edwards & Company 1997 Employee Stock Purchase Plan.
10.21 J.D. Edwards & Company 1997 Equity Incentive Plan.
*10.22 Amended and Restated Stockholders Agreement between C. Edward McVaney,
Jack L. Thompson, Robert C. Newman and the Registrant dated as of
1997.
10.23 J.D. Edwards & Company 1997 Employee Stock Purchase Plan for Non-U.S.
Employees.
+11.1 Statement regarding computation of earnings per share.
+16.1 Letter regarding change in certifying accountant.
23.1 Consent of Price Waterhouse LLP.
+23.2 Consent of Wilson Sonsini Goodrich & Rosati (included in Exhibit 5.1).
+24.1 Power of Attorney (filed herewith on the signature page of this
Registration Statement).
+27.1 Financial Data Schedule.
</TABLE>

- ---------------

* To be filed by amendment.

+ Previously filed.

(b) Financial Statement Schedules

Schedule II -- Valuation and Qualifying Accounts and Reserves

All other schedules for which provision is made in the applicable
accounting regulations of the SEC are not required under the related
instructions or are inapplicable or the information is contained in the
consolidated financial statements and related notes and therefore have been
omitted.

ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing, as specified in the Underwriting Agreement, certificates in such
denomination and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 14 above, or
otherwise, the Registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered hereunder, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnifica-

II-4
<PAGE> 102

tion by it is against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of the prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-5
<PAGE> 103

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment to the Registration Statement (No. 333-30701) to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Denver, State of Colorado, on this 8th day of August 1997.

J.D. EDWARDS & COMPANY

By: /s/ RICHARD E. ALLEN

----------------------------------

Name: Richard E. Allen
Title: Chief Financial Officer and
Vice President, Finance and
Administration

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO THE REGISTRATION STATEMENT (NO. 333-30701) HAS BEEN SIGNED BY THE FOLLOWING
PERSONS ON AUGUST 8, 1997 IN THE CAPACITIES INDICATED:

<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------- ----------------------------------------------
<C> <S>
C. EDWARD MCVANEY* Chairman of the Board of Directors, President
- --------------------------------------------- and Chief Executive Officer (principal
C. Edward McVaney executive officer)

/s/ RICHARD E. ALLEN Chief Financial Officer, Vice President,
- --------------------------------------------- Finance and Administration and Director
Richard E. Allen (principal financial officer)

PAMELA L. SAXTON* Vice President of Finance, Controller and
- --------------------------------------------- Chief Accounting Officer (principal
Pamela L. Saxton accounting officer)

ROBERT C. NEWMAN* Director
- ---------------------------------------------
Robert C. Newman

JACK L. THOMPSON* Director
- ---------------------------------------------
Jack L. Thompson

GERALD HARRISON* Director
- ---------------------------------------------
Gerald Harrison

DELWIN D. HOCK* Director
- ---------------------------------------------
Delwin D. Hock

HARRY T. LEWIS, JR.* Director
- ---------------------------------------------
Harry T. Lewis, Jr.

MICHAEL J. MAPLES* Director
- ---------------------------------------------
Michael J. Maples

TRYGVE E. MYHREN* Director
- ---------------------------------------------
Trygve E. Myhren

*By: /s/ RICHARD E. ALLEN
- ---------------------------------------------
Richard E. Allen
(Attorney-in-Fact)
</TABLE>

II-6
<PAGE> 104

SCHEDULE II

J.D. EDWARDS & COMPANY

VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
BALANCE AT ADDITIONS BALANCE AT
BEGINNING CHARGED TO TRANSLATION END
CLASSIFICATION OF PERIOD OPERATIONS WRITE-OFFS ADJUSTMENTS OF PERIOD
- --------------------------------------------- ---------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Allowance for Doubtful Accounts
Year Ended:
October 31, 1994........................... $2,675 $3,699 $ (1,284) $ 10 $5,100
------ ------ ------- ----- ------
October 31, 1995........................... $5,100 $2,305 $ (1,713) $ 8 $5,700
------ ------ ------- ----- ------
October 31, 1996........................... $5,700 $1,387 $ (1,496) $ 9 $5,600
------ ------ ------- ----- ------
Six Months Ended:
April 30, 1997 (unaudited)................. $5,600 $1,984 $ (726) $(158) $6,700
------ ------ ------- ----- ------
</TABLE>

<TABLE>
<CAPTION>
BALANCE AT RELEASE OF BALANCE AT
BEGINNING VALUATION END
CLASSIFICATION OF PERIOD ALLOWANCE OF PERIOD
- --------------------------------------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Year Ended:
October 31, 1994........................... $2,352 $ (2,352) $ --
====== ======= ======
</TABLE>

S-1
<PAGE> 105

EXHIBIT INDEX

<PAGE> 106

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- -------------------- ------------------------------------------------------------------------
<C> <S>
+10.19 Stock Plan for Employees of J.D. Edwards & Company.
10.20 J.D. Edwards & Company 1997 Employee Stock Purchase Plan.
10.21 J.D. Edwards & Company 1997 Equity Incentive Plan.
*10.22 Amended and Restated Stockholders Agreement between C. Edward McVaney,
Jack L. Thompson, Robert C. Newman and the Registrant dated as of
1997.
10.23 J.D. Edwards & Company 1997 Employee Stock Purchase Plan for Non-U.S.
Employees
+11.1 Statement regarding computation of earnings per share.
+16.1 Letter regarding change in certifying accountant.
23.1 Consent of Price Waterhouse LLP.
+23.2 Consent of Wilson Sonsini Goodrich & Rosati (included in Exhibit 5.1).
+24.1 Power of Attorney (filed herewith on the signature page of this
Registration Statement).
+27.1 Financial Data Schedule.
</TABLE>

- ---------------

* To be filed by amendment.

+ Previously filed.

<PAGE> 1

EXHIBIT 3.1(i)

AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
J.D. EDWARDS & COMPANY

J.D. Edwards & Company, a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), does hereby certify:

FIRST: The name of the Corporation is J.D. Edwards & Company.

SECOND: The date on which the Certificate of Incorporation of the
Corporation was originally filed with the Secretary of State of the State of
Delaware is July 3, 1997.

THIRD: The Sole Incorporator of the Corporation, acting in accordance
with the provisions of Sections 103, 241 and 245 of the General Corporation Law
of the State of Delaware, amends and restates its Certificate of Incorporation
as follows:

The name of this corporation is J.D. Edwards & Company (the
"Corporation").

II.

The address of the Corporation's registered office in the State of
Delaware is 1209 Orange Street, City of Wilmington, County of New Castle,
Delaware 19801. The name of its registered agent at such address is The
Corporation Trust Company.

III.

The nature of the business or purposes to be conducted or promoted by
the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of the State of
Delaware.

IV.

This Corporation is authorized to issue two classes of shares to be
designated, respectively, Common Stock and Preferred Stock. The total number of
shares of Common Stock which this corporation shall have the authority to issue
shall be 300,000,000, par value $0.001 per share, and the total number of
shares of Preferred Stock this Corporation shall have authority to issue shall
be 5,000,000, par value $0.001 per share.
<PAGE> 2
The Preferred Stock may be issued from time to time in one or more
series pursuant to a resolution or resolutions providing for such issue duly
adopted by the Board of Directors (authority to do so being hereby expressly
vested in the Board of Directors), and such resolution or resolutions shall
also set forth the voting powers, full or limited or none, of each such series
of Preferred Stock and shall fix the designations, preferences and relative,
participating, optional or other special rights and qualifications, limitations
or restrictions of each such series of Preferred Stock. The Board of Directors
is further authorized to determine or alter the rights, preferences, privileges
and restrictions granted to or imposed upon any wholly unissued series of
Preferred Stock and to fix the number of shares of any series of Preferred
Stock and the designation of any such series of Preferred Stock. The Board of
Directors, within the limits and restrictions stated in any resolution or
resolutions of the Board of Directors originally fixing the number of shares
constituting any series, may increase or decrease (but not below the number of
shares in any such series then outstanding) the number of shares of any series
subsequent to the issue of shares of that series.

The Corporation is to have perpetual existence.

VI.

Elections of directors need not be by written ballot unless the Bylaws
of the Corporation shall so provide.

VII.

The number of directors which constitute the whole Board of Directors
of the Corporation shall be designated in the Bylaws of the Corporation. At
each annual meeting of stockholders, directors of the Corporation shall be
elected to hold office until the expiration of the term for which they are
elected and until their successors have been duly elected and qualified; except
that if any such election shall not be so held, such election shall take place
at a stockholders' meeting called and held in accordance with the General
Corporation Law of the State of Delaware.

Effective upon the effective date of the registration of any class of
securities of the Corporation pursuant to the requirements of the Securities
Exchange Act of 1934, as amended (the "Effective Date"), the directors of the
Corporation shall be divided into three classes as nearly equal in size as is
practicable, hereby designated Class I, Class II and Class III. The term of
office of the initial Class I directors shall expire at the first regularly-
scheduled annual meeting of the stockholders following the Effective Date, the
term of office of the initial Class II directors shall expire at the second
annual meeting of the stockholders following the Effective Date and the term of
office of the initial Class III directors shall expire at the third annual
meeting of the stockholders following the Effective Date. At each annual
meeting of stockholders, commencing with the first regularly-scheduled annual
meeting of stockholders following the Effective Date, each of the successors
elected as directors of a Class whose term shall have expired at such annual
meeting shall be elected to hold office until the third annual meeting next
succeeding his or her election and until his or her respective successor shall
have been duly elected and qualified.

2
<PAGE> 3
If the number of directors is hereafter changed, any newly created
directorships or decrease in directorships shall be so apportioned among the
classes as to make all classes as nearly equal in number as is practicable,
provided that no decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.

VIII.

In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter, amend
or repeal the Bylaws of the Corporation.

IX.

(a) To the fullest extent permitted by the General Corporation Law
of the State of Delaware as the same exists or as may hereafter be amended, a
director of the Corporation shall not be personally liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director.

(b) The Corporation may indemnify to the fullest extent permitted
by law any person made or threatened to be made a party to an action or
proceeding, whether criminal, civil, administrative or investigative, by reason
of the fact that he, his testator or intestate is or was a director, officer or
employee of the Corporation or any predecessor of the Corporation or serves or
served at any other enterprise as a director, officer or employee at the
request of the Corporation or any predecessor to the Corporation.

(c) Neither any amendment nor repeal of this Article IX, nor the
adoption of any provision of this Corporation's Amended and Restated
Certificate of Incorporation inconsistent with this Article IX, shall eliminate
or reduce the effect of this Article IX, with respect to any matter occurring,
or any action or proceeding accruing or arising or that, but for this Article
IX, would accrue or arise, prior to such amendment, repeal or adoption of an
inconsistent provision.

Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) outside of the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of the Corporation.

XI.

Vacancies occurring on the Board of Directors for any reason and newly
created directorships resulting from an increase in the authorized number of
directors may be filled only by vote of a majority of the remaining members of
the Board of Directors, although less than a quorum, at any meeting of the
Board of Directors. A person so elected by the Board of Directors to fill a
vacancy or newly created directorship shall hold office until the next election
of the Class for which such director shall have been chosen and until his or
her successor shall have been duly elected and qualified.

3
<PAGE> 4
Whenever the holders of any class or classes of stock or series
thereof are entitled to elect one or more directors by the provisions of this
Amended and Restated Certificate of Incorporation, vacancies and newly created
directorships of such class or classes or series may be filled only by a
majority of the directors elected by such class or classes or series thereof
then in office, or by a sole remaining director so elected. In the event that
no directors elected by such class or classes of stock or series remain, the
majority of the other directors then in office, although less than a quorum, or
a sole remaining director may fill such vacancy or vacancies.

XII.

Advance notice of new business and stockholder nominations for the
election of directors shall be given in the manner and to the extent provided
in the Bylaws of the Corporation.

XIII.

The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Amended and Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation.

FOURTH: The Corporation has not received any payment for any of its
stock as of the date set forth below, nor have any directors been named. This
Amended and Restated Certificate of Incorporation is duly adopted by the Sole
Incorporator in accordance with the provisions of Section 241 of the General
Corporation Law of the State of Delaware.

4
<PAGE> 5
IN WITNESS WHEREOF, J.D. Edwards & Company has caused this Amended and
Restated Certificate of Incorporation to be signed by its Sole Incorporator
this 4th day of August, 1997.

J.D. EDWARDS & COMPANY

/s/ Romy S. Taubman
------------------------------------
Romy S. Taubman, Sole Incorporator

5
<PAGE> 6

EXHIBIT 3.1(ii)

BYLAWS

J. D. EDWARDS & COMPANY
(A DELAWARE CORPORATION)
<PAGE> 7
TABLE OF CONTENTS

<TABLE>
<CAPTION>
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----
<S> <C>
ARTICLE I CORPORATE OFFICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 REGISTERED OFFICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 OTHER OFFICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II MEETINGS OF STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 PLACE OF MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.3 SPECIAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.4 NOTICE OF STOCKHOLDERS' MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5 ADVANCE NOTICE OF STOCKHOLDER NOMINEES AND STOCKHOLDER BUSINESS . . . . . . . . . . . . . . . . . . . 2
2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.7 QUORUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.8 ADJOURNED MEETING; NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.9 VOTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10 VALIDATION OF MEETINGS; WAIVER OF NOTICE; CONSENT . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.11 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING . . . . . . . . . . . . . . . . . . . . . . . 6
2.12 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.13 PROXIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.14 ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.15 LIST OF STOCKHOLDERS ENTITLED TO VOTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.16 INSPECTORS OF ELECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.17 INSPECTORS OF ELECTION AND PROCEDURES FOR COUNTING WRITTEN CONSENTS . . . . . . . . . . . . . . . . . 9

ARTICLE III DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.1 POWERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.2 NUMBER OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.4 RESIGNATION AND VACANCIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.5 REMOVAL OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.6 PLACE OF MEETINGS; MEETINGS BY TELEPHONE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.7 FIRST MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.8 REGULAR MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.9 SPECIAL MEETINGS; NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.10 QUORUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.11 WAIVER OF NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.12 ADJOURNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>

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<PAGE> 8
TABLE OF CONTENTS
(CONTINUED)

<TABLE>
<CAPTION>
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----
<S> <C>
3.13 NOTICE OF ADJOURNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.14 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.15 FEES AND COMPENSATION OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.16 APPROVAL OF LOANS TO OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.17 SOLE DIRECTOR PROVIDED BY CERTIFICATE OF INCORPORATION . . . . . . . . . . . . . . . . . . . . . . . 16
3.18 CONDUCT OF BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

ARTICLE IV COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.1 COMMITTEES OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.2 MEETINGS AND ACTION OF COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.3 COMMITTEE MINUTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

ARTICLE V OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.1 OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.2 APPOINTMENT OF OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.3 SUBORDINATE OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.4 REMOVAL AND RESIGNATION OF OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.5 VACANCIES IN OFFICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.6 CHAIRMAN OF THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.7 PRESIDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.8 VICE PRESIDENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.9 SECRETARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.10 CHIEF FINANCIAL OFFICER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.11 ASSISTANT SECRETARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.12 ADMINISTRATIVE OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.13 AUTHORITY AND DUTIES OF OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

ARTICLE VI INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND OTHER AGENTS . . . . . . . . . . . . . . . . . . . . 21
6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.2 INDEMNIFICATION OF OTHERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.3 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

ARTICLE VII RECORDS AND REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.1 MAINTENANCE AND INSPECTION OF RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.2 INSPECTION BY DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
</TABLE>

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<PAGE> 9
TABLE OF CONTENTS
(CONTINUED)

<TABLE>
<CAPTION>
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----
<S> <C>
7.3 REPRESENTATION OF SHARES OF OTHER CORPORATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.4 CERTIFICATION AND INSPECTION OF BYLAWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

ARTICLE VIII GENERAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING . . . . . . . . . . . . . . . . . . . . . . . 24
8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.3 CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.4 STOCK CERTIFICATES; TRANSFER; PARTLY PAID SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.5 SPECIAL DESIGNATION ON CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.6 LOST CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.7 TRANSFER AGENTS AND REGISTRARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.8 CONSTRUCTION; DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.10 FISCAL YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.11 SEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.12 STOCK TRANSFER AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.13 REGISTERED STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.14 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

ARTICLE IX AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

ARTICLE X DISSOLUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

ARTICLE XI CUSTODIAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.1 APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.2 DUTIES OF CUSTODIAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>

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<PAGE> 10
BYLAWS

J.D. EDWARDS & COMPANY
(a Delaware corporation)

ARTICLE I

CORPORATE OFFICES

1.1 REGISTERED OFFICE

The registered office of the corporation shall be fixed in the
certificate of incorporation of the corporation.

1.2 OTHER OFFICES

The board of directors may at any time establish branch or subordinate
offices at any place or places where the corporation is qualified to do
business.

ARTICLE II

MEETINGS OF STOCKHOLDERS

2.1 PLACE OF MEETINGS

Meetings of stockholders shall be held at any place within or outside
the State of Delaware designated by the board of directors. In the absence of
any such designation, stockholders' meetings shall be held at the principal
executive office of the corporation.

2.2 ANNUAL MEETING

The annual meeting of stockholders shall be held each year on a date
and at a time designated by the board of directors. In the absence of such
designation, the annual meeting of stockholders shall be held on the third
Tuesday in March in each year at 10:00 a.m. However, if such day falls on a
legal holiday, then the meeting shall be held at the same time and place on the
next succeeding full

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<PAGE> 11
business day. At the meeting, directors shall be elected, and any other proper
business may be transacted if brought before the meeting in accordance with
Section 2.5 of these Bylaws.

2.3 SPECIAL MEETING

A special meeting of the stockholders may be called at any time by the
board of directors, or by the chairman of the board, or by the president.

2.4 NOTICE OF STOCKHOLDERS' MEETINGS

Except as otherwise provided by the General Corporation Law of
Delaware, all notices of meetings of stockholders shall be sent or otherwise
given in accordance with Section 2.6 of these bylaws not less than ten (10) nor
more than sixty (60) days before the date of the meeting. The notice shall
specify the place, date and hour of the meeting and (i) in the case of a
special meeting, the purpose or purposes for which the meeting is called (no
business other than that specified in the notice may be transacted) or (ii) in
the case of the annual meeting, those matters which the board of directors, at
the time of giving the notice, intends to present for action by the
stockholders (but any proper matter may be presented at the meeting for such
action). The notice of any meeting at which directors are to be elected shall
include the name of any nominee or nominees who, at the time of the notice, the
board intends to present for election.

2.5 ADVANCE NOTICE OF STOCKHOLDER NOMINEES AND STOCKHOLDER BUSINESS

(a) To be properly brought before an annual meeting,
nominations for the election of directors or other business must be (i)
specified in the notice of meeting (or any supplement thereto) given by or at
the direction of the board of directors, (ii) otherwise properly brought before
the meeting by or at the direction of the board of directors or (iii) otherwise
properly brought before the meeting by a stockholder in accordance with Section
2.5(b). To be properly brought before a special meeting, nominations for the
election of directors or other business must be specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the board
of directors.

(b) For business to be properly brought before an annual
meeting by a stockholder, the stockholder must have given timely notice thereof
in writing to the Secretary of the corporation. To be timely, such
stockholder's notice must be delivered to or mailed and received by the
secretary of the corporation not less than 60 days prior to the meeting;
provided, however, that in the event that less than 60 days notice or prior
public disclosure of the date of the meeting is given or made to stockholders,
notice by the stockholder to be timely must be so received not later than the
close of business on the seventh day following the day on which such notice of
the date of the meeting was mailed or such public disclosure was made. A
stockholder's notice to the Secretary shall set forth as to each matter the
stockholder proposes to bring before the annual meeting: (i) a brief
description of the business desired to be brought before the annual meeting and
the reasons for

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<PAGE> 12
conducting such business at the annual meeting, (ii) the name and address, as
they appear on the corporation's books, of the stockholder proposing such
business, (iii) the class and number of shares of the corporation which are
beneficially owned by the stockholder, (iv) any material interest of the
stockholder in such business and (v) any other information that is required to
be provided by the stockholder pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), in his capacity as a
proponent to a stockholder proposal. Notwithstanding the foregoing, in order to
include information with respect to a stockholder proposal in the proxy
statement and form of proxy for a stockholder's meeting, stockholders must
provide notice as required by the regulations promulgated under the Exchange
Act. Notwithstanding anything in these bylaws to the contrary, no business
shall be conducted at any annual meeting except in accordance with the
procedures set forth in this Section 2.5. The chairman of the annual meeting
shall, if the facts warrant, determine and declare at the meeting that business
was not properly brought before the meeting and in accordance with the
provisions of this Section 2.5, and, if he or she should so determine, he or
she shall so declare at the meeting that any such business not properly brought
before the meeting shall not be transacted.

(c) Only persons who are nominated in accordance with the
procedures set forth in this paragraph (c) shall be eligible for election as
directors. Nominations of persons for election to the Board of Directors of the
corporation may be made at a meeting of stockholders by or at the direction of
the Board of Directors or by any stockholder of the corporation entitled to
vote in the election of directors at the meeting who complies with the notice
procedures set forth in this paragraph (c). Such nominations, other than those
made by or at the direction of the Board of Directors, shall be made pursuant
to timely notice in writing to the Secretary of the corporation in accordance
with the provisions of paragraph (b) of this Section 2.5. Such stockholder's
notice shall set forth (i) as to such stockholder giving notice, the
information required to be provided pursuant to paragraph (b) of this Section
2.5; and (ii) as to each person, if any, whom the stockholder proposes to
nominate for election or re-election as a director: (A) the name, age, business
address and residence address of such person, (B) the principal occupation or
employment of such person, (C) the class and number of shares of the
corporation which are beneficially owned by such person, (D) a description of
all arrangements or understandings between the stockholder and each nominee and
any other person or persons (naming such person or persons) pursuant to which
the nominations are to be made by the stockholder and (E) any other information
relating to such person that is required to be disclosed in solicitations of
proxies for elections of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Exchange Act (including without limitation
such person's written consent to being named in the proxy statement, if any, as
a nominee and to serving as a director if elected). At the request of the Board
of Directors, any person nominated by a stockholder for election as a director
shall furnish to the Secretary of the corporation that information required to
be set forth in the stockholder's notice of nomination which pertains to the
nominee. No person shall be eligible for election as a director of the
corporation unless nominated in accordance with the procedures set forth in
this paragraph (c). The chairman of the meeting shall, if the facts warrants,
determine and declare at the meeting that a nomination was not made in
accordance with the

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procedures prescribed by these bylaws, and if he should so determine, he shall
so declare at the meeting, and the defective nomination shall be disregarded.

2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE

Written notice of any meeting of stockholders shall be given either
personally or by first-class mail or by telegraphic or other written
communication. Notices not personally delivered shall be sent charges prepaid
and shall be addressed to the stockholder at the address of that stockholder
appearing on the books of the corporation or given by the stockholder to the
corporation for the purpose of notice. Notice shall be deemed to have been
given at the time when delivered personally or deposited in the mail or sent by
telegram or other means of written communication. If any notice addressed to a
stockholder at the address of that stockholder appearing on the books of the
corporation is returned to the corporation by the United States Postal Service
marked to indicate that the United States Postal Service is unable to deliver
the notice to the stockholder at that address, then all future notices or
reports shall be deemed to have been duly given without further mailing if the
same shall be available to the stockholder on written demand of the stockholder
at the principal executive office of the corporation for a period of one (1)
year from the date of the giving of the notice.

An affidavit of the mailing or other means of giving any notice of any
stockholders' meeting, executed by the secretary, assistant secretary or any
transfer agent of the corporation giving the notice, shall be prima facie
evidence of the giving of such notice.

2.7 QUORUM

The holders of a majority in voting power of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. Where a separate vote by a class or classes is
required, a majority, present in person or by proxy, of the shares of such
class or classes entitled to take action with respect to that vote on that
matter shall constitute a quorum. If, however, such quorum is not present or
represented at any meeting of the stockholders, then either (i) the chairman of
the meeting or (ii) the holders of a majority of the shares represented at the
meeting and entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting in accordance with Section 2.8
of these bylaws.

When a quorum is present at any meeting, the vote of the holders of a
majority of the stock having voting power present in person or represented by
proxy shall decide any question brought before such meeting, unless the
question is one upon which, by express provision of the laws of the State of
Delaware or of the certificate of incorporation or these bylaws, a different
vote is required, in which case such express provision shall govern and control
the decision of the question.

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If a quorum be initially present, the stockholders may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum, if any action taken is approved by a
majority of the stockholders initially constituting the quorum.

2.8 ADJOURNED MEETING; NOTICE

Any stockholders' meeting, annual or special, whether or not a quorum
is present, may be adjourned from time to time by (i) the chairman of the
meeting or (ii) the vote of the holders of a majority of the shares represented
at that meeting and entitled to vote thereat, either in person or by proxy. In
the absence of a quorum, no other business may be transacted at that meeting
except as provided in Section 2.7 of these bylaws.

When a meeting is adjourned to another time and place, unless these
bylaws otherwise require, notice need not be given of the adjourned meeting if
the time and place thereof are announced at the meeting at which the
adjournment is taken. At the adjourned meeting the corporation may transact any
business that might have been transacted at the original meeting. If the
adjournment is for more than thirty (30) days, or if after the adjournment a
new record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting.

2.9 VOTING

The stockholders entitled to vote at any meeting of stockholders shall
be determined in accordance with the provisions of Section 2.12 of these
bylaws, subject to the provisions of Sections 217 and 218 of the General
Corporation Law of Delaware (relating to voting rights of fiduciaries, pledgors
and joint owners, and to voting trusts and other voting agreements).

Except as may be otherwise provided in the certificate of
incorporation or these bylaws, each stockholder shall be entitled to one vote
for each share of capital stock held by such stockholder. Any stockholder
entitled to vote on any matter may vote part of the shares in favor of the
proposal, refrain from voting the remaining shares or, may vote them against
the proposal; but, if the stockholder fails to specify the number of shares
which the stockholder is voting affirmatively, it will be conclusively presumed
that the stockholder's approving vote is with respect to all shares which the
stockholder is entitled to vote.

2.10 VALIDATION OF MEETINGS; WAIVER OF NOTICE; CONSENT

The transactions of any meeting of stockholders, either annual or
special, however called and noticed, and wherever held, shall be as valid as
though they had been taken at a meeting duly held after regular call and
notice, if a quorum be present either in person or by proxy, and if, either
before or after the meeting, each person entitled to vote, who was not present
in person or by proxy, signs a written waiver of notice or a consent to the
holding of the meeting or an approval of the minutes

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thereof. The waiver of notice or consent or approval need not specify either
the business to be transacted or the purpose of any annual or special meeting
of stockholders. All such waivers, consents, and approvals shall be filed with
the corporate records or made a part of the minutes of the meeting.

Attendance by a person at a meeting shall also constitute a waiver of
notice of and presence at that meeting, except when the person objects at the
beginning of the meeting to the transaction of any business because the meeting
is not lawfully called or convened. Attendance at a meeting is not a waiver of
any right to object to the consideration of matters required by law to be
included in the notice of the meeting but not so included, if that objection is
expressly made at the meeting.

2.11 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING

Unless otherwise provided in the certificate of incorporation, any
action required or permitted to be taken at any annual or special meeting of
stockholders may be taken without a meeting, without prior notice and without a
vote, if a consent or consents in writing setting forth the action so taken
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted. Such consents shall be delivered to the corporation by delivery to
it registered office in the state of Delaware, its principal place of business,
or an officer or agent of the corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to a
corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested.

Every written consent shall bear the date of signature of each
stockholder who signs the consent, and no written consent shall be effective to
take the corporate action referred to therein unless, within sixty (60) days
after the date the earliest dated consent is delivered to the corporation, a
written consent or consents signed by holders of a sufficient number of votes
to take action are delivered to the corporation in the manner prescribed in the
first paragraph of this section.

Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to those stockholders who
have not consented in writing. If the action which is consented to is such as
would have required the filing of a certificate under any section of the
General Corporation Law of Delaware if such action had been voted on by
stockholders at a meeting thereof, then the certificate filed under such
section shall state, in lieu of any statement required by such section
concerning any vote of stockholders, that written notice and written consent
have been given as provided in Section 228 of the General Corporation Law of
Delaware.

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2.12 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING

For purposes of determining the stockholders entitled to notice of any
meeting or to vote thereat the board of directors may fix, in advance, a record
date, which shall not precede the date upon which the resolution fixing the
record date is adopted by the board of directors and which shall not be more
than sixty (60) days nor less than ten (10) days before the date of any such
meeting, and in such event only stockholders of record on the date so fixed are
entitled to notice and to vote, notwithstanding any transfer of any shares on
the books of the corporation after the record date.

If the board of directors does not so fix a record date the record
date for determining stockholders entitled to notice of or to vote at a meeting
of stockholders shall be at the close of business on the business day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the business day next preceding the day on which the
meeting is held.

A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting
unless the board of directors fixes a new record date for the adjourned
meeting, but the board of directors shall fix a new record date if the meeting
is adjourned for more than thirty (30) days from the date set for the original
meeting.

In order that the corporation may determine the stockholders entitled
to consent to corporate action in writing without a meeting, the board of
directors may fix a record date, which record date shall neither precede nor be
more than ten (10) days after the date upon which such resolution is adopted by
the board of directors. Any stockholder of record seeking to have the
stockholders authorize or take action by written consent shall, by written
notice to the secretary, request the board of directors to fix a record date.
The board of directors shall promptly, but in all events within ten (10) days
after the date on which such notice is received, adopt a resolution fixing the
record date.

If the board of directors has not fixed a record date within such
time, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting, when no prior action by the
board of directors is required by law, shall be the first date on which a
signed written consent setting forth the action taken or proposed to be taken
is delivered to the corporation in the manner prescribed in the first paragraph
of Section 2.11 of these bylaws. If the board of directors has not fixed a
record date within such time and prior action by the board of directors is
required by law, the record date for determining stockholders entitled to
consent to corporate action in writing without a meeting shall be at the close
of business on the date on which the board of directors adopts the resolution
taking such prior action.

The record date for any other purpose shall be as provided in Section
8.1 of these bylaws.

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2.13 PROXIES

Every person entitled to vote for directors, or on any other matter,
shall have the right to do so either in person or by one or more agents
authorized by a written proxy signed by the person and filed with the secretary
of the corporation in accordance with the procedure established for the meeting
or taking of action in writing, as the case may be, but no such proxy shall be
voted or acted upon after three (3) years from its date, unless the proxy
provides for a longer period. A proxy shall be deemed signed if the
stockholder's name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission, telefacsimile or otherwise) by the
stockholder or the stockholder's attorney-in-fact. The revocability of a proxy
that states on its face that it is irrevocable shall be governed by the
provisions of Section 212(e) of the General Corporation Law of Delaware
(relating to the irrevocability of proxies).

2.14 ORGANIZATION

The president, or in the absence of the president, the chairman of the
board, and in the absence of the chairman of the board, the vice presidents, in
order of their rank as fixed by the board of directors, shall call the meeting
of the stockholders to order, and shall act as chairman of the meeting. In the
absence of the president, the chairman of the board, and all of the vice
presidents, the stockholders shall appoint a chairman for such meeting. The
chairman of any meeting of stockholders shall determine the order of business
and the procedures at the meeting, including such matters as the regulation of
the manner of voting and the conduct of business. The date and time of the
opening and closing of the polls for each matter upon which the stockholders
will vote at the meeting shall be announced at the meeting. The secretary of
the corporation shall act as secretary of all meetings of the stockholders, but
in the absence of the secretary at any meeting of the stockholders, the
chairman of the meeting may appoint any person to act as secretary of the
meeting.

2.15 LIST OF STOCKHOLDERS ENTITLED TO VOTE

The officer who has charge of the stock ledger of the corporation
shall prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten (10) days prior to the meeting, either at a place within
the city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place where the meeting
is to be held. The list shall also be produced and kept at the time and place
of the meeting during the whole time thereof, and may be inspected by any
stockholder who is present. The stock ledger shall be the only evidence as to
who are the stockholders entitled to examine the stock ledger, the list of
stockholders or the books of the corporation, or to vote in person or by proxy
at any meeting of stockholders and of the number of shares held by each such
stockholder.

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2.16 INSPECTORS OF ELECTION

The corporation may, and to the extent required by law, shall, in
advance of any meeting of stockholders, appoint one or more inspectors to act
at the meeting and make a written report thereof. The corporation may designate
one or more persons as alternate inspectors to replace any inspector who fails
to act. If no inspector or alternate is able to act at a meeting of
stockholders, the person presiding at the meeting may, and to the extent
required by law, shall, appoint one or more inspectors to act at the meeting.
Each inspector, before entering upon the discharge of his duties, shall take
and sign an oath faithfully to execute the duties of inspector with strict
impartiality and according to the best of his ability. Every vote taken by
ballots shall be counted by an inspector or inspectors appointed by the
chairman of the meeting.

Such inspectors shall:

(a) determine the number of shares outstanding and the
voting power of each, the number of shares represented at the meeting, the
existence of a quorum, and the authenticity, validity, and effect of proxies;

(b) receive votes, ballots or consents;

(d) count and tabulate all votes or consents;

(e) determine when the polls shall close;

(f) determine and certify the result; and

(g) do any other acts that may be proper to conduct the
election or vote with fairness to all stockholders.

2.17 INSPECTORS OF ELECTION AND PROCEDURES FOR COUNTING WRITTEN
CONSENTS

Within three (3) business days after receipt of the earliest dated
consent delivered to the corporation in the manner provided in Section 228(c)
of the General Corporation Law of Delaware or the determination by the board of
directors of the corporation that the corporation should seek corporate action
by written consent, as the case may be, the secretary may, but is not required
to, engage nationally recognized independent inspectors of elections for the
purpose of performing a ministerial review of the validity of the consents and
revocations. The cost of retaining inspectors of election shall be borne by the
corporation.

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Consents and revocations shall be delivered to the inspectors upon
receipt by the corporation, the stockholder or stockholders soliciting consents
or soliciting revocations in opposition to action by consent proposed by the
corporation (the "Soliciting Stockholders") or their proxy solicitors or other
designated agents. As soon as consents and revocations are received, the
inspectors shall review the consents and revocations and shall maintain a count
of the number of valid and unrevoked consents. The inspectors shall keep such
count confidential and shall not reveal the count to the corporation, the
Soliciting Stockholders or their representatives or any other person or entity.
As soon as practicable after the earlier of (i) sixty (60) days after the date
of the earliest dated consent delivered to the corporation in the manner
provided in Section 228(c) of the General Corporation Law of Delaware or (ii) a
written request therefor by the corporation or the Soliciting Stockholders
(whichever is soliciting consents) (which request, except in the case of
corporate action by written consent taken pursuant to the solicitations of not
more than ten (10) persons, may be made no earlier than after such reasonable
amount of time after the commencement date of the applicable solicitation of
consents as is necessary to permit the inspectors to commence and organize
their count, but in no event less than five (5) days after such commencement
date), notice of which request shall be given to the party opposing the
solicitation of consents, if any, which request shall state that the
corporation or Soliciting Stockholders, as the case may be, have a good faith
belief that the requisite number of valid and unrevoked consents to authorize
or take the action specified in the consents has been received in accordance
with these bylaws, the inspectors shall issue a preliminary report to the
corporation and the Soliciting Stockholders stating: (i) the number of valid
consents; (ii) the number of valid revocations; (iii) the number of valid and
unrevoked consents; (iv) the number of invalid consents; (v) the number of
invalid revocations; and (vi) whether, based on their preliminary count, the
requisite number of valid and unrevoked consents has been obtained to authorize
or take the action specified in the consents.

Unless the corporation and the Soliciting Stockholders shall agree in
writing to a shorter or longer period, the corporation and the Soliciting
Stockholders shall have 48 hours to review the consents and revocations and to
advise the inspectors and the opposing party in writing as to whether they
intend to challenge the preliminary report of the inspectors. If no written
notice of an intention to challenge the preliminary report is received within
48 hours after the inspectors' issuance of the preliminary report, the
inspectors shall issue to the corporation and the Soliciting Stockholders their
final report containing the information from the inspectors' determination with
respect to whether the requisite number of valid and unrevoked consents was
obtained to authorize and take the action specified in the consents. If the
corporation or the Soliciting Stockholders issue written notice of an intention
to challenge the inspectors' preliminary report within 48 hours after the
issuance of that report, a challenge session shall be scheduled by the
inspectors as promptly as practicable. A transcript of the challenge session
shall be recorded by a certified court reporter. Following completion of the
challenge session, the inspectors shall as promptly as practicable issue their
final report to the corporation and the Soliciting Stockholders, which report
shall contain the information included in the preliminary report, plus all
changes made to the vote totals as a result of the challenge and a
certification of whether the requisite number of valid and unrevoked consents
was obtained to authorize or take the action specified in the consents. A copy
of the final report of the

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inspectors shall be included in the book in which the proceedings of meetings
of stockholders are recorded.

ARTICLE III

DIRECTORS

3.1 POWERS

Subject to the provisions of the General Corporation Law of Delaware
and to any limitations in the certificate of incorporation or these bylaws
relating to action required to be approved by the stockholders or by the
outstanding shares, the business and affairs of the corporation shall be
managed and all corporate powers shall be exercised by or under the direction
of the board of directors.

3.2 NUMBER OF DIRECTORS

The board of directors shall consist of nine (9) members. The number
of directors may be changed by an amendment to this bylaw, duly adopted by the
board of directors or by the stockholders, or by a duly adopted amendment to
the certificate of incorporation. No reduction of the authorized number of
directors shall have the effect of removing any director before that director's
term of office expires. If for any cause, the directors shall not have been
elected at an annual meeting, they may be elected as soon thereafter as
convenient at a special meeting of the stockholders called for that purpose in
the manner provided in these Bylaws.

3.3 ELECTION AND TERM OF OFFICE OF DIRECTORS

Except as provided in Section 3.4 of these bylaws, directors shall
hold office until the expiration of the term for which elected and until a
successor has been elected and qualified; except that if any such election
shall not be so held, such election shall take place at a stockholders' meeting
called and held in accordance with the General Corporation Law of Delaware.

Effective upon the effective date of the registration of any class of
securities of the corporation pursuant to the requirements of the Exchange Act
(the "Effective Date"), the directors of the corporation shall be divided into
three classes as nearly equal in size as is practicable, hereby designated
Class I, Class II and Class III. The term of office of the initial Class I
directors shall expire at the first regularly-scheduled annual meeting of the
stockholders following the Effective Date, the term of office of the initial
Class II directors shall expire at the second annual meeting of the
stockholders following the Effective Date and the term of office of the initial
Class III directors shall expire at the third annual meeting of the
stockholders following the Effective Date. At each

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annual meeting of stockholders, commencing with the first regularly-scheduled
annual meeting of stockholders following the Effective Date, each of the
successors elected to replace the directors of a Class whose term shall have
expired at such annual meeting shall be elected to hold office until the third
annual meeting next succeeding his or her election and until his or her
respective successor shall have been duly elected and qualified. If the number
of directors is hereafter changed, any newly created directorships or decrease
in directorships shall be so apportioned among the classes as to make all
classes as nearly equal in number as is practicable, provided that no decrease
in the number of directors constituting the Board of Directors shall shorten
the term of any incumbent director.

Directors need not be stockholders unless so required by the
certificate of incorporation or these bylaws, wherein other qualifications for
directors may be prescribed.

Elections of directors need not be by written ballot.

3.4 RESIGNATION AND VACANCIES

Any director may resign effective on giving written notice to the
chairman of the board, the president, the secretary or the board of directors,
unless the notice specifies a later time for that resignation to become
effective. If the resignation of a director is effective at a future time,
only a majority of the board of directors then in office, including those who
have so resigned (until the effective date of such resignation), shall have the
power to fill such vacancy or vacancies, the vote thereon to take effect when
such resignation or resignations shall become effective.

Vacancies in the board of directors may be filled by a majority of the
remaining directors, even if less than a quorum, or by a sole remaining
director; however, a vacancy created by the removal of a director by the vote
of the stockholders or by court order may be filled only by the affirmative
vote of a majority of the shares represented and voting at a duly held meeting
at which a quorum is present (which shares voting affirmatively also constitute
a majority of the required quorum). Each director so elected shall hold office
until the next annual meeting of the stockholders and until a successor has
been elected and qualified.

Unless otherwise provided in the certificate of incorporation or these
bylaws:

(i) Vacancies and newly created directorships resulting
from any increase in the authorized number of directors elected by all of the
stockholders having the right to vote as a single class may be filled only by a
majority of the directors then in office, although less than a quorum, or by a
sole remaining director.

(ii) Whenever the holders of any class or classes of stock
or series thereof are entitled to elect one or more directors by the provisions
of the certificate of incorporation, vacancies and newly created directorships
of such class or classes or series may be filled only by a majority of

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the directors elected by such class or classes or series thereof then in
office, or by a sole remaining director so elected. In the event that no
directors elected by such class or classes of stock or series remain, the
majority of the other directors then in office, although less than a quorum, or
a sole remaining director may fill such vacancy or vacancies.

If at any time, by reason of death or resignation or other cause, the
corporation should have no directors in office, then any officer or any
stockholder or an executor, administrator, trustee or guardian of a
stockholder, or other fiduciary entrusted with like responsibility for the
person or estate of a stockholder, may call a special meeting of stockholders
in accordance with the provisions of the certificate of incorporation or these
bylaws, or may apply to the Court of Chancery for a decree summarily ordering
an election as provided in Section 211 of the General Corporation Law of
Delaware.

If, at the time of filling any vacancy or any newly created
directorship, the directors then in office constitute less than a majority of
the whole board (as constituted immediately prior to any such increase), then
the Court of Chancery may, upon application of any stockholder or stockholders
holding at least ten (10) percent of the total number of the shares at the time
outstanding having the right to vote for such directors, summarily order an
election to be held to fill any such vacancies or newly created directorships,
or to replace the directors chosen by the directors then in office as
aforesaid, which election shall be governed by the provisions of Section 211 of
the General Corporation Law of Delaware as far as applicable.

3.5 REMOVAL OF DIRECTORS

Unless otherwise restricted by statute, by the certificate of
incorporation or by these bylaws, any director or the entire board of directors
may be removed, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors; provided, however,
that, if and so long as stockholders of the corporation are entitled to
cumulative voting, if less than the entire board is to be removed, no director
may be removed without cause if the votes cast against his removal would be
sufficient to elect him if then cumulatively voted at an election of the entire
board of directors. Whenever the holders of any class or series are entitled to
elect one or more directors by the certificate of incorporation, this Section
3.5 shall apply, in respect to the removal without cause of a director or
directors so elected, to the vote of the holders of the outstanding shares of
that class or series and not to the vote of the outstanding shares as a whole.

No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of such director's term
of office.

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3.6 PLACE OF MEETINGS; MEETINGS BY TELEPHONE

Regular meetings of the board of directors may be held at any place
within or outside the State of Delaware that has been designated from time to
time by resolution of the board. In the absence of such a designation, regular
meetings shall be held at the principal executive office of the corporation.
Special meetings of the board may be held at any place within or outside the
State of Delaware that has been designated in the notice of the meeting or, if
not stated in the notice or if there is no notice, at the principal executive
office of the corporation.

Any meeting of the board, regular or special, may be held by
conference telephone or similar communication equipment, so long as all
directors participating in the meeting can hear one another; and all such
participating directors shall be deemed to be present in person at the meeting.

3.7 FIRST MEETINGS

The first meeting of each newly elected board of directors shall be
held at such time and place as shall be fixed by the vote of the stockholders
at the annual meeting and no notice of such meeting shall be necessary to the
newly elected directors in order legally to constitute the meeting, provided a
quorum shall be present. In the event of the failure of the stockholders to fix
the time or place of such first meeting of the newly elected board of
directors, or in the event such meeting is not held at the time and place so
fixed by the stockholders, the meeting may be held at such time and place as
shall be specified in a notice given as hereinafter provided for special
meetings of the board of directors, or as shall be specified in a written
waiver signed by all of the directors.

3.8 REGULAR MEETINGS

Regular meetings of the board of directors may be held without notice
at such time as shall from time to time be determined by the board of
directors. If any regular meeting day shall fall on a legal holiday, then the
meeting shall be held at the same time and place on the next succeeding full
business day.

3.9 SPECIAL MEETINGS; NOTICE

Special meetings of the board of directors for any purpose or purposes
may be called at any time by the chairman of the board, the president, any vice
president, the secretary or any two directors.

Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail,
telecopy or telegram, charges prepaid, addressed to each director at that
director's address as it is shown on the records of the corporation. If the
notice is mailed, it shall be deposited in the United States mail at least two
(2) days before the time of the holding of the meeting. If the notice is
delivered personally or by telephone, telecopy or telegram, it

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shall be delivered personally or by telephone or telecopy or to the telegraph
company at least four (4) hours before the time of the holding of the meeting.
Any oral notice given personally or by telephone may be communicated either to
the director or to a person at the office of the director who the person giving
the notice has reason to believe will promptly communicate it to the director.
If the meeting is to be held at the principal executive office of the
corporation, the notice need not specify the place of the meeting. Moreover, a
notice of special meeting need not state the purpose of such meeting, and,
unless indicated in the notice thereof, any and all business may be transacted
at a special meeting.

3.10 QUORUM

A majority of the authorized number of directors shall constitute a
quorum for the transaction of business, except to adjourn as provided in
Section 3.12 of these bylaws. Every act or decision done or made by a majority
of the directors present at a duly held meeting at which a quorum is present
shall be regarded as the act of the board of directors, subject to the
provisions of the certificate of incorporation and applicable law.

A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if any action
taken is approved by at least a majority of the quorum for that meeting.

3.11 WAIVER OF NOTICE

Notice of a meeting need not be given to any director (i) who signs a
waiver of notice, whether before or after the meeting, or (ii) who attends the
meeting without protesting, prior thereto or at its commencement, the lack of
notice to such directors. All such waivers shall be filed with the corporate
records or made part of the minutes of the meeting. A waiver of notice need not
specify the purpose of any regular or special meeting of the board of
directors.

3.12 ADJOURNMENT

A majority of the directors present, whether or not constituting a
quorum, may adjourn any meeting of the board to another time and place.

3.13 NOTICE OF ADJOURNMENT

Notice of the time and place of holding an adjourned meeting of the
board need not be given unless the meeting is adjourned for more than
twenty-four (24) hours. If the meeting is adjourned for more than twenty-four
(24) hours, then notice of the time and place of the adjourned meeting shall be
given before the adjourned meeting takes place, in the manner specified in
Section 3.9 of these bylaws, to the directors who were not present at the time
of the adjournment.

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3.14 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING

Any action required or permitted to be taken by the board of directors
may be taken without a meeting, provided that all members of the board
individually or collectively consent in writing to that action. Such action by
written consent shall have the same force and effect as a unanimous vote of the
board of directors. Such written consent and any counterparts thereof shall be
filed with the minutes of the proceedings of the board of directors.

3.15 FEES AND COMPENSATION OF DIRECTORS

Directors and members of committees may receive such compensation, if
any, for their services and such reimbursement of expenses as may be fixed or
determined by resolution of the board of directors. This Section 3.15 shall not
be construed to preclude any director from serving the corporation in any other
capacity as an officer, agent, employee or otherwise and receiving compensation
for those services. Members of special or standing committees may be allowed
like compensation for attending committee meetings.

3.16 APPROVAL OF LOANS TO OFFICERS

The corporation may lend money to, or guarantee any obligation of, or
otherwise assist any officer or other employee of the corporation or any of its
subsidiaries, including any officer or employee who is a director of the
corporation or any of its subsidiaries, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be expected to
benefit the corporation. The loan, guaranty or other assistance may be with or
without interest and may be unsecured, or secured in such manner as the board
of directors shall approve, including, without limitation, a pledge of shares
of stock of the corporation. Nothing contained in this section shall be deemed
to deny, limit or restrict the powers of guaranty or warranty of the
corporation at common law or under any statute.

3.17 SOLE DIRECTOR PROVIDED BY CERTIFICATE OF INCORPORATION

In the event only one director is required by these bylaws or the
certificate of incorporation, then any reference herein to notices, waivers,
consents, meetings or other actions by a majority or quorum of the directors
shall be deemed to refer to such notice, waiver, etc., by such sole director,
who shall have all the rights and duties and shall be entitled to exercise all
of the powers and shall assume all the responsibilities otherwise herein
described as given to the board of directors.

3.18 CONDUCT OF BUSINESS

At any meeting of the board of directors, business shall be transacted
in such order and manner as the board may from time to time determine, and all
matters shall be determined by the vote of a majority of the directors present,
except as otherwise provided herein or required by law.

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ARTICLE IV

COMMITTEES

4.1 COMMITTEES OF DIRECTORS

The board of directors may, by resolution adopted by a majority of the
authorized number of directors, designate one or more committees, each
consisting of one or more directors, to serve at the pleasure of the board. The
board may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee. The appointment of members or alternate members of a committee
requires the vote of a majority of the authorized number of directors. Any
committee, to the extent provided in the resolution of the board, shall have
and may exercise all the powers and authority of the board, but no such
committee shall have the power or authority to (i) amend the certificate of
incorporation (except that a committee may, to the extent authorized in the
resolution or resolutions providing for the issuance of shares of stock adopted
by the board of directors as provided in Section 151(a) of the General
Corporation Law of Delaware, fix the designations and any of the preferences or
rights of such shares relating to dividends, redemption, dissolution, any
distribution of assets of the corporation or the conversion into, or the
exchange of such shares for, shares of any other class or classes or any other
series of the same or any other class or classes of stock of the corporation or
fix the number of shares of any series of stock or authorize the increase or
decrease of the shares of any series), (ii) adopt an agreement of merger or
consolidation under Sections 251 or 252 of the General Corporation Law of
Delaware, (iii) recommend to the stockholders the sale, lease or exchange of
all or substantially all of the corporation's property and assets, (iv)
recommend to the stockholders a dissolution of the corporation or a revocation
of a dissolution or (v) amend the bylaws of the corporation; and, unless the
board resolution establishing the committee, a supplemental resolution of the
board of directors, the bylaws or the certificate of incorporation expressly so
provide, no such committee shall have the power or authority to declare a
dividend, to authorize the issuance of stock, or to adopt a certificate of
ownership and merger pursuant to Section 253 of the General Corporation Law of
Delaware.

4.2 MEETINGS AND ACTION OF COMMITTEES

Meetings and actions of committees shall be governed by, and held and
taken in accordance with, the following provisions of Article III of these
bylaws: Section 3.6 (place of meetings; meetings by telephone), Section 3.8
(regular meetings), Section 3.9 (special meetings; notice), Section 3.10
(quorum), Section 3.11 (waiver of notice), Section 3.12 (adjournment), Section
3.13 (notice of adjournment) and Section 3.14 (board action by written consent
without meeting), with such changes in the context of those bylaws as are
necessary to substitute the committee and its members for the board of
directors and its members; provided, however, that the time of regular

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meetings of committees may be determined either by resolution of the board of
directors or by resolution of the committee, that special meetings of
committees may also be called by resolution of the board of directors, and that
notice of special meetings of committees shall also be given to all alternate
members, who shall have the right to attend all meetings of the committee. The
board of directors may adopt rules for the government of any committee not
inconsistent with the provisions of these bylaws.

4.3 COMMITTEE MINUTES

Each committee shall keep regular minutes of its meetings and report
the same to the board of directors when required.

ARTICLE V

OFFICERS

5.1 OFFICERS

The Corporate Officers of the corporation shall be a president, a
secretary and a chief financial officer. The corporation may also have, at the
discretion of the board of directors, a chairman of the board, a chief
executive officer, a chief operating officer, a chief technical officer, one or
more vice presidents (however denominated), one or more assistant secretaries,
a treasurer, one or more assistant treasurers and such other officers as may be
appointed in accordance with the provisions of Section 5.3 of these bylaws. Any
number of offices may be held by the same person.

In addition to the Corporate Officers of the Company described above,
there may also be such Administrative Officers of the corporation as may be
designated and appointed from time to time by the president of the corporation
in accordance with the provisions of Section 5.12 of these bylaws.

5.2 APPOINTMENT OF OFFICERS

The Corporate Officers of the corporation, except such officers as may
be appointed in accordance with the provisions of Section 5.3 or Section 5.5 of
these bylaws, shall be chosen by the board of directors, subject to the rights,
if any, of an officer under any contract of employment, and shall hold their
respective offices for such terms as the board of directors may from time to
time determine.

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5.3 SUBORDINATE OFFICERS

The board of directors may appoint, or may empower the president to
appoint, such other Corporate Officers as the business of the corporation may
require, each of whom shall hold office for such period, have such power and
authority, and perform such duties as are provided in these bylaws or as the
board of directors may from time to time determine.

The president may from time to time designate and appoint
Administrative Officers of the corporation in accordance with the provisions of
Section 5.12 of these bylaws.

5.4 REMOVAL AND RESIGNATION OF OFFICERS

Subject to the rights, if any, of a Corporate Officer under any
contract of employment, any Corporate Officer may be removed, either with or
without cause, by the board of directors at any regular or special meeting of
the board or, except in case of a Corporate Officer chosen by the board of
directors, by any Corporate Officer upon whom such power of removal may be
conferred by the board of directors.

Any Corporate Officer may resign at any time by giving written notice
to the corporation. Any resignation shall take effect at the date of the
receipt of that notice or at any later time specified in that notice; and,
unless otherwise specified in that notice, the acceptance of the resignation
shall not be necessary to make it effective. Any resignation is without
prejudice to the rights, if any, of the corporation under any contract to which
the Corporate Officer is a party.

Any Administrative Officer designated and appointed by the president
may be removed, either with or without cause, at any time by the president. Any
Administrative Officer may resign at any time by giving written notice to the
president or to the secretary of the corporation.

5.5 VACANCIES IN OFFICES

A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled in the manner prescribed in
these bylaws for regular appointments to that office.

5.6 CHAIRMAN OF THE BOARD

The chairman of the board, if such an officer be elected, shall, if
present, preside at meetings of the board of directors and exercise such other
powers and perform such other duties as may from time to time be assigned to
him by the board of directors or as may be prescribed by these bylaws. If there
is no president, then the chairman of the board shall also be the chief
executive officer of the corporation and shall have the powers and duties
prescribed in Section 5.7 of these bylaws.

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5.7 PRESIDENT

Subject to such supervisory powers, if any, as may be given by the
board of directors to the chairman of the board, if there be such an officer,
the president shall be the chief executive officer of the corporation and
shall, subject to the control of the board of directors, have general
supervision, direction and control of the business and the officers of the
corporation. He or she shall preside at all meetings of the stockholders and,
in the absence or nonexistence of a chairman of the board, at all meetings of
the board of directors. He or she shall have the general powers and duties of
management usually vested in the office of president of a corporation, and
shall have such other powers and perform such other duties as may be prescribed
by the board of directors or these bylaws.

The president shall, without limitation, have the authority to execute
bonds, mortgages and other contracts requiring a seal, under the seal of the
Corporation, except where required or permitted by law to be otherwise signed
and executed and except where the signing and execution thereof shall be
expressly delegated by the Board of Directors to some other officer or agent of
the corporation.

5.8 VICE PRESIDENTS

In the absence or disability of the president, and if there is no
chairman of the board, the vice presidents, if any, in order of their rank as
fixed by the board of directors or, if not ranked, a vice president designated
by the board of directors, shall perform all the duties of the president and
when so acting shall have all the powers of, and be subject to all the
restrictions upon, the president. The vice presidents shall have such other
powers and perform such other duties as from time to time may be prescribed for
them respectively by the board of directors, these bylaws, the president or the
chairman of the board.

5.9 SECRETARY

The secretary shall keep or cause to be kept, at the principal
executive office of the corporation or such other place as the board of
directors may direct, a book of minutes of all meetings and actions of the
board of directors, committees of directors and stockholders. The minutes shall
show the time and place of each meeting, whether regular or special (and, if
special, how authorized and the notice given), the names of those present at
directors' meetings or committee meetings, the number of shares present or
represented at stockholders' meetings and the proceedings thereof.

The secretary shall keep, or cause to be kept, at the principal
executive office of the corporation or at the office of the corporation's
transfer agent or registrar, as determined by resolution of the board of
directors, a share register or a duplicate share register, showing the names of
all stockholders and their addresses, the number and classes of shares held by
each, the number and date of certificates evidencing such shares and the number
and date of cancellation of every certificate surrendered for cancellation.

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The secretary shall give, or cause to be given, notice of all meetings
of the stockholders and of the board of directors required to be given by law
or by these bylaws. He or she shall keep the seal of the corporation, if one be
adopted, in safe custody and shall have such other powers and perform such
other duties as may be prescribed by the board of directors or by these bylaws.

5.10 CHIEF FINANCIAL OFFICER

The chief financial officer shall keep and maintain, or cause to be
kept and maintained, adequate and correct books and records of accounts of the
properties and business transactions of the corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital,
retained earnings and shares. The books of account shall at all reasonable
times be open to inspection by any director for a purpose reasonably related to
his position as a director.

The chief financial officer shall deposit all money and other
valuables in the name and to the credit of the corporation with such
depositaries as may be designated by the board of directors. He or she shall
disburse the funds of the corporation as may be ordered by the board of
directors, shall render to the president and directors, whenever they request
it, an account of all of his or her transactions as chief financial officer and
of the financial condition of the corporation, and shall have such other powers
and perform such other duties as may be prescribed by the board of directors or
these bylaws.

5.11 ASSISTANT SECRETARY

The assistant secretary, if any, or, if there is more than one, the
assistant secretaries in the order determined by the board of directors (or if
there be no such determination, then in the order of their election) shall, in
the absence of the secretary or in the event of his or her inability or refusal
to act, perform the duties and exercise the powers of the secretary and shall
perform such other duties and have such other powers as the board of directors
may from time to time prescribe.

5.12 ADMINISTRATIVE OFFICERS

In addition to the Corporate Officers of the corporation as provided
in Section 5.1 of these bylaws and such subordinate Corporate Officers as may
be appointed in accordance with Section 5.3 of these bylaws, there may also be
such Administrative Officers of the corporation as may be designated and
appointed from time to time by the president of the corporation. Administrative
Officers shall perform such duties and have such powers as from time to time
may be determined by the president or the board of directors in order to assist
the Corporate Officers in the furtherance of their duties. In the performance
of such duties and the exercise of such powers, however, such Administrative
Officers shall have limited authority to act on behalf of the corporation as
the board of directors shall establish, including but not limited to
limitations on the dollar amount and on the scope of agreements or commitments
that may be made by such Administrative Officers on behalf of

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the corporation, which limitations may not be exceeded by such individuals or
altered by the president without further approval by the board of directors.

5.13 AUTHORITY AND DUTIES OF OFFICERS

In addition to the foregoing powers, authority and duties, all
officers of the corporation shall respectively have such authority and powers
and perform such duties in the management of the business of the corporation as
may be designated from time to time by the board of directors.

ARTICLE VI

INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES
AND OTHER AGENTS

6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS

The corporation shall, to the maximum extent and in the manner
permitted by the General Corporation Law of Delaware as the same now exists or
may hereafter be amended, indemnify any person against expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement actually and
reasonably incurred in connection with any threatened, pending or completed
action, suit, or proceeding in which such person was or is a party or is
threatened to be made a party by reason of the fact that such person is or was
a director or officer of the corporation. For purposes of this Section 6.1, a
"director" or "officer" of the corporation shall mean any person (i) who is or
was a director or officer of the corporation, (ii) who is or was serving at the
request of the corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise or (iii) who was a
director or officer of a corporation which was a predecessor corporation of the
corporation or of another enterprise at the request of such predecessor
corporation.

The corporation shall be required to indemnify a director or officer
in connection with an action, suit, or proceeding (or part thereof) initiated
by such director or officer only if the initiation of such action, suit, or
proceeding (or part thereof) by the director or officer was authorized by the
board of Directors of the corporation.

The corporation shall pay the expenses (including attorney's fees)
incurred by a director or officer of the corporation entitled to
indemnification hereunder in defending any action, suit or proceeding referred
to in this Section 6.1 in advance of its final disposition; provided, however,
that payment of expenses incurred by a director or officer of the corporation
in advance of the final disposition of such action, suit or proceeding shall be
made only upon receipt of an undertaking by the director or officer to repay
all amounts advanced if it should ultimately be determined that the director or
officer is not entitled to be indemnified under this Section 6.1 or otherwise.

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The rights conferred on any person by this Article shall not be
exclusive of any other rights which such person may have or hereafter acquire
under any statute, provision of the corporation's Certificate of Incorporation,
these bylaws, agreement, vote of the stockholders or disinterested directors or
otherwise.

Any repeal or modification of the foregoing provisions of this Article
shall not adversely affect any right or protection hereunder of any person in
respect of any act or omission occurring prior to the time of such repeal or
modification.

6.2 INDEMNIFICATION OF OTHERS

The corporation shall have the power, to the maximum extent and in the
manner permitted by the General Corporation Law of Delaware as the same now
exists or may hereafter be amended, to indemnify any person (other than
directors and officers) against expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement actually and reasonably
incurred in connection with any threatened, pending or completed action, suit,
or proceeding, in which such person was or is a party or is threatened to be
made a party by reason of the fact that such person is or was an employee or
agent of the corporation. For purposes of this Section 6.2, an "employee" or
"agent" of the corporation (other than a director or officer) shall mean any
person (i) who is or was an employee or agent of the corporation, (ii) who is
or was serving at the request of the corporation as an employee or agent of
another corporation, partnership, joint venture, trust or other enterprise or
(iii) who was an employee or agent of a corporation which was a predecessor
corporation of the corporation or of another enterprise at the request of such
predecessor corporation.

6.3 INSURANCE

The corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him or her and incurred
by him or her in any such capacity, or arising out of his or her status as
such, whether or not the corporation would have the power to indemnify him or
her against such liability under the provisions of the General Corporation Law
of Delaware.

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ARTICLE VII

RECORDS AND REPORTS

7.1 MAINTENANCE AND INSPECTION OF RECORDS

The corporation shall, either at its principal executive office or at
such place or places as designated by the board of directors, keep a record of
its stockholders listing their names and addresses and the number and class of
shares held by each stockholder, a copy of these bylaws as amended to date,
accounting books and other records of its business and properties.

Any stockholder of record, in person or by attorney or other agent,
shall, upon written demand under oath stating the purpose thereof, have the
right during the usual hours for business to inspect for any proper purpose the
corporation's stock ledger, a list of its stockholders, and its other books and
records and to make copies or extracts therefrom. A proper purpose shall mean a
purpose reasonably related to such person's interest as a stockholder. In every
instance where an attorney or other agent is the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power of attorney
or such other writing that authorizes the attorney or other agent to so act on
behalf of the stockholder. The demand under oath shall be directed to the
corporation at its registered office in Delaware or at its principal place of
business.

7.2 INSPECTION BY DIRECTORS

Any director shall have the right to examine the corporation's stock
ledger, a list of its stockholders and its other books and records for a
purpose reasonably related to his or her position as a director. The Court of
Chancery is hereby vested with the exclusive jurisdiction to determine whether
a director is entitled to the inspection sought. The Court may summarily order
the corporation to permit the director to inspect any and all books and
records, the stock ledger, and the stock list and to make copies or extracts
therefrom. The Court may, in its discretion, prescribe any limitations or
conditions with reference to the inspection, or award such other and further
relief as the Court may deem just and proper.

7.3 REPRESENTATION OF SHARES OF OTHER CORPORATIONS

The chairman of the board, if any, the president, any vice president,
the chief financial officer, the secretary or any assistant secretary of this
corporation, or any other person authorized by the board of directors or the
president or a vice president, is authorized to vote, represent and exercise on
behalf of this corporation all rights incident to any and all shares of the
stock of any other corporation or corporations standing in the name of this
corporation. The authority herein granted may be exercised either by such
person directly or by any other person authorized to do so by proxy or power of
attorney duly executed by such person having the authority.

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7.4 CERTIFICATION AND INSPECTION OF BYLAWS

The original or a copy of these bylaws, as amended or otherwise
altered to date, certified by the secretary, shall be kept at the corporation's
principal executive office and shall be open to inspection by the stockholders
of the corporation, at all reasonable times during office hours.

ARTICLE VIII

GENERAL MATTERS

8.1 RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING

For purposes of determining the stockholders entitled to receive
payment of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the board of directors may fix, in advance, a record date, which shall not
precede the date upon which the resolution fixing the record date is adopted
and which shall not be more than sixty (60) days before any such action. In
that case, only stockholders of record at the close of business on the date so
fixed are entitled to receive the dividend, distribution or allotment of
rights, or to exercise such rights, as the case may be, notwithstanding any
transfer of any shares on the books of the corporation after the record date so
fixed, except as otherwise provided by law.

If the board of directors does not so fix a record date, then the
record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the board of directors adopts the
applicable resolution.

8.2 CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS

From time to time, the board of directors shall determine by
resolution which person or persons may sign or endorse all checks, drafts,
other orders for payment of money, notes or other evidences of indebtedness
that are issued in the name of or payable to the corporation, and only the
persons so authorized shall sign or endorse those instruments.

8.3 CORPORATE CONTRACTS AND INSTRUMENTS: HOW EXECUTED

The board of directors, except as otherwise provided in these bylaws,
may authorize and empower any officer or officers, or agent or agents, to enter
into any contract or execute any instrument in the name of and on behalf of the
corporation; such power and authority may be general or confined to specific
instances. Unless so authorized or ratified by the board of directors or within
the agency power of an officer, no officer, agent or employee shall have any
power or authority to

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bind the corporation by any contract or engagement or to pledge its credit or
to render it liable for any purpose or for any amount.

8.4 STOCK CERTIFICATES; TRANSFER; PARTLY PAID SHARES

The shares of the corporation shall be represented by certificates,
provided that the board of directors of the corporation may provide by
resolution or resolutions that some or all of any or all classes or series of
its stock shall be uncertificated shares. Any such resolution shall not apply
to shares represented by a certificate until such certificate is surrendered to
the corporation. Notwithstanding the adoption of such a resolution by the board
of directors, every holder of stock represented by certificates and, upon
request, every holder of uncertificated shares, shall be entitled to have a
certificate signed by, or in the name of the corporation by, the chairman or
vice-chairman of the board of directors, or the president or vice-president,
and by the treasurer or an assistant treasurer, or the secretary or an
assistant secretary of such corporation representing the number of shares
registered in certificate form. Any or all of the signatures on the certificate
may be a facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate has
ceased to be such officer, transfer agent or registrar before such certificate
is issued, it may be issued by the corporation with the same effect as if he or
she were such officer, transfer agent or registrar at the date of issue.

Certificates for shares shall be of such form and device as the board
of directors may designate and shall state the name of the record holder of the
shares represented thereby; its number; date of issuance; the number of shares
for which it is issued; a summary statement or reference to the powers,
designations, preferences or other special rights of such stock and the
qualifications, limitations or restrictions of such preferences and/or rights,
if any; a statement or summary of liens, if any; a conspicuous notice of
restrictions upon transfer or registration of transfer, if any; a statement as
to any applicable voting trust agreement; if the shares be assessable, or, if
assessments are collectible by personal action, a plain statement of such
facts.

Upon surrender to the secretary or transfer agent of the corporation
of a certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.

The corporation may issue the whole or any part of its shares as
partly paid and subject to call for the remainder of the consideration to be
paid therefor. Upon the face or back of each stock certificate issued to
represent any such partly paid shares, or upon the books and records of the
corporation in the case of uncertificated partly paid shares, the total amount
of the consideration to be paid therefor and the amount paid thereon shall be
stated. Upon the declaration of any dividend on fully paid shares, the
corporation shall declare a dividend upon partly paid shares of the same class,
but only upon the basis of the percentage of the consideration actually paid
thereon.

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8.5 SPECIAL DESIGNATION ON CERTIFICATES

If the corporation is authorized to issue more than one class of stock
or more than one series of any class, then the powers, the designations, the
preferences and the relative, participating, optional or other special rights
of each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate that the corporation shall
issue to represent such class or series of stock; provided, however, that,
except as otherwise provided in Section 202 of the General Corporation Law of
Delaware, in lieu of the foregoing requirements there may be set forth on the
face or back of the certificate that the corporation shall issue to represent
such class or series of stock a statement that the corporation will furnish
without charge to each stockholder who so requests the powers, the
designations, the preferences and the relative, participating, optional or
other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or rights.

8.6 LOST CERTIFICATES

Except as provided in this Section 8.6, no new certificates for shares
shall be issued to replace a previously issued certificate unless the latter is
surrendered to the corporation and cancelled at the same time. The board of
directors may, in case any share certificate or certificate for any other
security is lost, stolen or destroyed, authorize the issuance of replacement
certificates on such terms and conditions as the board may require; the board
may require indemnification of the corporation secured by a bond or other
adequate security sufficient to protect the corporation against any claim that
may be made against it, including any expense or liability, on account of the
alleged loss, theft or destruction of the certificate or the issuance of the
replacement certificate.

8.7 TRANSFER AGENTS AND REGISTRARS

The board of directors may appoint one or more transfer agents or
transfer clerks, and one or more registrars, each of which shall be an
incorporated bank or trust company -- either domestic or foreign, who shall be
appointed at such times and places as the requirements of the corporation may
necessitate and the board of directors may designate.

8.8 CONSTRUCTION; DEFINITIONS

Unless the context requires otherwise, the general provisions, rules
of construction and definitions in the General Corporation Law of Delaware
shall govern the construction of these bylaws. Without limiting the generality
of this provision, as used in these bylaws, the singular number includes the
plural, the plural number includes the singular, and the term "person" includes
both an entity and a natural person.

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<PAGE> 37
8.9 DIVIDENDS

The directors of the corporation, subject to any restrictions
contained in the certificate of incorporation, may declare and pay dividends
upon the shares of its capital stock pursuant to the General Corporation Law of
Delaware. Dividends may be paid in cash, in property, or in shares of the
corporation's capital stock.

The directors of the corporation may set apart out of any of the funds
of the corporation available for dividends a reserve or reserves for any proper
purpose and may abolish any such reserve. Such purposes shall include but not
be limited to equalizing dividends, repairing or maintaining any property of
the corporation, and meeting contingencies.

8.10 FISCAL YEAR

The fiscal year of the corporation shall be fixed by resolution of the
board of directors and may be changed by the board of directors.

8.11 SEAL

The corporation may adopt a corporate seal, which may be altered at
pleasure, and may use the same by causing it or a facsimile thereof to be
impressed or affixed or in any other manner reproduced.

8.12 STOCK TRANSFER AGREEMENTS

The corporation shall have power to enter into and perform any
agreement with any number of stockholders of any one or more classes of stock
of the corporation to restrict the transfer of shares of stock of the
corporation of any one or more classes owned by such stockholders in any manner
not prohibited by the General Corporation Law of Delaware.

8.13 REGISTERED STOCKHOLDERS

The corporation shall be entitled to recognize the exclusive right of
a person registered on its books as the owner of shares to receive dividends
and to vote as such owner, shall be entitled to hold liable for calls and
assessments the person registered on its books as the owner of shares, and
shall not be bound to recognize any equitable or other claim to or interest in
such share or shares on the part of another person, whether or not it shall
have express or other notice thereof, except as otherwise provided by the laws
of Delaware.

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<PAGE> 38
8.14 NOTICES

Except as otherwise specifically provided herein or required by law,
all notices required to be given to any stockholder, director, officer,
employee or agent shall be in writing and may in every instance be effectively
given by hand delivery, by mail, postage paid, or by facsimile transmission.
Any such notice shall be addressed to such stockholder, director, officer,
employee or agent at his last known address as it appears on the books of the
corporation. The time when such notice shall be deemed received, if hand
delivered, or dispatched, if sent by mail or facsimile, transmission, shall be
the time of the giving of the notice.

ARTICLE IX

AMENDMENTS

The original or other bylaws of the corporation may be adopted,
amended or repealed by the stockholders entitled to vote; provided, however,
that the corporation may, in its certificate of incorporation, confer the power
to adopt, amend or repeal bylaws upon the directors. The fact that such power
has been so conferred upon the directors shall not divest the stockholders of
the power, nor limit their power to adopt, amend or repeal bylaws.

Whenever an amendment or new bylaw is adopted, it shall be copied in
the book of bylaws with the original bylaws, in the appropriate place. If any
bylaw is repealed, the fact of repeal with the date of the meeting at which the
repeal was enacted or the filing of the operative written consent(s) shall be
stated in said book.

ARTICLE X

DISSOLUTION

If it should be deemed advisable in the judgment of the board of
directors of the corporation that the corporation should be dissolved, the
board, after the adoption of a resolution to that effect by a majority of the
whole board at any meeting called for that purpose, shall cause notice to be
mailed to each stockholder entitled to vote thereon of the adoption of the
resolution and of a meeting of stockholders to take action upon the resolution.

At the meeting a vote shall be taken for and against the proposed
dissolution. If a majority of the outstanding stock of the corporation entitled
to vote thereon votes for the proposed dissolution, then a certificate stating
that the dissolution has been authorized in accordance with the provisions of

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<PAGE> 39
Section 275 of the General Corporation Law of Delaware and setting forth the
names and residences of the directors and officers shall be executed,
acknowledged, and filed and shall become effective in accordance with Section
103 of the General Corporation Law of Delaware. Upon such certificate's
becoming effective in accordance with Section 103 of the General Corporation
Law of Delaware, the corporation shall be dissolved.

Whenever all the stockholders entitled to vote on a dissolution
consent in writing, either in person or by duly authorized attorney, to a
dissolution, no meeting of directors or stockholders shall be necessary. The
consent shall be filed and shall become effective in accordance with Section
103 of the General Corporation Law of Delaware. Upon such consent's becoming
effective in accordance with Section 103 of the General Corporation Law of
Delaware, the corporation shall be dissolved. If the consent is signed by an
attorney, then the original power of attorney or a photocopy thereof shall be
attached to and filed with the consent. The consent filed with the Secretary of
State shall have attached to it the affidavit of the secretary or some other
officer of the corporation stating that the consent has been signed by or on
behalf of all the stockholders entitled to vote on a dissolution; in addition,
there shall be attached to the consent a certification by the secretary or some
other officer of the corporation setting forth the names and residences of the
directors and officers of the corporation.

ARTICLE XI

CUSTODIAN

11.1 APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES

The Court of Chancery, upon application of any stockholder, may
appoint one or more persons to be custodians and, if the corporation is
insolvent, to be receivers, of and for the corporation when:

(i) at any meeting held for the election of directors the
stockholders are so divided that they have failed to elect successors to
directors whose terms have expired or would have expired upon qualification of
their successors; or

(ii) the business of the corporation is suffering or is
threatened with irreparable injury because the directors are so divided
respecting the management of the affairs of the corporation that the required
vote for action by the board of directors cannot be obtained and the
stockholders are unable to terminate this division; or

(iii) the corporation has abandoned its business and has
failed within a reasonable time to take steps to dissolve, liquidate or
distribute its assets.

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<PAGE> 40
11.2 DUTIES OF CUSTODIAN

The custodian shall have all the powers and title of a receiver
appointed under Section 291 of the General Corporation Law of Delaware, but the
authority of the custodian shall be to continue the business of the corporation
and not to liquidate its affairs and distribute its assets, except when the
Court of Chancery otherwise orders and except in cases arising under Sections
226(a)(3) or 352(a)(2) of the General Corporation Law of Delaware.

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<PAGE> 41
CERTIFICATE OF ADOPTION OF BYLAWS

J. D. EDWARDS & COMPANY

Adoption by Incorporator

The undersigned person appointed in the Certificate of Incorporation
as the Incorporator of J. D. Edwards & Company hereby adopts the foregoing
bylaws, comprising thirty-one (31) pages, as the Bylaws of the corporation.

Executed this 4th day of August, 1997

/s/Romy S. Taubman
-------------------------------
Romy S. Taubman
Incorporator

Certificate by Secretary of Adoption by Incorporator

The undersigned hereby certifies that he is the duly elected,
qualified, and acting Secretary of J. D. Edwards & Company and that the
foregoing Bylaws, comprising thirty-one (31) pages, were adopted as the Bylaws
of the corporation on August 4, 1997, by the person appointed in the
Certificate of Incorporation as the Incorporator of the corporation.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 6th
day of August, 1997.

/s/ Richard G. Snow, Jr.
-------------------------------
Richard G. Snow, Jr.
Secretary

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<PAGE> 1

EXHIBIT 10.2

AMENDED AND RESTATED CREDIT AGREEMENT

By and Between

WELLS FARGO BANK, N.A.,
as a Lender and as Agent Bank

HARRIS TRUST AND SAVINGS BANK,
as a Lender,

KEYBANK NATIONAL ASSOCIATION,
as a Lender,

and

J.D. EDWARDS & COMPANY,
as a Borrower,

J.D. EDWARDS WORLD SOLUTIONS COMPANY,
as a Borrower,

J.D. EDWARDS WORLD SOURCE COMPANY,
as a Borrower

July 25, 1997
<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. The Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 Revolving Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Letter of Credit Accommodations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.1 Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.2 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.3 Draws Constitute Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.4 Application for Issuance of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.5 Form of Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.6 Expiration Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.7 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.8 Indemnification for Acts of Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.9 Syndication Parties to Receive a Copy of All Letters of Credit Issued by Agent . . . . . . . . . . . . . 3
4. Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.1 Variable Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.2 Libor Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.3 Matrix Spread . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.4 Default Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.5 Minimum Principal Amount of Variable Rate Loans and Libor Loans . . . . . . . . . . . . . . . . . . . . . 4
4.6 360-Day Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
</TABLE>

i
<PAGE> 3
<TABLE>
<S> <C>
4.7 Additional Provisions for Libor Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.8 Agent Fee; Arrangement Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.9 Unused Line Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.1 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.2 Interest Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.3 Principal Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.4 Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.4.1 Voluntary Prepayment of Variable Rate Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.4.2 Voluntary Prepayment of Libor Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.4.3 Minimum Amount of Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.5 Mandatory Prepayment on Account of Commitment Amount . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.6 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.7 Prepaid Principal May Be Reborrowed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.8 Reduction of Aggregate Commitment Amount by Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.9 Payments on Business Days; Date That Payments and Prepayments Are Deemed Received . . . . . . . . . . . . 9
5.10 Payments Free and Clear of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.11 Payments to be Made United States Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6. Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.1 Conditions to Initial Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.1.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.1.2 No Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.1.3 Receipt of Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.1.4 Advance Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>

ii
<PAGE> 4
<TABLE>
<S> <C>
6.1.5 Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.1.6 Organizational Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.1.7 Evidence of Corporate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.1.8 Authorized Representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.1.9 Officer's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.1.10 Evidence of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.1.11 Evidence of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.1.12 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.1.13 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.1.14 Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.1.15 Appointment of The Corporation Company . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.2 Conditions to All Subsequent Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.2.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.2.2 No Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.2.3 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.2.4 Advance Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.3 Conditions to Issuance of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.3.1 Application and Reimbursement Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.3.2 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.3.3 Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.4 Additional Disbursement Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.4.1 Aggregate Commitment Amount; LC Commitment Amount . . . . . . . . . . . . . . . . . . . . . . 12
6.4.2 Construction Commitment Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.4.3 Disbursement Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.4.4 Illegality of Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>

iii
<PAGE> 5
<TABLE>
<S> <C>
6.5 Conditions to Performance Under This Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.5.1 Receipt of Executed Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.5.3 Organizational Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.5.4 Evidence of Corporate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7. Borrowers' Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.1 Organization and Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.2 Corporate Authority, Due Authorization; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.3 Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.5 No Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.6 Binding Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.7 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.8 Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.9 Financial Statements; No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.10 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.11 Licenses and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.12 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.12.1 Employee Benefit Plans; Multiemployer Plans . . . . . . . . . . . . . . . . . . . . . . . . 15
7.12.2 Pension Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.12.3 Compliance by Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.12.4 Annual Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.12.5 Prohibited Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.12.6 Bonding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.12.7 Civil/Criminal Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.12.8 Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>

iv
<PAGE> 6
<TABLE>
<S> <C>
7.12.9 Compliance With Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.12.10 Multiple Employer Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.12.11 Plan Termination Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.12.12 Pension Plan Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.12.13 Reportable Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.12.14 Payment of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.12.15 Welfare Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.12.16 ESOP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.13 Capitalization of Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.14 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.15 Environmental Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.16 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.17 Regulations U and X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.18 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.19 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.20 Continuing Nature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8. Borrowers' Affirmative Covenants and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.1 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.2 Reports and Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.2.1 Annual Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.2.2 Quarterly Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.2.3 Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.2.4 Annual Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.2.5 Notice of Default under Other Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.2.6 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>

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8.2.7 Notice of Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.2.8 Notice of Material Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.2.9 Notification of Claims by Contractors and Materialmen . . . . . . . . . . . . . . . . . . . . 21
8.2.10 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.2.11 Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.2.12 SEC Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.2.13 Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.3 Maintenance of Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.4 Compliance with Legal Requirements and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.5 Compliance with Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.6 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.7 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.8 Title to Assets and Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.9 Payment of Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.10 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.11 Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.12 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.13 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.13.1 Quick Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.13.2 Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.13.3 Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.14 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.15 Additional Costs of Maintaining Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.16 Reimbursement for Additional Capital Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.17 Hazardous Substances Indemnifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
</TABLE>

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8.18 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.19 Good Standing Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.20 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9. Borrowers' Negative Covenants and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.1 Change in Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.2 Change in Business Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.3 Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.4 Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.5 Recapitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.6 Dividends and Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.7 Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.8 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.9 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.10 Loans, Advances and Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.11 Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.12 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.14 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.15 Profitability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10. Events of Default/Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.1 Failure to Pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.2 Failure to Perform Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.3 Failure to Perform Other Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.4 Bankruptcy/Insolvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.5 False Representations or Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>

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10.6 Default Under Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.7 Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.8 Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.9 Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.10 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11. Agency Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.1 Purchase and Sale of Syndication Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.2 Syndication Parties' Obligations to Remit Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.3 Notice and Timing of Initial Payment and Each Advance Payment . . . . . . . . . . . . . . . . . . . . 33
11.4 Syndication Party's Failure to Remit Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.5 Agency Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.6 Power and Authority of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.7 Duties of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.8 Agent's Resignation or Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.9 Consent Required for Certain Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.10 Distribution of Principal and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.11 Distribution of Certain Fees and Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.12 Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.13 Collateral Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.14 Amounts Required to be Returned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.15 Reports and Information to Syndication Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.16 Standard of Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.17 No Trust Relationship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.18 Sharing of Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.19 Syndication Parties' Indemnification of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
</TABLE>

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<TABLE>
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11.20 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.21 Agent Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.22 Representations and Warranties of All Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.23 Representations and Warranties of Wells Fargo . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.24 Syndication Parties' Independent Credit Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.25 No Joint Venture or Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.26 Purchase for Own Account/Restrictions on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.27 Method of Making Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11.28 Events of Syndication Default/Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
11.29 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
12. Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
12.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
12.2 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.3.1 Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.3.2 Syndication Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.3.3 Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
12.5 Colorado Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
12.6 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
12.7 Severability/Titles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
12.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
12.9 Waiver of Jurisdiction, Service of Process, and Jury Trial . . . . . . . . . . . . . . . . . . . . . . 53
12.10 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
12.10.1 Binding Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
</TABLE>

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12.10.2 Governing Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
12.10.3 No Waiver, Preservation of Remedies, Multiple Parties . . . . . . . . . . . . . . . . . . . 55
12.10.4 Arbitration Powers and Qualifications; Awards . . . . . . . . . . . . . . . . . . . . . . . 55
12.10.5 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
12.11 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
12.12 Termination and Mutual Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
12.13 Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
12.14 Amendment to Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
12.15 Replacement Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
12.16 Notice to Syndication Parties and Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
12.17 Joint and Several Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
</TABLE>

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<PAGE> 12
EXHIBITS

<TABLE>
<S> <C>
Exhibit 5.1 Form of Note

Exhibit 6.2.4 Form of Advance Request

Exhibit 7.3 Permitted Encumbrances and Condition of Assets

Exhibit 7.4 Litigation

Exhibit 7.8 Material Agreements

Exhibit 7.12 Employee Benefit Plans

Exhibit 7.13 Capitalization of Borrowers

Exhibit 7.14 Subsidiaries

Exhibit 7.15 Environmental Matters

Exhibit 7.16 Intellectual Property

Exhibit 9.11.1 Investment Policy

Exhibit 9.11.2 Existing Investments

Exhibit 11.3.1 Form of Initial Payment Notice

Exhibit 11.3.2 Form of Loan Notice of Advance

Exhibit 11.3.3 Form of LC Notice of Advance

Exhibit 11.27 Wire Instructions

Exhibit 12.1 Form of Compliance Certificate

Exhibit 12.1(a) Legal Description
</TABLE>

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<PAGE> 13

AMENDED AND RESTATED CREDIT AGREEMENT

This Amended and Restated Credit Agreement ("Agreement") is entered
into as of the 25th day of July, 1997, by and between WELLS FARGO BANK, N.A.,
successor by merger to Wells Fargo Bank (Colorado), N.A. ("Wells Fargo") for
its own benefit as a lender (in that capacity sometimes referred to as "Wells
Fargo") and, as Agent Bank for the benefit of the present and future
Syndication Parties (in that capacity "Agent"), HARRIS TRUST AND SAVINGS BANK
("Harris Bank") as a lender, KEYBANK NATIONAL ASSOCIATION, successor by merger
to Key Bank of Colorado ("Key Bank") as a lender, and J.D. EDWARDS & COMPANY
("Holding Company"), as a borrower, J.D. EDWARDS WORLD SOLUTIONS COMPANY
("World Solutions"), as a borrower, and J.D. EDWARDS WORLD SOURCE COMPANY
("World Source"), (Holding Company, World Solutions and World Source shall be
collectively referred to herein as "Borrowers").

R E C I T A L S

A. The parties hereto entered into that certain Credit Agreement
dated as of August 1, 1996 ("Original Credit Agreement").

B. The parties hereto now desire to modify certain covenants set
forth in the Original Credit Agreement, to make certain other amendments to the
Original Credit Agreement and to set forth all such amendments and
modifications in an amendment and restatement of the Original Credit Agreement.

A G R E E M E N T

For good and valuable consideration, including the mutual covenants
contained herein, the parties hereto hereby agree as follows:

1. Definitions. Certain capitalized terms are used in this
Agreement as specifically defined herein. These definitions are set forth or
referred to in Section 12.1 hereof.

2. The Loan. The Syndication Parties agree to make, in
accordance with their respective Syndication Shares, the following loan
("Loan") to Borrowers:

2.1 Revolving Loan. A revolving line of credit loan
("Revolving Loan") on the terms and conditions contained herein, with the
maximum amount thereof available to, or for the benefit of, Borrowers at any
time being limited to (a) $50,000,000.00 ("Aggregate Commitment Amount"), less
(b) the undrawn face amount of all Letters of Credit (as defined below) issued
hereunder. All funds advanced under the Revolving Loan may, to the extent
repaid, be reborrowed at any time prior to July 31, 1999 ("Termination Date"),
subject to the terms and conditions set forth herein.

2.2 Purpose. Borrowers agree to use the proceeds of the
Loan only for (a) working capital requirements and other general corporate
purposes in connection with its normal operations and (b) funding the
construction of the Phase I Headquarters Building ("Phase I Construction") and
the Phase II Headquarters Building ("Phase II
<PAGE> 14
Construction"); provided, however that (i) the aggregate amount of Loan
proceeds used to fund the Phase I Construction shall not exceed $5,000,000.00
("Phase I Construction Commitment Amount") unless Borrowers have obtained, and
the Required Lenders have approved in their reasonable discretion, either a
commitment for the permanent financing of all Advances disbursed and to be
disbursed for the Phase I Construction or an agreement between Borrowers and a
third party which is not an affiliate of Borrowers for the purchase of the
Phase I Headquarters Building from Borrowers; and (ii) the aggregate amount of
Loan proceeds used to fund the Phase II Construction shall not exceed
$5,000,000.00 ("Phase II Construction Commitment Amount") unless Borrowers have
obtained, and the Required Lenders have approved in their reasonable
discretion, either a commitment for the permanent financing of all Advances
disbursed and to be disbursed for the Phase II Construction or an agreement
between Borrowers and a third party which is not an affiliate of Borrowers for
the purchase of the Phase II Headquarters Building from Borrowers.

3. Letter of Credit Accommodations. The Syndication Parties
agree to cause Agent to issue standby letters of credit (each, a "Letter of
Credit") for the account of Borrowers, or any of them, as follows:

3.1 Amount. The face amount of each such Letter of
Credit issued hereunder: (a) when added to the principal then outstanding under
the Notes shall not exceed the Aggregate Commitment Amount less the undrawn
face amount of all other Letters of Credit outstanding; and (b) when added to
the undrawn face amount of all other outstanding Letters of Credit, shall not
exceed $20,000,000.00 ("LC Commitment Amount").

3.2 Purpose. Letters of Credit may be requested for any
purpose set forth in Section 2.2 and for any other purpose approved by Agent in
its sole discretion.

3.3 Draws Constitute Advances. The amount of each draw
paid under each Letter of Credit (a) shall be deemed to be an Advance and shall
be added to the outstanding principal balance of the Notes on the date such
draw is honored, and (b) shall bear interest at the Variable Rate.

3.4 Application for Issuance of Letters of Credit. A
Borrower shall be required to complete Agent's standard application and
reimbursement agreement for each Letter of Credit to be issued hereunder. Each
reimbursement agreement shall be executed for the benefit of Agent and the
Syndication Parties, and Borrowers shall be obligated to pay to Agent for the
account of the Syndication Parties according to their respective Syndication
Shares, the amount payable under the applicable reimbursement agreement for a
draw under a Letter of Credit, either as a payment on the Principal Amount or
as a direct payment under the reimbursement agreement.

3.5 Form of Letter of Credit. Each Letter of Credit
shall be issued on Agent's standard form of standby letter of credit.

2
<PAGE> 15
3.6 Expiration Date. No Letter of Credit may have an
expiration date which is more than twelve (12) months from the date of issuance
of such Letter of Credit, and in no event shall the expiration date of any
Letter of Credit be later than July 31, 2000.

3.7 Letter of Credit Fees. Borrowers shall pay Agent a
fee ("Letter of Credit Fee"), for the account of the Syndication Parties
according to their respective Syndication Shares, with respect to each Letter
of Credit issued or renewed pursuant to this Credit Agreement equal to the
greater of 80 basis points of the face amount of each Letter of Credit or
$250.00, each such Letter of Credit Fee to be paid upon the issuance or renewal
of each Letter of Credit. Borrowers shall pay Agent such other fees with
respect to each Letter of Credit, such as fees for amendment, transfer or
negotiation of a Letter of Credit, as are charged by Agent in accordance with
its then current fee policy in effect for letters of credit ("Letter of Credit
Fee Policy").

3.8 Indemnification for Acts of Beneficiary. Borrowers
assume all risks with respect to, and indemnify and holds Agent harmless from
and against any and all losses, claims, damages, liabilities, costs and
expenses which Agent may suffer or incur on account of, the acts or omissions
of the beneficiary of any Letter of Credit, and for such purposes, the
beneficiary shall be deemed Borrowers' agent; provided, however, that nothing
herein shall relieve Agent of responsibility for its gross negligence or
willful misconduct.

3.9 Syndication Parties to Receive a Copy of All Letters
of Credit Issued by Agent. Agent shall, promptly after issuance, send each
Syndication Party a copy of each Letter of Credit issued hereunder.

4. Interest and Fees.

4.1 Variable Rate. Except as provided in Section 4.2 of
this Agreement and subject to the requirements of Section 4.5 of this
Agreement, the unpaid principal balance owing on the Notes will bear interest
at the Base Rate as it may change from time to time modified by the addition
(or subtraction where it is a negative number) of the applicable Base Rate
Margin as determined pursuant to Section 4.3 hereof ("Variable Rate"). The
term "Base Rate" shall mean the greater of (a) the Federal Funds Rate plus 50
basis points or (b) the Prime Rate. Information on the Prime Rate currently in
effect is announced publicly by, and can be obtained by contacting, Agent at
its principal office in San Francisco, California. The Prime Rate is not
necessarily the best rate which Agent charges to its customers, and Agent and
the Syndication Parties may make loans at, above, or below the Prime Rate.

4.2 Libor Rate. From time to time, and so long as no
Event of Default has occurred and is continuing and subject to the requirements
of Section 4.5 of this Agreement, at the request of a Borrower ("Libor Rate
Request"), all or a portion of the outstanding principal balance under the
Notes may bear interest at the Base Libor Rate plus the applicable Libor Margin
as determined pursuant to Section 4.3 hereof ("Libor

3
<PAGE> 16
Rate"). A Libor Rate Request must be submitted each time that a Borrower would
like either (a) all or a portion of a Variable Rate Loan to be converted to a
Libor Loan, or (b) a current Libor Loan to bear interest at the Libor Rate upon
expiration of the Interest Period for such Libor Loan. The Libor Rate Request
may be made to Agent orally or in writing on any Business Day (provided that if
such request is made orally, such Borrower must furnish written confirmation of
such request within one (1) Business Day) and is effective as of the second
Business Day after the Libor Rate Request is received if received by Agent no
later than 10:00 a.m. Pacific time or as of the third Business Day if received
later than 10:00 a.m. Pacific time. The Libor Rate Request must specify (a)
the principal amount of the requested Libor Loan, (b) the Interest Period
selected by such Borrower, and the date on which such Borrower requests that
such Interest Period commence ("Interest Period Commencement Date"). Following
the expiration of the Interest Period for any Libor Loan, interest shall
automatically accrue on the principal amount thereof at the Variable Rate
until, and except to the extent, a Borrower requests and receives another Libor
Loan as provided in this Section.

4.3 Matrix Spread. The applicable Base Rate Margin and
Libor Margin will be determined as provided in the Original Credit Agreement
until July 25, 1997. As of such date, the applicable Base Rate Margin and
Libor Margin will be re-set, effective on the first day of the month commencing
after the month in which Agent receives Borrowers' financial statements for
Borrowers' most recently completed Fiscal Quarter, based upon the Leverage
Ratio for such most recently completed Fiscal Quarter determined in accordance
with the following table:

<TABLE>
<CAPTION>
Leverage Ratio Libor Margin Base Rate Margin
<S> <C> <C>
less than or equal to 1.00 75 basis points -25 basis points

less than or equal to 1.25 greater than 1.00 100 basis points 0 basis points

less than or equal to 1.50 greater than 1.25 125 basis points 0 basis points

less than or equal to 2.00 greater than 1.50 150 basis points 25 basis points

greater than 2.00 175 basis points 50 basis points
</TABLE>

4.4 Default Interest Rate. Upon the occurrence of the
Maturity Date or an Event of Default, the unpaid balance of principal and
accrued interest on the Notes shall bear interest at the Default Interest Rate
from and after the due date for the payment, or on the date of maturity or
acceleration, as the case may be.

4.5 Minimum Principal Amount of Variable Rate Loans and
Libor Loans. Each Variable Rate Loan shall be for a minimum principal amount
of $100,000.00 and shall be a multiple of $50,000.00. Each Libor Loan shall be
for a minimum principal amount of $500,000.00 and shall be a multiple of
$100,000.00.

4.6 360-Day Year. Interest on the Notes shall be
converted from an annual rate to a daily rate on the basis of a 360-day year
and applied to the actual number of days elapsed.

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<PAGE> 17
4.7 Additional Provisions for Libor Loans.

4.7.1 If (a) Agent at any time shall determine that
for any reason adequate and reasonable means do not exist for ascertaining the
Base Libor Rate, or (b) if any Syndication Party shall advise Agent that the
Base Libor Rate does not adequately and fairly reflect the cost to such
Syndication Party of funding its Syndication Share of any Libor Loan, then
Agent shall promptly give notice thereof to Borrowers. If such notice is given
and until such notice has been withdrawn by Agent, then (a) no new Libor Loan
may be requested by any Borrower, and (b) any portion of the outstanding
principal balance hereof which bears interest determined in relation to the
Base Libor Rate, shall, subsequent to the end of the Interest Period applicable
thereto, bear interest at the Variable Rate.

4.7.2 If any law, treaty, rule, regulation or
determination of a court or governmental authority or any change therein or in
the interpretation or application thereof (each, a "Change in Law") shall make
it unlawful for any of the Syndication Parties to (a) advance its Syndication
Share of any Libor Loan or (b) maintain its Syndication Share of all or any
portion of the Libor Loans, each such Syndication Party shall promptly, by
telephone or facsimile, notify Agent thereof, and of the reasons therefor and
Agent shall promptly notify Borrowers thereof and if the notice from such
Syndication Party is in writing, Agent shall provide a copy of such notice to
Borrowers. In the former event, any obligation of any such Syndication Party
to make available its Syndication Share of any future Libor Loan shall
immediately be canceled, and in the latter event, any such unlawful Libor Loans
or portions thereof then outstanding shall be converted, at the option of such
Syndication Party, to a Variable Rate Loan; provided, however, that if any such
Change in Law shall permit the Libor Rate to remain in effect until the
expiration of the Interest Period applicable to any such unlawful Libor Loan,
then such Libor Loan shall continue in effect until the expiration of such
Interest Period. Upon the occurrence of any of the foregoing events, Borrowers
shall pay to Agent immediately upon demand such amounts as may be necessary to
compensate any such Syndication Party for any fines, fees, charges, penalties
or other costs incurred or payable by such Syndication Party as a result
thereof and which are attributable to any Libor Loan made available to
Borrowers hereunder, and any reasonable allocation made by any such Syndication
Party among its operations shall be conclusive and binding upon Borrowers
absent manifest error.

4.7.3 If any Change in Law or compliance by any
Syndication Party with any request or directive (whether or not having the
force of law) from any central bank or other governmental authority shall:

(a) subject such Syndication Party to any tax,
duty or other charge with respect to any Libor Loan, or change the basis of
taxation of payments to such Syndication Party of principal, interest, fees or
any other amount payable hereunder (except for changes in the rate of tax on
the overall net income of such Syndication Party); or

5
<PAGE> 18
(b) impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of, advances or
loans by, or any other acquisition of funds by any office of any Syndication
Party; or

and the result of any of the foregoing is to increase the cost to such
Syndication Party of making, renewing or maintaining its Syndication Share of
any Libor Loan hereunder and/or to reduce any amount receivable by such
Syndication Party in connection therewith, then in any such case, Borrowers
shall pay to Agent for the account of such Syndication Party, within five
Business Days after receipt of written notice from Agent, such amounts as may
be necessary to compensate such Syndication Party for any additional costs
incurred by such Syndication Party and/or reductions in amounts received by
such Syndication Party which are attributable to such Libor Loans. In
determining which costs incurred by such Syndication Party and/or reductions in
amounts received by such Syndication Party are attributable to the Libor Rate
option made available to Borrowers hereunder, any reasonable allocation made by
such Syndication Party among its operations shall be conclusive and binding
upon Borrowers absent manifest error.

4.8 Agent Fee; Arrangement Fee. Borrowers shall pay
Agent the Arrangement Fee and Agent's Fee set forth in the Fee Letter.

4.9 Unused Line Fee. Borrowers shall pay to Agent, for
the account of the Syndication Parties according to their respective
Syndication Shares, for the period from the Closing Date to the Termination
Date ("Unused Line Fee") an amount equal to the average of the difference,
calculated daily during the measurement Fiscal Quarter, between (a) the
Aggregate Commitment Amount and (b) the outstanding principal owed on the Notes
plus the undrawn amount of all Letters of Credit, multiplied by the rate per
Fiscal Quarter determined to be the Commitment Fee based on Borrowers' Leverage
Ratio in accordance with the following table:

<TABLE>
<CAPTION>
Leverage Ratio Commitment Fee
<S> <C>
less than or equal to 1.25 22.5 basis points
less than or equal to 1.50 greater than 1.25 27.5 basis points
less than or equal to 2.00 greater than 1.50 32.5 basis points
greater than 2.00 37.5 basis points
</TABLE>

The Commitment Fee will be set as of August 1, 1996 based on the Leverage Ratio
calculated from Borrowers' financial statements for its Fiscal Quarter ending
April 30, 1996, and, thereafter, will be re-set, effective on the first day of
the month commencing after the month in which Agent receives Borrowers'
financial statements for Borrowers' most recently completed Fiscal Quarter
(each an "Unused Commitment Fee Reset Date") based upon the Leverage Ratio for
such most recently completed Fiscal Quarter. The Unused Line Fee shall be
calculated on the basis of a 360-day year and the actual number of days
elapsed, and shall be payable in arrears on each of August 5, November 5,
February 5, and May 5 for the preceding Fiscal Quarter and on the Maturity
Date.

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<PAGE> 19
5. Payments.

5.1 Notes. Each Syndication Party's Syndication Interest
in the Loan is evidenced by a promissory note, executed in connection with the
Original Credit Agreement and dated August 1, 1996, payable to the order of
such Syndication Party in the face amount equal to such Syndication Party's
Maximum Syndication Amount in the form attached hereto as Exhibit 5.1
(collectively, such promissory notes shall be referred to as the "Notes").

5.2 Interest Payments. Interest on Variable Rate Loans
shall be payable quarterly in arrears on the last day of each Fiscal Quarter.
Interest on Libor Loans shall be payable in arrears upon the maturity of the
applicable Interest Period; provided, however, that with respect to each Libor
Loan where the Interest Period is equal to six months, interest shall also be
payable on the date which is three months after the Interest Period
Commencement Date for such Libor Loan (the "Three Month Anniversary Date");
provided, however, that if the Three Month Anniversary Date would occur on a
day which is not a Business Day, then such Three Month Anniversary Date shall
be deemed to be the next succeeding Business Day so long as such Business Day
does not extend into the next calendar month in which case such Three Month
Anniversary Date shall be deemed to be the next preceding Business Day.

5.3 Principal Payments. Borrowers agree that the entire
outstanding principal balance on the Notes, together with accrued interest
thereon, shall be due and payable on the earlier of (a) the Termination Date,
or (b) such earlier date on which the Loan becomes due and payable as a result
of acceleration of the payment of the Notes on account of the occurrence of an
Event of Default ("Maturity Date").

5.4 Voluntary Prepayments. Borrowers shall have the
option to make the following prepayments:

5.4.1 Voluntary Prepayment of Variable Rate Loans.
Subject to the requirements of Subsection 5.4.3, Borrowers shall have the right
to prepay without penalty at any time all or any part of the outstanding
principal balance under the Variable Rate Loans.

5.4.2 Voluntary Prepayment of Libor Loans. Subject
to the requirements of Subsection 5.4.3, Borrowers shall have the right to
prepay all or any part of the outstanding principal balance of any Libor Loan,
provided that (a) Borrowers shall, at least two (2) Business Days prior to
making any such prepayment, deliver to Agent a written notice which sets forth
the amount of the prepayment, the date on which the prepayment will be made,
and the Libor Loan (or portion thereof) being prepaid; (b) Borrowers shall pay
all accrued and unpaid interest relating to the amount prepaid to the date of
prepayment; and (c) on the prepayment date, Borrowers shall pay the Funding
Losses, if any, resulting from the prepayment. Any written notice by Borrowers
of their election to prepay under this Subsection 5.4.2 shall be irrevocable.

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<PAGE> 20
5.4.3 Minimum Amount of Voluntary Prepayments. All
voluntary prepayments (a) of Variable Rate Loans, must be in amounts no less
than $50,000.00 ("Minimum Variable Prepayment"), and (b) of Libor Loans, must
be in amounts no less than $1,000,000.00 and must be a multiple of $100,000.00
("Minimum Libor Prepayment"), (the Minimum Variable Prepayment and the Minimum
Libor Prepayment shall be collectively referred to as the "Minimum Prepayment
Requirement"); provided, however, that the Minimum Prepayment Requirement shall
not apply if the Principal Amount is less than $1,000,000.00.

5.5 Mandatory Prepayment on Account of Commitment Amount.
If at any time the amount of principal owing on the Notes exceeds the Aggregate
Commitment Amount, Borrowers shall pay the amount of such excess within one (1)
Business Day.

5.6 Funding Losses. In the event of:

(a) payment or prepayment by Borrowers of all or
any portion of any Libor Loan on a date other than the last day of the Interest
Period for such Libor Loan for any reason;

(b) conversion of all or any portion of any Libor
Loan to a Variable Rate Loan on a day other than the last day of the Interest
Period applicable to such Libor Loan for any reason; or

Borrowers shall, upon Agent's request, pay directly to Agent for the account of
the Syndication Parties the amount of the Funding Losses resulting from the
occurrence of an event described above in (a), (b) or (c) of this Section.
"Funding Losses" shall be equal to the product of: (i) the excess, if any, of
the Libor Rate for the applicable Libor Loan over the then current interest
rate on a comparable principal amount of United States Treasury obligations
which have an unexpired term comparable to period of time between the date of
prepayment of, or failure to borrow, such Libor Loan and the expiration of the
Interest Period for the Libor Loan which is being prepaid or which Borrowers
fail to borrow, as applicable, (ii) the amount of such prepayment or the amount
which Borrowers fail to borrow, as applicable, and (iii) the number of years,
including any fractional portion of a year, constituting the remaining term of
the Interest Period for such Libor Loan.

5.7 Prepaid Principal May Be Reborrowed. Prepayments of
principal may be reborrowed in accordance with the provisions of this
Agreement.

5.8 Reduction of Aggregate Commitment Amount by
Borrowers. Borrowers shall have the right, from time to time, to reduce the
Aggregate Commitment Amount upon five (5) Business Days prior written notice to
Agent, provided that the requested reduction in such Aggregate Commitment
Amount (a) must be at least $5,000,000.00 and (b) shall not cause the Aggregate
Commitment Amount to be less

8
<PAGE> 21
than the amount of outstanding principal under the Notes plus the aggregate
undrawn face amount of all Letters of Credit then outstanding. Any reduction
of the Aggregate Commitment Amount pursuant to this Section shall be
irrevocable and shall result in a ratable reduction of each Syndication Party's
Maximum Syndication Amount.

5.9 Payments on Business Days; Date That Payments and
Prepayments Are Deemed Received. In the event any payment of principal or
interest is due on a date other than a Business Day, such payment shall be due
on the succeeding Business Day. Payments or prepayments received after 11:00
a.m. Pacific time on any Business Day will be deemed received on the next
succeeding Business Day.

5.10 Payments Free and Clear of Taxes. All payments by
Borrowers will be made free and clear of present and future taxes, withholding
or deductions (except for taxes imposed on the overall net income of each
Syndication Party).

5.11 Payments to be Made United States Dollars. Payments
on the Principal Amount shall be made in United States Dollars.

6. Conditions Precedent.

6.1 Conditions to Initial Advance. The Syndication
Parties' obligation to make the initial Advance under the Original Credit
Agreement was subject to satisfaction, in Agent's sole discretion, of the
following conditions precedent, that:

6.1.1 Representations and Warranties. The
representations and warranties of Borrowers contained in the Original Credit
Agreement were true and correct in all material respects on and as of the
Closing Date as though made on and as of such date.

6.1.2 No Event of Default. No Event of Default had
occurred and no event had occurred that with notice or lapse of time or both
would constitute an Event of Default ("Potential Default"), and no Event of
Default or Potential Default would result from the making of the Advance.

6.1.3 Receipt of Loan Documents. Agent received
duly executed originals of the Original Credit Agreement and the Notes.

6.1.4 Advance Request. Agent received a written
request for an Advance in the form attached to the Original Credit Agreement as
Exhibit 6.1.4 thereto signed by an Authorized Representative and containing the
certification of an Authorized Representative of each of Borrowers stating
that, after giving effect to the requested Advance, the amount of the Loan used
to fund the Phase I Construction did not exceed the Phase I Construction
Commitment Amount ("Phase I Construction Commitment Amount Certification").

9
<PAGE> 22
6.1.5 Legal Opinion. Agent received the opinion of
counsel for Borrowers in form and content reasonably acceptable to Agent and
addressed to the Syndication Parties.

6.1.6 Organizational Documents. Agent received:
(a) a certificate of good standing dated no more than thirty (30) days prior to
the Closing Date, for each of Borrowers, issued by the Secretary of State for
the state of such Borrower's incorporation and for each state where such
Borrower's operations require qualification or authorization to transact
business; (b) a copy of the articles of incorporation, and any amendments
thereto, of each Borrower certified by the Secretary of State of such
Borrower's state of incorporation; and (c) a copy of the bylaws, and any
amendments thereto, of each Borrower certified as true and complete by the
Secretary of such Borrower.

6.1.7 Evidence of Corporate Action. Agent
received: a copy of the documents evidencing all corporate action taken by each
Borrower to authorize the execution, delivery and performance of the Original
Credit Agreement and the Notes and naming the officer(s) of each Borrower who
are authorized to execute the Original Credit Agreement and the Notes on behalf
of such Borrower, certified to be true and correct by the Secretary of such
Borrower.

6.1.8 Authorized Representatives. Each Borrower
furnished Agent with a current list, and a specimen signature, of all officers
or other employees of such Borrower authorized to request an Advance or the
issuance of a Letter of Credit ("Authorized Representatives"), the names and
signatures of which were certified by the Secretary of such Borrower
("Certificate of Authorized Representatives"). Agent and the Syndication
Parties may conclusively rely on such Certificate of Authorized Representatives
until Agent shall have received a further Certificate of Authorized
Representatives from a Borrower amending or canceling the previous Certificate
of Authorized Representatives from such Borrower.

6.1.9 Officer's Certificate. Agent received a
certificate of the President, Chief Executive Officer or Chief Financial
Officer of each Borrower dated as of the Closing Date certifying that:

(a) the representations and warranties set forth
in Section 7 of the Original Credit Agreement were correct on and as of the
Closing Date as though made on and as of such date; and

(b) no Event of Default or Potential Default had
occurred and was continuing or would result from the making of the Loan.

6.1.10 Evidence of Insurance. Agent received
insurance certificates and such other evidence, in form and substance
satisfactory to Agent, of all insurance required to be maintained by Borrowers
under the Original Credit Agreement.

10
<PAGE> 23
6.1.11 Evidence of Consents. Agent received
evidence that all consents and approvals of governmental authorities and third
parties which were necessary for the execution, delivery and performance of the
Original Credit Agreement and the Notes and the transactions contemplated
thereby had been obtained and were in full force and effect.

6.1.12 Fees and Expenses. Agent received payment
from Borrowers of the fees specified in the Original Credit Agreement or the
Fee Letter as being payable on the Closing Date and all out-of-pocket costs and
expenses incurred by Agent (including, without limitation, the reasonable fees
and expenses of counsel retained by Agent) and the allocated costs of internal
counsel for Agent in connection with the preparation, negotiation, and
execution of the Original Credit Agreement and the Notes and the transactions
contemplated thereby, which fees and expenses Borrowers authorized Agent to pay
by disbursement from the Loan.

6.1.13 No Material Adverse Change. No material
adverse change had occurred in the condition, operations, or prospects of
Borrowers since April 30, 1996.

6.1.14 Other Documents. Borrowers provided or
caused to be provided to Agent such other documents, instruments and agreements
as Agent may have reasonably requested.

6.1.15 Appointment of The Corporation Company.
Agent have received evidence that each of Borrowers either (a) has a registered
agent for service of process in Colorado, or (b) that The Corporation Company,
located at 1675 Broadway, Denver, Colorado 80202, has accepted such party's
appointment to serve as its agent for service of process in accordance with
Section 12.9.2 of this Agreement.

6.2 Conditions to All Subsequent Advances. The
Syndication Parties' obligation to make all Advances after the initial Advance
is subject to satisfaction, in Agent's sole discretion, of each of the
following conditions precedent:

6.2.1 Representations and Warranties. The
representations and warranties of Borrowers contained in this Agreement shall
be true and correct in all material respects on and as of the date of such
Advance as though made on and as of such date.

6.2.2 No Event of Default. No Event of Default and
no Potential Default has occurred, and no Event of Default or Potential Default
would result from the making of the Advance.

6.2.3 No Material Adverse Change. No material
adverse change shall have occurred in the condition, operations, or prospects
of Borrowers.

11
<PAGE> 24
6.2.4 Advance Request. Agent shall have received
(including by facsimile transmission) a duly completed written request for an
Advance in the form attached hereto as Exhibit 6.2.4 ("Advance Request") signed
by an Authorized Representative and containing: (a) until such time as the
Phase I Construction is completed, a Phase I Construction Commitment Amount
Certification, and (b) upon commencement of the Phase II Construction, a
certification that the amount of the Loan used to fund the Phase II
Construction does not exceed the Phase II Construction Commitment Amount
("Phase II Construction Commitment Amount Certification"). With respect to
Variable Rate Loans, the Advance Request shall be effective on the Business Day
received if actually received by Agent before 10:00 a.m. Pacific time, and as
of the next Business Day if received by Agent after such time. With respect to
Libor Loans, the Advance Request shall be effective on second Business Day
after the Advance Request is received if actually received by Agent before
10:00 a.m. Pacific time, and as of the third Business Day if received by Agent
after such time. If the Advance Request is submitted by facsimile
transmission, the Borrower submitting such Advance Request shall deliver to
Agent, no later than the next Business Day, the originally executed Advance
Request. All Advance Requests submitted by a Borrower shall be irrevocable.

6.3 Conditions to Issuance of Letters of Credit. The
Syndication Parties' obligation to cause Agent to issue the Letters of Credit
and to fund and maintain their respective Syndication Shares of all draws under
the Letters of Credit, and Agent's obligation to issue any Letter of Credit, is
conditioned upon Borrowers' satisfaction of the following conditions in
addition to the other conditions set forth in Sections 6.1 and 6.2 hereof
(except for the conditions relating to the submission of Advance Requests set
forth in Sections 6.1.4 and 6.2.4):

6.3.1 Application and Reimbursement Agreement.
Borrowers must deliver to Agent, not later than three (3) Business Days
preceding the requested issue date for each Letter of Credit, Agent's standard
form of application and reimbursement agreement for standby letters of credit
which has been duly completed and signed by an Authorized Representative.

6.3.2 Fees. Borrowers shall have paid the Letter
of Credit Fee and any other fees payable to Agent pursuant to its Letter of
Credit Fee Policy.

6.3.3 Agent. Agent shall have approved in its sole
discretion the form of Letter of Credit.

6.4 Additional Disbursement Conditions. At no time and
in no event shall the Syndication Parties be obligated to make Advances or to
cause Agent to issue the Letters of Credit and to fund and maintain their
respective Syndication Shares of all draws under the Letters of Credit, as the
case may be:

6.4.1 Aggregate Commitment Amount; LC Commitment
Amount. In excess of an amount, which: (a) when added to all prior Advances
would exceed the

12
<PAGE> 25
Aggregate Commitment Amount, or (b) when added to the undrawn face amount of
all other outstanding Letters of Credit, would exceed the LC Commitment Amount.

6.4.2 Construction Commitment Amounts. If the
Advance is to be used for the purpose of funding the Phase I Construction, in
excess of an amount which, when added to all prior Advances made for the
purpose of funding the Phase I Construction, would exceed the Phase I
Construction Commitment Amount, unless Borrowers have obtained, and the
Required Lenders have approved in their reasonable discretion, either a
commitment for the permanent financing of all Advances disbursed and to be
disbursed for the Phase I Construction or an agreement between Borrowers and a
third party which is not an affiliate of Borrowers for the purchase of the
Phase I Headquarters Building from Borrowers. If the Advance is to be used for
the purpose of funding the Phase II Construction, in excess of an amount which,
when added to all prior Advances made for the purpose of funding the Phase II
Construction, would exceed the Phase II Construction Commitment Amount, unless
Borrowers have obtained, and the Required Lenders have approved in their
reasonable discretion, either a commitment for the permanent financing of all
Advances disbursed and to be disbursed for the Phase II Construction or an
agreement between Borrowers and a third party which is not an affiliate of
Borrowers for the purchase of the Phase II Headquarters Building from
Borrowers.

6.4.3 Disbursement Period. After the Termination
Date.

6.4.4 Illegality of Loan. After the enactment of
any law by any governmental authority having jurisdiction over any Syndication
Party which would make it unlawful in any respect for such Syndication Party to
make the Advance.

6.5 Conditions to Performance Under This Agreement. The
Syndication Parties' obligation to make the first Advance requested by a
Borrower after the date of this Agreement shall be subject to the fulfillment
of the following conditions:

6.5.1 Receipt of Executed Agreement. Agent shall
have received duly executed originals of this Agreement from all parties
hereto.

6.5.2 Organizational Documents. Agent shall have
received a certificate of the Secretary of each of Borrowers stating that no
amendments have been made to the articles of incorporation or bylaws of such
Borrower since August 1, 1996.

6.5.3 Evidence of Corporate Action. Agent shall
have received: a copy of the documents evidencing all corporate action taken by
each Borrower to authorize the execution, delivery and performance of this
Agreement and naming the officer(s) of each Borrower who are authorized to
execute this Agreement on behalf of such Borrower, certified to be true and
correct by the Secretary of such Borrower.

13
<PAGE> 26
7. Borrowers' Representations and Warranties.

Borrowers, to induce the Syndication Parties to make the Loan and to
enter into this Agreement, hereby represent and warrant as follows:

7.1 Organization and Existence. Each Borrower is a
corporation, duly organized, validly existing and in good standing under the
laws of the state of its incorporation and is duly qualified to do business and
is in good standing in each jurisdiction in which the transaction of its
business makes such qualification necessary.

7.2 Corporate Authority, Due Authorization; Consents.
Each Borrower has full power and authority to execute, deliver and perform the
Loan Documents, all of which have been duly authorized by all necessary
corporate action of such Borrower. All consents or approvals of any Person
which are necessary for, or are required as a condition of, the execution,
delivery and performance of the Loan Documents have been obtained.

7.3 Title to Properties. Each Borrower has good and
marketable title to all of its properties and assets, free and clear of all
liens, pledges, security interests, restrictions, encumbrances and defects in
title, except as set forth on Exhibit 7.3 hereto ("Permitted Encumbrances") and
except as otherwise permitted hereunder. Except as set forth on Exhibit 7.3,
all of the material properties and assets used in the conduct of the business
of each Borrower are in good repair, working order and condition (reasonable
wear and tear excepted) and suitable for use in the operation of the business
of such Borrower.

7.4 Litigation. Except for those matters set forth on
Exhibit 7.4, there are no pending legal or governmental actions, proceedings or
investigations to which any Borrower is a party or to which any property of any
Borrower is subject and, to the best of the knowledge of each Borrower, no such
actions or proceedings are threatened or contemplated by governmental
authorities or any other Person.

7.5 No Violations. The execution, delivery and
performance of the Loan Documents will not (a) violate any provision of the
articles of incorporation or bylaws of any Borrower, or any law, rule,
regulation, judgment, order or ruling of any court or governmental agency, or
(b) violate, conflict with, result in a breach of, constitute a default under,
or with the giving of notice or the expiration of time or both, constitute a
default under, any existing mortgage, indenture, lease, security agreement,
contract, note, instrument or any other agreements or documents binding on any
Borrower or affecting the properties of any Borrower.

7.6 Binding Agreement. Each of the Loan Documents is the
legal, valid and binding obligation of each Borrower, enforceable in accordance
with its terms, subject only to limitations on enforceability imposed by
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting creditors' rights generally and by general principles of equity.

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7.7 Compliance with Laws. Each Borrower is in compliance
in all material respects with all federal, state, and local laws, rules,
regulations, ordinances, codes and orders, including without limitation all
laws relating to environmental matters.

7.8 Material Agreements. Exhibit 7.8 hereto accurately
and completely lists all agreements to which any Borrower is a party, the
breach or termination of which would have a Material Adverse Effect ("Material
Agreements"). All Material Agreements are legally valid and binding on the
parties thereto and are in full force and effect and neither Borrowers, nor, to
the knowledge of Borrowers, any other party thereto, is in default thereunder,
and no facts exist which with the giving of notice or the passage of time, or
both, would constitute such a default.

7.9 Financial Statements; No Material Adverse Change.
All consolidated financial statements, schedules, and other written documents
relating to the financial condition and results of operations of Borrowers
submitted by Borrowers to Agent prior to the execution of this Agreement,
including without limitation those as of April 30, 1996, fairly presented, as
of the date thereof, the financial condition and results of operations of
Borrowers for the period indicated, and were prepared in accordance with GAAP.
Since April 30, 1996, there has been no material adverse change in the
financial condition, results of operations, business or prospects of Borrowers.

7.10 Payment of Taxes. Borrowers have filed all required
federal, state and local tax returns and have paid all taxes shown thereon to
be due and no such tax returns are being audited as of the date of this
Agreement. Each Borrower has paid when due all other taxes, assessments or
impositions levied or assessed against such Borrower or the business or
properties of such Borrower.

7.11 Licenses and Approvals. Each Borrower has all
material governmental approvals, licenses and permits necessary or desirable to
enable each of them to conduct their respective business as presently being
conducted, and all such approvals, licenses and permits are in full force and
effect.

7.12 Employee Benefit Plans.

7.12.1 Employee Benefit Plans; Multiemployer
Plans. Exhibit 7.12 sets forth: (a) a true and complete list of each
"employee benefit plan," as such term is defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended, and the
regulations thereunder ("ERISA"), that is or was maintained or contributed to
by any Borrower or any predecessor to any Borrower, or in which any Borrower or
any predecessor to any Borrower participates or participated (each a "Borrower
Benefit Plan"); and (b) a true and complete list of each employee stock
ownership plan ("ESOP") that is maintained by any Borrower under ERISA and the
Internal Revenue Code of 1986, as amended from time to time (the "Code"). No
Borrower, no predecessor to any Borrower and no member of any Borrower's
"controlled group" (as that term is defined in Section 414 of the Code) has, or
at any

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time has had, an obligation to contribute to any "multiemployer plans," as
defined in Section 3(37) of ERISA (each a "Multiemployer Plan") prior to the
Closing Date.

7.12.2 Pension Benefit Plans. To the knowledge of
Borrowers, each Borrower Benefit Plan that is an employee pension benefit plan
as defined in Section 3(2) of ERISA, and not exempted under Section 4(b) or
Section 201 of ERISA (each a "Borrower Pension Plan"), and the trust, if any,
forming a part thereof, meets, and since its inception has met, the
requirements for qualification under Section 401(a) of the Code, and is, and
since its inception has been, exempt from taxation under Section 501(a) of the
Code. Except as set forth in Exhibit 7.12, the Internal Revenue Service (the
"IRS") has issued a favorable determination letter with respect to the
qualification of each Borrower Pension Plan and the trust, if any, relating
thereto, and the IRS has not taken any action to revoke any such letter.

7.12.3 Compliance by Administrator. To the
knowledge of Borrowers, the administrator of each Borrower Benefit Plan has
complied in all material respects with the disclosure and reporting
requirements of Part I of Subtitle B of Title I of ERISA.

7.12.4 Annual Reports. To the knowledge of
Borrowers, those sections of all annual reports heretofore filed with the IRS,
the Department of Labor or the Pension Benefit Guaranty Corporation on behalf
of each Borrower Benefit Plan which were required to be certified were duly
certified without qualification by the accountants or actuaries of such plan.

7.12.5 Prohibited Transactions. To the knowledge
of Borrowers, with respect to each Borrower Benefit Plan, neither Borrowers nor
any Borrower Benefit Plan or a fiduciary thereof, is engaged or has engaged in
any transaction which is prohibited by Part 4 of Subtitle B of Title I of ERISA
or which might subject any such plan or related trust, or any trustee or
administrator thereof, to a tax or penalty imposed by Section 4975 of the Code
or Section 502(i) of ERISA or to liability under Section 409 of ERISA, any of
which would have a Material Adverse Effect.

7.12.6 Bonding. To the knowledge of Borrowers,
every fiduciary and every "plan official" (as defined in Section 412 of ERISA)
of each Borrower Benefit Plan is bonded to the extent required by Section 412
of ERISA.

7.12.7 Civil/Criminal Action. To the knowledge of
Borrowers, no civil or criminal action brought pursuant to Part V of Subtitle B
of Title I of ERISA is pending, or, to the knowledge of Borrowers, is
threatened against Borrowers, any Borrower Benefit Plan or any fiduciary
thereof with respect to any Borrower Benefit Plan.

7.12.8 Funding. (a) Each of the Borrower Pension
Plans is in compliance with the minimum funding standards of Section 412 of the
Code and Part 3 of Subtitle B of Title I of ERISA, to the extent applicable,
and (b) for each Borrower

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<PAGE> 29
Pension Plan, no waivers of the minimum funding standards have been requested,
and no Borrower Pension Plan has any "accumulated funding deficiency" within
the meaning of Section 412 of the Code.

7.12.9 Compliance With Law. Borrowers are in
compliance in all material respects with, and each Borrower Benefit Plan has
been operated in all material respects in accordance with, the provisions of
such plan and in compliance in all material respects with, ERISA, the Code and
all other applicable law governing each such Borrower Benefit Plan, including
but not limited to rules and regulations promulgated by the Department of
Labor, the Pension Benefit Guaranty Corporation, and the Department of the
Treasury pursuant to the provisions of ERISA and the Code, except to the extent
any such failure would not have a Material Adverse Effect.

7.12.10 Multiple Employer Plan. Borrowers do not
participate in any "multiple employer plan" within the meaning of Section 413
of the Code.

7.12.11 Plan Termination Liability. Borrowers have
not incurred any liability under Title IV of ERISA arising in connection with
the termination of, or complete or partial withdrawal from, any Borrower
Benefit Plan, covered or previously covered by Title IV of ERISA, which
liability, or any portion thereof, could constitute a liability of Borrowers at
or after the Closing Date.

7.12.12 Pension Plan Termination. No proceedings
to terminate any Borrower Pension Plan have been instituted under Subtitle C of
Title IV of ERISA.

7.12.13 Reportable Event. No "reportable event"
within the meaning of Section 4043 of ERISA and the regulations thereunder
other than a reportable event for which notice or penalty has been waived by
regulation or otherwise has occurred with respect to any Borrower Pension Plan
that is a defined benefit plan. With respect to any Multiemployer Pension Plan
that is a defined benefit plan, to the knowledge of Borrowers, no such
"reportable event" has occurred which would materially and adversely affect
such plan, and no such plan is in reorganization within the meaning of Part 3
of Subtitle E of Title IV of ERISA.

7.12.14 Payment of Contributions. In respect of
each Borrower Benefit Plan, each Borrower has paid or will have paid as of the
Closing Date all contributions or premiums required to be made by it for all
plan years ending on or prior to the Closing Date and, for the plan year which
includes the Closing Date, contributions or premiums for the pro rata portion
of the plan year ending on the Closing Date. Except as set forth in Exhibit
7.12, all contributions paid or accrued by Borrowers on or prior to the Closing
Date in respect of any Borrower Pension Plan that is a defined benefit plan
will be based on the actuarial assumptions and methods used for the last plan
year ended on or before the Closing Date, or if there is no prior plan year for
any such plan, contributions shall be based upon reasonable actuarial
assumptions and methods.

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7.12.15 Welfare Benefit Plans. Borrowers do not
participate in a "multiple employer welfare arrangement" within the meaning of
Section 3(40) of ERISA. Borrowers do not maintain or contribute to a
"voluntary employees' beneficiary association" within the meaning of Section
501(a)(9) of the Code or a "welfare benefit fund" within the meaning of Section
419 of the Code, nor do Borrowers maintain or contribute to any employee
welfare benefit plan within the meaning of Section 3(1) of ERISA for the
benefit of retired or former employees (other than as required by Section 4980B
of the Code and Sections 601 through 608 of ERISA ("COBRA")). Borrowers have
complied in all material respects with the provisions of COBRA.

7.12.16 ESOP. In respect of each ESOP, each
Borrower has paid or will have paid as of the Closing Date all contributions or
premiums required to be made by it on or prior to the Closing Date. Except as
set forth on Exhibit 7.12, no ESOP has any indebtedness for borrowed money
("ESOP Indebtedness"). The estimated repurchase liability of Holding Company,
based on reasonable actuarial assumptions and methods, under any ESOP during
the Loan Period is set forth on Exhibit 7.12. Assuming that each Borrower
makes all required contributions in accordance with the terms of each ESOP,
each ESOP has or will have sufficient funds to make all scheduled payments on
its ESOP Indebtedness. Holding Company has sufficient funds to meet its
reasonably anticipated repurchase liability during the Loan Period.

7.13 Capitalization of Borrowers. The capitalization of
each of World Solutions and World Source (expressed both in terms of total
number of shares and percentage of each class of stock) is set forth on Exhibit
7.13. All of the issued and outstanding shares of capital stock of each of
World Solutions and World Source have been duly authorized and validly issued
and are fully paid and nonassessable. No authorized but unissued shares and no
treasury shares of World Solutions or World Source are subject to any option,
warrant, right to call or commitment of any kind or character except those
arising pursuant to the Plans. All of the issued and outstanding shares of
capital stock of Holding Company have been duly authorized and validly issued
and are fully paid and nonassessable.

7.14 Subsidiaries. All of the Subsidiaries, the
capitalization of each Subsidiary, and any Borrower's stock ownership therein
are set forth on Exhibit 7.14. All of the issued and outstanding shares of
capital stock of each Subsidiary have been duly authorized and validly issued
and are fully paid and nonassessable. No authorized but unissued shares and no
treasury shares of any Subsidiary are subject to any option, warrant, right to
call or commitment of any kind or character.

7.15 Environmental Compliance. Except as set forth on
Exhibit 7.15 hereto:

7.15.1 no Hazardous Substances are now located on
any real property owned or leased by any Borrower ("Premises"), and neither
Borrowers, nor, to the best of the knowledge of Borrowers, any other Person has
ever caused or permitted any Hazardous Substances to be placed, held, located,
or disposed of on, under, or at the

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<PAGE> 31
Premises or any part thereof except in compliance at all times with the
Environmental Laws and the Environmental Regulations;

7.15.2 no part of the Premises or any improvements
located thereon is being used nor, to the best of the knowledge of Borrowers
after due inquiry, has been used at any previous time for the disposal,
storage, treatment, processing, or other handling of Hazardous Substances
except in compliance at all times with the Environmental Laws and the
Environmental Regulations, nor is any part of the Premises or any improvements
located thereon affected by any contamination from Hazardous Substances;

7.15.3 to the best of the knowledge of Borrowers,
no property adjoining the Premises is being used, nor has ever been used at any
previous time, for the disposal, storage, treatment, processing, or other
handling of Hazardous Substances except in compliance at all times with all
Environmental Laws and Environmental Regulations, nor is any other property
adjoining the Premises affected by contamination from Hazardous Substances;

7.15.4 to the best of the knowledge of Borrowers,
no investigation, administrative order, consent order and agreement,
litigation, or settlement with respect to Hazardous Substances or contamination
from Hazardous Substances is proposed, threatened, anticipated or in existence
with respect to the Premises; and

7.15.5 to the best of the knowledge of Borrowers,
the Premises are not currently on and have never been on any federal or state
"Superfund" or "Superlien" list.

7.16 Intellectual Property. Except as set forth in
Exhibit 7.16, each Borrower owns or has licenses to use all the patents,
trademarks, service marks, trade names, copyrights and non-governmental
licenses, and all rights with respect to the foregoing, necessary for the
conduct of their respective businesses as now conducted.

7.17 Regulations U and X. No portion of any Advance will
be used for the purpose of purchasing or carrying any "margin security" or
"margin stock" as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.

7.18 Fiscal Year. Each fiscal year of each Borrower
begins on November 1 of each calendar year and ends on October 31 of each
calendar year.

7.19 Disclosure. None of Borrowers' representations or
warranties set forth in this Agreement or in any document or certificate
furnished pursuant to this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading.

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<PAGE> 32
7.20 Continuing Nature. All warranties and
representations of Borrowers herein are now and will continue to be true and
correct (except to the extent that any such warranty or representation states
that it relates to a particular date) until the Notes are repaid in full, all
covenants and agreements herein contained are observed and performed by
Borrowers, all Letters of Credit have expired, and the Syndication Parties have
no further obligation to make Advances or to cause Agent to issue Letters of
Credit.

8. Borrowers' Affirmative Covenants and Agreements.

Borrowers, to induce the Syndication Parties to make the Loan, hereby
covenant and agree as follows:

8.1 Books and Records. Borrowers shall at all times keep
proper books of record and account, in which correct and complete entries shall
be made of all its dealings, in accordance with GAAP.

8.2 Reports and Notices. Borrowers shall provide to
Agent the following reports, information and notices, and, upon receipt, Agent
shall promptly send a copy thereof to each Syndication Party:

8.2.1 Annual Financial Statements. As soon as
available, but in no event later than one hundred twenty (120) days after the
end of any fiscal year of Borrowers occurring during the term hereof, annual
financial statements of Borrowers on a consolidated basis, prepared in
accordance with GAAP consistently applied which shall: (a) be audited by
independent certified public accountants selected by Borrowers which are
reasonably acceptable to Agent; (b) be accompanied by a report of such
accountants containing an unqualified opinion reasonably acceptable to Agent;
(c) be accompanied by a Compliance Certificate; (d) be prepared in reasonable
detail and in comparative form; and (e) include a balance sheet, an income
statement, a statement of cash flows, and all notes and schedules relating
thereto.

8.2.2 Quarterly Financial Statements. As soon as
available but in no event more than forty- five (45) days after the end of each
of Borrowers' first three Fiscal Quarters in Borrowers' fiscal year, the
following financial statements of Borrowers, on a consolidated basis, prepared
in accordance with GAAP consistently applied: a balance sheet, an income
statement, and a statement of cash flows, which quarterly statements shall
include any and all notes and schedules thereto. Such quarterly financial
statements shall be accompanied by a Compliance Certificate.

8.2.3 Additional Information. With reasonable
promptness, such additional financial information or documentation as Agent or
any Syndication Party may reasonably request.

8.2.4 Annual Projections. As soon as available,
but in no event later than sixty (60) days after the end of any fiscal year of
Borrowers occurring during

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<PAGE> 33
the term hereof, written projections of Borrowers' consolidated financial
statements for the following fiscal year, setting forth all material
assumptions utilized (and the basis therefor).

8.2.5 Notice of Default under Other Financing.
Notice in writing promptly after Borrowers, or any of them, obtain knowledge
thereof, of any default under any indenture, agreement or instrument to which
any Borrower is a party or by which it may be bound (limited, with respect to
agreements in connection with borrowed money, to those in which the principal
amount owing is $5,000,000.00 or more) and of any acceleration of indebtedness
caused thereby.

8.2.6 Notice of Default. As soon as the existence
of any Event of Default or Potential Default becomes known to any officer of
any of Borrowers, written notice of such Event of Default or Potential Default,
the nature and status thereof, and the action being taken or proposed to be
taken with respect thereto.

8.2.7 Notice of Actions. Notice in writing
promptly after Borrowers, or any of them, obtain knowledge thereof, of all
actions, suits and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
concerning Borrowers or any of them, which is material to the financial
condition, results of operation, business or prospects of Borrowers or any of
them.

8.2.8 Notice of Material Change. Promptly after
Borrowers, or any of them, obtain knowledge thereof, notice of any matter which
has resulted or would result in a Material Adverse Effect.

8.2.9 Notification of Claims by Contractors and
Materialmen. Borrowers shall immediately advise Agent in writing of any notice
received by Borrowers or any of them from any laborer, contractor,
subcontractor or materialman to the effect that such laborer, contractor,
subcontractor or materialman has not been paid when due for any labor or
materials furnished with respect to the Premises.

8.2.10 ERISA. Each Borrower shall immediately
provide Agent with a copy of (a) any notice received by such Borrower relating
to any violation of the provisions of the Code or ERISA asserted by the
Department of Labor, the Pension Benefit Guaranty Corporation or the Department
of the Treasury with respect to any Borrower Benefit Plan or ESOP; and (b) a
material amendment to any Plan.

8.2.11 Change of Control. Each Borrower shall
immediately advise Agent in writing of any planned or consummated Change of
Control.

8.2.12 SEC Statements. Each Borrower shall
promptly furnish to Agent copies of all material (excluding exhibits) which it
sends or will send its shareholders and which it files or will file with the
Securities and Exchange Commission ("SEC") or any national securities exchange,
including but not limited to, all registration

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<PAGE> 34
statements, reports on Form 10Q, reports on Form 10-K, reports on Form 8K,
proxy material and annual reports to shareholders and any and all amendments
thereof or supplements thereto. Each Borrower shall promptly furnish to Agent
copies of all exhibits to the materials furnished to Agent pursuant to the
previous sentence of this Subsection 8.2.12 which are requested by Agent.

8.2.13 Hazardous Materials. Each Borrower shall
immediately advise Agent in writing of (a) any and all enforcement, cleanup,
remedial, removal, or other governmental or regulatory actions of which such
Borrower has knowledge which are instituted, completed, or threatened against
any Borrower pursuant to the Environmental Laws or Environmental Regulations;
and (b) all claims made or, to such Borrower's knowledge, threatened by any
third party against any Borrower relating to damage, contribution, cost
recovery compensation, loss, or injury resulting from any Hazardous Substances
(the matters set forth in clauses (a) and (b) above are hereinafter referred to
as "Hazardous Substances Claims").

8.3 Maintenance of Existence. Borrowers shall preserve
and maintain in full force and effect their respective legal existence in the
jurisdiction of its organization and shall qualify or remain qualified as a
foreign corporation in each jurisdiction in which the transaction of their
business makes such qualification necessary.

8.4 Compliance with Legal Requirements and Agreements.
Each Borrower shall comply with: (a) all laws, rules, regulations and orders
applicable to such Borrower or their respective businesses; and (b) all
agreements, indentures, mortgages, and other instruments to which such Borrower
is a party or by which such Borrower or any of their respective property is
bound; provided, however, that the failure of any Borrower to comply with this
Section in any instance shall not be a default hereunder unless such failure
would result in a Material Adverse Effect.

8.5 Compliance with Environmental Laws. Without limiting
the provisions of Section 8.4 of this Agreement, Borrowers shall comply in all
material respects with, and cause all Persons occupying or present on the
Premises to comply with, all Environmental Laws and Environmental Regulations.

8.6 Insurance. Borrowers shall keep their assets insured
at all times by an insurance carrier or carriers approved by Agent which have
an A rating by the current BEST Key Rating Guide, against all risks covered by
a special form policy (and including flood, earthquake and windstorm coverage)
in the amount of the full replacement cost (other than with respect to motor
vehicles) of the assets as well as liability, worker's compensation, business
interruption, boiler and machinery and such other insurance as Agent may
reasonably require, in amounts and with deductibles or maximum payouts
customarily carried by entities in similar lines of business. Borrowers shall
also maintain fidelity coverage (including employee dishonesty) on such
officers and employees and in such amounts as customarily carried by
corporations engaged in comparable businesses and comparably situated.
Certificates of such insurance satisfactory to Agent shall be delivered to and
held by Agent. All such insurance policies shall contain a provision

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<PAGE> 35
requiring at least ten (10) days' notice to Agent prior to any cancellation for
non-payment of premiums and at least forty-five (45) days' notice to Agent of
cancellation for any other reason or of modification or non-renewal. Borrowers
agree to pay all premiums on such insurance as they become due, and will not
permit any condition to exist on or with respect to the insured assets which
would wholly or partially invalidate any insurance thereon. Borrowers shall
provide Agent with such evidence as Agent may request from time to time as to
the maintenance of all insurance required pursuant to this Section.

8.7 Taxes. Each Borrower shall cause to be paid when due
all taxes, assessments, and other governmental charges upon it, its income, its
sales, its properties, and federal and state taxes withheld from its employees'
earnings, unless such taxes, assessments, or other governmental charges shall
be contested in good faith by appropriate actions or legal proceedings and each
Borrower shall establish adequate reserves therefor in accordance with GAAP.

8.8 Title to Assets and Maintenance. Borrowers shall
defend and maintain title to all their respective material properties and
assets, free and clear of all liens, pledges, security interests, restrictions,
encumbrances and defects in title other than the Permitted Encumbrances and
those allowed pursuant to the terms of this Agreement. Borrowers shall keep
their respective assets, both real and personal, in good order and condition
consistent with industry practice and as required to maintain all equipment
warranties in full force and effect and shall make all necessary repairs,
replacements and improvements.

8.9 Payment of Liabilities. Each Borrower shall pay all
its liabilities as they become due unless (with the exception of the Loan) they
are contested in good faith by appropriate actions or legal proceedings and
such Borrower establishes reserves therefor in form and amount satisfactory to
Agent.

8.10 Inspection. Each Borrower shall permit Agent and the
Syndication Parties, and their respective agents, during normal business hours
or at such other times as the parties may agree, to examine such Borrower's
properties, books, and records, and to discuss such Borrower's affairs,
finances, operations, and accounts with its respective officers, directors,
employees, and independent certified public accountants.

8.11 Management. Each Borrower shall maintain its present
management or shall obtain management of comparable experience and expertise.

8.12 Licenses. Each Borrower shall preserve and maintain
in full force and effect all material rights, franchises, licenses, and
governmental approvals owned or possessed by it which are necessary or
desirable in view of its business and operations or the ownership of its
properties.

8.13 Financial Covenants. Borrowers shall maintain the
following financial covenants, measured on a consolidated basis, until the Loan
is indefeasibly paid

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<PAGE> 36
in full, all Letters of Credit have expired, and the Syndication Parties have
no obligation to make Advances or to cause Agent to issue Letters of Credit:

8.13.1 Quick Ratio. Maintain at all times a Quick
Ratio of not less than 1.2 to 1.

8.13.2 Leverage Ratio. Maintain at all times a
Leverage Ratio of not more than 2.5 to 1.0.

8.13.3 Coverage Ratio. Maintain, for the twelve
(12) month period ending on the last day of each Fiscal Quarter, a Coverage
Ratio of not less than 1.75 to 1.0.

8.14 ERISA. Each Borrower shall: (a) comply in all
material respects with the Code and ERISA; (b) cause any Borrower Pension Plan
to initially qualify and continue to qualify under ERISA and the Code,
including, but not limited to obtaining a favorable determination letter with
respect to each Borrower Pension Plan; (c) prepare and deliver each material
report, statement or other document required by ERISA and the Code within the
period specified therein and conforming in form and substance to the provisions
thereof; (d) administer each Borrower Benefit Plan in all material respects in
accordance with the terms of such plan and with ERISA, the Code, and any other
applicable law; (e) make all contributions or premiums required to be made by
it in connection with any Borrower Benefit Plan or ESOP during the Loan Period,
and (f) upon Agent's request, promptly deliver to Agent a true, correct and
complete copy of all documents and agreements relating to the establishment of
each Borrower Pension Plan, Borrower Benefit Plan and ESOP, as well as the
latest available custodian or trustee reports, annual reports and the latest
actuarial reports for each Borrower Pension Plan, Borrower Benefit Plan and
ESOP.

8.15 Additional Costs of Maintaining Loan. Borrowers
shall pay to Agent from time to time such amounts as Agent may determine to be
necessary to compensate any Syndication Party for any costs incurred by it
which Agent determines, based on information presented to it by such
Syndication Party, are attributable to such Syndication Party's making or
maintaining any Advances hereunder or its obligation to make any such Advances,
or any reduction in any amount receivable by such Syndication Party under this
Agreement or the Note payable to it in respect to any such Advances or such
obligation (such increases in costs and reductions in amounts receivable being
herein called "Additional Costs"), resulting from any change after the date of
this Agreement in United States federal, state, municipal, or foreign laws or
regulations (including Regulation D), or the adoption or making after such date
of any interpretations, directives, or requirements applying to a class of
banks including such Syndication Party of or under any United States federal,
state, municipal, or foreign laws or regulations (whether or not having the
force of law) by any court or governmental or monetary authority charged with
the interpretation or administration thereof ("Regulatory Change"), which: (a)
changes the basis of taxation of any amounts payable to such Syndication Party
under this Agreement or the Note payable to such Syndication

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<PAGE> 37
Party in respect of any of such Advances (other than taxes imposed on the
overall net income of such Syndication Party); or (b) imposes or modifies any
reserve, special deposit, or similar requirements relating to any extensions of
credit or other assets of, or any deposits with or other liabilities of, such
Syndication Party; or (c) imposes any other condition affecting this Agreement
or the Note payable to such Syndication Party (or any of such extensions of
credit or liabilities). Agent will notify Borrowers of any event occurring
after the date of this Agreement which will entitle such Syndication Party to
compensation pursuant to this Section as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation. Agent
shall include with such notice, a certificate from such Syndication Party
setting forth in reasonable detail the calculation of the amount of such
compensation. Determinations by Agent for purposes of this Section of the
effect of any Regulatory Change on the costs of such Syndication Party of
making or maintaining Advances or on amounts receivable by such Syndication
Party in respect of Advances, and of the additional amounts required to
compensate such Syndication Party in respect of any Additional Costs, shall be
conclusive absent manifest error, provided that such determinations are made on
a reasonable basis.

8.16 Reimbursement for Additional Capital Requirements.
In the event that the introduction of or any change in (a) any law or
regulation, or (b) the judicial, administrative, or other governmental
interpretation of any law or regulation, or (c) compliance by any Syndication
Party or any corporation controlling any such Syndication Party with any
guideline or request from any governmental authority (whether or not having the
force of law) has the effect of requiring an increase in the amount of capital
required or expected to be maintained by such Syndication Party or any
corporation controlling such Syndication Party, and such Syndication Party
certifies that such increase is based in any part upon such Syndication Party's
obligations hereunder, and other similar obligations, Borrowers shall pay to
such Syndication Party such additional amount as shall be certified by such
Syndication Party to Agent and to Borrowers to be the net present value
(discounted at the Variable Rate) of (a) the amount by which such increase in
capital reduces the rate of return on capital which such Syndication Party
could have achieved over the period remaining until the Maturity Date but for
such introduction or change, (b) multiplied by such Syndication Party's
Syndication Share of the Aggregate Commitment. Agent will notify Borrowers of
any event occurring after the date of this Agreement that will entitle any such
Syndication Party to compensation pursuant to this Section as promptly as
practicable after it obtains knowledge thereof and of such Syndication Party's
determination to request such compensation. Agent shall include with such
notice, a certificate from such Syndication Party setting forth in reasonable
detail the calculation of the amount of such compensation. Determinations by
any Syndication Party for purposes of this Section of the effect of any
increase in the amount of capital required to be maintained by any such
Syndication Party and of the amount of compensation owed to any such
Syndication Party under this Section shall be conclusive absent manifest error,
provided that such determinations are made on a reasonable basis.

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8.17 Hazardous Substances Indemnifications. Borrowers
shall be solely responsible for and shall indemnify and hold harmless Agent and
the Syndication Parties, their respective directors, officers, employees,
agents, successors, and assigns, from and against any loss, damage, cost,
expense, or liability directly or indirectly arising out of or attributable to
the subject of any Hazardous Substances Claims.

8.18 Indemnification. Borrowers shall indemnify and hold
Agent and each Syndication Party and their respective directors, officers,
employees, agents, professional advisers and representatives, harmless from and
against any and all losses, claims, damages, liabilities, costs or expenses
imposed on, incurred by or asserted against any of them in connection with any
litigation, investigation, claim or proceeding commenced or threatened related
to the negotiation, preparation, execution, delivery, enforcement, performance
or administration of this Agreement, any other Credit Document, or any
undertaking or proceeding related to any of the transactions contemplated
hereby or any act, omission, event or transaction related or attendant thereto,
including without limitation, amounts paid in settlement, court costs, and the
fees and expenses of counsel. The foregoing indemnity shall survive the
repayment of the Loan and the termination of this Agreement.

8.19 Good Standing Certificates. Borrowers shall provide
to Agent, (a) on or before August 25, 1997, a certificate of good standing
dated no more than thirty (30) days prior to July 25, 1997, for each of
Borrowers, issued by the Secretary of State for the state of such Borrower's
incorporation, and (b) on or before September 30, 1997, a certificate of an
officer acceptable to Agent listing the locations of the offices of each
Borrower and a certificate of good standing from each state in which a Borrower
has an office stating that such Borrower is in good standing in such state.

8.20 Further Assurances. Each Borrower shall execute and
deliver such other and further instruments and shall perform such other and
further acts as in the opinion of Agent may be necessary or desirable to carry
out more effectively the purposes of this Agreement.

9. Borrowers' Negative Covenants and Agreements. Until the Notes
and all other amounts owing to the Syndication Parties under the Loan Documents
are indefeasibly paid in full and all Letters of Credit have expired or been
terminated and the Syndication Parties have no further obligation to make
Advances or to cause Agent to issue any further Letters of Credit hereunder,
Borrowers shall not:

9.1 Change in Business. Make any material changes to
their business as presently conducted or in any other way materially disrupt
the continuity of their existing operations.

9.2 Change in Business Form. Change their business form
from a corporation organized under Subchapter C of the Internal Revenue Code.

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9.3 Acquisitions. Acquire all or substantially all of
the assets or stock of any Person, except to the extent that: (a) the fair
market value of all such assets or stock acquired by Borrowers during the Loan
Period, when taken together with the fair market value of the assets acquired
by Borrowers as a result of all mergers and other combinations by Borrowers
pursuant to Subsection 9.4 of this Agreement and with the amount of all
investments made by Borrowers pursuant to Subsection 9.11.3 of this Agreement
occurring during the Loan Period, does not exceed that amount which is equal to
20% of Total Net Worth, (b) taking into account each such acquisition,
Borrowers remain in compliance with all of the financial covenants set forth in
Section 8.13 hereof, and (c) after giving effect to such acquisition, no Event
of Default would exist. For purposes of subparagraph (a) of this Subsection,
with respect to each such acquisition, Total Net Worth shall be calculated as
of the last day of the Fiscal Quarter ending immediately prior to the
anticipated closing date of such acquisition.

9.4 Mergers. Enter into any merger, consolidation, joint
venture, or other combination, except:

9.4.1 Holding Company shall be permitted to merge
into a Delaware corporation which, prior to the merger with Holding Company,
has no assets or liabilities, so long as: (a) such Delaware corporation is the
surviving corporation after such merger, (b) such surviving Delaware
corporation ("Survivor") assumes Holding Company's exact corporate name as a
result of such merger, (c) upon the consummation of such merger, Survivor
promptly delivers to Agent a true, correct and complete copy of all merger
documents and any amendments to Holding Company's articles of incorporation and
bylaws, (d) after the consummation of such merger, Survivor promptly informs
Agent of its federal taxpayer identification number and provides evidence of
its qualification to do business, under the name of Holding Company, in all
states in which Holding Company is so qualified immediately prior to such
merger; and

9.4.2 for mergers or consolidations in which a
Borrower is the surviving corporation where the following tests are or would be
met: (a) after giving effect to such merger or consolidation, no Event of
Default would exist, (b) based on pro forma financial statements for the
applicable Fiscal Quarter assuming the prior consolidation during such period
of Borrowers and the entity with which the merger or consolidation is proposed,
the financial covenants set forth in Section 8.13 hereof will all be met, and
(c) the fair market value of the assets acquired as a result of any such
merger, consolidation, joint venture or other combination, when viewed as an
asset acquisition, and, when taken together with all acquisitions by Borrowers
pursuant to Subsection 9.3 of this Agreement and with the amount of all
investments made by Borrowers pursuant to Subsection 9.11.3 of this Agreement
occurring during the Loan Period, does not exceed that amount which is equal to
20% of Total Net Worth. For purposes of subparagraph (c) of this Subsection,
with respect to each such merger, consolidation, joint venture, or other
combination, Total Net Worth shall be calculated as of the last day of the
Fiscal Quarter ending immediately prior to the anticipated closing date of such
transaction.

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9.5 Recapitalization. With respect to World Source and
World Solutions, redeem (and including any issuance of stock which has the
effect of a redemption), purchase, or retire any of its capital stock or grant
or issue any warrant, right, or option pertaining thereto, or other security
convertible into any of the foregoing, except that World Source and World
Solutions may redeem, purchase or retire their capital stock as required under
the terms of the Plans.

9.6 Dividends and Distributions. With respect to World
Source and World Solutions, declare or pay or set side for payment any
dividends upon any shares of their capital stock (except dividends payable in
shares of such stock) or purchase, redeem or retire, or make any other
distribution on any shares of their capital stock, except pursuant to the
Plans.

9.7 Sale of Assets. Dissolve or liquidate, sell, assign,
lease or transfer all or any material part of their assets or business;
provided, however, this prohibition shall not prevent each Borrower from taking
the following action:

9.7.1 sales of inventory in the ordinary course of
its business;

9.7.2 sales of surplus, damaged, worn out or
obsolete equipment or inventory for not less than fair market value;

9.7.3 sales or other dispositions of investments
permitted hereunder for not less than fair market value;

9.7.4 granting licenses of its patents, copyrights,
trademarks, trade names and service marks in the ordinary course of its
business;

9.7.5 sales or other dispositions of office
furnishings or office equipment in the ordinary course of business; or

9.7.6 other sales, leases, transfers and disposals
of assets, provided that the aggregate value of all such assets (based upon the
greater of the fair market or book value of such assets) so sold, leased,
transferred or otherwise disposed of in any twelve (12) month period does not
exceed five percent (5%) of such Borrower's assets measured immediately prior
to any such disposition.

9.8 Indebtedness. Incur additional indebtedness, except
that Borrowers may incur additional indebtedness (a) not to exceed
$10,000,000.00 in the aggregate during the Loan Period in the ordinary course
of Borrowers' business ("Permitted Indebtedness"), and (b) as a result of their
stock repurchase obligations under the Plans ("ESOP Repurchase Indebtedness").

9.9 Encumbrances. Create, incur, assume, or suffer to
exist, any pledge, mortgage, lien, charge, lien charge or other encumbrance on,
or any security interest in, any of their assets, except:

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<PAGE> 41
9.9.1 liens for taxes or other governmental charges
which are not due or remain payable without penalty, or are being contested in
good faith by appropriate actions or proceedings; provided that such reserves
or other appropriate provisions satisfactory to Agent in its sole discretion
shall have been made for such taxes or other governmental charges;

9.9.2 deposits or pledges to secure workmen's
compensation, unemployment insurance, old age benefits or other social security
obligations or in connection with or to secure the performance of bids,
tenders, trade contracts or leases or to secure statutory obligations or surety
or appeal bonds securing liabilities not in excess of $5,000,000 in the
aggregate or other pledges or deposits of like nature and all in the ordinary
course of business;

9.9.3 mechanics', carriers', workmen's, repairmen's
or other like liens arising in the ordinary course of business in respect of
obligations not yet due or which are being contested in good faith and by
appropriate proceedings (except that no such liens are permitted with respect
to construction of the Phase I Headquarters Building and the Phase II
Headquarters Building in excess of $1,000,000.00 in the aggregate outstanding
at any one time);

9.9.4 easements, rights-of-way, restrictions and
other similar matters incidental to the ownership of property which do not in
the aggregate materially detract from the value of such property or assets or
materially impair their use in the operation of the business of any Borrower;

9.9.5 purchase money security interests in office
furnishings and office equipment acquired in the ordinary course of business,
provided that such security interests shall attach only to the furnishings and
equipment so purchased;

9.9.6 liens securing the Permitted Indebtedness
which are granted in the ordinary course of business; and

9.9.7 liens on the treasury shares of the capital
stock of Holding Company securing the ESOP Repurchase Indebtedness.

9.10 Loans, Advances and Guarantees. Make any loans or
advances to, or guarantee, endorse, or become a surety or otherwise become
liable, directly or contingently, upon the obligation of, any other Person
except for:

9.10.1 the endorsement of checks and other
instruments in the ordinary course of business;

9.10.2 extensions of trade credit made in the
ordinary course of business consistent with past customs and practice;

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9.10.3 loans to any Person in the ordinary course
of business of the lending Borrower, provided that the aggregate of all such
loans outstanding at any time during the Loan Period may not exceed $5,000,000;

9.10.4 guarantee by any Borrower of the
obligations of any other Borrower or of the wholly- owned Subsidiary of any
Borrower which guarantee is entered into in the ordinary course of business of
the guaranteeing Borrower; and

9.10.5 guarantees by any Borrower of the
obligations of any Person other than a Borrower or a wholly-owned Subsidiary of
any Borrower which guarantee is entered into in the ordinary course of business
of the guaranteeing Borrower, provided that the aggregate of all such amounts
guaranteed at any time during the Loan Period may not exceed $5,000,000.

9.11 Investment. Own, purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any Person, except that Borrowers may own, purchase or
acquire:

9.11.1 investments described in the Investment
Policy set forth on Exhibit 9.11.1;

9.11.2 investments existing on the date hereof
which are described on Exhibit 9.11.2; and

9.11.3 investments by any Borrower in entities
engaged in similar lines of business as Borrowers in an aggregate amount which,
when taken together with all acquisitions by Borrowers pursuant to Subsection
9.3 of this Agreement and all mergers, consolidations, joint ventures or other
combinations entered into by Borrowers pursuant to Subsection 9.4 of this
Agreement during the Loan Period, does not exceed that amount which is equal to
20% of Total Net Worth. For purposes of this Subsection 9.11.3, with respect
to each investment by a Borrower in an entity engaged in a similar line of
business as Borrowers, Total Net Worth shall be calculated as of the last day
of the Fiscal Quarter ending immediately prior to the making of such
investment.

9.12 Use of Proceeds. Use the proceeds of the Loan for
any purpose other than those authorized in Section 2.2 hereof.

9.13 ERISA. (a) Engage in or permit any transaction which
could result in a "prohibited transaction" (as such term is defined in Section
406 or Section 2003(a) of ERISA) or in the imposition of an excise tax pursuant
to Section 4975 of the Code; (b) engage in or permit any transaction or other
event which could result in a "reportable event" as such term is defined in
Section 4043 of ERISA for any Borrower Pension Plan; (c) fail to make full
payment when due of all amounts which, under the provisions of any Borrower
Benefit Plan or ESOP, a Borrower is required to pay as contributions thereto;
(d) permit to exist any "accumulated funding deficiency" (as such term is
defined in Section 302 of ERISA), whether or not waived, with respect to any
Borrower Pension

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Plan; (e) fail to make any payments to any "multiemployer plan" that a Borrower
may be required to make under any agreement relating to such "multiemployer
plan" or any law pertaining thereto; or (f) terminate any Borrower Pension Plan
or Borrower Benefit Plan in a manner which could result in the imposition of a
lien on any property of any Borrower pursuant to Section 4068 of ERISA.
Borrowers shall not permit the "present value" of vested and nonvested "accrued
benefits" under any Borrower Pension Plan to exceed the "current value" of the
assets of such Borrower Pension Plan allocable to such "accrued benefits". All
actuarial assumptions and methods used to make each determination required by
the preceding sentence shall be reasonable and shall comply with all
requirements of law. Borrowers shall not terminate any Borrower Pension Plan
so as to result in any liability to the Pension Benefit Guaranty Corporation.
As used in this Section, all terms enclosed in quotation marks shall have the
meanings set forth in ERISA.

9.14 Capital Expenditures. Incur Capital Expenditures,
for the period consisting of the most recently completed four Fiscal Quarters,
in excess of 70% of Free Cash Flow.

9.15 Profitability. On a consolidated basis for Borrowers
and the Subsidiaries, sustain (a) a net loss (as determined in accordance with
GAAP) for any two consecutive Fiscal Quarters, or (b) a net loss (as determined
in accordance with GAAP) for any fiscal year.

10. Events of Default/Remedies. The occurrence of any of the
followings events shall be deemed to constitute an "Event of Default" under
this Agreement:

10.1 Failure to Pay. Borrowers' failure to pay in full
when due, any payment or other amount required under the Notes, this Agreement
or any reimbursement agreement executed in connection with the issuance of a
Letter of Credit under this Agreement (collectively, the "Credit Documents")
when the same is due and payable.

10.2 Failure to Perform Certain Covenants. The failure of
Borrowers to fully perform any and all covenants and agreements set forth in
Sections 8.3, 8.13, 9.1 - 9.15 of this Agreement.

10.3 Failure to Perform Other Covenants. The failure of
Borrowers to fully perform any and all covenants and agreements contained in
this Agreement or in any of the other Credit Documents, other than a covenant
or agreement referred to referred to in any other subsection of this Section
10, and such failure continues unremedied for five (5) Business Days after the
occurrence thereof.

10.4 Bankruptcy/Insolvency. Borrowers or any of them
becomes insolvent or bankrupt, or files for bankruptcy, or shall makes an
assignment for the benefit of or a composition with creditors, or is unable, or
admits in writing its inability, to pay its debts as they mature; or a
bankruptcy, reorganization, arrangement, insolvency

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or similar proceeding for relief of financially distressed debtors is
instituted against any Borrower, and is not dismissed on appeal, within sixty
(60) days of such institution, or an order for relief is entered in any such
involuntary proceeding; or any Borrower petitions for, or there is appointed
for a substantial part of the assets or properties of any Borrower, a trustee,
receiver or liquidator, or any Borrower takes any action for the purposes of
effecting any of the foregoing.

10.5 False Representations or Warranties. If any
representation or warranty of Borrower or any of them contained herein, or in
any of the other Credit Documents, or in any financial statement or other
document provided to Agent or any Syndication Party in connection with the Loan
or pursuant to terms of any Credit Document, proves to have been false or
misleading in any material respect when made or furnished.

10.6 Default Under Other Indebtedness. Any Borrower is in
default with respect to any indebtedness for borrowed money, other than the
indebtedness of such Borrower under the Credit Documents, in the principal
amount of $5,000,000.00 or more incurred, assumed or guaranteed by it which
results in the acceleration of such indebtedness or which permits, or with the
giving of notice and/or the passage of time would permit, any holder or holders
of such indebtedness to accelerate the stated maturity thereof.

10.7 Judgment. The entry of one or more judgments in an
aggregate amount of $5,000,000.00 or greater against Borrowers which is not
stayed, discharged or paid within thirty (30) days after entry.

10.8 Dissolution. The dissolution, liquidation or
termination of existence of any Borrower.

10.9 Material Adverse Change. The occurrence of a
Material Adverse Effect with respect to any Borrower.

10.10 Remedies. Upon the occurrence of any Event of
Default as defined herein, Agent shall be entitled to exercise (and must
exercise if the Required Lenders so direct) the following remedies and all such
remedies are deemed to be cumulative and may be exercised individually or in
combination as appropriate: (a) to declare all amounts owing under the Notes
and any other Credit Documents to be immediately due and payable in full
(provided such declaration shall be deemed to have occurred automatically with
respect to any Event of Default under Subsection 10.4 hereof); (b) to pursue
all rights and remedies provided for in the Credit Documents, or by any
applicable law; (c) whether or not it exercises its rights under clause (a) or
(b) in this Subsection 10.10, to cease making Advances or issuing Letters of
Credit; and (d) to have a receiver appointed by a court of competent
jurisdiction, in order to manage, protect, and preserve the business of
Borrowers and to continue the operations of Borrowers. The exercise of any one
or more rights or remedies shall not be deemed a waiver of any other rights or
remedies.

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11. Agency Agreement.

11.1 Purchase and Sale of Syndication Interest. (a) Each
Syndication Party, severally but not jointly, hereby irrevocably agrees to fund
its Syndication Share of all Advances from time to time up to the Maturity Date
pursuant to the terms and conditions contained herein; provided that no
Syndication Party shall be required to fund an Advance in an amount such that
the aggregate principal balance owing to such Syndication Party after such
funding would be in excess of such Syndication Party's Maximum Syndication
Amount. Each Syndication Party's interest in the Advances ("Syndication
Interest") hereunder shall be without recourse to Agent or any other
Syndication Party and shall not be construed as a loan from any Syndication
Party to Agent or any other Syndication Party. Each Syndication Party
acknowledges that the Loan is a revolving credit until the Maturity Date, and
that, as a result, the amount of its Syndication Interest will fluctuate as
Borrowers repay and reborrow amounts under the Loan.

11.2 Syndication Parties' Obligations to Remit Funds.
Each Syndication Party agrees to remit the following amounts at the time and in
the manner provided in Section 11.3 hereof:

11.2.1 The amount of the Advance to be made by
Agent to Borrower on the Closing Date multiplied by its Syndication Share
("Initial Payment").

11.2.2 The Advance Amount as set forth in each
Notice of Advance multiplied by its Syndication Share ("Advance Payment") as
such Notices of Advance may be sent, in the manner provided in Section 11.3
hereof, from time to time for Advances to be made under the Loan on or prior to
the Termination Date, or draws made or to be made on a Letter of Credit on or
prior to July 31, 2000.

Provided however, the amount of any Advance Payment which a Syndication Party
would otherwise be required to tender hereunder shall be reduced as necessary
so that the aggregate principal owing to such Syndication Party at such time
(including such Advance Payment) does not exceed that Syndication Party's
Maximum Syndication Amount.

11.3 Notice and Timing of Initial Payment and Each Advance
Payment.

11.3.1 On the date on which Borrowers submit the
Advance Request required pursuant to Section 6.1.4 hereof, Agent shall provide
each Syndication Party with a notice in substantially the form attached hereto
as Exhibit 11.3.1 ("Initial Payment Notice") indicating, among other things,
the amount of the Advance to be made by Agent to Borrower on the Closing Date,
and the amount of the Syndication Party's Initial Payment. The amount of its
Initial Payment shall be remitted by each Syndication Party directly to Agent
on the Closing Date.

11.3.2 Prior to making an Advance to Borrower
under the Loan, Agent shall provide each Syndication Party with a notice in
substantially the form

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attached hereto as Exhibit 11.3.2 ("Loan Notice of Advance"), indicating, among
other things, the amount ("Loan Advance Amount") and Advance Date of the
Advance and the amount of the Syndication Party's Advance Payment. Each Loan
Notice of Advance shall be provided to the Syndication Parties on the same
Business Day that Agent receives an Advance Request from a Borrower. Each
Syndication Party shall remit its Advance Payment directly to Borrower, or, at
Agent's sole discretion, directly to Agent, on the date specified in the Loan
Notice of Advance which shall not be later than the Advance Date ("Syndication
Party Loan Payment Date").

11.3.3 Prior to, or promptly after, honoring a
draw under any Letter of Credit, Agent shall provide each Syndication Party
with a notice in substantially the form attached hereto as Exhibit 11.3.3 ("LC
Notice of Advance"), indicating, among other things, the amount of the draw
("LC Advance Amount"), the Letter of Credit number under which the draw is
being made, and the amount of the Syndication Party's Advance Payment. (The
Loan Notice of Advance and the LC Notice of Advance shall be referred to
collectively as "Notice of Advance," and the Loan Advance Amount and the LC
Advance Amount shall be referred to collectively as the "Advance Amount".)
Each Syndication Party shall remit such payment directly to Agent, on the date
specified in the LC Notice of Advance ("Syndication Party LC Payment Date")
(the Syndication Party Loan Payment Date and the Syndication Party LC Payment
Date shall be referred to collectively as the "Syndication Party Payment
Date").

11.4 Syndication Party's Failure to Remit Funds. If a
Syndication Party ("Delinquent Syndication Party") fails to remit its Initial
Payment as required in Sections 11.2 and 11.3 hereof, or fails to remit any
Advance Payment in full by 11:00 a.m. Pacific time on the Syndication Party
Payment Date (the unpaid amount of any such payment being hereinafter referred
to as the "Delinquent Amount"), in addition to any other remedies available
hereunder, any other Syndication Party or Syndication Parties may, but shall
not be obligated to, pay the Delinquent Amount (the Syndication Party or
Syndication Parties which advance such Delinquent Amount are referred to as the
"Contributing Syndication Parties"), in which case (a) the Delinquent Amount
which any Contributing Syndication Party pays shall not count as an Advance
Payment against the Maximum Syndication Amount of the Contributing Syndication
Party, and (b) the Delinquent Syndication Party shall be obligated to pay to
Agent, for the account of the Contributing Syndication Parties, interest on the
Delinquent Amount at a rate of interest equal to the rate of interest which
Borrowers are obligated to pay on the Delinquent Amount ("Delinquency
Interest") until the Delinquent Syndication Party remits the full Delinquent
Amount and remits all Delinquency Interest to Agent, which will distribute such
payments to the Contributing Syndication Parties (pro rata based on the amount
of the Delinquent Amount which each of them (if more than one) paid) on the
same Business Day as such payments are received by Agent if received no later
than 11:00 a.m. Pacific time or the next Business Day if received by Agent
thereafter. In addition, the Contributing Syndication Parties shall be
entitled to share, on the same pro rata basis, and Agent shall pay over to
them, for application against Delinquency Interest and the Delinquent Amount,
the Delinquent Syndication Party's Payment Distribution

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and any fee distributions made under Section 11.11 hereof until the Delinquent
Amount and all Delinquency Interest have been paid in full. In the event no
Syndication Party elects to pay the Delinquent Amount with respect to any
Advance Amount but Borrowers elect to receive such Advance Amount (less the
Delinquent Amount), the proportionate share of Payment Distributions to which
the Delinquent Syndication Party is entitled shall be adjusted to reflect its
failure to pay the Delinquent Amount. As between the Delinquent Syndication
Party and the Contributing Syndication Parties, the Delinquent Syndication
Party's interest in its Note shall be deemed to have been partially assigned to
the Contributing Syndication Parties in the amount of the Delinquent Amount and
Delinquency Interest owing from time to time.

11.5 Agency Appointment. Each of the Syndication Parties
hereby designates and appoints Wells Fargo to act as Agent to service and
collect the Loan and its respective Note and to take such action on behalf of
such Syndication Party with respect to the Loan and such Note, and to execute
such powers and to perform such duties, as specifically delegated or required
herein, as well as to exercise such powers and to perform such duties as are
reasonably incident thereto, and to receive and benefit from such fees and
indemnifications as are provided for or set forth herein, until such time as a
successor is appointed and qualified to act as Agent.

11.6 Power and Authority of Agent. Without limiting the
generality of the power and authority vested in Agent pursuant to Section 11.5
hereof, the power and authority vested in Agent includes, but is not limited
to, the following:

11.6.1 To solicit the advice and assistance of
each of the Syndication Parties concerning the administration of the Loan and
the exercise by Agent of its various rights, remedies, powers, and discretions
with respect thereto.

11.6.2 To execute, seal, acknowledge, and deliver
as Agent, all such instruments as may be appropriate in connection with the
administration of the Loan and the exercise by Agent of its various rights with
respect thereto.

11.6.3 To initiate, prosecute, defend, and to
participate in, actions and proceedings in its name as Agent for the ratable
benefit of the Syndication Parties.

11.6.4 To retain attorneys, accountants, and other
professionals to provide advice and professional services to Agent, with their
fees and expenses reimbursable to Agent by Syndication Parties pursuant to
Section 11.18 hereof.

11.6.5 To exercise powers reasonably incident to
Agent's discharge of its duties enumerated in Section 11.7 hereof.

11.6.6 To determine the purposes other than those
set forth in Section 2.2 of this Agreement for which a Letter of Credit may be
issued.

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11.7 Duties of Agent. The duties of Agent hereunder shall
consist of the following:

11.7.1 To safekeep one original of each of the
Loan Documents other than the Notes (which will be in the possession of the
Syndication Party named as payee therein).

11.7.2 To receive and distribute to the
Syndication Parties payments made by Borrowers pursuant to the Loan Documents.

11.7.3 Subject to the provisions of Section 11.9
hereof, to, on behalf of and for the ratable benefit of all Syndication
Parties, in accordance with customary banking practices, exercise all rights,
remedies, powers, privileges, and discretion to which Agent is entitled to
collect amounts owing under the Loan and the Notes.

11.8 Agent's Resignation or Removal. Agent may resign at
any time by giving at least sixty (60) days' prior written notice of its
intention to do so to each of the Syndication Parties. After the receipt of
such notice, the Syndication Parties holding in the aggregate at least 66 2/3%
of the Syndication Shares of the Loan ("Required Lenders") shall appoint a
Successor Agent. If no Successor Agent shall have been so appointed and shall
have accepted such appointment within forty-five (45) days after the retiring
Agent's giving of such notice of resignation, then the retiring Agent may
appoint a Successor Agent which shall be a bank or a trust company organized
under the laws of the United States of America or any state thereof and having
a combined capital, surplus and undivided profit of at least $250,000,000. Any
Agent may be removed upon the written demand of the Required Lenders, which
demand shall also appoint a Successor Agent. Upon the appointment of a new
Agent hereunder, the term "Agent" shall for all purposes of this Agreement
thereafter mean such successor. After any retiring Agent's resignation
hereunder as Agent, or the removal hereunder of any Agent, the provisions of
this Agreement shall continue to inure to the benefit of such Agent as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement.

11.9 Consent Required for Certain Actions. Agent may not
take any of the following actions (nor may the Syndication Parties take the
action described in Subsection 11.9.1(c)) without the prior written consent,
given after notification by Agent of its intention to take any such action (or
notification by such Syndication Parties as are proposing the action described
in Subsection 11.9.1(c) of their intention to do so), of Syndication Parties
holding in the aggregate, at the time of such notification:

11.9.1 One hundred percent (100%) of the
Syndication Shares before:

(a) Agreeing to an increase in the Aggregate
Commitment Amount, the Phase I Construction Commitment Amount, the Phase II
Construction Commitment Amount, the LC Commitment Amount or an extension of the
Termination Date;

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<PAGE> 49
(b) Agreeing to a reduction in the amount, or to
a delay in the due date, of any payment by Borrowers of interest, principal, or
fees; provided, however, this restriction shall not apply to a delay in payment
granted by Agent in the ordinary course of administration of the Loan and the
exercise of reasonable judgment (so long as such payment delay does not exceed
five (5) days); or

11.9.2 Sixty-six and two thirds percent (66 2/3%)
before:

(a) Agreeing to any action, amendment, or waiver
not covered in Subsection 11.9.1;

(b) Agreeing to amend Section 11 of this
Agreement; or

(c) Determining the purposes other than those set
forth in Section 2.2 of this Agreement for which a Letter of Credit may be
issued.

If no written consent or denial is received from a Syndication Party within
five (5) Business Days after written notice of any proposed action as described
in this Section is delivered to such Syndication Party by Agent, such
Syndication Party shall be conclusively deemed to have consented thereto for
the purposes of this Section.

11.10 Distribution of Principal and Interest. Agent will
receive and accept all payments (including prepayments) of principal and
interest made by Borrowers on the Loan and the Notes and will hold all such
payments in trust for the benefit of all present and future Syndication
Parties, in an account segregated from Agent's other funds and accounts
("Payment Account"). After the receipt by Agent of any payment representing
interest or principal on the Loan, Agent shall remit to each Syndication Party
an amount equal to such payment, multiplied by the Syndication Party's
Syndication Share ("Payment Distribution") no later than the same Business Day
as such payment is received by Agent if received no later than 11:00 a.m.
Pacific time or the next Business Day if received by Agent thereafter. Any
Syndication Party's rights to its Payment Distribution shall be subject to the
rights of any Contributing Syndication Parties to such amounts as set forth in
Section 11.4 hereof.

11.11 Distribution of Certain Fees and Amounts. Agent
shall (a) receive and hold in trust for the benefit of all present and future
Syndication Parties, in the Payment Account and segregated from Agent's other
funds and accounts and (b) shall remit to the Syndication Parties, as
indicated, the fees and other amounts described below:

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11.11.1 The quarterly Unused Line Fee paid by
Borrowers to Agent in connection with the Loan shall be distributed to
Syndication Parties in accordance with their respective Syndication Shares no
later than the same Business Day that payment of such fee is received by Agent,
if received no later than 11:00 a.m. Pacific time, or the next Business Day if
received by Agent thereafter.

11.11.2 The amount of any Funding Losses paid by
Borrowers to Agent in connection with a prepayment of any portion of a Libor
Loan shall be distributed to the Syndication Parties in accordance with their
respective Syndication Shares no later than the same Business Day that payment
of such Funding Losses is received by Agent, if received no later than 11:00
Pacific time, or the next Business Day if received by Agent thereafter.

11.12 Loan Documents. The Loan Documents (other than the
Notes) shall be held by Agent in its name, for the ratable benefit of itself
and the other Syndication Parties without preference or priority.

11.13 Collateral Application. Syndication Parties shall
have no interest in any other loans made to Borrowers, or any of them, by any
other Syndication Party other than the Loan, or in any property taken as
security for any other loan or loans made to Borrowers, or any of them, by any
other Syndication Party, or in any property now or hereinafter in the
possession or control of any other Syndication Party, which may be or become
security for the Loan solely by reason of the provisions of a security
instrument that would cause such security instrument and the property covered
thereby to secure generally all indebtedness owing to such other Syndication
Party. Notwithstanding the foregoing, to the extent such other Syndication
Party applies such funds or the proceeds of such property to reduction of the
Loan, such other Syndication Party shall share such funds or proceeds with all
Syndication Parties according to their respective Syndication Shares. In the
event that any Syndication Party shall obtain payment, whether partial or full,
from any source in respect of the Loan, including without limitation payment by
reason of the exercise of a right of offset, banker's lien, general lien, or
counterclaim, reducing such Syndication Party's outstanding balance in the Loan
to below its Syndication Share, such Syndication Party will promptly make such
adjustments (which may include payment in cash or the purchase of further
syndications or participations in the Loan) to the end that such excess payment
shall be shared with all other Syndication Parties in accordance with their
respective Syndication Shares.

11.14 Amounts Required to be Returned. If Agent makes any
payment to a Syndication Party in anticipation of the receipt of final funds
from Borrowers, and such funds are not received from Borrowers, or if excess
funds are paid by Agent to any Syndication Party as the result of a
miscalculation by Agent, then Syndication Party shall, on demand of Agent,
forthwith return to Agent any such amounts, plus interest thereon (from the day
such amounts were transferred by Agent to the Syndication Party to, but not
including, the day such amounts are returned by Syndication Party) at a rate
per annum equal to the Federal Funds Rate in effect on the date of such demand.
If Agent is required at any time to return to Borrowers, or any of them, or a
trustee,

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<PAGE> 51
receiver, liquidator, custodian, or similar official any portion of the
payments made by Borrowers, or any of them, to Agent, whether pursuant to any
bankruptcy or insolvency law or otherwise, then Syndication Party shall, on
demand of Agent, forthwith return to Agent any such payments transferred to
Syndication Party by Agent but without interest or penalty (unless Agent is
required to pay interest or penalty on such amounts to the person recovering
such payments).

11.15 Reports and Information to Syndication Parties.
Agent shall use reasonable efforts to provide to Syndication Parties, as soon
as practicable after actual knowledge thereof is acquired by an officer thereof
primarily responsible for Agent's duties as such with respect to the Loan or
primarily responsible for the credit relationship between Wells Fargo and
Borrowers: (a) notice of the existence of any Event of Default or Potential
Default under the Loan Documents, and (b) any material factual information
which has a material adverse effect on the creditworthiness of Borrowers, or
any of them and Borrowers hereby authorize such disclosure by Agent to the
Syndication Parties. Failure of Agent to provide the information referred to
in this Section shall not result in any liability upon, or right to make a
claim against, Agent except where a court of competent jurisdiction renders a
final non- appealable determination that such failure is a result of the
willful misconduct or gross negligence of Agent. Syndication Parties
acknowledge and agree that all information and reports received pursuant to
this Agreement will be received in confidence in connection with their
Syndication Interest, and that such information and reports constitute
confidential information and shall not be disclosed to any third party, except
pursuant to appropriate legal or regulatory process, (or used by the
Syndication Party except in connection with the Loan and its Syndication
Interest) without the prior written consent of Agent or Borrowers, as
applicable.

11.16 Standard of Care. Agent shall not be liable to
Syndication Parties for any error in judgment or for any action taken or not
taken by Agent or its agents, except for its gross negligence or willful
misconduct. Subject to the preceding sentence, Agent will exercise the same
care in administering the Loan and the Loan Documents as it exercises for
similar loans which it holds for its own account and risk, and Agent shall not
have any further responsibility to the Syndication Parties. Without limiting
the foregoing, Agent may rely on the advice of counsel concerning legal matters
and on any written document it believes to be genuine and correct and to have
been signed or sent by the proper Person or Persons.

11.17 No Trust Relationship. Neither the execution of this
Agreement, nor the sharing in the Loan, nor the holding of the Loan Documents
in its name by Agent, nor the management and administration of the Loan and
Loan Documents by Agent (including the obligation to hold certain payments and
proceeds in the Payment Account in trust for the Syndication Parties), nor any
other right, duty or obligation of Agent under or pursuant to this Agreement is
intended to be or create, and none of the foregoing shall be construed to be or
create, any express, implied or constructive trust relationship between Agent
and any Syndication Party. Each Syndication Party hereby

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<PAGE> 52
agrees and stipulates that Agent is not acting as trustee for such Syndication
Party with respect to the Loan, this Agreement, or any aspect of either, or in
any other respect.

11.18 Sharing of Costs and Expenses. To the extent not
paid by Borrowers, each Syndication Party will promptly upon demand reimburse
Agent, ratably according to their respective Syndication Shares, for all
reasonable costs, disbursements, and expenses incurred by Agent on or after the
date of this Agreement for legal, accounting, consulting, and other services
rendered to Agent in its role as Agent in the administration of the Loan,
interpreting the Credit Documents, and protecting, enforcing, or otherwise
exercising any rights, both before and after default by Borrowers, or any of
them, under the Credit Documents; provided, however, that the costs and
expenses to be shared in accordance with this Section shall not include any
costs or expenses incurred by Wells Fargo solely as a Syndication Party in
connection with the Loan, nor to Agent's internal costs and expenses.

11.19 Syndication Parties' Indemnification of Agent. Each
of the Syndication Parties agree to indemnify Agent, including any Successor
Agent, and its directors, officers, employees, agents, professional advisers
and representatives ("Indemnified Parties"), (to the extent not reimbursed by
Borrowers, and without in any way limiting the obligation of Borrowers to do
so), ratably according to their respective Syndication Shares, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including, without limitation, at any time following the
payment of the Loan and/or the expiration or termination of the Syndication
Interests or this Agreement) be imposed on, incurred by or asserted against
Agent (or any of the Indemnified Parties while acting for Agent or for any
Successor Agent) in any way relating to or arising out of this Agreement or the
Loan Documents, or the performance of the duties of Agent hereunder or
thereunder or any action taken or omitted while acting in the capacity of Agent
under or in connection with any of the foregoing; provided that the Syndication
Parties shall not be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of an Indemnified Party to the extent that any of the
forgoing result from the gross negligence or willful misconduct of that
Indemnified Party as determined by a court of competent jurisdiction. The
agreements and obligations in this Section shall survive the payment of the
Loan, the Syndication Interests, and the expiration or termination of this
Agreement.

11.20 Books and Records. Agent shall maintain such books
of account and records relating to the Loan as it maintains with respect to
other loans of similar type and amount, and which shall clearly and accurately
reflect the Syndication Interest of each Syndication Party. Syndication
Parties, or their agents, may inspect such books of account and records at all
reasonable times during Agent's regular business hours.

11.21 Agent Fee. Wells Fargo shall not be entitled to any
fee or compensation other than as expressly provided in the Fee Letter for
acting as Agent ("Agent Fee"). In the event the Successor Agent is
contractually entitled to an

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<PAGE> 53
additional fee, each Syndication Party will be responsible for the amount
thereof multiplied by their Syndication Share.

11.22 Representations and Warranties of All Parties. Agent
and each Syndication Party represents and warrants that (a) the making and
performance of this Agreement is within its power and has been duly authorized
by all necessary corporate and other action by it, (b) this Agreement is in
compliance with all applicable laws and regulations promulgated under such laws
and does not conflict with nor constitute a breach of its charter or by-laws
nor any agreements by which it is bound, and does not violate any judgment,
decree or governmental or administrative order, rule or regulation applicable
to it, (c) no approval, authorization or other action by, or declaration to or
filing with, any governmental or administrative authority or any other Person
is required to be obtained or made by it in connection with the execution,
delivery and performance of its duties under this Agreement, and (d) this
Agreement has been duly executed by it, and constitutes the legal, valid, and
binding obligation of such Person, enforceable in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
rights of creditors generally and general equitable principles (regardless of
whether such enforceability is considered in a proceeding at law or in equity).
Each Syndication Party that is a state or national bank represents and warrants
that the act of entering into and performing its obligations under this
Agreement has been approved by its board of directors or its loan committee and
such action was duly noted in the written minutes of the meeting of such board
or committee, and that it will furnish Agent with a certified copy of such
minutes or an excerpt therefrom reflecting such approval.

11.23 Representations and Warranties of Wells Fargo. Wells
Fargo, in its role as Syndication Party and as Agent, makes no express or
implied representation or warranty and assumes no responsibilities with respect
to the due authorization, execution, or delivery of the Loan Documents; the
accuracy of any information, statements, or certificates provided by Borrowers,
or any of them; the legality, validity, or enforceability of the Loan
Documents; the filing or recording of any document; the collectibility of the
Loan; the performance by any Borrower of any of its obligations under the Loan
Documents; or the financial condition or solvency of any Borrower or any other
party obligated with respect to the Loan.

11.24 Syndication Parties' Independent Credit Analysis.
Each Syndication Party acknowledges receipt of true and correct copies of all
Loan Documents (other than any Note payable to another Syndication Party) from
Agent. Each Syndication Party agrees and represents that it has relied upon
its independent review (a) of the Loan Documents, and (b) any information
independently acquired by such Syndication Party from Borrowers or otherwise in
making its decision to acquire an interest in the Loan independently and
without reliance on Wells Fargo or Agent. Each Syndication Party represents
and warrants that it has obtained such information as it deems necessary
(including any information such Syndication Party independently obtained from
Borrowers or others) prior to making its decision to acquire an interest in

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<PAGE> 54
the Loan. Each Syndication Party further agrees and represents that it has
made its own independent analysis and appraisal of and investigation into each
Borrower's authority, business, operations, financial and other condition,
creditworthiness, and ability to perform its obligations under the Loan
Documents and has relied on such review in making its decision to acquire an
interest in the Loan. Each Syndication Party agrees that it will continue to
rely solely upon its independent review of the facts and circumstances related
to Borrowers, and without reliance upon Wells Fargo or Agent, in making future
decisions with respect to all matters under or in connection with the Loan
Documents and its participation in the Loan. Wells Fargo and Agent assume no
responsibility for the financial condition of Borrowers or for the performance
of each Borrower's obligations under the Loan Documents. Except as otherwise
expressly provided herein, neither Wells Fargo nor any other Syndication Party
shall have any duty or responsibility to furnish to any other Syndication
Parties any credit or other information concerning Borrowers which may come
into its possession.

11.25 No Joint Venture or Partnership. Neither the
execution of this Agreement, the sharing in the Loan, nor any agreement to
share in payments or losses arising as a result of this transaction is intended
to be or to create, and the foregoing shall not be construed to be, any
partnership, joint venture or other joint enterprise between Agent and any
Syndication Party, nor between any of the Syndication Parties.

11.26 Purchase for Own Account/Restrictions on Transfer.
Each Syndication Party represents that it has acquired and is retaining its
Syndication Interest in the Loan for its own account in the ordinary course of
its banking or financing business and not with a view toward the sale,
distribution, further participation, or transfer thereof. Each Syndication
Party agrees that it will not sell, assign, convey or otherwise dispose of
("Transfer"), other than to a commonly-owned affiliate bank, or create or
permit to exist any lien or security interest on all or any part of its
Syndication Interest in the Loan without the prior written consent of the
Required Lenders (which consent will not be unreasonably withheld); provided
that (a) any such Transfer (except a Transfer to another Syndication Party)
must be in a minimum amount of the lesser of (i) $5,000,000.00 or (ii) the full
amount of the Syndication Interest, (b) the transferee must assume all of the
transferor's obligations hereunder and execute such documents as Agent may
reasonably require, and (c) the Syndication Party making such Transfer must pay
Agent an assignment fee of $2,500.00. Any Syndication Party may participate
any part of its Syndication Interest in the Loan to any Person, and each
Syndication Party understands and agrees that in the event of any such
participation, (x) its Syndication Share and Maximum Syndication Amount will
not change on account of such participation, (y) the participant will have no
rights under this Agreement, including, without limitation, voting rights or
the right to receive payments or distributions, and (z) Agent shall continue to
deal directly with the Syndication Party with respect to the Loan and the
Syndication Party's Syndication Interest as though no participation had been
granted and will not be obligated to deal directly with any participant.
Notwithstanding any provision contained herein to the contrary, any Syndication
Party

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<PAGE> 55
may at any time pledge or assign all or any portion of its Syndication Interest
to any Federal Reserve Bank in accordance with applicable law.

11.27 Method of Making Payments. Payment and transfer of
all amounts owing or to be paid or remitted hereunder, including, without
limitation, payment of the Initial Payment and each Advance Payment by
Syndication Parties, and distribution of principal or interest payments or fees
or other amounts by Agent, shall be by wire transfer in accordance with the
instructions contained on Exhibit 11.27 hereto ("Wire Instructions").

11.28 Events of Syndication Default/Remedies.

11.28.1 Any of the following occurrences, failures
or acts, with respect to any of the Syndication Parties shall constitute an
Event of Syndication Default hereunder by such party: (a) if any representation
or warranty made by such party in this Agreement shall be found to have been
untrue in any material respect, (b) if such party fails to make any
distributions or payments required under this Agreement within five (5) days of
the date required, (c) if such party breaches any other covenant, agreement, or
provision of this Agreement which breach shall have continued uncured for a
period of thirty (30) consecutive days after such breach first occurs, unless a
shorter period is required to avoid prejudicing the rights and position of the
other Syndication Parties, (d) if any agency having supervisory authority over
such party, or any creditors thereof, shall file a petition to reorganize or
liquidate such party pursuant to any applicable federal or state law or
regulation and such petition shall not be discharged or denied within fifteen
(15) days after the date on which it is filed, (e) if by the order of a court
of competent jurisdiction or by any appropriate supervisory agency, a receiver,
trustee or liquidator shall be appointed for such party or for all or any
material part of its property or if such party shall be declared insolvent, or
(f) if such party shall be dissolved, or shall make an assignment for the
benefit of its creditors, or shall file a petition seeking to take advantage of
any debtors' act, including the bankruptcy act, or shall admit in writing its
inability to pay its debts generally as they become due, or shall consent to
the appointment of a receiver or liquidator of all or any material part of its
property.

11.28.2 Upon the occurrence of an Event of
Syndication Default, the non-defaulting parties, acting by, or through the
direction of, a majority of the non-defaulting parties, may, in addition to any
other remedy specifically set forth in this Agreement, have and exercise any
and all remedies available generally at law or equity, including the right to
damages and to specific performance.

11.29 Further Assurances. Agent and each Syndication Party
agree to take whatever steps and execute such documents may be reasonable and
necessary to implement this Section 11 and to carry out fully the intent
thereof.

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12. Miscellaneous Provisions.

12.1 Definitions. The following terms shall have the
definitions set forth below:

"Advance" shall mean (a) an advance of funds pursuant to an Advance
Request to or for the account of Borrowers or any of them, or (b) payment by
Agent of a draw under a Letter of Credit.

"Advance Date" shall mean the requested disbursement date of the
Advance set forth in the applicable Advance Request.

"Base Libor Rate" shall mean the rate per annum for United States
dollar deposits quoted by Wells Fargo as the Inter-Bank Market Offered Rate
determined as of 11:00 a.m. London time 2 Business Days prior to the requested
Interest Period Commencement Date set forth in the applicable Libor Rate
Request, with the understanding that such rate is quoted by Wells Fargo for the
purpose of calculating effective rates of interest for loans making reference
thereto, on the first day of an Interest Period for delivery of funds on such
date for a period of time approximately equal to the number of days in such
Interest Period and in an amount approximately equal to the principal amount of
the Libor Loan to which such Interest Period applies. Borrowers understand and
agree that Wells Fargo may base its quotation of the Inter-Bank Market Offered
Rate upon such offers or other market indicators of the Inter-Bank Market as
Wells Fargo in its discretion deems appropriate including, but not limited to,
the rated offered for United States dollar deposits on the London Inter-Bank
Market.

"Business Day" shall mean any day (a) other than a Saturday or Sunday
and other than a day which is a Federal legal holiday or a legal holiday for
banks in the State of Colorado, the State of California or the State of
Illinois, or (b) if such day relates to a borrowing of, a payment or prepayment
of principal of or interest on, a continuation of or conversion into, or an
Interest Period for, a Libor Loan or a notice by a Borrower with respect to any
such borrowing, payment, prepayment, continuation, conversion, or Interest
Period, on which dealings in U.S. Dollar deposits are carried out in the London
interbank market.

"Capital Expenditures" shall mean all expenditures paid or incurred,
on a consolidated basis for Borrowers and the Subsidiaries, in respect of (a)
the acquisition, construction, improvement or replacement of land, buildings,
machinery, equipment, any other fixed assets or leaseholds and (b) to the
extent related to and not included in (a) above, materials, contract labor and
direct labor, which expenditures have been or should be, in accordance with
GAAP, capitalized on the books of any such Borrower, except for (i) the
expenditure by Borrowers not to exceed $20,000,000 to purchase the Headquarters
Land, and (ii) the expenditure by Borrowers not to exceed $29,000,000 in
connection with the construction of the Phase II Headquarters Building.

"Closing Date" shall mean the date on which the initial Advance is
made to or on behalf of Borrowers hereunder.

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"Compliance Certificate" shall mean a certificate of the chief
financial officer of each Borrower in the form attached hereto as Exhibit 12.1,
setting forth in reasonable detail the data and calculations showing compliance
with the financial covenants set forth in Section 8.13 hereof.

"Coverage Ratio" shall mean for any measurement period: (a) for the
four most recently completed Fiscal Quarters, the aggregate of the consolidated
net income of Borrowers and the Subsidiaries (as determined in accordance with
GAAP), plus, on a consolidated basis for Borrowers and the Subsidiaries,
depreciation and amortization, plus interest expense; divided by (b) on a
consolidated basis for Borrowers and the Subsidiaries, the aggregate of
scheduled principal reductions in the following twelve (12) month period, plus
interest expense paid in the four most recently completed Fiscal Quarters, plus
the current portion of payments on capitalized leases.

"Current Liabilities" shall mean all of the current liabilities of
Borrowers as determined in accordance with GAAP.

"Default Interest Rate" shall mean a rate of interest equal to 200
basis points plus the greater of (a) the Variable Rate, or (b) the highest
Libor Rate being charged on any Libor Loan.

"Environmental Laws" shall mean the provisions of C.R.S. Section
25-15-101, C.R.S. Section 25-5-502, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended, 42 U.S.C. 9601-9657
("CERCLA") and the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
6901-6987 ("RCRA"), the Hazardous Materials Transportation Act of 1975
("HMTA"), 49 U.S.C. 1801-1821.

"Environmental Regulations" shall mean any federal, state or local
code, ordinance, regulation, requirement or rule relating to the Environmental
Laws or the subject of the Environmental Laws.

"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the ask rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day. If the day for which the Federal Funds Rate is to be
determined is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day and, if such rate is not so
published for any Business Day, the Federal Funds Rate for such Business Day
shall be the average rate quoted to Agent on such day on such transactions as
determined by Agent.

"Fee Letter" shall mean the letter dated July 2, 1996 signed by Agent
and Borrowers setting forth the amount and terms of payment of certain fees
payable by Borrower to Agent in connection with the Loan.

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"Fiscal Quarter" shall mean the three month period commencing as of
each November 1, February 1, May 1, and August 1 and ending on the last day of
each October, January, April, and July, respectively.

"Free Cash Flow" shall mean for the four (4) most recent Fiscal
Quarters: the aggregate of the consolidated net income of Borrowers and the
Subsidiaries (as determined in accordance with GAAP), plus, on a consolidated
basis for Borrowers and the Subsidiaries, depreciation and amortization, plus
interest expense.

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

"Hazardous Substances" shall mean dangerous, toxic or hazardous
pollutants, contaminants, chemicals, wastes, materials or substances, as
defined in or governed by the Environmental Laws or the Environmental
Regulations, and also including urea formaldehyde, polychlorinated biphenyls,
asbestos, asbestos- containing materials, nuclear fuel or waste, and petroleum
products, or any other waste, material, substances, pollutant or contaminant
which would subject an owner of property to any damages, penalties or
liabilities under any applicable Environmental Laws or Environmental
Regulations.

"Headquarters Land" the real property described on Exhibit 12.1(a)
hereto.

"Interest Period" shall mean the period of time commencing on a
Business Day and continuing for one, two, three or six months, as, designated
by Borrowers in accordance with Section 4.2 of this Agreement; provided,
however, that no Interest Period shall extend beyond the Maturity Date, and,
provided further, that if any Interest Period would otherwise end on a day
which is not a Business Day, then such Interest Period shall be extended to the
next succeeding Business Day so long as such Business Day does not extend
beyond the Maturity Date (except that if such next succeeding Business Day
would fall in the next calendar month, such Interest Period shall end on the
next preceding Business Day), and provided further, that if there is no
numerically corresponding day in the month in which such an Interest Period is
to end or if such an Interest Period begins on the last Business Day of a
calendar month, then such Interest Period shall end on the last Business Day of
the calendar month in which such Interest Period is to end.

"Leverage Ratio" shall mean, on a consolidated basis for Borrowers and
the Subsidiaries, the ratio of Total Liabilities less unearned revenue and
customer deposits, as determined in accordance with GAAP, to Total Net Worth.

"Libor Loan" shall mean any portion of the Loan bearing interest at
the Libor Rate.

"Loan Documents" shall mean this Agreement and the Notes.

"Loan Period" the period commencing on the Closing Date and ending on
the Termination Date.

"Marketable Securities" shall mean securities that are traded on a
public stock exchange.

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"Material Adverse Effect" shall mean (a) a material adverse effect on
the financial condition, results of operation, business or property of
Borrowers, or any of them, (b) an adverse effect on the ability of Borrowers,
or any of them, to perform its or their obligations under the Loan Documents.

"Maximum Syndication Amount" shall mean:

<TABLE>
<S> <C> <C>
For Wells Fargo - $ 25,000,000.00
For Syndication Party #1 - $ 12,500,000.00
For Syndication Party #2 - $ 12,500,000.00
</TABLE>

"Net Trade Receivables" shall mean the net trade receivables of
Borrowers as determined in accordance with GAAP.

"Person" shall mean any individual, corporation, association,
partnership, limited liability company, limited liability partnership, trust,
organization, government, governmental agency, or other entity.

"Phase I Headquarters Building" shall mean the office building and
related facilities, located on a portion of the Headquarters Land, with respect
to which construction was completed in 1997.

"Phase II Headquarters Building" shall mean the office building and
related facilities, to be located on a portion of the Headquarters Land, with
respect to which construction was commenced after completion of the Phase I
Headquarters Building.

"Plans" shall mean the following Borrower Benefit Plans set forth on
Exhibit 7.12: each ESOP, Borrowers' Restricted Stock Grant Plan, Borrowers'
Stock Option Plans and Borrowers' Employee Stock Purchase Plans.

"Principal Amount" shall mean the outstanding amount of principal
under the Notes.

"Prime Rate" shall mean the rate of interest most recently announced
within Well Fargo as its Prime Rate, with the understanding that Wells Fargo's
Prime Rate is one of its base rates and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto, and is evidenced by the recording thereof after its announcement in
such internal publication or publications as Wells Fargo may designate. Each
change in the Prime Rate will be effective on the day the change is announced
within Wells Fargo.

"Quick Ratio" shall mean, on a consolidated basis for Borrowers and
the Subsidiaries, the following ratio:

CASH + MARKETABLE SECURITIES + TERM DEPOSITS + NET TRADE RECEIVABLES
-----------------------------------------------------------------------
CURRENT LIABILITIES - CURRENT PORTION OF UNEARNED REVENUES AND CUSTOMER
DEPOSITS - PRINCIPAL AMOUNT

47
<PAGE> 60
"Subsidiary" shall mean any corporation or entity other than a
Borrower of which more than 50% of the outstanding capital stock or voting
interests or rights having ordinary voting power to elect a majority of the
board of directors or other managers of such entity is at the time directly or
indirectly owned by a Borrower or by a Borrower and/or one or more Subsidiaries
or the management of which corporation or entity is under control of a Borrower
and/or any other Subsidiary, directly or indirectly through one or more Persons
and any other Person which, under GAAP, should at any time for financial
reporting purposes be consolidated or combined with a Borrower and/or any other
Subsidiary.

"Successor Agent" shall mean such Person as may be appointed as
successor to the rights and duties of Agent as provided in Section 11.8 of this
Agreement.

"Syndication Parties" shall mean:

Wells Fargo in its role as such, but not in its role
as Agent hereunder.

Syndication Party #1: Harris Bank

Syndication Party #2: Key Bank

"Syndication Share" shall mean

For Wells Fargo - 50%
(subject to adjustment for sale of further
Syndication Interests)

For Syndication Party #1 - 25%

For Syndication Party #2 - 25%

subject to adjustment as provided in Section 11.4 hereof.

"Term Deposits" shall mean all cash on deposit in banks which cannot
be withdrawn on demand.

"Total Liabilities" shall mean all of the liabilities of Borrowers as
determined in accordance with GAAP.

"Total Net Worth" shall mean all of the assets of Borrowers as
determined in accordance with GAAP, less Total Liabilities.

"Variable Rate Loan" shall mean any portion of the Loan bearing
interest at the Variable Rate.

The following terms are defined in the Sections of the Agreement
referenced below:

48
<PAGE> 61
<TABLE>
<CAPTION>
Term Section
<S> <C>
"Additional Costs" Section 8.15
"Administrator" Section 12.10.2
"Advance Amount" Section 11.3.3
"Advance Payment" Section 11.2.2
"Advance Request" Section 6.2.4
"Agent Fee" Section 11.21
"Aggregate Commitment Amount" Section 2.1
"Arbitration Panel" Section 12.10.4
"Authorized Representatives" Section 6.1.8
"Base Rate" Section 4.1
"Base Rate Margin" Section 4.3
"Borrower Benefit Plan" Section 7.12.1
"Borrower Pension Plan" Section 7.12.2
"Certificate of Authorized Representatives" Section 6.1.8
"Change in Law" Section 4.7.2
"COBRA" Section 7.12.15
"Code" Section 7.12.1
"Contributing Syndication Parties" Section 11.4
"Credit Documents" Section 10.1
"Delinquency Interest" Section 11.4
"Delinquent Amount" Section 11.4
"Delinquent Syndication Party" Section 11.4
"Designating Party" Section 12.9.2
"Dispute" Section 12.10.1
"Documents" Section 12.10.1
"ERISA" Section 7.12.1
"ESOP" Section 7.12.1
"ESOP Indebtedness" Section 7.12.16
"ESOP Repurchase Indebtedness" Section 9.8
"Event of Default" Section 10
"Funding Losses" Section 5.6
"Hazardous Substances Claims" Section 8.2.13
"Indemnified Parties" Section 11.19
"Initial Payment" Section 11.2.1
"Initial Payment Notice" Section 11.3.1
"Interest Period Commencement Date" Section 4.2
"IRS" Section 7.12.2
"LC Advance Amount" Section 11.3.3
"LC Commitment Amount" Section 3.1
"LC Notice of Advance" Section 11.3.3
"Letter of Credit" Section 3
"Letter of Credit Fee" Section 3.7
"Letter of Credit Fee Policy" Section 3.7
</TABLE>

49
<PAGE> 62
<TABLE>
<CAPTION>
Term Section
<S> <C>
"Libor Margin" Section 4.3
"Libor Rate" Section 4.2
"Libor Rate Request" Section 4.2
"Loan" Section 2
"Loan Advance Amount" Section 11.3.2
"Loan Notice of Advance" Section 11.3.2
"Material Agreement" Section 7.8
"Maturity Date" Section 5.3
"Minimum Libor Prepayment" Section 5.4.3
"Minimum Prepayment Requirement" Section 5.4.3
"Minimum Variable Prepayment" Section 5.4.3
"Multiemployer Plan" Section 7.12.1
"Notes" Section 5.1
"Notice of Advance" Section 11.3.3
"Payment Account" Section 11.10
"Payment Distribution" Section 11.10
"Permitted Encumbrances" Section 7.3
"Permitted Indebtedness" Section 9.8
"Phase I Construction" Section 2.2
"Phase II Construction" Section 2.2
"Phase I Construction Commitment Amount" Section 2.2
"Phase II Construction Commitment Amount" Section 2.2
"Phase I Construction Commitment Amount Section 6.1.4
Certification"
"Phase II Construction Commitment Amount Section 6.2.4
Certification"
"Potential Default" Section 6.1.2
"Premises Section 7.15.1
"Regulatory Change" Section 8.15
"Required Lenders" Section 11.8
"Revolving Loan" Section 2.1
"SEC" Section 8.2.12
"Syndication Interest" Section 11.1
"Syndication Party LC Payment Date" Section 11.3.3
"Syndication Party Loan Payment Date" Section 11.3.2
"Syndication Party Payment Date" Section 11.3.3
"Termination Date" Section 2.1
"Three Month Anniversary Date" Section 5.2
"Transfer" Section 11.26
"Unused Commitment Fee Reset Date" Section 4.9
"Unused Line Fee" Section 4.9
"Variable Rate" Section 4.1
"Wire Instructions" Section 11.27
</TABLE>

50
<PAGE> 63
12.2 No Waiver. No waiver of any Event of Default shall
be implied from any omission by Agent or any Syndication Party to take action
on account of such default, and no express waiver shall affect any default
other than the defaults specified in the waiver and shall be operative only for
the time and to the extent therein stated.

12.3 Notices. All notices, requests and demands hereunder
shall be in writing and (a) made to the address set forth below, or to such
other address as either party may designate by written notice to the other in
accordance with this provision, and (b) deemed to have been given or made: if
delivered in person, immediately upon delivery; if by telex, telegram or
facsimile transmission, immediately upon sending and upon confirmation of
receipt; if by nationally recognized overnight courier service with
instructions to deliver the next Business Day, one (1) Business Day after
sending; and if by certified mail, return receipt requested, five (5) days
after mailing.

12.3.1 Borrowers:

J.D. EDWARDS & COMPANY
8055 East Tufts Avenue
Suite 1331
Denver, Colorado 80237
FAX: (303) 488-1077
Attention: Etta West

J.D. EDWARDS WORLD SOLUTIONS COMPANY
8055 East Tufts Avenue
Suite 1331
Denver, Colorado 80237
FAX: (303) 488-1077
Attention: Etta West

J.D. EDWARDS WORLD SOURCE COMPANY
8055 East Tufts Avenue
Suite 1331
Denver, Colorado 80237
FAX: (303) 488-1077
Attention: Etta West

12.3.2 Syndication Parties:

WELLS FARGO: WELLS FARGO BANK, N.A.
633 17th Street
Denver, Colorado 80270
FAX: (303) 293-5467
Attention: Sara Francis

51
<PAGE> 64
with a copy to:

Wells Fargo Bank Agency Department
MAC0187-081
420 Montgomery Street
San Francisco, CA 94163
FAX: (415) 989-4319
Attention: Maggie Miranda

HARRIS: Harris Trust and Savings Bank
111 W. Monroe Street
Chicago, IL 60603
FAX: (312) 461-2591
Attention: Emerging Majors West -
James H. Colley

KEY BANK: KeyBank National Association
600 Cherry Street.
Denver, Colorado 80222
FAX: (303) 355-5670
Attention: Mark Sunderland

with a copy to:

Key Bank
Mail Code: WA-31-10-4812
700 Fifth Avenue, 48th Floor
P.O. Box 90
Seattle, WA 98111-0090
FAX: (206) 684-6035
Attention: Mary Young

12.3.3 Agent:

AGENT: WELLS FARGO BANK, N.A.
633 17th Street
Denver, Colorado 80270
FAX: (303) 293-5467
Attention: Sara Francis

Wells Fargo Bank Agency Department
MAC0187-081
420 Montgomery Street
San Francisco, CA 94163
FAX: (415) 989-4319
Attention: Maggie Miranda

52
<PAGE> 65

12.4 Entire Agreement. This Agreement is the entire,
final and complete agreement regarding the subject matter hereof between the
parties hereto and supersedes and replaces all prior or existing oral or
written agreements between them or their representatives relating to the Loan
and the Syndication Interests.

12.5 Colorado Law. This Agreement is being executed in
the state of Colorado and is to be governed by and construed in accordance with
the laws of said state.

12.6 Amendment. No amendment to this Agreement shall be
effective unless in writing and signed by Borrower and the Required Lenders,
except that (a) all Syndication Parties must sign any amendment hereto that
would change any provision herein requiring the consent or approval of 100% of
the Syndication Parties, and (b) no Syndication Party's Syndication Share or
Maximum Syndication Amount may be changed without its written consent.

12.7 Severability/Titles. In case any one or more of the
provisions of any of the Loan Documents shall be held to be invalid, illegal or
unenforceable in any respect by any Court or other entity having the authority
to do so, the validity of the remaining provisions shall in no way be affected,
prejudiced or disturbed. Titles and headings herein are for reference purposes
only and do not constitute a part of this Agreement.

12.8 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one agreement.

12.9 Waiver of Jurisdiction, Service of Process, and Jury
Trial. Agent, Borrower, and each Syndication Party:

12.9.1 Irrevocably consents and submits to the
non-exclusive jurisdiction of the courts of the State of Colorado and the
United States District Court for the District of Colorado and waives any
objection based on venue or forum non conveniens with respect to any action
instituted therein arising under this Agreement or in any way connected with or
related or incidental to the dealings of the parties hereto in respect of this
Agreement or the transactions related hereto, in each case whether now existing
or hereafter arising, and whether in contract, tort, equity or otherwise, and
agrees that any dispute with respect to any such matters shall be heard only in
the courts described above.

12.9.2 With respect to litigation concerning this
Agreement within the jurisdiction of the courts of the State of Colorado or the
United States District Court for the District of Colorado, Borrower, each
Syndication Party, and Agent, unless they have an office located in Colorado
where service of process may be made) ("Designating

53
<PAGE> 66
Party") hereby irrevocably appoints CT Corporation Systems, 1600 Broadway,
Denver, Colorado 80202, as its agent to receive for and on its behalf, service
of process, which service may be made by mailing a copy of any summons or other
legal process to such party in care of such agent. Each Designating Party
agrees that it shall maintain a duly appointed agent for service of summons and
other legal process as long as it remains obligated under this Agreement and
shall keep Agent advised in writing of the identity and location of such agent.
The receipt by such agent and/or by such Designating Party of such summons or
other legal process in any such litigation shall be deemed personal service and
acceptance by such Designating Party for all purposes of such litigation. In
the event any Designating Party shall fail to maintain a duly appointed agent
for service of summons as required by this Subsection 12.9.2, such Designating
Party hereby waives personal service of any and all process upon it and
consents that all such service or process may be made by certified mail (return
receipt requested) directed to its address set forth in Section 12.3 hereof and
service so made shall be deemed to be completed five (5) days after the same
shall have been so deposited in the U.S. mails, or, at the option of the party
making such service, by service in any other manner provided under the rules of
any such courts. Within thirty (30) days after such service, the party so
served shall appear in answer to such process, failing which such party shall
be deemed in default and judgment may be entered against it for the amount of
the claim and other relief requested.

12.9.3 HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a) ARISING UNDER THIS AGREEMENT
OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF
THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR THE TRANSACTIONS RELATED
HERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN
CONTRACT, TORT, EQUITY OR OTHERWISE. BORROWER, AGENT, AND EACH SYNDICATION
PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE
OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT BORROWER,
AGENT, OR ANY SYNDICATION PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

12.10 Arbitration.

12.10.1 Binding Arbitration. Upon the demand of
Borrower, the Agent, or the Required Lenders (collectively the "parties"),
whether made before the institution of any judicial proceeding or not more than
60 days after service of a complaint, third party complaint, cross-claim or
counterclaim or any answer thereto or any amendment to any of the above, any
Dispute (as defined below) shall be resolved by binding arbitration in
accordance with the terms of this arbitration clause. A "Dispute" shall
include any action, dispute, claim, or controversy of any kind, whether founded
in

54
<PAGE> 67
contract, tort, statutory or common law, equity, or otherwise, not existing or
hereafter occurring between the parties arising out of, pertaining to or in
connection with this Agreement, the Notes, or any related agreements,
documents, or instruments (the "Documents"). THE PARTIES UNDERSTAND THAT BY
THIS AGREEMENT THEY HAVE DECIDED THAT THE DISPUTES MAY BE SUBMITTED TO
ARBITRATION RATHER THAN BEING DECIDED THROUGH LITIGATION IN COURT AND THAT ONCE
DECIDED BY AN ARBITRATOR THE CLAIMS INVOLVED CANNOT LATER BE BROUGHT, FILED, OR
PURSUED IN COURT.

12.10.2 Governing Rules. Arbitrations conducted
pursuant to this Agreement, including selection of arbitrators, shall be
administered by the American Arbitration Association ("Administrator") pursuant
to the Commercial Arbitration rules of the Administrator. Arbitrations
conducted pursuant to the terms hereof shall be governed by the laws of the
State of Colorado, including the provisions of CRS 13-22-201 et seq., and CRS
13- 21-102(5). Judgment upon any award rendered hereunder may be entered in
any court having jurisdiction; provided, however, that nothing contained herein
shall be deemed to be a waiver by any party that is a bank of the protections
afforded to it under 12 U.S.C. Section 91 or similar governing state law. Any
party who fails to submit to binding arbitration following a lawful demand by
the opposing party shall bear all costs and expenses, including reasonable
attorney's fees, incurred by the opposing party in compelling arbitration of
any Dispute.

12.10.3 No Waiver, Preservation of Remedies,
Multiple Parties. No provision of, nor the exercise of any rights under, this
Section 12.10 shall limit the right of any party to (1) foreclose against any
real or personal property collateral or other security, (2) exercise self-help
remedies (including repossession and setoff rights), or (3) obtain provisional
or ancillary remedies such as injunctive relief, sequestration, attachment,
replevin, garnishment, or the appointment of a receiver from a court having
jurisdiction. Such rights can be exercised at any time except to the extent,
and until, such action is contrary to a final award or decision in any
arbitration proceeding. The institution and maintenance of an action as
described above shall not constitute a waiver of the right of any party,
including the plaintiff, to submit the Dispute to arbitration, nor render
inapplicable the compulsory arbitration provisions hereof. Any claim or
dispute related to exercise of any self-help, auxiliary or other exercise of
rights under this Subsection 12.10.3 shall be a Dispute hereunder.

12.10.4 Arbitration Powers and Qualifications;
Awards. Arbitrator(s) shall resolve all Disputes in accordance with the
applicable substantive law. The arbitrator(s) may make an award of attorneys'
fees and expenses if permitted by law or the agreement of the parties. All
statutes of limitation applicable to any Dispute shall apply to any proceeding
in accordance with this arbitration clause. Any arbitrator selected to act as
the only arbitrator in a Dispute shall be required to be a practicing attorney
with not less than 10 years practice in commercial law in the State of
Colorado. With respect to a Dispute in which the claim or amounts in
controversy do not exceed five hundred thousand dollars ($500,000.00), a single
arbitrator shall be chosen and shall resolve the Dispute. In such case the
arbitrator shall have authority to render an award

55
<PAGE> 68
up to but not to exceed five hundred thousand dollars ($500,000.00) including
all damages of any kind whatsoever, costs, fees and expenses. Submission to a
single arbitrator shall be a waiver of the claims of each party to recover more
than five hundred thousand dollars ($500,000.00). A Dispute involving claims
or amounts in controversy exceeding five hundred thousand dollars ($500,000.00)
shall be decided by a majority vote of a panel of three arbitrators
("Arbitration Panel"). An Arbitration Panel shall be composed of one
arbitrator who would be qualified to sit as the single arbitrator in a Dispute
decided by one arbitrator, one who has at least ten years experience in
commercial lending and one who has at least ten years experience in the
Borrowers' industry. Arbitrator(s) may, in the exercise of their discretion,
at the written request of a party in any Dispute, (1) consolidate in a single
proceeding any multiple party claims that are substantially identical and all
claims arising out of a single loan or series of loans including claims by or
against Borrowers, guarantors, sureties and or owners of collateral if
different from the Borrower, and (2) administer multiple arbitration claims as
class actions in accordance with Rule 23 of the Federal Rules of Civil
Procedure. The arbitrator(s) shall be empowered to resolve any dispute
regarding the terms of this Agreement or the arbitrability of any dispute or
any claim that all or any part (including this provision) is void or voidable
but shall have no power to change or alter the terms of this Agreement. The
award of the arbitrator(s) shall be in writing and shall specify the factual
and legal basis for the award.

12.10.5 Miscellaneous. To the maximum extent
practicable, the Administrator, the arbitrator(s), and the parties shall take
any action necessary to require that an arbitration proceeding hereunder be
concluded within one-hundred eighty (180) days of the filing of the Dispute
with the Administrator. The arbitrator(s) shall be empowered to impose
sanctions for any party's failure to proceed within the times established
herein. Arbitration proceedings hereunder shall be conducted in Denver,
Colorado, at a location determined by the Administrator. In any such
proceeding a party shall state as a counterclaim any claim which arises out of
the transaction or occurrence or is in any way related to the Documents which
does not require the presence of a third party which could not be joined as a
party in the proceeding. The provisions of this arbitration clause shall
survive any termination, amendment, or expiration of the Documents and
repayment in full of sums owed by Borrower hereunder and under the Notes unless
the parties otherwise expressly agree in writing. Each party agrees to keep
all disputes and arbitration proceedings strictly confidential, except for
disclosures of information required in the ordinary course of business of the
parties or as required by applicable law or regulation.

12.11 Successors and Assigns. Without limiting any
prohibition on assignment contained herein, this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

12.12 Termination and Mutual Release. Upon full payment
and satisfaction of the Notes and the obligations contained in this Agreement
and the other Loan Documents and after the expiration date of all Letters of
Credit issued hereunder,

56
<PAGE> 69
this Agreement, except for any obligations under Sections 3.8, 8.17, 8.18,
11.14 and 11.19, shall terminate and the parties shall, thereupon automatically
each be fully, finally, and forever released and discharged from any further
claim, liability, or obligation in connection with the Loan.

12.13 Costs and Expenses. To the extent permitted by law,
Borrowers agree to pay to Agent and the Syndication Parties, on demand, all
out-of-pocket costs and expenses (a) incurred by Agent in connection with the
preparation, negotiation, and execution of the Credit Documents or any
amendments thereto and the transactions contemplated thereby, and (b) incurred
by Agent or any Syndication Party (including, without limitation, the
reasonable fees and expenses of counsel retained by Agent and the Syndication
Parties) in connection with the enforcement or protection of the Syndication
Parties' rights under the Credit Documents upon the occurrence of an Event of
Default or upon the commencement of an action by any Borrower against Agent or
any Syndication Party (except that if the court or the arbitrator(s), as
applicable, make a specific finding that such Borrower(s) have prevailed on all
or substantially all of their claims in such action brought by such
Borrower(s), such Borrower(s) shall not be obligated to pay the out- of-pocket
costs and expenses of Agent and the Syndication Parties in connection with such
action), including without limitation collection of the Loan (regardless of
whether such enforcement or collection is by court action or otherwise). If
Agent does not receive payment from Borrowers for the out-of-pocket costs and
expenses described in subparagraph (a) of this Subsection within thirty (30)
days of the date of Agent's demand therefor, Borrowers hereby authorize the
Syndication Parties to make an Advance in the amount of such out-of-pocket
costs and expenses, and the amount of such Advance shall bear interest at the
Variable Rate.

12.14 Amendment to Notes. The parties hereto agree that:
(a) any reference to the term "Credit Agreement" in the Notes shall be deemed a
reference to this Agreement, (b) any reference in the Notes to "Wells Fargo
Bank (Colorado), N.A." shall be deemed a reference to "Wells Fargo Bank, N.A.",
successor by merger to Wells Fargo Bank (Colorado), N.A., and (c) any reference
in the Notes to "Key Bank of Colorado" shall be deemed a reference to "KeyBank
National Association", successor by merger to Key Bank of Colorado.

12.15 Replacement Notes. Upon receipt by Borrower of
evidence satisfactory to it of (a) the loss, theft, destruction or mutilation
of any Note, and (in case of loss, theft or destruction) of such Syndication
Party's agreement to indemnify Borrower, and upon surrender and cancellation of
such Note, if mutilated, or (b) the assignment of any Syndication Interest or
any portion thereof pursuant to this Agreement, then Borrower will pay any
unpaid principal and interest (and Funding Losses, if applicable) then or
previously due and payable on such Note and will deliver in lieu of such Note a
new Note or, in the case of an assignment of a portion of a Syndication
Interest, Notes for any remaining balance.

12.16 Notice to Syndication Parties and Agent. No action
shall be commenced by Borrower for any claim against Agent or any Syndication
Party on

57
<PAGE> 70
account of any act or failure to act by such Person unless a notice
specifically setting forth the claim of Borrower shall have been given to such
Person within sixty (60) calendar days after Borrower has knowledge or should
reasonably have acquired knowledge of the act or omission which Borrower
alleges gave rise to such claim, and failure to give such notice shall
constitute a waiver of any such claim.

12.17 Joint and Several Liability. The liability of the
Borrowers hereunder and under the Notes shall be joint and several.

IN WITNESS WHEREOF the parties have caused this Agreement to be
executed as of the date set forth above.

BORROWERS:

J.D. EDWARDS & COMPANY, a Colorado corporation

By: /s/ Richard E. Allen
----------------------------------

Name: Richard E. Allen
----------------------------------

Title: Chief Financial Officer
----------------------------------

J.D. EDWARDS WORLD SOLUTIONS COMPANY, a Colorado
corporation

By: /s/ Richard E. Allen
----------------------------------

Name: Richard E. Allen
----------------------------------

Title: Chief Financial Officer
----------------------------------

J.D. EDWARDS WORLD SOURCE COMPANY, a Colorado
corporation

By: /s/ Richard E. Allen
----------------------------------

Name: Richard E. Allen
----------------------------------

Title: Chief Financial Officer
----------------------------------

58
<PAGE> 71

SYNDICATION PARTIES:

WELLS FARGO BANK, N.A., successor by merger to
Wells Fargo Bank (Colorado), N.A.

By: /s/ Sarah Francis
----------------------------------

Name: Sarah Francis
----------------------------------

Title: Relationship Manager
----------------------------------

HARRIS TRUST AND SAVINGS BANK

By: /s/ Stephen J. Gray
----------------------------------

Name: Stephen J. Gray
----------------------------------

Title: Vice President
----------------------------------

KEYBANK NATIONAL ASSOCIATION, successor by
merger to Key Bank of Colorado

By: /s/ Mark K. Sunderland
----------------------------------

Name: Mark K. Sunderland
----------------------------------

Title: Vice President
----------------------------------

AGENT:

WELLS FARGO BANK, N.A., successor by merger to
Wells Fargo Bank (Colorado), N.A.

By: /s/ Sarah Francis
----------------------------------

Name: Sarah Francis
----------------------------------

Title: Relationship Manager
----------------------------------

<PAGE> 1

EXHIBIT 10.13

J.D. EDWARDS & COMPANY

INDEMNIFICATION AGREEMENT

This Indemnification Agreement ("Agreement") is effective as of
________________, by and between J.D. Edwards & Company, a Delaware corporation
(the "Company"), and ________________ ("Indemnitee").

WHEREAS, the Company desires to attract and retain the services of
highly qualified individuals, such as Indemnitee, to serve the Company and its
related entities;

WHEREAS, in order to induce Indemnitee to continue to provide services
to the Company, the Company wishes to provide for the indemnification of, and
the advancement of expenses to, Indemnitee to the maximum extent permitted by
law;

WHEREAS, the Company and Indemnitee recognize the continued difficulty
in obtaining liability insurance for the Company's directors, officers,
employees, agents and fiduciaries, the significant increases in the cost of
such insurance and the general reductions in the coverage of such insurance;

WHEREAS, the Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting directors, officers,
employees, agents and fiduciaries to expensive litigation risks at the same
time as the availability and coverage of liability insurance has been severely
limited; and

WHEREAS, in view of the considerations set forth above, the Company
desires that Indemnitee shall be indemnified and advanced expenses by the
Company as set forth herein;

NOW, THEREFORE, the Company and Indemnitee hereby agree as set forth
below.

1. Certain Definitions.

(a) "Change in Control" shall mean, and shall be deemed
to have occurred if, on or after the date of this Agreement, (i) any "person"
(as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Company
acting in such capacity or a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing more than 50% of the total voting power represented by
the Company's then outstanding Voting Securities (as defined below), (ii)
during any period of two consecutive years, individuals who at the beginning of
such period constitute the Board of Directors of the Company and any new
director whose election by the Board of Directors or
<PAGE> 2
nomination for election by the Company's stockholders was approved by a vote of
at least two thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof, or (iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation other than a merger or
consolidation which would result in the Voting Securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least 80% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of (in one transaction or a series
of related transactions) all or substantially all of the Company's assets.

(b) "Claim" shall mean with respect to a Covered Event
(as defined below): any threatened, pending or completed action, suit,
proceeding or alternative dispute resolution mechanism, or any hearing, inquiry
or investigation that Indemnitee in good faith believes might lead to the
institution of any such action, suit, proceeding or alternative dispute
resolution mechanism, whether civil, criminal, administrative, investigative or
other.

(c) References to the "Company" shall include, in
addition to J.D. Edwards & Company, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger to which
J.D. Edwards & Company (or any of its wholly-owned subsidiaries) is a party
which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, employees, agents or
fiduciaries, so that if Indemnitee is or was a director, officer, employee,
agent or fiduciary of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee, agent
or fiduciary of another corporation, partnership, joint venture, employee
benefit plan, trust or other enterprise, Indemnitee shall stand in the same
position under the provisions of this Agreement with respect to the resulting
or surviving corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had continued.

(d) "Covered Event" shall mean any event or occurrence
related to the fact that Indemnitee is or was a director, officer, employee,
agent or fiduciary of the Company, or any subsidiary of the Company, or is or
was serving at the request of the Company as a director, officer, employee,
agent or fiduciary of another corporation, partnership, joint venture, trust or
other enterprise, or by reason of any action or inaction on the part of
Indemnitee while serving in such capacity.

(e) "Expenses" shall mean any and all expenses (including
attorneys' fees and all other costs, expenses and obligations incurred in
connection with investigating, defending, being a witness in or participating
in (including on appeal), or preparing to defend, to be a witness in or to
participate in, any action, suit, proceeding, alternative dispute resolution
mechanism, hearing, inquiry or investigation), judgments, fines, penalties and
amounts paid in settlement (if such settlement is approved in advance by the
Company, which approval shall not be unreasonably withheld), actually and
reasonably incurred, of any Claim and any federal, state, local or foreign

-2-
<PAGE> 3
taxes imposed on the Indemnitee as a result of the actual or deemed receipt of
any payments under this Agreement.

(f) "Expense Advance" shall mean a payment to Indemnitee
pursuant to Section 3 of Expenses in advance of the settlement of or final
judgement in any action, suit, proceeding or alternative dispute resolution
mechanism, hearing, inquiry or investigation which constitutes a Claim.

(g) "Independent Legal Counsel" shall mean an attorney or
firm of attorneys, selected in accordance with the provisions of Section 2(d)
hereof, who shall not have otherwise performed services for the Company or
Indemnitee within the last three years (other than with respect to matters
concerning the rights of Indemnitee under this Agreement, or of other
indemnitees under similar indemnity agreements).

(h) References to "other enterprises" shall include
employee benefit plans; references to "fines" shall include any excise taxes
assessed on Indemnitee with respect to an employee benefit plan; and references
to "serving at the request of the Company" shall include any service as a
director, officer, employee, agent or fiduciary of the Company which imposes
duties on, or involves services by, such director, officer, employee, agent or
fiduciary with respect to an employee benefit plan, its participants or its
beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan, Indemnitee shall be deemed to have acted in a
manner "not opposed to the best interests of the Company" as referred to in
this Agreement.

(i) "Reviewing Party" shall mean, subject to the
provisions of Section 2(d), any person or body appointed by the Board of
Directors in accordance with applicable law to review the Company's obligations
hereunder and under applicable law, which may include a member or members of
the Company's Board of Directors, Independent Legal Counsel or any other person
or body not a party to the particular Claim for which Indemnitee is seeking
indemnification.

(j) "Section" refers to a section of this Agreement unless
otherwise indicated.

(k) "Voting Securities" shall mean any securities of the
Company that vote generally in the election of directors.

2. Indemnification.

(a) Indemnification of Expenses. Subject to the
provisions of Section 2(b) below, the Company shall indemnify Indemnitee for
Expenses to the fullest extent permitted by law if Indemnitee was or is or
becomes a party to or witness or other participant in, or is threatened to be
made a party to or witness or other participant in, any Claim (whether by
reason of or arising in part out of a Covered Event), including all interest,
assessments and other charges paid or payable in connection with or in respect
of such Expenses.

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<PAGE> 4
(b) Review of Indemnification Obligations.
Notwithstanding the foregoing, in the event any Reviewing Party shall have
determined (in a written opinion in any case in which Independent Legal Counsel
is the Reviewing Party) that Indemnitee is not entitled to be indemnified
hereunder under applicable law, (i) the Company shall have no further
obligation under Section 2(a) to make any payments to Indemnitee not made prior
to such determination by such Reviewing Party, and (ii) the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all Expenses theretofore paid in indemnifying Indemnitee;
provided, however, that if Indemnitee has commenced or thereafter commences
legal proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee is entitled to be indemnified hereunder under
applicable law, any determination made by any Reviewing Party that Indemnitee
is not entitled to be indemnified hereunder under applicable law shall not be
binding and Indemnitee shall not be required to reimburse the Company for any
Expenses theretofore paid in indemnifying Indemnitee until a final judicial
determination is made with respect thereto (as to which all rights of appeal
therefrom have been exhausted or lapsed). Indemnitee's obligation to reimburse
the Company for any Expenses shall be unsecured and no interest shall be
charged thereon.

(c) Indemnitee Rights on Unfavorable Determination;
Binding Effect. If any Reviewing Party determines that Indemnitee substantively
is not entitled to be indemnified hereunder in whole or in part under
applicable law, Indemnitee shall have the right to commence litigation seeking
an initial determination by the court or challenging any such determination by
such Reviewing Party or any aspect thereof, including the legal or factual
bases therefor, and, subject to the provisions of Section 15, the Company
hereby consents to service of process and to appear in any such proceeding.
Absent such litigation, any determination by any Reviewing Party shall be
conclusive and binding on the Company and Indemnitee.

(d) Selection of Reviewing Party; Change in Control. If
there has not been a Change in Control, any Reviewing Party shall be selected
by the Board of Directors, and if there has been such a Change in Control
(other than a Change in Control which has been approved by a majority of the
Company's Board of Directors who were directors immediately prior to such
Change in Control), any Reviewing Party with respect to all matters thereafter
arising concerning the rights of Indemnitee to indemnification of Expenses
under this Agreement or any other agreement or under the Company's certificate
of incorporation or bylaws as now or hereafter in effect, or under any other
applicable law, if desired by Indemnitee, shall be Independent Legal Counsel
selected by Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld). Such counsel, among other things, shall render its
written opinion to the Company and Indemnitee as to whether and to what extent
Indemnitee would be entitled to be indemnified hereunder under applicable law
and the Company agrees to abide by such opinion. The Company agrees to pay the
reasonable fees of the Independent Legal Counsel referred to above and to
indemnify fully such counsel against any and all expenses (including attorneys'
fees), claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto. Notwithstanding any other
provision of this Agreement, the Company shall not be required to pay Expenses
of more than one Independent Legal Counsel in connection with all matters
concerning a single Indemnitee, and such Independent Legal Counsel shall be the
Independent Legal Counsel for any or all other Indemnitees unless (i) the
Company otherwise

-4-
<PAGE> 5
determines or (ii) any Indemnitee shall provide a written statement setting
forth in detail a reasonable objection to such Independent Legal Counsel
representing other Indemnitees.

(e) Mandatory Payment of Expenses. Notwithstanding any
other provision of this Agreement other than Section 10 hereof, to the extent
that Indemnitee has been successful on the merits or otherwise, including,
without limitation, the dismissal of an action without prejudice, in defense of
any Claim, Indemnitee shall be indemnified against all Expenses incurred by
Indemnitee in connection therewith.

3. Expense Advances.

(a) Obligation to Make Expense Advances. The Company
shall make Expense Advances to Indemnitee upon receipt of a written undertaking
by or on behalf of the Indemnitee to repay such amounts if it shall ultimately
be determined that the Indemnitee is not entitled to be indemnified therefor by
the Company.

(b) Form of Undertaking. Any written undertaking by the
Indemnitee to repay any Expense Advances hereunder shall be unsecured and no
interest shall be charged thereon.

(c) Determination of Reasonable Expense Advances. The
parties agree that for the purposes of any Expense Advance for which Indemnitee
has made written demand to the Company in accordance with this Agreement, all
Expenses included in such Expense Advance that are certified by affidavit of
Indemnitee's counsel as being reasonable shall be presumed conclusively to be
reasonable.

4. Procedures for Indemnification and Expense Advances.

(a) Timing of Payments. All payments of Expenses
(including without limitation Expense Advances) by the Company to the
Indemnitee pursuant to this Agreement shall be made to the fullest extent
permitted by law as soon as practicable after written demand by Indemnitee
therefor is presented to the Company, but in no event later than forty- five
(45) business days after such written demand by Indemnitee is presented to the
Company, except in the case of Expense Advances, which shall be made no later
than twenty (20) business days after such written demand by Indemnitee is
presented to the Company.

(b) Notice/Cooperation by Indemnitee. Indemnitee shall,
as a condition precedent to Indemnitee's right to be indemnified or
Indemnitee's right to receive Expense Advances under this Agreement, give the
Company notice in writing as soon as practicable of any Claim made against
Indemnitee for which indemnification will or could be sought under this
Agreement. Notice to the Company shall be directed to the Chief Executive
Officer of the Company at the address shown on the signature page of this
Agreement (or such other address as the Company shall designate in writing to
Indemnitee). In addition, Indemnitee shall give the Company such information
and cooperation as it may reasonably require and as shall be within
Indemnitee's power.

-5-
<PAGE> 6
(c) No Presumptions; Burden of Proof. For purposes of
this Agreement, the termination of any Claim by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that Indemnitee
did not meet any particular standard of conduct or have any particular belief
or that a court has determined that indemnification is not permitted by this
Agreement or applicable law. In addition, neither the failure of any Reviewing
Party to have made a determination as to whether Indemnitee has met any
particular standard of conduct or had any particular belief, nor an actual
determination by any Reviewing Party that Indemnitee has not met such standard
of conduct or did not have such belief, prior to the commencement of legal
proceedings by Indemnitee to secure a judicial determination that Indemnitee
should be indemnified under this Agreement or applicable law, shall be a
defense to Indemnitee's claim or create a presumption that Indemnitee has not
met any particular standard of conduct or did not have any particular belief.
In connection with any determination by any Reviewing Party or otherwise as to
whether the Indemnitee is entitled to be indemnified hereunder, the burden of
proof shall be on the Company to establish that Indemnitee is not so entitled.

(d) Notice to Insurers. If, at the time of the receipt by
the Company of a notice of a Claim pursuant to Section 4(b) hereof, the Company
has liability insurance in effect which may cover such Claim, the Company shall
give prompt notice of the commencement of such Claim to the insurers in
accordance with the procedures set forth in the respective policies. The
Company shall thereafter take all necessary or desirable action to cause such
insurers to pay, on behalf of the Indemnitee, all amounts payable as a result
of such Claim in accordance with the terms of such policies.

(e) Selection of Counsel. In the event the Company shall
be obligated hereunder to provide indemnification for or make any Expense
Advances with respect to the Expenses of any Claim, the Company, if
appropriate, shall be entitled to assume the defense of such Claim with counsel
approved by Indemnitee (which approval shall not be unreasonably withheld) upon
the delivery to Indemnitee of written notice of the Company's election to do
so. After delivery of such notice, approval of such counsel by Indemnitee and
the retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees or expenses of separate counsel
subsequently employed by or on behalf of Indemnitee with respect to the same
Claim; provided, however, that (i) Indemnitee shall have the right to employ
Indemnitee's separate counsel in any such Claim at Indemnitee's expense and
(ii) if (A) the employment of separate counsel by Indemnitee has been
previously authorized by the Company, (B) Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and
Indemnitee in the conduct of any such defense, or (C) the Company shall not
continue to retain such counsel to defend such Claim, then the fees and
expenses of Indemnitee's separate counsel shall be Expenses for which
Indemnitee may receive indemnification or Expense Advances hereunder.

5. Additional Indemnification Rights; Nonexclusivity.

(a) Scope. The Company hereby agrees to indemnify the
Indemnitee to the fullest extent permitted by law, notwithstanding that such
indemnification is not specifically

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<PAGE> 7
authorized by the other provisions of this Agreement, the Company's certificate
of incorporation, the Company's bylaws or by statute. In the event of any
change after the date of this Agreement in any applicable law, statute or rule
which expands the right of a Delaware corporation to indemnify a member of its
board of directors or an officer, employee, agent or fiduciary, it is the
intent of the parties hereto that Indemnitee shall enjoy by this Agreement the
greater benefits afforded by such change. In the event of any change in any
applicable law, statute or rule which narrows the right of a Delaware
corporation to indemnify a member of its board of directors or an officer,
employee, agent or fiduciary, such change, to the extent not otherwise required
by such law, statute or rule to be applied to this Agreement, shall have no
effect on this Agreement or the parties' rights and obligations hereunder
except as set forth in Section 10(a) hereof.

(b) Nonexclusivity. The indemnification and the payment
of Expense Advances provided by this Agreement shall be in addition to any
rights to which Indemnitee may be entitled under the Company's certificate of
incorporation, its bylaws, any other agreement, any vote of stockholders or
disinterested directors, the General Corporation Law of the State of Delaware,
or otherwise. The indemnification and the payment of Expense Advances provided
under this Agreement shall continue as to Indemnitee for any action taken or
not taken while serving in an indemnified capacity even though subsequent
thereto Indemnitee may have ceased to serve in such capacity.

6. No Duplication of Payments. The Company shall not be liable
under this Agreement to make any payment in connection with any Claim made
against Indemnitee to the extent Indemnitee has otherwise actually received
payment (under any insurance policy, provision of the Company's certificate of
incorporation, bylaws or otherwise) of the amounts otherwise payable hereunder.

7. Partial Indemnification. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of Expenses incurred in connection with any Claim, but not, however,
for all of the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such Expenses to which Indemnitee is entitled.

8. Mutual Acknowledgement. Both the Company and Indemnitee
acknowledge that in certain instances, federal law or applicable public policy
may prohibit the Company from indemnifying its directors, officers, employees,
agents or fiduciaries under this Agreement or otherwise. Indemnitee understands
and acknowledges that the Company has undertaken or may be required in the
future to undertake with the Securities and Exchange Commission to submit the
question of indemnification to a court in certain circumstances for a
determination of the Company's right under public policy to indemnify
Indemnitee.

9. Liability Insurance. To the extent the Company maintains
liability insurance applicable to directors, officers, employees, agents or
fiduciaries, Indemnitee shall be covered by such policies in such a manner as
to provide Indemnitee the same rights and benefits as are provided to the most
favorably insured of the Company's directors, if Indemnitee is a director; or
of the Company's officers, if Indemnitee is not a director of the Company but
is an officer; or of

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<PAGE> 8
the Company's key employees, agents or fiduciaries, if Indemnitee is not an
officer or director but is a key employee, agent or fiduciary.

10. Exceptions. Notwithstanding any other provision of this
Agreement, the Company shall not be obligated pursuant to the terms of this
Agreement:

(a) Excluded Action or Omissions. To indemnify Indemnitee
for Expenses resulting from acts, omissions or transactions for which
Indemnitee is prohibited from receiving indemnification under this Agreement or
applicable law; provided, however, that notwithstanding any limitation set
forth in this Section 10(a) regarding the Company's obligation to provide
indemnification, Indemnitee shall be entitled under Section 3 to receive
Expense Advances hereunder with respect to any such Claim unless and until a
court having jurisdiction over the Claim shall have made a final judicial
determination (as to which all rights of appeal therefrom have been exhausted
or lapsed) that Indemnitee has engaged in acts, omissions or transactions for
which Indemnitee is prohibited from receiving indemnification under this
Agreement or applicable law.

(b) Claims Initiated by Indemnitee. To indemnify or make
Expense Advances to Indemnitee with respect to Claims initiated or brought
voluntarily by Indemnitee and not by way of defense, counterclaim or
crossclaim, except (i) with respect to actions or proceedings brought to
establish or enforce a right to indemnification under this Agreement or any
other agreement or insurance policy or under the Company's certificate of
incorporation or bylaws now or hereafter in effect relating to Claims for
Covered Events, (ii) in specific cases if the Board of Directors has approved
the initiation or bringing of such Claim, or (iii) as otherwise required under
Section 145 of the Delaware General Corporation Law (relating to
indemnification of officers, directors, employees and agents; and insurance),
regardless of whether Indemnitee ultimately is determined to be entitled to
such indemnification or insurance recovery, as the case may be.

(c) Lack of Good Faith. To indemnify Indemnitee for any
Expenses incurred by the Indemnitee with respect to any action instituted (i)
by Indemnitee to enforce or interpret this Agreement, if a court having
jurisdiction over such action determines as provided in Section 13 that each of
the material assertions made by the Indemnitee as a basis for such action was
not made in good faith or was frivolous, or (ii) by or in the name of the
Company to enforce or interpret this Agreement, if a court having jurisdiction
over such action determines as provided in Section 13 that each of the material
defenses asserted by Indemnitee in such action was made in bad faith or was
frivolous.

(d) Claims Under Section 16(b). To indemnify Indemnitee
for expenses and the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or any similar successor statute; provided,
however, that notwithstanding any limitation set forth in this Section 10(d)
regarding the Company's obligation to provide indemnification, Indemnitee shall
be entitled under Section 3 to receive Expense Advances hereunder with respect
to any such Claim unless and until a court having jurisdiction over the Claim
shall have made a final judicial determination (as to

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<PAGE> 9
which all rights of appeal therefrom have been exhausted or lapsed) that
Indemnitee has violated said statute.

11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.

12. Binding Effect; Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns (including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), spouses, heirs and
personal and legal representatives. The Company shall require and cause any
successor (whether direct or indirect, and whether by purchase, merger,
consolidation or otherwise) to all, substantially all, or a substantial part,
of the business or assets of the Company, by written agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform if no such succession had taken place. This Agreement
shall continue in effect regardless of whether Indemnitee continues to serve as
a director, officer, employee, agent or fiduciary (as applicable) of the
Company or of any other enterprise at the Company's request.

13. Expenses Incurred in Action Relating to Enforcement or
Interpretation. In the event that any action is instituted by Indemnitee under
this Agreement or under any liability insurance policies maintained by the
Company to enforce or interpret any of the terms hereof or thereof, Indemnitee
shall be entitled to be indemnified for all Expenses incurred by Indemnitee
with respect to such action (including without limitation attorneys' fees),
regardless of whether Indemnitee is ultimately successful in such action,
unless as a part of such action a court having jurisdiction over such action
makes a final judicial determination (as to which all rights of appeal
therefrom have been exhausted or lapsed) that each of the material assertions
made by Indemnitee as a basis for such action was not made in good faith or was
frivolous; provided, however, that until such final judicial determination is
made, Indemnitee shall be entitled under Section 3 to receive payment of
Expense Advances hereunder with respect to such action. In the event of an
action instituted by or in the name of the Company under this Agreement to
enforce or interpret any of the terms of this Agreement, Indemnitee shall be
entitled to be indemnified for all Expenses incurred by Indemnitee in defense
of such action (including without limitation costs and expenses incurred with
respect to Indemnitee's counterclaims and cross- claims made in such action),
unless as a part of such action a court having jurisdiction over such action
makes a final judicial determination (as to which all rights of appeal
therefrom have been exhausted or lapsed) that each of the material defenses
asserted by Indemnitee in such action was made in bad faith or was frivolous;
provided, however, that until such final judicial determination is made,
Indemnitee shall be entitled under Section 3 to receive payment of Expense
Advances hereunder with respect to such action.

14. Notice. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed
duly given (i) if delivered by hand and signed for by the party addressed, on
the date of such delivery, or (ii) if mailed by domestic certified or
registered mail with postage prepaid, on the third business day after the date
postmarked.

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<PAGE> 10
Addresses for notice to either party are as shown on the signature page of this
Agreement or as subsequently modified by written notice.

15. Consent to Jurisdiction. The Company and Indemnitee each
hereby irrevocably consent to the jurisdiction of the courts of the State of
Delaware for all purposes in connection with any action or proceeding which
arises out of or relates to this Agreement and agree that any action instituted
under this Agreement shall be commenced, prosecuted and continued only in the
Court of Chancery of the State of Delaware in and for New Castle County, which
shall be the exclusive and only proper forum for adjudicating such a claim.

16. Severability. The provisions of this Agreement shall be
severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph or sentence) are held by a court
of competent jurisdiction to be invalid, void or otherwise unenforceable, and
the remaining provisions shall remain enforceable to the fullest extent
permitted by law. Furthermore, to the fullest extent possible, the provisions
of this Agreement (including without limitation each portion of this Agreement
containing any provision held to be invalid, void or otherwise unenforceable,
that is not itself invalid, void or unenforceable) shall be construed so as to
give effect to the intent manifested by the provision held invalid, illegal or
unenforceable.

17. Choice of Law. This Agreement, and all rights, remedies,
liabilities, powers and duties of the parties to this Agreement, shall be
governed by and construed in accordance with the laws of the State of Delaware
without regard to principles of conflicts of laws.

18. Subrogation. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all documents required and shall
do all acts that may be necessary to secure such rights and to enable the
Company effectively to bring suit to enforce such rights.

19. Amendment and Termination. No amendment, modification,
termination or cancellation of this Agreement shall be effective unless it is
in writing signed by both the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed to be or shall constitute a waiver
of any other provisions hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver.

20. Integration and Entire Agreement. This Agreement sets forth
the entire understanding between the parties hereto and supersedes and merges
all previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties hereto.

21. No Construction as Employment Agreement. Nothing contained in
this Agreement shall be construed as giving Indemnitee any right to be retained
in the employ of the Company or any of its subsidiaries or affiliated entities.

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<PAGE> 11
IN WITNESS WHEREOF, the parties hereto have executed this
Indemnification Agreement as of the date first above written.

J.D. EDWARDS & COMPANY

By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------

Address: J.D. Edwards & Company
8055 East Tufts Avenue
Denver, Colorado 80237

AGREED TO AND ACCEPTED BY:

INDEMNITEE

--------------------------------------
(signature)

--------------------------------------

Address:
------------------------------

--------------------------------------

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<PAGE> 1
EXHIBIT 10.16

J. D. EDWARDS & COMPANY

1992 INCENTIVE STOCK OPTION PLAN
<PAGE> 2
J. D. EDWARDS & COMPANY
1992 INCENTIVE
STOCK OPTION PLAN

ARTICLE 1
PURPOSE

THIS 1992 INCENTIVE STOCK OPTION PLAN (the "Plan") was adopted by the
Board and approved by the shareholders of J. D. EDWARDS & COMPANY, a Colorado
corporation, (the "Company"), with an effective date of November 9, 1992, in
order that certain employees of the Company who are responsible for the conduct
and management of the Company's business or who are involved in endeavors
significant to its success may be given an inducement to acquire a proprietary
interest in the Company, to gain an added incentive to advance the interests of
the Company, and to remain affiliated with the Company. Accordingly, the
Company will offer to sell shares of Common Stock as provided in this Plan to
such individuals as are designated in accordance with the provisions of the
Plan. The term "Company" also includes any parent or subsidiary corporation as
provided by Section 422 of the Code and applicable regulations.

ARTICLE 2
DEFINITIONS

2.1 "Board" means the board of directors of the Company.

2.2 "Code" means the Internal Revenue Code of 1986, as amended.

2.3 "Common Stock" means authorized but unissued shares or treasury
shares, or any combination thereof, of Common Stock ($.01 par value each), of
the Company, and includes Common Stock to be issued as outstanding shares
pursuant to exercise of a stock option.

2.4 "Disinterested Person" means a director who qualifies as a
disinterested person for purposes of disinterested administration pursuant to
Rule 16b-3 as in effect with respect to the Plan from time to time.

2.5 "Fair Market Value" of a share of Common Stock on any date shall
mean the price determined under Article 5.1.

2.6 "Grant Date" means the date and time when Common Stock is offered
for sale to an Optionee under a Stock Option, as determined under Article 6.3
hereof.

2.7 "Option Stock" or "Optioned Stock" means shares of Common Stock for
which options to purchase have been granted under the Plan.

2.8 "Plan" means any reference to this J.D. Edwards & Company 1992
Incentive Stock Option Plan, as it may be amended.

2.9 "Optionee" means a key employee (including any officer or director
who is an employee) of the

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<PAGE> 3
Company whose judgment, initiative, and continued efforts are expected to
contribute to the successful conduct of the business of the Company, as
determined by the Committee, and to whom the Committee has granted a Stock
Option.

2.10 "Stock Option" means the right granted under the Plan to an
Optionee to acquire the number of shares of Common Stock pursuant to the
Optionee's Stock Option Agreement.

2.11 "Stock Option Price" means the exercise price established by the
Committee with respect to an Optionee's Stock Option, determined as not less
than the Fair Market Value of a share of Common Stock on the Grant Date.
Notwithstanding the preceding sentence, the Optionee owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company on the Grant Date, the Stock Option Price shall be at least 110% of
such Fair Market Value on the Grant Date.

2.12 "Stock Option Agreement" means the contract under which an
Optionee is given the right to acquire Common Stock pursuant to this Plan.

2.13 "1933 Act" means the Securities Act of 1933, as amended.

2.14 "1934 Act" means the Securities Exchange Act of 1934, as amended.

ARTICLE 3
TAX STATUS

3.1 Tax Status. The Stock Options granted under this Plan are intended
to be options that qualify as "incentive stock options" under Section 422 of
the Code. Under current law, no federal income tax is payable upon the grant
or upon exercise of an incentive stock option. Generally, any tax liability on
stock appreciation is deferred until disposition of the stock, and is subject
to the more favorable capital gain rates. However, failure to meet certain
holding period requirements can result in a disqualifying disposition, causing
ordinary compensation income upon such disposition. In addition, the exercise
of a qualified stock option generally causes the spread between stock value and
option price to be treated as an item of alternative minimum taxable income.
Optionees are urged to consult with their own tax advisors with respect to the
federal and state income taxation of the grant, exercise and disposition of
Stock pursuant to a Stock Option.

3.2 Interpretation. This Plan, and all questions arising under it
(including any Stock Option Agreement), shall be interpreted and answered in
the manner necessary to comply with Section 422 of the Code and applicable
United States of America Treasury Department Regulations ("Treasury
Regulations") relating to qualified "incentive stock options." With respect to
persons subject to Section 16 of the 1934 Act, transactions under this Plan are
intended to comply with all applicable conditions of Rule 16b-3 promulgated
thereunder ("Rule 16b-3") or its successors. To the extent any provision of
the Plan or action by the Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Committee.

ARTICLE 4
ADMINISTRATION

4.1 Committee. The Plan shall be administered by a committee of three
or more directors, each of whom is a Disinterested Person (the "Committee"),
appointed by the Board.

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<PAGE> 4
4.2 Authority of Committee. Subject to further direction from the
Board, the Committee shall have full authority to administer the Plan,
including authority to interpret and construe any provision of the Plan and to
adopt such rules and regulations for administering the Plan as it may deem
necessary in order to comply with the requirements of the Plan, or in order to
conform to any regulation or to any change in any law or regulation applicable
thereto. In addition, the Committee is authorized to:

(a) direct the grant of Stock Options;

(b) determine the identity of key employees, which of them shall
be granted Stock Options, and the number of shares of Common Stock to be
covered by such Stock Options;

(d) determine the nature and amount of consideration for the
Option Stock;

(e) determine the manner and the times at which the Stock
Options shall be exercisable, including the discretion to accelerate the
time of the exercise of such Stock Options;

(f) determine other conditions and limitations, if any, on each
Stock Option granted under the Plan (which need not be identical, but
which shall comply with the terms of this Plan);

(g) prescribe the form or forms of the instruments evidencing
the Stock Options and any restrictions imposed on the Option Stock and
of any other instruments required under the Plan to change such forms
from time to time;

(h) waive compliance (either generally or in any one or more
particular instances) by an Optionee with the requirements of any rule
or regulation with respect to a Stock Option, subject to the Plan
provisions or other applicable requirements;

(i) waive any restrictions imposed with respect to the
transferability of shares acquired by the exercise of Stock Options; and

(j) decide all questions and settle all controversies and
disputes which may arise in connection with the Plan.

4.3 Actions of Committee. All actions taken and all interpretations
and determinations made by the Committee in good faith (including
determinations of Fair Market Value) shall be final and binding upon all
Optionees, the Company, and all other interested persons.

4.4 Indemnification. In addition to any other rights of
indemnification, each Committee member shall be indemnified by the Company
against reasonable expenses (including attorneys' fees) actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding (or in connection with any appeal) to which such person may be a
party by reason of an action taken, or any failure to act, in connection with
this Plan and any Stock Option granted under it and the Company shall pay for
or reimburse the reasonable expenses incurred by a Committee member who is a
party to a proceeding in advance of the final disposition of the proceeding to
the full extent and as provided in the Colorado

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<PAGE> 5
Corporation Code. This indemnification shall further extend to all amounts
paid by any Committee member either in a settlement approved by independent
legal counsel selected by the Committee or pursuant to a judgment in any such
action, suit or proceeding, provided that the Committee member acted in good
faith and in a manner he or she reasonably believed to be in the best interests
of the Company. Any action taken by the Committee under this Plan may be taken
without notice or meeting if the action is evidenced by a writing signed by all
members of the Committee. This Article shall not be interpreted to limit in
any manner any indemnification of the Company may be required to pay pursuant
to the Colorado Corporation Code, any court order, or any contract, resolution
or other commitment which is legally valid.

ARTICLE 5
FAIR MARKET VALUE

5.1 Determination. To qualify as an incentive stock option under the
Code, the Stock Option Price on the Grant Date must bear the relationship to
the Stock's Fair Market Value as set forth in Article 2.11. The Committee
shall make a good faith determination of Fair Market Value of Common Stock as
of the Grant Date in accordance with the provisions of Article 5.2 if there is
no established market in which the Common Stock is traded and the provisions of
Article 5.3 if there is an established market in which the Common Stock is
traded and in the manner necessary to comply with Section 422 of the Code and
applicable Treasury Regulations.

5.2 No Market. If there is no established market in which the Common
Stock is traded, the Committee may use any reasonable valuation method to make
a good faith determination of Fair Market Value. The objective shall be to set
the value at the price at which a share of Stock would change hands between a
willing buyer and a willing seller, neither being under any compulsion to buy
or to sell and both having reasonable knowledge of relevant facts, determined
without regard to any restriction other than a restriction which, by its terms,
will never lapse.

5.3 Established Market. If there is an established market in which the
Stock is traded (whether on a national or regional stock exchange including the
National Association of Securities Dealers, Inc. Automated Quotation System or
in an over-the-counter market), the Fair Market Value of a share of Common
Stock shall be the mean between the highest and lowest selling prices on the
Grant Date as quoted in a composite listing selected by the Committee. If no
sales occurred on the Grant Date, the Fair Market Value of a share of Common
Stock shall be the mean between the bid and asked prices on such date. If such
price information is not available for the Grant Date, the relevant date shall
be the next preceding trading day on which a quotation of selling prices or bid
and asked prices was available.

ARTICLE 6
PARTICIPATION, STOCK OPTION PRICE, AND STOCK OPTION LIMITATIONS

6.1 Stock Subject to Plan. Subject to adjustment for capital changes
under Article 8, the number of shares available for issue under this Plan shall
not exceed _______________________ shares of Common Stock. All shares for
which a Stock Option is granted under this Plan, which for any reason are not
exercised prior to Stock Option expiration, or which are otherwise canceled or
forfeited, shall be available for the granting of further Stock Options under
this Plan.

6.2 Participation. Grants of Stock Options may be made to any key
employee of the Company, as determined by the Committee except that no Stock
Options may be granted under this Plan to a member of the Committee or, during
the year prior to service on the Committee, to a person designated to serve on
the

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<PAGE> 6
Committee. In determining Optionees in its discretion, the Committee shall
consider granting Stock Options to those individuals whose judgment, initiative
and continued efforts are expected to contribute to the successful conduct of
the Company's business. Individuals who have been granted Stock Options may,
if otherwise eligible, be granted additional Stock Options.

6.3 Grant Date of Stock Option. The Grant Date of a Stock Option under
the Plan shall be the date on which the Committee makes the determination
granting such Stock Option, or the date of shareholder approval of the Plan if
later, and no grant shall be deemed effective prior to such date. If the
Committee specifically determines that the Common Stock shall be offered to an
Optionee at a date and time subsequent to Committee and shareholder approval or
if there is an unreasonable delay in giving Notice of the grant of a Stock
Option to the Optionee, the Grant Date shall be the date of the offer to the
Optionee.

6.4 Notice. Notice of the grant of a Stock Option shall be given to
the Optionee within a reasonable time.

6.5 Agreement. Each Stock Option shall be evidenced by a written Stock
Option Agreement, signed on behalf of the Company containing such terms and
provisions as the Committee may determine, subject to the provisions of this
Plan. If the Optionee fails to sign and deliver an original of the Stock
Option Agreement to the Company within thirty (30) days after such agreement
has been delivered to the Optionee, the Stock Option granted by such Stock
Option Agreement shall automatically terminate at the end of such thirty-day
period (unless the Committee otherwise determines).

6.6 Period of Grant. No Stock Option shall be granted under this Plan
after ten (10) years from the date this Plan is adopted by the Board or
approved by the shareholders of the Company (whichever is earlier). Stock
Options outstanding ten (10) years or more after the effective date of the Plan
shall continue to be governed by the provisions of this Plan.

6.7 Other Limitations. The Committee may impose such other limitations
upon the exercise of a Stock Option as the Committee shall deem appropriate, in
its discretion, including but not limited to Stock Option vesting provisions,
period for exercise of Stock Options, limitations on transferability of Stock
Options, and manner of exercise of Stock Options, and any such limitations
shall be provided in the Stock Option Agreement between the Company and an
Optionee for such Stock Option.

6.8 Maximum Option Value. In any calendar year, no Optionee may be
granted Stock Options for which the Fair Market Value (determined as of the
time the Stock Options are granted) of the Stock with respect to which Stock
Options are exercisable for the first time by the Optionee shall exceed
$100,000. For these purposes, the Fair Market Value of Stock shall be
determined as of the Grant Date, and Stock Options shall be applied in the
order in which they were granted and determined with reference to all such
plans of the Company.

ARTICLE 7
EXERCISE OF STOCK OPTIONS

7.1 Time of Exercise. Stock Options granted under this Plan shall be
exercisable at any time or times within the period prescribed in the Stock
Option Agreement, as determined by the Committee, which period shall not be
more than ten (10) years from the Grant Date; provided, however, if at the time
a Stock Option is granted to an Optionee who owns more than ten percent (10%)
of the total combined voting

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<PAGE> 7
power of all classes of stock of the Company, the Stock Option may not be
exercisable after the expiration of five (5) years from the Grant Date. The
provisions on exercise of the Stock Option, including any provision on earlier
termination, shall be as determined by the Committee. If any Stock Option is
not exercised during the applicable exercise period, it shall be deemed to have
been forfeited as of the expiration of such period and shall be of no further
force or effect.

7.2 Manner of Exercise. Each exercise of a Stock Option, in whole or
in part, shall be made by the Optionee's delivery of written notice of such
exercise to the Company. Such notice shall be signed by the Optionee and shall
set forth the number of shares of Option Stock with respect to which the Stock
Option is being exercised and the Company's offer accepted, and shall specify
the date on which payment will be made. The date of payment shall be at least
five (5), but no more than thirty (30), days after the giving of such notice
unless an earlier date shall have been agreed upon by the Optionee and the
Company.

7.3 Enforceable Contract. The Optionee's written notice of exercise
shall constitute the Optionee's acceptance of the Company's offer under this
Plan, and shall create personal liability on the Optionee with respect to such
person's contractual promise. Upon such acceptance by the Optionee, all legal
remedies to enforce such contractual promise shall be available to both the
Company and the Optionee, including rights to damages or specific performance.

7.4 Closing. On the date specified in the notice of exercise and
conditioned upon the Optionee's payment of the Stock Option Price for all
Common Stock being acquired, the Company shall deliver (or cause to be
delivered) to the Optionee, or designee, one or more stock certificates for the
number of shares of Option Stock with respect to which the Stock Option is
being exercised and if deemed necessary by counsel to the Company, bearing a
legend to evidence any commitments given or restrictions imposed. The Stock
Option Price shall be paid as provided in the Stock Option Agreement. (This
event is referred to as the "Closing.") The shares issued upon exercise of a
Stock Option shall be issued fully paid, non-assessable and shall be registered
in the name of the Optionee or pursuant to his direction. The Stock Option
shall continue with respect to any remaining shares subject to the Stock Option
as to which exercise and payment has not yet been made, subject to the terms of
the applicable Stock Option Agreement.

7.5 Stock Issuance and Payment.

(a) Issuance. The Company shall not be obligated to deliver any
Optioned Stock unless and until, in the opinion of the Company's counsel, there
has been compliance with all applicable federal and state laws and regulations
and only when all other legal matters in connection with the issuance and
delivery of such stock have been approved by the Company's counsel. Without
limitation, the Committee may require from the Optionee such investment
representation or other agreement as the Company's counsel may consider
necessary or desirable in order to comply with the 1933 Act and any state
securities law. In addition, the Committee may require that the Optionee agree
that any sale of the Common Stock obtained by exercise of a Stock Option will
be made only in such manner as is permitted by the Committee, and that the
Optionee will notify the Company when such person makes any disposition of the
Common Stock (whether by sale, gift or otherwise). The Company shall use its
best efforts to effect any such compliance, and the Optionee shall take any
such action reasonably requested by the Committee.

(b) Payment in Cash. Unless the Stock Option Agreement otherwise
provides, or unless the Committee otherwise determines, the acquisition price
shall be paid by the Optionee in cash, by personal check or at the Committee's
discretion by bank cashier's check or certified check, in all cases in funds
immediately available in Denver, Colorado.

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<PAGE> 8
(c) Payment in Shares. The Committee, in its sole discretion and
pursuant to such terms and conditions as it determines, may permit an Optionee
to surrender to the Company shares of Common Stock previously acquired by the
Optionee as part or full payment for the exercise of a Stock Option. Such
surrendered shares shall be valued at their Fair Market Value on the date of
exercise.

(d) Cashless Exercise. Payment may be made through delivery of a
properly executed exercise notice together with such other documentation as the
Committee and the broker, if applicable, shall require to effect an exercise of
the Option and delivery to the Company of the sale or loan proceeds of the
Common Stock required to pay the Stock Option Price.

(e) Shareholder Rights. An Optionee shall have the rights of a
shareholder of the Company only as to shares actually issued to such person
under this Plan.

7.6 Employment Termination.

(a) General. If an Optionee's employment with the Company shall
terminate for any reason other than the Optionee's disability, any Stock Option
then held by the Optionee, to the extent then exercisable under the applicable
Stock Option Agreement, shall remain exercisable for one month after such
termination of employment or for a lesser period of time as specified in the
applicable Stock Option Agreement.

(b) Death. In the event of Optionee's death, the limitation imposed by
Section 7.6(a) is waived and exercise of the Stock Option may be made by the
deceased Optionee's personal representative, administrator or other person who
acquired the Option by bequest, inheritance or under the laws of descent and
distribution by reason of the Optionee's death (and any reference in this Plan
to the Optionee shall be a reference to such person). Any exercise of this
Stock Option after the Optionee's death shall be accompanied by letters
testamentary or other proof, satisfactory to the Company, of such personal
representative's (or other person's) right to exercise the Stock Option.

(c) Disability. If an Optionee's employment with the Company shall
terminate because of the disability of the Optionee, any Stock Option then held
by the Optionee, to the extent then exercisable under the applicable Stock
Option Agreement, shall remain exercisable for one year after the date of such
termination of employment because of the Optionee's disability or for a lesser
period of time as specified in the applicable Stock Option Agreement.

7.7 Leave of Absence. For purposes of this Plan, employment of an
Optionee shall be treated as continuing intact while such person is on sick
leave, military leave or other bona fide leave of absence if the period of
such leave does not exceed one hundred eighty (180) days. If such person's
leave exceeds one hundred eighty (180) days, employment shall be treated as
terminated for purposes of this Plan on the one hundredth eighty-first day of
such leave unless such person's right of continued employment is guaranteed
either by statute or contract.

7.8 Re-load Option. Without in any way limiting the authority of the
Committee to make grants hereunder, and in order to induce officers and other
key employees to retain ownership of shares in the Company, the Committee shall
have the authority (but not an obligation) to include within any Stock Option
Agreement a provision entitling the Optionee to a further option (a "Re-load
Option") in the event the Optionee exercises the option evidenced by the Stock
Option Agreement, in whole or in part, by

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<PAGE> 9
surrendering other shares of the Company in accordance with this Plan and the
terms and conditions of the Option Agreement. Any such Re-load Option shall be
for a number of shares equal to the number of surrendered shares, shall become
exercisable in the event the purchased shares are held for a minimum period of
time not less than three (3) years, and shall be subject to such other terms
and conditions as the Committee may determine.

7.9 Disposition of Forfeited Stock Options. Any shares of Common Stock
subject to Stock Options forfeited by an Optionee shall not thereafter be
eligible for a purchase by the Optionee but may be made subject to Stock
Options granted to other Optionees.

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<PAGE> 10
ARTICLE 8
CAPITAL CHANGES

.1 Stock Changes. In the event of a change to the shares of Common
Stock by reason of recapitalization, stock dividend, stock split, combination
of shares, exchange of shares, change in corporate structure or otherwise,
appropriate adjustments shall be made in:

(a) the number of shares of Common Stock theretofore made
subject to Stock Options and in the purchase price of said shares; and

(b) the aggregate number of shares which may be made subject to
Stock Options.

Such adjustments shall be made by the Committee, in its sole discretion,
if any of the foregoing adjustment shall result in a fractional share, the
fraction shall be disregarded, and the Company shall have no obligation to make
any cash or other payment with respect to such a fractional share.

.2 Acquisition Event. As used in Article 8.3, "Acquisition Event"
means:

(a) any merger or consolidation of the Company with one or more other
corporations, whether or not the Company is the surviving corporation;

(b) any sale or other disposition of all or substantially all of the
assets of the Company pursuant to a plan which provides for the liquidation of
the Company;

(c) any exchange by the holders of more than fifty percent (50%) of the
outstanding shares of Common Stock for securities issued by another entity, or
in whole or in part for cash or other property, pursuant to a plan of exchange
approved by the holders of a majority of such outstanding shares;

(d) a change in the majority of the members of the Board other than by
voluntary resignation; or

(e) any transaction to which Code Section 424(a) applies and to which
the Company is a party.

.3 Substitution or Cancellation Upon Acquisition. In connection with
any Acquisition Event and upon such terms and conditions as the Committee may
establish:

(a) The Optionee may be given the opportunity to make a final
settlement for the entire unexercised portion of any Stock Option
granted under this Plan, including any portion not then currently
exercisable, in any one or more of the following manners:

(1) Surrender such unexercised portion for cancellation
in exchange for the payment in cash of an amount not less than
the difference between the value per share of Common Stock as
measured by the value to be received by the holders of the
outstanding shares of Common Stock pursuant to the terms of the
Acquisition Event, as determined by the Committee in its
discretion, and the Stock Option Price at which such Stock Option
is or would become exercisable, multiplied by the number of
shares represented by such unexercised portion.

(2) Exercise such Stock Option, including any portion not
then otherwise

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<PAGE> 11
currently exercisable, prior to the Acquisition Event so that the
Optionee would be entitled, with respect to shares thereby
acquired, to participate in the Acquisition Event as a holder of
Common Stock.

(3) Surrender such Stock Option for cancellation in
exchange for a substitute Stock Option, providing substantially
equal benefits are granted or are to be granted by an employer
corporation, or a parent or subsidiary of such an employer
corporation, which corporation after the Acquisition Event, is
expected to continue to conduct substantially the same business
as that acquired from the Company pursuant to the Acquisition
Event.

If the Optionee is given one or more of such opportunities with respect
to the entire unexercised portion of any Stock Option granted under this Plan,
the Stock Option may be canceled by the Company upon the occurrence of the
Acquisition Event and thereafter the Optionee will be entitled only to receive
the appropriate benefit pursuant to clause (1), (2) or (3) above, whichever may
be applicable.

The provisions of this Article are not intended to be exclusive of any
other arrangements that the Committee might approve for settlement of all
outstanding Stock Options in connection with an Acquisition Event or otherwise.

ARTICLE 9
GENERAL PROVISIONS

.1 Constructive Ownership. In determining whether an Optionee owns
stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company, any stock attribution rules required by
Section 422 of the Code shall apply. At the effective date of this Plan, any
Optionee would be treated as owning the stock owned, directly or indirectly, by
or for such person's brothers and sisters (whether by the whole or half blood),
spouse, ancestors and lineal descendants. In addition, the stock owned
directly or indirectly, by or for a corporation, partnership, estate or trust
would be treated as owned proportionately by or for its shareholders, partners
or beneficiaries. However, Common Stock that an Optionee may acquire under
outstanding Stock Options shall not be treated as owned by the Optionee.

.2 Parent and Subsidiary. In order to comply with Section 422 of the
Code, any reference to the Company includes its parent or a subsidiary
corporation. At the effective date of this Plan, the Code provides that [a]
the term "parent corporation" means any corporation (other than the employer
corporation if, at the time of the granting of the option, each of the
corporations other than the employer corporation owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain, and [b] the term
"subsidiary corporation" means any

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<PAGE> 12
corporation (other than the employer corporation) in an unbroken chain of
corporations beginning with the employer corporation if, at the time of the
granting of the option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%) or
more of the total combining voting power of all classes of stock in one of the
other corporations in such chain.

.3 Disability. In determining whether an Optionee is disabled, the
definition specified in Section 422 of the Code shall apply. At the effective
date of the Plan, the Code provides that an Optionee is disabled if such person
is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or which has lasted or can be expected to last for a continuous
period of not less than twelve (12) months. A person shall not be considered
to be disabled unless such person furnishes proof as may be required by the
Code and applicable Treasury Regulations.

.4 No Contract of Employment. Nothing in this Plan shall confer upon
the Optionee the right to continue in the employ of the Company, nor shall it
interfere in any way with the right of the Company to discharge the Optionee at
any time for any reason whatsoever, with or without cause. Neither the
existence of the Plan nor the grant of any Stock Option hereunder shall be
taken into account in determining any damages to which an Optionee may be
entitled upon his or her termination of employment.

.5 No Rights as a Shareholder. An Optionee shall have no rights as a
shareholder with respect to any shares of Common Stock subject to Stock
Options granted him under the Plan. Except as provided in Article 8, no
adjustment shall be made in the number of shares of Common Stock issued to an
Optionee, or in any other rights of the Optionee upon exercise of a Stock
Option by reason of any dividend, distribution, or other right granted to
shareholders for which the record date is prior to the date of exercise of the
Optionee's Stock Option.

.6 Transferability, Restrictions. No Stock Option, Option Stock, nor
any other rights acquired by an Optionee under this Plan, shall be assignable
or transferable by an Optionee, other than by will or the laws of descent and
distribution and are exercisable, during his or her lifetime, only by the
Optionee. In the event of the Optionee's death, the Stock Option may be
exercised only as provided in Article 7.7(b). Any such assignments, transfer,
pledge, hypothecation or other disposition of any Stock Option contrary to the
provisions of the Plan, and any levy of any attachment or similar process upon
a Stock Option will be without effect, and the Committee may, in its
discretion, upon the occurrence of such an event, terminate the Stock Option.

.7 Disqualifying Disposition. Neither the grant nor the exercise of a
Stock Option that meets the requirements of Section 422 of the Code and
applicable regulations results in taxable income to the Optionee. However, if
the Optionee disposes of the Stock acquired pursuant to this Plan within two
(2) years from the Grant Date or within one (1) year after the transfer of the
Stock to such person, then the Optionee recognizes ordinary income in the
taxable year in which the disqualifying disposition occurs (based on the excess
of the lesser of the amount realized or the Fair Market Value of the Stock on
the date of exercise over the Stock Option Price). Within thirty (30) days
following any disqualifying disposition under the Code, the Optionee shall give
written notice to the Company of the time and manner of any such transaction,
including the amount realized upon disposition of the Stock.

.8 Delivery. Delivery of any notice or document shall occur upon
actual delivery to the recipient (including receipt of telecopy or facsimile
transmission), and shall be deemed delivered the third day following mailing by
U.S. certified mail, postage prepaid, return receipt requested, addressed to
the

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<PAGE> 13
recipient's then current mailing address. Any corporate officer or other
authorized agent may receipt for any notice or document on behalf of the
Company.

.9 Amendment. Subject to shareholder approval if required by Article
9.10, the Board may from time to time alter, amend, suspend or discontinue this
Plan (including any amendment deemed necessary or advisable to comply with the
requirements of "incentive stock options" under the Code and applicable
Treasury Regulations). However, no such action shall adversely affect the
rights and obligations with respect to Stock Options which are then outstanding
under this Plan.

.10 Shareholder Approval. This Plan shall become effective only if
approved by the Company's shareholders in the manner required by its articles
of incorporation and bylaws and the Colorado Corporation Code, and in
compliance with Rule 16b-3(b). In addition the requisite shareholder approval
shall be obtained for any amendment of this Plan for which such approval is
required in order to remain in compliance with Rule 16b-3(b).

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<PAGE> 1
EXHIBIT 10.20

J. D. EDWARDS & COMPANY

1997 EMPLOYEE STOCK PURCHASE PLAN

The following constitute the provisions of the 1997 Employee Stock
Purchase Plan of J. D. Edwards & Company.

1. Purpose. The purpose of the Plan is to provide employees of
the Company and its Designated Subsidiaries with an opportunity to purchase
Common Stock of the Company through accumulated payroll deductions. It is the
intention of the Company to have the Plan qualify as an "Employee Stock
Purchase Plan" under Section 423 of the Internal Revenue Code of 1986, as
amended. The provisions of the Plan, accordingly, shall be construed so as to
extend and limit participation in a manner consistent with the requirements of
that section of the Code.

2. Definitions.

(a) "Board" shall mean the Board of Directors of the
Company or any of its committee's as shall be administering the Plan.

(b) "Code" shall mean the Internal Revenue Code of 1986,
as amended.

(d) "Company" shall mean J. D. Edwards & Company and any
Designated Subsidiary of the Company.

(e) "Compensation" shall mean all base straight gross
earnings, commissions, quarterly bonuses, year-end bonuses, overtime and shift
premium, but shall exclude other compensation.

(f) "Designated Subsidiary" shall mean any Subsidiary
which has been designated by the Board from time to time in its sole discretion
as eligible to participate in the Plan.

(g) "Employee" shall mean any individual who is an
Employee of the Company for tax purposes whose customary employment with the
Company is at least twenty (20) hours per week and more than five (5) months in
any calendar year. For purposes of the Plan, the employment relationship shall
be treated as continuing intact while the individual is on sick leave or other
leave of absence approved by the Company. Where the period of leave exceeds 90
days and the individual's right to reemployment is not guaranteed either by
statute or by contract, the employment relationship shall be deemed to have
terminated on the 91st day of such leave.

(h) "Enrollment Date" shall mean the first day of each
Offering Period.

(i) "Exercise Date" shall mean the last day of each
Purchase Period or Offering Period, as applicable, on which a purchase of
shares shall occur under the Plan.
<PAGE> 2
(j) "Fair Market Value" shall mean, as of any date, the
value of Common Stock determined as follows:

(1) If the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The
Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the date of such determination, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable, or;

(2) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean of the closing bid and asked prices for the
Common Stock on the date of such determination, as reported in The Wall Street
Journal or such other source as the Board deems reliable, or;

(3) In the absence of an established market for
the Common Stock, the Fair Market Value thereof shall be determined in good
faith by the Board, or;

(4) For purposes of the Enrollment Date of the
first Offering Period under the Plan, the Fair Market Value shall be the
initial price to the public as set forth in the final prospectus included
within the registration statement on Form S-1 filed with the Securities and
Exchange Commission for the initial public offering of the Company's Common
Stock (the "Registration Statement").

(k) "Offering Periods" shall mean the periods of
approximately six (6) months during which an option granted pursuant to the
Plan may be exercised, commencing on the first Trading Day on or after January
1 and July 1 of each year and terminating on the last Trading Day in the
periods ending six (6) months later; provided, however, that the first Offering
Period under the Plan shall commence with the first Trading Day on or after the
date on which the Securities and Exchange Commission declares the Company's
Registration Statement effective and shall end on the last Trading Day on or
before December 31, 1998; provided, further that the second Offering Period
under the Plan shall commence on the first Trading Day on or after January 1,
1998, and shall end on the last Trading Day on or before December 31, 1998.
The duration and timing of Offering Periods may be changed pursuant to Section
4 of this Plan.

(l) "Plan" shall mean this Employee Stock Purchase Plan.

(m) "Purchase Price" shall mean an amount equal to 85% of
the Fair Market Value of a share of Common Stock on the Enrollment Date or on
the Exercise Date, whichever is lower.

-2-
<PAGE> 3
(n) "Purchase Period" shall mean, as applicable:

(1) during the first Offering Period under the
Plan, (A) the period of approximately three (3) months commencing with the
first Trading Day on or after the date on which the Securities and Exchange
Commission declares the Company's Registration Statement effective and ending
on the last Trading Day on or before December 31, 1997, or (B) the period of
approximately six (6) months commencing with the first Trading Day on or after
January 1, 1998, and ending on the last Trading Day on or before June 30, 1998,
or (C) the period of approximately six (6) months commencing with the first
Trading Day on or after July 1, 1998, and ending on the last Trading Day on or
before December 31, 1998; or

(2) during the second Offering Period under the
Plan, the period of approximately six (6) months commencing on the first
Trading Day on or after January 1, 1998, and ending on the last Trading Day on
or before June 30, 1998, or (B) the period of approximately six (6) months
commencing with the first Trading Day on or after July 1, 1998, and ending on
the last Trading Day on or before December 31, 1998.

(o) "Reserves" shall mean the number of shares of Common
Stock covered by each option under the Plan which have not yet been exercised
and the number of shares of Common Stock which have been authorized for
issuance under the Plan but not yet placed under option.

(p) "Subsidiary" shall mean a corporation, domestic or
foreign, of which not less than 50% of the voting shares are held by the
Company or a Subsidiary, whether or not such corporation now exists or is
hereafter organized or acquired by the Company or a Subsidiary.

(q) "Trading Day" shall mean a day on which national
stock exchanges and the Nasdaq Stock Market are open for trading.

3. Eligibility.

(a) Any Employee who shall be employed by the Company on
a given Enrollment Date shall be eligible to participate in the Plan.

(b) Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted an option under the Plan (i) to
the extent that, immediately after the grant, such Employee (or any other
person whose stock would be attributed to such Employee pursuant to Section
424(d) of the Code) would own capital stock of the Company and/or hold
outstanding options to purchase such stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of the capital stock
of the Company or of any Subsidiary, or (ii) to the extent that his or her
rights to purchase stock under all employee stock purchase plans of the Company
and its subsidiaries accrues at a rate which exceeds Twenty-Five Thousand
Dollars ($25,000) worth of stock (determined at the fair market value of the
shares at the time such option is granted) for each calendar year in which such
option is outstanding at any time.

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<PAGE> 4
4. Offering Periods. The Plan shall be implemented by
consecutive Offering Periods with a new Offering Period commencing on the first
Trading Day on or after January 1 and July 1 each year, or on such other date
as the Board shall determine, and continuing thereafter until terminated in
accordance with Section 20 hereof; provided, however, that the first Offering
Period under the Plan shall commence with the first Trading Day on or after the
date on which the Securities and Exchange Commission declares the Company's
Registration Statement effective and shall end on the last Trading Day on or
before December 31, 1998; provided, further that the second Offering Period
under the Plan shall commence on the first Trading Day on or after January 1,
1998, and shall end on the last Trading Day on or before December 31, 1998.
The Board shall have the power to change the duration of Offering Periods
(including the commencement dates thereof) with respect to future offerings
without shareholder approval if such change is announced at least five (5) days
prior to the scheduled beginning of the first Offering Period to be affected
thereafter.

5. Participation.

(a) An eligible Employee may become a participant in the
Plan by completing a subscription agreement authorizing payroll deductions in
the form of Exhibit A to this Plan and filing it with the Company's human
resources office prior to the applicable Enrollment Date in accordance with the
applicable due dates established by the Company from time to time.

(b) Payroll deductions for a participant shall commence
on the first payroll following the Enrollment Date and shall end on the last
payroll in the Offering Period to which such authorization is applicable,
unless sooner terminated by the participant as provided in Section 10 hereof.

(c) Notwithstanding anything to the contrary contained
herein, an Employee's enrollment in the Plan shall also constitute enrollment
in the Company's 1997 Employee Stock Purchase Plan for Non-U.S. Employees (the
"Non-U.S. ESPP") as of the Enrollment Date of the current Offering Period
under the Non-U.S. ESPP. Such Employee's payroll deductions with respect to
the Non-U.S. ESPP prior to the effective date of a transfer of the Employee to
the Company or a Designated Subsidiary that results in the Employee ceasing to
be an Employee for U.S. tax purposes shall be zero percent (0%), and such
Employee's payroll deductions with respect to the Non-U.S. ESPP following the
effective date of the Employee's transfer may be at the same rate as the
Employee's rate of payroll deductions with respect to this Plan prior to such
transfer, or may be adjusted by the Employee pursuant to Section 6 of the
Non-U.S. ESPP. Such Employee's payroll deductions with respect to this Plan
shall be zero percent (0%) as of the effective date of such transfer.

6. Payroll Deductions.

(a) At the time a participant files his or her
subscription agreement, he or she shall elect to have payroll deductions made
on each pay day during the Offering Period in an amount not exceeding 10% of
the Compensation which he or she receives on each pay day during the Offering
Period.

-4-
<PAGE> 5
(b) All payroll deductions made for a participant shall
be credited to his or her account under the Plan and shall be withheld in whole
percentages only. A participant may not make any additional payments into such
account.

(c) A participant may discontinue his or her
participation in the Plan as provided in Section 10 hereof. A participant may
decrease the rate of his or her payroll deductions for the Purchase Period or
Offering Period (if such Offering Period contains no Purchase Periods) in which
he or she is currently enrolled to zero percent (0%), but may not otherwise
change the rate of his or her payroll deductions for such Purchase Period or
Offering Period, by completing and filing with the Company a new subscription
agreement authorizing a change in payroll deduction rate. A participant may
increase or decrease the rate of his or her payroll deductions for future
Purchase Periods and Offering Periods by completing and filing with the Company
a new subscription agreement authorizing a change in payroll deduction rate.
The Board may, in its discretion, limit the number of participation rate
changes during any Offering Period. A decrease in a participant's payroll
deduction rate during a Purchase Period or Offering Period shall be effective
with the first full payroll period following five (5) business days after the
Company's receipt of the new subscription agreement, unless the Company elects
to process a given change in participation more quickly. A change in a
participant's payroll deduction rate for a future Purchase Period or Offering
Period shall be effective with the commencement of such Purchase Period or
Offering Period. A participant's subscription agreement shall remain in effect
for successive Purchase Periods and Offering Periods unless terminated as
provided in Section 10 hereof.

(d) Notwithstanding the foregoing, to the extent
necessary to comply with Section 423(b)(8) of the Code and Section 3(b) hereof,
a participant's payroll deductions may be decreased to zero percent (0%) at any
time during an Offering Period. Payroll deductions shall recommence at the
rate provided in such participant's subscription agreement at the beginning of
the first Purchase Period or Offering Period which is scheduled to end in the
following calendar year, unless terminated by the participant as provided in
Section 10 hereof.

(e) At the time the option is exercised, in whole or in
part, or at the time some or all of the Company's Common Stock issued under the
Plan is disposed of, the participant must make adequate provision for the
Company's federal, state, or other tax withholding obligations, if any, which
arise upon the exercise of the option or the disposition of the Common Stock.
At any time, the Company may, but shall not be obligated to, withhold from the
participant's compensation the amount necessary for the Company to meet
applicable withholding obligations, including any withholding required to make
available to the Company any tax deductions or benefits attributable to sale or
disposition of Common Stock by the Employee prior to the expiration of any
applicable holding periods under Section 423 of the Code.

-5-
<PAGE> 6
Date by the applicable Purchase Price; provided that in no event shall an
Employee be permitted to purchase during each Offering Period more than 30,000
shares of the Company's Common Stock (subject to any adjustment pursuant to
Section 19), and provided further that such purchase shall be subject to the
limitations set forth in Sections 3(b) and 12 hereof. Exercise of the option
shall occur as provided in Section 8 hereof, unless the participant has
withdrawn pursuant to Section 10 hereof. The option shall expire on the last
day of the Offering Period.

8. Exercise of Option. Unless a participant withdraws from the
Plan as provided in Section 10 hereof, his or her option for the purchase of
shares shall be exercised automatically on the Exercise Date, and the maximum
number of full shares subject to option shall be purchased for such participant
at the applicable Purchase Price with the accumulated payroll deductions in his
or her account. No fractional shares shall be purchased; any payroll
deductions accumulated in a participant's account which are not sufficient to
purchase a full share shall be retained in the participant's account for the
subsequent Purchase Period or Offering Period, subject to earlier withdrawal by
the participant as provided in Section 10 hereof. Any other monies left over
in a participant's account after the Exercise Date shall be returned to the
participant. During a participant's lifetime, a participant's option to
purchase shares hereunder is exercisable only by him or her.

9. Delivery. As promptly as practicable after each Exercise Date
on which a purchase of shares occurs, the Company shall issue (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company) to each participant the shares purchased upon
exercise of his or her option.

10. Withdrawal.

(a) A participant may withdraw all but not less than all
the payroll deductions credited to his or her account and not yet used to
exercise his or her option under the Plan at any time by giving written notice
to the Company in the form of Exhibit B to this Plan at least 15 days prior to
the end of a Purchase Period or Offering Period, as applicable. All of the
participant's payroll deductions credited to his or her account shall be paid
to such participant within 45 days after receipt of notice of withdrawal and
such participant's option for the Offering Period shall be automatically
terminated, and no further payroll deductions for the purchase of shares shall
be made for such Offering Period. If a participant withdraws from an Offering
Period, payroll deductions shall not resume at the beginning of the succeeding
Offering Period unless the participant delivers to the Company a new
subscription agreement.

(b) A participant's withdrawal from an Offering Period
shall not have any effect upon his or her eligibility to participate in any
similar plan which may hereafter be adopted by the Company or in succeeding
Offering Periods which commence after the termination of the Offering Period
from which the participant withdraws.

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<PAGE> 7
11. Termination of Employment.

Upon a participant's ceasing to be an Employee, for any
reason, he or she shall be deemed to have elected to withdraw from the Plan and
the payroll deductions credited to such participant's account during the
Offering Period but not yet used to exercise the option shall be returned to
such participant or, in the case of his or her death, to the person or persons
entitled thereto under Section 15 hereof, and such participant's option shall
be automatically terminated. The preceding sentence notwithstanding, a
participant who receives payment in lieu of notice of termination of employment
(but not a participant who is receiving severance pay) shall be treated as
continuing to be an Employee for the participant's customary number of hours
per week of employment during the period in which the participant is subject to
such payment in lieu of notice.

12. Interest. No interest shall accrue on the payroll deductions
of a participant in the Plan.

13. Stock.

(a) Subject to adjustment upon changes in capitalization
of the Company as provided in Section 19 hereof the maximum number of shares of
the Company's Common Stock which shall be made available for sale under the
Plan shall be 2,000,000 shares, plus an annual increase to be added on each
anniversary date of the adoption of the Plan equal to the lesser of (i) the
number of Shares needed to restore the maximum aggregate number of Shares
available for sale under the Plan to 2,000,000, or (ii) a lesser amount
determined by the Board. If, on a given Exercise Date, the number of shares
with respect to which options are to be exercised exceeds the number of shares
then available under the Plan, the Company shall make a pro rata allocation of
the shares remaining available for purchase in as uniform a manner as shall be
practicable and as it shall determine to be equitable.

(b) The participant shall have no interest or voting
right in shares covered by his option until such option has been exercised.

(c) Shares to be delivered to a participant under the
Plan shall be registered in the name of the participant or in the name of the
participant and his or her spouse.

14. Administration. The Plan shall be administered by the Board
or a committee of members of the Board appointed by the Board. The Board or
its committee shall have full and exclusive discretionary authority to
construe, interpret and apply the terms of the Plan, to determine eligibility
and to adjudicate all disputed claims filed under the Plan. Every finding,
decision and determination made by the Board or its committee shall, to the
full extent permitted by law, be final and binding upon all parties.

15. Designation of Beneficiary.

(a) A participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
participant's account under the Plan in the event of such

-7-
<PAGE> 8
participant's death subsequent to an Exercise Date on which the option is
exercised but prior to delivery to such participant of such shares and cash.
In addition, a participant may file a written designation of a beneficiary who
is to receive any cash from the participant's account under the Plan in the
event of such participant's death prior to exercise of the option. If a
participant is married and the designated beneficiary is not the spouse,
spousal consent shall be required for such designation to be effective.

(b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known
to the Company, then to such other person as the Company may designate.

16. Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option
or to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.

17. Use of Funds. All payroll deductions received or held by the
Company under the Plan may be used by the Company for any corporate purpose,
and the Company shall not be obligated to segregate such payroll deductions.

18. Reports. Individual accounts shall be maintained for each
participant in the Plan. Statements of account shall be given to participating
Employees at least annually, which statements shall set forth the amounts of
payroll deductions, the Purchase Price, the number of shares purchased and the
remaining cash balance, if any.

19. Adjustments Upon Changes in Capitalization, Dissolution,
Liquidation, Merger or Asset Sale.

(a) Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the Reserves, the maximum number of
shares each participant may purchase each Purchase Period or Offering Period
(pursuant to Section 7), as well as the price per share and the number of
shares of Common Stock covered by each option under the Plan which has not yet
been exercised shall be proportionately adjusted for any increase or decrease
in the number of issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the
Common Stock, or any other increase or decrease in the number of shares of
Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected

-8-
<PAGE> 9
without receipt of consideration". Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an option.

(b) Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, any Purchase Periods or
Offering Periods then in progress shall be shortened by setting a new Exercise
Date (the "New Exercise Date"), and shall terminate immediately prior to the
consummation of such proposed dissolution or liquidation, unless provided
otherwise by the Board. The New Exercise Date shall be before the date of the
Company's proposed dissolution or liquidation. The Board shall notify each
participant in writing, at least ten (10) business days prior to the New
Exercise Date, that the Exercise Date for the participant's option has been
changed to the New Exercise Date and that the participant's option shall be
exercised automatically on the New Exercise Date, unless prior to such date the
participant has withdrawn from the Offering Period as provided in Section 10
hereof.

(c) Merger or Asset Sale. In the event of a proposed
sale of all or substantially all of the assets of the Company, or the merger of
the Company with or into another corporation, each outstanding option shall be
assumed or an equivalent option substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the option, any
Purchase Periods or Offering Periods then in progress shall be shortened by
setting a new Exercise Date (the "New Exercise Date") and any Offering Periods
then in progress shall end on the New Exercise Date. The New Exercise Date
shall be before the date of the Company's proposed sale or merger. The Board
shall notify each participant in writing, at least ten (10) business days prior
to the New Exercise Date, that the Exercise Date for the participant's option
has been changed to the New Exercise Date and that the participant's option
shall be exercised automatically on the New Exercise Date, unless prior to such
date the participant has withdrawn from the Offering Period as provided in
Section 10 hereof.

20. Amendment or Termination.

(a) The Board of Directors of the Company may at any time
and for any reason terminate or amend the Plan. Except as provided in Section
19 hereof, no such termination can affect options previously granted, provided
that an Offering Period may be terminated by the Board of Directors on any
Exercise Date if the Board determines that the termination of the Plan is in
the best interests of the Company and its shareholders. Except as provided in
Section 19 hereof, no amendment may make any change in any option theretofore
granted which adversely affects the rights of any participant. To the extent
necessary to comply with Section 423 of the Code (or any successor rule or
provision or any other applicable law, regulation or stock exchange rule), the
Company shall obtain shareholder approval in such a manner and to such a degree
as required.

(b) Without shareholder consent and without regard to
whether any participant rights may be considered to have been "adversely
affected," the Board (or its committee) shall be

-9-
<PAGE> 10
entitled to change the Offering Periods or Purchase Periods, limit the
frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock
for each participant properly correspond with amounts withheld from the
participant's Compensation, and establish such other limitations or procedures
as the Board (or its committee) determines in its sole discretion advisable
which are consistent with the Plan.

21. Notices. All notices or other communications by a participant
to the Company under or in connection with the Plan shall be deemed to have
been duly given when received in the form specified by the Company at the
location, or by the person, designated by the Company for the receipt thereof.

22. Conditions Upon Issuance of Shares. Shares shall not be
issued with respect to an option unless the exercise of such option and the
issuance and delivery of such shares pursuant thereto shall comply with all
applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933, as amended, the Securities Exchange Act
of 1934, as amended, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the shares may then be listed,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.

23. Term of Plan. The Plan shall become effective upon the
earlier to occur of its adoption by the Board of Directors or its approval by
the shareholders of the Company. It shall continue in effect for a term of ten
(10) years unless sooner terminated under Section 20 hereof.

24. Automatic Transfer to Low Price Offering Period. To the
extent permitted by any applicable laws, regulations, or stock exchange rules
if the Fair Market Value of the Common Stock on any Exercise Date in an
Offering Period (if such Offering Period is not terminating on such Exercise
Date) is lower than the Fair Market Value of the Common Stock on the Enrollment
Date of such Offering Period, then all participants in such Offering Period
shall be automatically withdrawn from such Offering Period immediately after
the exercise of their option on such Exercise Date and automatically
re-enrolled in the immediately following Offering Period as of the first day
thereof.

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<PAGE> 11
EXHIBIT A

J. D. EDWARDS & COMPANY

1997 EMPLOYEE STOCK PURCHASE PLAN

SUBSCRIPTION AGREEMENT

_____ Original Application Enrollment Date: ___________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)

1. _____________________________________________________ hereby elects to
participate in the J. D. Edwards & Company 1997 Employee Stock
Purchase Plan (the "Employee Stock Purchase Plan") and subscribes to
purchase shares of the Company's Common Stock in accordance with this
Subscription Agreement and the Employee Stock Purchase Plan.

2. I hereby authorize payroll deductions from each paycheck in the amount
of ____% of my Compensation on each payday (from 0 to 10%) during the
Offering Period in accordance with the Employee Stock Purchase Plan.
(I understand that no fractional percentages are permitted.)

3. I understand that said payroll deductions shall be accumulated for the
purchase of shares of Common Stock at the applicable Purchase Price
determined in accordance with the Employee Stock Purchase Plan. I
understand that if I do not withdraw from an Offering Period, any
accumulated payroll deductions will be used to automatically exercise
my option.

4. I have received a copy of the complete Employee Stock Purchase Plan.
I understand that my participation in the Employee Stock Purchase Plan
is in all respects subject to the terms of the Plan. I understand
that my ability to exercise the option under this Subscription
Agreement is subject to shareholder approval of the Employee Stock
Purchase Plan.

5. Shares purchased for me under the Employee Stock Purchase Plan should
be issued in the name(s) of (Employee or Employee and Spouse only):
_______________________________________________________________________
_____________.

6. I understand that if I dispose of any shares received by me pursuant
to the Plan within 2 years after the Enrollment Date (the first day of
the Offering Period during which I purchased such shares) or one year
after the Exercise Date, I will be treated for federal income tax
purposes as having received ordinary income at the time of such
disposition in an amount equal to the excess of the fair market value
of the shares at the time such shares were purchased by me over the
price which I paid for the shares. I hereby agree to notify the
Company in writing within 30 days after the date of any disposition of
my shares, and I will make adequate
<PAGE> 12
provision for Federal, state or other tax withholding obligations, if
any, which arise upon the disposition of the Common Stock. The
Company may, but will not be obligated to, withhold from my
compensation the amount necessary to meet any applicable withholding
obligations, including any withholding in connection with the sale or
other disposition of Common Stock by me at any time before the
expiration of the 2-year and 1-year holding periods. If I dispose of
such shares at any time after the expiration of the 2-year and 1-year
holding periods, I understand that I will be treated for federal
income tax purposes as having received income only at the time of such
disposition, and that such income will be taxed as ordinary income
only to the extent of an amount equal to the lesser of (1) the excess
of the fair market value of the shares at the time of such disposition
over the purchase price which I paid for the shares, or (2) 15% of the
fair market value of the shares on the first day of the Offering
Period. The remainder of the gain, if any, recognized on such
disposition will be taxed as capital gain.

7. I hereby agree to be bound by the terms of the Employee Stock Purchase
Plan. The effectiveness of this Subscription Agreement is dependent
upon my eligibility to participate in the Employee Stock Purchase
Plan.

8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the
Employee Stock Purchase Plan:

NAME: (Please print)
-----------------------------------------------
(First) (Middle) (Last)

- ----------------------------------- -----------------------------------------
Relationship

-----------------------------------------
(Address)

Employee's Social
Security Number:
-----------------------------------------

Employee's Address:
-----------------------------------------

-----------------------------------------

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<PAGE> 13
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated:
------------------------------ -----------------------------------------
Signature of Employee

-----------------------------------------
Spouse's Signature (If beneficiary
other than spouse)

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<PAGE> 14
EXHIBIT B

J. D. EDWARDS & COMPANY

1997 EMPLOYEE STOCK PURCHASE PLAN

NOTICE OF WITHDRAWAL

The undersigned participant in the Offering Period of the J. D.
Edwards & Company 1997 Employee Stock Purchase Plan which began on
____________, 19____ (the "Enrollment Date") hereby notifies the Company that
he or she hereby withdraws from the Offering Period. He or she hereby directs
the Company to pay to the undersigned as promptly as practicable all the
payroll deductions credited to his or her account with respect to such Offering
Period. The undersigned understands and agrees that his or her option for such
Offering Period will be automatically terminated. The undersigned understands
further that no further payroll deductions will be made for the purchase of
shares in the current Offering Period and the undersigned shall be eligible to
participate in succeeding Offering Periods only by delivering to the Company a
new Subscription Agreement.

Name and Address of Participant:

----------------------------------------

Signature:

----------------------------------------

Date:
-----------------------------------

<PAGE> 1
EXHIBIT 10.21

J. D. EDWARDS & COMPANY
1997 EQUITY INCENTIVE PLAN

1. Purposes of the Plan. The purposes of this Plan are:

o to attract and retain the best available personnel for
positions of substantial responsibility,

o to provide additional incentive to Employees, Directors
and Consultants, and

o to promote the success of the Company's business.

Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.

2. Definitions. As used herein, the following definitions shall
apply:

(a) "Administrator" means the Board or any of its Committees
as shall be administering the Plan, in accordance with Section 4 of the Plan.

(b) "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are,
or will be, granted under the Plan.

(d) "Code" means the Internal Revenue Code of 1986, as
amended.

(e) "Committee" means a committee of Directors appointed by
the Board in accordance with Section 4 of the Plan.

(f) "Common Stock" means the common stock of the Company.

(g) "Company" means J. D. Edwards & Company, a Delaware
corporation.

(h) "Consultant" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services to such
entity.

(i) "Director" means a member of the Board.
<PAGE> 2
(j) "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.

(k) "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
A Service Provider shall not cease to be an Employee in the case of (i) any
leave of absence approved by the Company or (ii) transfers between locations of
the Company or between the Company, its Parent, any Subsidiary, or any
successor. For purposes of Incentive Stock Options, no such leave may exceed
ninety days, unless reemployment upon expiration of such leave is guaranteed by
statute or contract. If reemployment upon expiration of a leave of absence
approved by the Company is not so guaranteed, on the 181st day of such leave
any Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option. Neither service as a Director nor payment of a director's fee by
the Company shall be sufficient to constitute "employment" by the Company.

(l) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.

(m) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:

(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock
Market, its Fair Market Value shall be the closing sales price for such stock
(or the closing bid, if no sales were reported) as quoted on such exchange or
system on the date of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;

(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the date of determination, as
reported in The Wall Street Journal or such other source as the Administrator
deems reliable; or

(iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

(n) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

(o) "Inside Director" means a Director who is an Employee.

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(p) "Misconduct" means, at any time within (i) the term of an
Option granted hereunder, (ii) within one (1) year after ceasing to be a
Service Provider, or (iii) within one (1) year after exercise of any portion of
an Option granted hereunder, whichever is the latest, the commission of any act
in competition with any activity of the Company or any act contrary or harmful
to the interests of the Company, including, but not limited to: (1) conviction
of a felony or crime involving moral turpitude or dishonesty, (2) violation of
Company policies, (3) accepting employment with or serving as a consultant,
advisor or in any other capacity to an entity that is in competition with or
acting against the interests of the Company, including employing or recruiting
any present, former or future employee of the Company, (4) misuse of any trade
or business secrets or confidential, secret, privileged, or non-public
information relating to the Company's business or breach of the Company's
Confidentiality Agreement, or (5) participating in a hostile takeover attempt
of the Company. The foregoing definition shall not be deemed to be inclusive
of all acts or omissions that the Company (or any Parent or Subsidiary) may
consider as Misconduct for purposes of the Plan.

(q) "Nonstatutory Stock Option" means an Option not intended
to qualify as an Incentive Stock Option.

(r) "Notice of Grant" means a written or electronic notice
evidencing certain terms and conditions of an individual Option or Stock
Purchase Right grant. The Notice of Grant is part of the Option Agreement.

(s) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

(t) "Option" means a stock option granted pursuant to the
Plan.

(u) "Option Agreement" means an agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the
Plan.

(v) "Option Exchange Program" means a program whereby
outstanding Options are surrendered in exchange for Options with a lower
exercise price.

(w) "Optioned Stock" means the Common Stock subject to an
Option or Stock Purchase Right.

(x) "Optionee" means the holder of an outstanding Option or
Stock Purchase Right granted under the Plan.

(y) "Outside Director" means a Director who is not an
Employee.

(z) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

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(aa) "Plan" means this 1997 Stock Option Plan.

(bb) "Restricted Stock" means shares of Common Stock acquired
pursuant to a grant of Stock Purchase Rights under Section 11 of the Plan.

(cc) "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right. The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.

(dd) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

(ee) "Section 16(b)" means Section 16(b) of the Exchange Act.

(ff) "Service Provider" means an Employee, Director or
Consultant.

(gg) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 14 of the Plan.

(hh) "Stock Purchase Right" means the right to purchase Common
Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.

(ii) "Subsidiary" means a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.

3. Stock Subject to the Plan. Subject to the provisions of Section
14 of the Plan, the maximum aggregate number of Shares which may be optioned
and sold under the Plan is 10,000,000 Shares, plus an annual increase to be
added on each anniversary date of the adoption of the Plan equal to the lesser
of (i) the number of Shares needed to restore the maximum aggregate number of
Shares which may be optioned and sold under the Plan to 10,000,000, or (ii) a
lesser amount determined by the Administrator. The Shares may be authorized,
but unissued, or reacquired Common Stock.

If an Option or Stock Purchase Right expires or becomes
unexercisable without having been exercised in full, or is surrendered pursuant
to an Option Exchange Program, the unpurchased Shares which were subject
thereto shall become available for future grant or sale under the Plan (unless
the Plan has terminated); provided, however, that Shares that have actually
been issued under the Plan, whether upon exercise of an Option or Right, shall
not be returned to the Plan and shall not become available for future
distribution under the Plan, except that if Shares of Restricted Stock are
repurchased by the Company at their original purchase price, such Shares shall
become available for future grant under the Plan.

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<PAGE> 5
4. Administration of the Plan.

(a) Procedure.

(i) Multiple Administrative Bodies. The Plan may be
administered by different Committees with respect to different groups of
Service Providers.

(ii) Section 162(m). To the extent that the
Administrator determines it to be desirable to qualify Options granted
hereunder as "performance-based compensation" within the meaning of Section
162(m) of the Code, the Plan shall be administered by a Committee of two or
more "outside directors" within the meaning of Section 162(m) of the Code.

(iii) Rule 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions
contemplated hereunder shall be structured to satisfy the requirements for
exemption under Rule 16b-3.

(iv) Other Administration. Other than as provided
above, the Plan shall be administered by (A) the Board or (B) a Committee,
which committee shall be constituted to satisfy Applicable Laws.

(b) Powers of the Administrator. Subject to the provisions of
the Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:

(i) to determine the Fair Market Value;

(ii) to select the Service Providers to whom Options and
Stock Purchase Rights may be granted hereunder;

(iii) to determine the number of shares of Common Stock
to be covered by each Option and Stock Purchase Right granted hereunder;

(iv) to approve forms of agreement for use under the
Plan;

(v) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Option or Stock Purchase Right
granted hereunder. Such terms and conditions include, but are not limited to,
the exercise price, the time or times when Options or Stock Purchase Rights may
be exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any restriction or
limitation regarding any Option or Stock Purchase Right of the shares of Common
Stock relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;

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<PAGE> 6
(vi) to reduce the exercise price of any Option or Stock
Purchase Right to the then current Fair Market Value if the Fair Market Value
of the Common Stock covered by such Option or Stock Purchase Right shall have
declined since the date the Option or Stock Purchase Right was granted;

(vii) to institute an Option Exchange Program;

(viii) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;

(ix) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;

(x) to modify or amend each Option or Stock Purchase
Right (subject to Section 16(c) of the Plan), including the discretionary
authority to extend the post-termination exercisability period of Options
longer than is otherwise provided for in the Plan;

(xi) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Stock Purchase Right that number of Shares
having a Fair Market Value equal to the amount required to be withheld. The
Fair Market Value of the Shares to be withheld shall be determined on the date
that the amount of tax to be withheld is to be determined. All elections by an
Optionee to have Shares withheld for this purpose shall be made in such form
and under such conditions as the Administrator may deem necessary or advisable;

(xii) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;

(xiii) to make all other determinations deemed necessary
or advisable for administering the Plan.

(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Purchase Rights.

5. Eligibility. Nonstatutory Stock Options and Stock Purchase
Rights may be granted to Service Providers. Incentive Stock Options may be
granted only to Employees.

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<PAGE> 7
6. Limitations.

(a) Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

(b) Neither the Plan nor any Option or Stock Purchase Right
shall confer upon an Optionee any right with respect to continuing the
Optionee's relationship as a Service Provider with the Company, nor shall they
interfere in any way with the Optionee's right or the Company's right to
terminate such relationship at any time, with or without cause.

(i) No Service Provider shall be granted, in any fiscal
year of the Company, Options to purchase more than 4,000,000 Shares.

(ii) In connection with his or her initial service, a
Service Provider may be granted Options to purchase up to an additional
2,000,000 Shares which shall not count against the limit set forth in
subsection (i) above.

(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization
as described in Section 14.

(iv) If an Option is cancelled in the same fiscal year
of the Company in which it was granted (other than in connection with a
transaction described in Section 14), the cancelled Option will be counted
against the limits set forth in subsections (i) and (ii) above. For this
purpose, if the exercise price of an Option is reduced, the transaction will be
treated as a cancellation of the Option and the grant of a new Option.

7. Term of Plan. Subject to Section 20 of the Plan, the Plan shall
become effective upon its adoption by the Board. It shall continue in effect
for a term of ten (10) years unless terminated earlier under Section 16 of the
Plan.

8. Term of Option. The term of each Option shall be stated in the
Option Agreement. In the case of an Incentive Stock Option, the term shall be
eight (8) years from the date of grant or such shorter term as may be provided
in the Option Agreement. Moreover, in the case of an Incentive Stock Option
granted to an Optionee who, at the time the Incentive Stock Option is granted,
owns stock representing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Incentive Stock Option shall be

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<PAGE> 8
five (5) years from the date of grant or such shorter term as may be provided
in the Option Agreement.

9. Option Exercise Price and Consideration.

(a) Exercise Price. The per share exercise price for the
Shares to be issued pursuant to exercise of an Option shall be determined by
the Administrator, subject to the following:

(i) In the case of an Incentive Stock Option

(A) granted to an Employee who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than 110%
of the Fair Market Value per Share on the date of grant.

(B) granted to any Employee other than an
Employee described in paragraph (A) immediately above, the per Share exercise
price shall be no less than 100% of the Fair Market Value per Share on the date
of grant.

(ii) In the case of a Nonstatutory Stock Option, the per
Share exercise price shall be determined by the Administrator. In the case of
a Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.

(iii) Notwithstanding the foregoing, Options may be
granted with a per Share exercise price of less than 100% of the Fair Market
Value per Share on the date of grant pursuant to a merger or other corporate
transaction.

(b) Waiting Period and Exercise Dates. At the time an Option
is granted, the Administrator shall fix the period within which the Option may
be exercised and shall determine any conditions which must be satisfied before
the Option may be exercised.

(c) Form of Consideration. The Administrator shall determine
the acceptable form of consideration for exercising an Option, including the
method of payment. In the case of an Incentive Stock Option, the Administrator
shall determine the acceptable form of consideration at the time of grant.
Such consideration may consist entirely of:

(i) cash;

(ii) check;

(iii) promissory note;

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<PAGE> 9
(iv) other Shares which have a Fair Market Value on the
date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised;

(v) consideration received by the Company under a
cashless exercise program implemented by the Company in connection with the
Plan;

(vi) a reduction in the amount of any Company liability
to the Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;

(vii) any combination of the foregoing methods of
payment; or

(viii) such other consideration and method of payment for
the issuance of Shares to the extent permitted by Applicable Laws.

10. Exercise of Option.

(a) Procedure for Exercise; Rights as a Shareholder. Any
Option granted hereunder shall be exercisable according to the terms of the
Plan and at such times and under such conditions as determined by the
Administrator and set forth in the Option Agreement. Unless the Administrator
provides otherwise, Options granted hereunder shall cease to vest during any
unpaid leave of absence. An Option may not be exercised for a fraction of a
Share.

An Option shall be deemed exercised when the Company, or
the Company's designee, receives: (i) written or electronic notice of exercise
(in accordance with the Option Agreement) from the person entitled to exercise
the Option, and (ii) full payment for the Shares with respect to which the
Option is exercised. Full payment may consist of any consideration and method
of payment authorized by the Administrator and permitted by the Option
Agreement and the Plan. Shares issued upon exercise of an Option shall be
issued in the name of the Optionee or, if requested by the Optionee, in the
name of the Optionee and his or her spouse. Until the Shares are issued (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 14 of the Plan.

Exercising an Option in any manner shall decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.

(b) Termination of Relationship as a Service Provider. If an
Optionee ceases to be a Service Provider, other than upon the Optionee's death
or Disability, such Optionee may exercise his

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<PAGE> 10
or her Option within such period of time as is specified in the Option
Agreement to the extent that the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement). In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for one (1) month
following the Optionee's termination. If, on the date of termination, the
Optionee is not vested as to his or her entire Option, the Shares covered by
the unvested portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

(c) Disability of Optionee. If an Optionee ceases to be a
Service Provider as a result of the Optionee's Disability, the Optionee may
exercise his or her Option within such period of time as is specified in the
Option Agreement to the extent the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement). In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for twelve (12) months
following the Optionee's termination. If, on the date of termination, the
Optionee is not vested as to his or her entire Option, the Shares covered by
the unvested portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.

(d) Death of Optionee. If an Optionee dies while a Service
Provider, the Option may be exercised within such period of time as is
specified in the Option Agreement (but in no event later than the expiration of
the term of such Option as set forth in the Notice of Grant), by the Optionee's
estate or by a person who acquires the right to exercise the Option by bequest
or inheritance, but only to the extent that the Option is vested on the date of
death. In the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for twelve (12) months following the Optionee's death.
If, at the time of death, the Optionee is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option shall
immediately revert to the Plan. The Option may be exercised by the executor or
administrator of the Optionee's estate or, if none, by the person(s) entitled
to exercise the Option under the Optionee's will or the laws of descent or
distribution. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

(e) Buyout Provisions. The Administrator may at any time
offer to buy out for a payment in cash or Shares an Option previously granted
based on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made.

11. Stock Purchase Rights.

(a) Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it

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<PAGE> 11
shall advise the offeree in writing or electronically, by means of a Notice of
Grant, of the terms, conditions and restrictions related to the offer,
including the number of Shares that the offeree shall be entitled to purchase,
the price to be paid, and the time within which the offeree must accept such
offer. The offer shall be accepted by execution of a Restricted Stock Purchase
Agreement in the form determined by the Administrator.

(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company the
option, exercisable upon the voluntary or involuntary termination of the
purchaser's service with the Company for any reason (including death or
Disability), to repurchase the Shares; provided, however, that the Company
shall have no obligation to repurchase the Shares. The purchase price for
Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be
the original price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. The repurchase option shall
lapse at a rate determined by the Administrator.

(c) Other Provisions. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion.

(d) Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered
upon the records of the duly authorized transfer agent of the Company. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the Stock Purchase Right is exercised, except as provided
in Section 14 of the Plan.

12. Formula Option Grants to Outside Directors. All grants of
Options to Outside Directors pursuant to this Section shall be automatic and
nondiscretionary and shall be made strictly in accordance with the following
provisions:

(a) All Options granted pursuant to this Section shall be
Nonstatutory Stock Options and, except as otherwise provided herein, shall be
subject to the other terms and conditions of the Plan.

(b) No person shall have any discretion to select which
Outside Directors shall be granted Options under this Section or to determine
the number of Shares to be covered by such Options.

(c) Each person who first becomes an Outside Director
following the effective date of this Plan, as determined in accordance with
Section 7 hereof, shall be automatically granted an Option to purchase 35,000
Shares (the "First Option") or the date on which such person first becomes an
Outside Director, whether through election by the shareholders of the Company
or appointment by the Board to fill a vacancy; provided, however, that an
Inside Director who ceases to be an Inside Director but who remains a Director
shall not receive a First Option.

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<PAGE> 12
(d) Each Outside Director shall be automatically granted an
Option to purchase 7,000 Shares (a "Subsequent Option") on the date of the
Company's first meeting of the Board of each year; provided he or she is then
an Outside Director and, if as of such date, he or she shall have served on the
Board for at least the preceding six (6) months.

(e) Notwithstanding the provisions of subsections (ii) and
(iii) hereof, any exercise of an Option granted before the Company has obtained
shareholder approval of the Plan in accordance with Section 20 hereof shall be
conditioned upon obtaining such shareholder approval of the Plan in accordance
with Section 20 hereof.

(f) The terms of each Option granted pursuant to this Section
shall be as follows:

(i) the term of the Option shall be eight (8) years.

(ii) Notwithstanding any other provision of the Plan or
the cessation of the Outside Director's status as a Service provider, an Option
granted to an Outside Director pursuant to this Section 12 shall continue to
vest and become exercisable pursuant to Section 12(f)(iv), and shall remain
exercisable for the term set forth in Section 12(f)(i).

(iii) the exercise price per Share shall be 100% of the
Fair Market Value per Share on the date of grant of the Option.

(iv) subject to Section 14 hereof, the Option shall vest
and become exercisable as to 25% of the Shares subject to the Option on the
first anniversary of its date of grant, and as to 1/48th of the Shares subject
to the Option each month thereafter, such that all Shares subject to the Option
shall be vested and exercisable four (4) years from the date of grant of the
Option.

13. Non-Transferability of Options and Stock Purchase Rights. Unless
determined otherwise by the Administrator, an Option or Stock Purchase Right
may not be sold, pledged, assigned, hypothecated, transferred, or disposed of
in any manner other than by will or by the laws of descent or distribution and
may be exercised, during the lifetime of the Optionee, only by the Optionee.
If the Administrator makes an Option or Stock Purchase Right transferable, such
Option or Stock Purchase Right shall contain such additional terms and
conditions as the Administrator deems appropriate.

14. Adjustments Upon Changes in Capitalization, Dissolution, Merger
or Asset Sale.

(a) Changes in Capitalization. Subject to any required action
by the shareholders of the Company, the number of shares of Common Stock
covered by each outstanding Option and Stock Purchase Right, and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but as to which no Options or Stock Purchase Rights have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option or Stock Purchase Right, as well as the price per share of Common Stock
covered by each such outstanding Option or Stock Purchase Right, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued

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<PAGE> 13
shares of Common Stock effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive. Except
as expressly provided herein, no issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.

(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee
to have the right to exercise his or her Option until ten (10) days prior to
such transaction as to all of the Optioned Stock covered thereby, including
Shares as to which the Option would not otherwise be exercisable. In addition,
the Administrator may provide that any Company repurchase option applicable to
any Shares purchased upon exercise of an Option or Stock Purchase Right shall
lapse as to all such Shares, provided the proposed dissolution or liquidation
takes place at the time and in the manner contemplated. To the extent it has
not been previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.

(c) Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option and Stock Purchase Right
shall be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the
event that the successor corporation refuses to assume or substitute for the
Option or Stock Purchase Right, the Optionee shall fully vest in and have the
right to exercise the Option or Stock Purchase Right as to all of the Optioned
Stock, including Shares as to which it would not otherwise be vested or
exercisable. If an Option or Stock Purchase Right becomes fully vested and
exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Administrator shall notify the Optionee in writing or
electronically that the Option or Stock Purchase Right shall be fully vested
and exercisable for a period of fifteen (15) days from the date of such notice,
and the Option or Stock Purchase Right shall terminate upon the expiration of
such period. For the purposes of this paragraph, the Option or Stock Purchase
Right shall be considered assumed if, following the merger or sale of assets,
the option or right confers the right to purchase or receive, for each Share of
Optioned Stock subject to the Option or Stock Purchase Right immediately prior
to the merger or sale of assets, the consideration (whether stock, cash, or
other securities or property) received in the merger or sale of assets by
holders of Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets is not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide
for the consideration to be

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<PAGE> 14
received upon the exercise of the Option or Stock Purchase Right, for each
Share of Optioned Stock subject to the Option or Stock Purchase Right, to be
solely common stock of the successor corporation or its Parent equal in fair
market value to the per share consideration received by holders of Common Stock
in the merger or sale of assets.

15. Date of Grant. The date of grant of an Option or Stock Purchase
Right shall be, for all purposes, the date on which the Administrator grants
such Option or Stock Purchase Right, or such other later date as is determined
by the Administrator. Notice of the determination shall be provided to each
Optionee within a reasonable time after the date of such grant.

16. Amendment and Termination of the Plan.

(a) Amendment and Termination. The Board may at any time
amend, alter, suspend or terminate the Plan.

(b) Shareholder Approval. The Company shall obtain
shareholder approval of any Plan amendment to the extent necessary to comply
with Applicable Laws.

(c) Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of
any Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee
and the Company. Termination of the Plan shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to Options
granted under the Plan prior to the date of such termination.

17. Conditions Upon Issuance of Shares.

(a) Legal Compliance. Shares shall not be issued pursuant to
the exercise of an Option or Stock Purchase Right unless the exercise of such
Option or Stock Purchase Right and the issuance and delivery of such Shares
shall comply with Applicable Laws and shall be further subject to the approval
of counsel for the Company with respect to such compliance.

(b) Investment Representations. As a condition to the
exercise of an Option or Stock Purchase Right, the Company may require the
person exercising such Option or Stock Purchase Right to represent and warrant
at the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is
required.

18. Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

-14-
<PAGE> 15
19. Reservation of Shares. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.

20. Shareholder Approval. The Plan shall be subject to approval by
the shareholders of the Company within twelve (12) months after the date the
Plan is adopted. Such shareholder approval shall be obtained in the manner and
to the degree required under Applicable Laws.

-15-
<PAGE> 16
J. D. EDWARDS & COMPANY
1997 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option Agreement.

I. NOTICE OF GRANT

[Optionee's Name and Address]

You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:

Grant Number _________________________

Date of Grant _________________________

Vesting Commencement Date _________________________

Exercise Price per Share $________________________

Total Number of Shares Granted _________________________

Total Exercise Price $_________________________

Type of Option: ___ Incentive Stock Option

___ Nonstatutory Stock Option

Term/Expiration Date: _________________________

Vesting Schedule:

This Option may be exercised, in whole or in part, in accordance with
the following schedule:

25% of the Shares subject to the Option shall vest twelve months after
the Vesting Commencement Date, and 1/48 of the Shares subject to the Option
shall vest each month thereafter such that all Shares subject to the Option
shall be exercisable four years from the date of grant of the Option subject to
the Optionee continuing to be a Service Provider on such dates.
<PAGE> 17
Termination:

1. Except as provided below, this Option may be exercised for one
month after Optionee ceases to be a Service Provider.

2. Except as provided below, upon the death or Disability of the
Optionee, this Option may be exercised for one year after Optionee ceases to be
a Service Provider.

3. Notwithstanding any other provision of the Plan, upon Optionee's
engaging in Misconduct (as defined in the Plan):

(a) to the extent it has not been exercised, this Option shall
expire immediately and the Shares covered thereby shall revert to the Plan;

(b) to the extent this Option has been exercised (whether
prior to or subsequent to such Misconduct), the Company may within ninety (90)
days after the Administrator has knowledge of the Misconduct, (a) rescind such
exercise and recover the Shares issued to the Optionee upon returning to the
Optionee the exercise price for such Shares, or (b) if the Optionee has sold
the Shares, recover from the Optionee the net proceeds from the sale of such
Shares less the Option's exercise price (the "Difference"), plus interest on
the Difference at an annual rate equal to the then prime rate on commercial
loans plus one percent (1%) from the exercise date to the date the Difference
is paid by the Optionee to the Company.

4. In no event may this Option be exercised later than the
Term/Expiration Date as provided above.

II. AGREEMENT

1. Grant of Option. The Plan Administrator of the Company hereby
grants to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee") an option (the "Option") to purchase the number of
Shares, as set forth in the Notice of Grant, at the exercise price per share
set forth in the Notice of Grant (the "Exercise Price"), subject to the terms
and conditions of the Plan, which is incorporated herein by reference. Subject
to Section 16(c) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.

If designated in the Notice of Grant as an Incentive Stock Option
("ISO"), this Option is intended to qualify as an Incentive Stock Option under
Section 422 of the Code. However, if this Option is intended to be an
Incentive Stock Option, to the extent that it exceeds the $100,000 rule of Code
Section 422(d) it shall be treated as a Nonstatutory Stock Option ("NSO").

-2-
<PAGE> 18
2. Exercise of Option.

(a) Right to Exercise. This Option is exercisable during its
term in accordance with the Vesting Schedule set out in the Notice of Grant and
the applicable provisions of the Plan and this Option Agreement.

(b) Method of Exercise. This Option is exercisable by
delivery of an exercise notice, in the form attached as Exhibit A (the
"Exercise Notice"), which shall state the election to exercise the Option, the
number of Shares in respect of which the Option is being exercised (the
"Exercised Shares"), and such other representations and agreements as may be
required by the Company pursuant to the provisions of the Plan. The Exercise
Notice shall be completed by the Optionee and delivered to the Vice President,
General Counsel and Secretary (or designee) of the Company. The Exercise
Notice shall be accompanied by payment of the aggregate Exercise Price as to
all Exercised Shares. This Option shall be deemed to be exercised upon receipt
by the Company of such fully executed Exercise Notice accompanied by such
aggregate Exercise Price.

No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.

3. Method of Payment. Payment of the aggregate Exercise Price shall
be by any of the following, or a combination thereof, at the election of the
Optionee:

(a) cash; or

(b) check; or

(c) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan[; or

(d) surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, AND (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares].

4. Non-Transferability of Option. This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by the
Optionee. The terms of the Plan and this Option Agreement shall be binding
upon the executors, administrators, heirs, successors and assigns of the
Optionee.

-3-
<PAGE> 19
5. Term of Option. This Option may be exercised only within the
term set out in the Notice of Grant, and may be exercised during such term only
in accordance with the Plan and the terms of this Option Agreement.

6. Tax Consequences. Some of the United States federal tax
consequences relating to this Option, as of the date of this Option, are set
forth below. THIS SUMMARY DOES NOT DISCUSS THE PROVISIONS OF THE INCOME TAX
LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE OPTIONEE MAY
RESIDE, THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.

(a) Exercising the Option.

(i) Nonstatutory Stock Option. The Optionee may incur
regular federal income tax liability upon exercise of a NSO. The Optionee will
be treated as having received compensation income (taxable at ordinary income
tax rates) equal to the excess, if any, of the Fair Market Value of the
Exercised Shares on the date of exercise over their aggregate Exercise Price.
If the Optionee is an Employee or a former Employee, the Company will be
required to withhold from his or her compensation or collect from Optionee and
pay to the applicable taxing authorities an amount in cash equal to a
percentage of this compensation income at the time of exercise, and may refuse
to honor the exercise and refuse to deliver Shares if such withholding amounts
are not delivered at the time of exercise.

(ii) Incentive Stock Option. If this Option qualifies
as an ISO, the Optionee will have no regular federal income tax liability upon
its exercise, although the excess, if any, of the Fair Market Value of the
Exercised Shares on the date of exercise over their aggregate Exercise Price
will be treated as an adjustment to alternative minimum taxable income for
federal tax purposes and may subject the Optionee to alternative minimum tax in
the year of exercise. In the event that the Optionee ceases to be an Employee
but remains a Service Provider, any Incentive Stock Option of the Optionee that
remains unexercised shall cease to qualify as an Incentive Stock Option and
will be treated for tax purposes as a Nonstatutory Stock Option on the date two
(2) months and one (1) day following such change of status.

(b) Disposition of Shares.

(i) NSO. If the Optionee holds NSO Shares for at least
18 months, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.

(ii) ISO. If the Optionee holds ISO Shares for at least
one year after exercise and two years after the grant date, any gain realized
on disposition of the Shares will be treated as long-term capital gain for
federal income tax purposes. If the Optionee disposes of ISO Shares within one
year after exercise or two years after the grant date, any gain realized on
such disposition will be

-4-
<PAGE> 20
treated as compensation income (taxable at ordinary income rates) to the extent
of the excess, if any, of the lesser of (A) the difference between the Fair
Market Value of the Shares acquired on the date of exercise and the aggregate
Exercise Price, or (B) the difference between the sale price of such Shares and
the aggregate Exercise Price. Any additional gain will be taxed as capital
gain, short-term or long-term depending on the period that the ISO Shares were
held.

(c) Notice of Disqualifying Disposition of ISO Shares. If the
Optionee sells or otherwise disposes of any of the Shares acquired pursuant to
an ISO on or before the later of (i) two years after the grant date, or (ii)
one year after the exercise date, the Optionee shall immediately notify the
Company in writing of such disposition. The Optionee agrees that he or she may
be subject to income tax withholding by the Company on the compensation income
recognized from such early disposition of ISO Shares by payment in cash or out
of the current earnings paid to the Optionee.

7. Entire Agreement; Governing Law. The Plan is incorporated herein
by reference. The Plan and this Option Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof, and may not be
modified adversely to the Optionee's interest except by means of a writing
signed by the Company and Optionee. This agreement is governed by the internal
substantive laws, but not the choice of law rules, of Colorado.

8. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND
AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS
EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND
NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING
SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET
FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT
ALL, AND SHALL NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO
TERMINATE OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR
WITHOUT CAUSE.

-5-
<PAGE> 21
By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee
has reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option
Agreement. Optionee hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Administrator upon any questions
relating to the Plan and Option Agreement. Optionee further agrees to notify
the Company upon any change in the residence address indicated below.

OPTIONEE: J. D. EDWARDS & COMPANY

- -------------------------------------- -------------------------------
Signature By

- -------------------------------------- -------------------------------
Print Name Title

- --------------------------------------
Residence Address

- --------------------------------------

-6-
<PAGE> 22
EXHIBIT A
J. D. EDWARDS & COMPANY
1997 EQUITY INCENTIVE PLAN
EXERCISE NOTICE
J. D. Edwards & Company
8055 E. Tufts Avenue
Suite 1300
Denver, CO 80237

Attention: Vice President, General Counsel and Secretary

1. Exercise of Option. Effective as of today, ________________,
199__, the undersigned ("Purchaser") hereby elects to exercise the option(s)
(the "Options") for the shares set forth in the table below (the "Shares").

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Option Agreement Date Shares Exercised Exercise Price Per Share Aggregate Exercise Price
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------

- ----------------------------------------------------------------------------------------------------------------
Total:
- ----------------------------------------------------------------------------------------------------------------
</TABLE>

2. Delivery of Payment. Purchaser herewith delivers to the Company
the full purchase price for the Shares.

3. Representations of Purchaser. Purchaser acknowledges that
Purchaser has received, read and understood the Plan, the Option Agreement(s)
and J. D. EDWARDS & COMPANY POLICY REGARDING SECURITIES TRADING AND HANDLING OF
NONPUBLIC INFORMATION and agrees to abide by and be bound by their terms and
conditions. Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser's exercise of the Options(s) or
disposition of the Shares. Purchaser represents that Purchaser has consulted
with any tax consultants Purchaser deems advisable in connection with the
purchase or disposition of the Shares and that Purchaser is not relying on the
Company for any tax advice.

4. Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Shares,
notwithstanding the exercise of the Option(s). The Shares so acquired shall be
issued to the Optionee within 60 days after exercise of the Option(s). No
adjustment will be made for a dividend or other right for which the record date
is prior to the date of issuance, except as provided in Section 14 of the Plan.

5. Entire Agreement; Governing Law. The Plan and Option Agreement
are incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings
and agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
Colorado.

Submitted by: Accepted by:

PURCHASER: J. D. EDWARDS & COMPANY

- ----------------------------------- ------------------------------------
Signature By

- ----------------------------------- ------------------------------------
Print Name Its

------------------------------------
Date Received
<PAGE> 23
J. D. EDWARDS & COMPANY
1997 EQUITY INCENTIVE PLAN

NOTICE OF GRANT OF STOCK PURCHASE RIGHT

Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Notice of Grant.

[Grantee's Name and Address]

You have been granted the right to purchase Common Stock of the Company,
subject to the Company's Repurchase Option and your ongoing status as a Service
Provider (as described in the Plan and the attached Restricted Stock Purchase
Agreement), as follows:

Grant Number _________________________

Date of Grant _________________________

Price Per Share $________________________

Total Number of Shares Subject _________________________
to This Stock Purchase Right

Expiration Date: _________________________

YOU MUST EXERCISE THIS STOCK PURCHASE RIGHT BEFORE THE EXPIRATION DATE
OR IT WILL TERMINATE AND YOU WILL HAVE NO FURTHER RIGHT TO PURCHASE THE SHARES.
By your signature and the signature of the Company's representative below, you
and the Company agree that this Stock Purchase Right is granted under and
governed by the terms and conditions of the J. D. Edwards & Company 1997 Stock
Option Plan and the Restricted Stock Purchase Agreement, attached hereto as
Exhibit A-1, both of which are made a part of this document. You further agree
to execute the attached Restricted Stock Purchase Agreement as a condition to
purchasing any shares under this Stock Purchase Right.

GRANTEE: J. D. EDWARDS & COMPANY

- ---------------------------- ---------------------------------
Signature By

- ---------------------------- ---------------------------------
Print Name Title
<PAGE> 24
EXHIBIT A-1

J. D. EDWARDS & COMPANY
1997 EQUITY INCENTIVE PLAN

RESTRICTED STOCK PURCHASE AGREEMENT

Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Restricted Stock Purchase Agreement.

WHEREAS the Purchaser named in the Notice of Grant, (the "Purchaser") is
an Service Provider, and the Purchaser's continued participation is considered
by the Company to be important for the Company's continued growth; and

WHEREAS in order to give the Purchaser an opportunity to acquire an
equity interest in the Company as an incentive for the Purchaser to participate
in the affairs of the Company, the Administrator has granted to the Purchaser a
Stock Purchase Right subject to the terms and conditions of the Plan and the
Notice of Grant, which are incorporated herein by reference, and pursuant to
this Restricted Stock Purchase Agreement (the "Agreement").

NOW THEREFORE, the parties agree as follows:

1. Sale of Stock. The Company hereby agrees to sell to the
Purchaser and the Purchaser hereby agrees to purchase shares of the Company's
Common Stock (the "Shares"), at the per Share purchase price and as otherwise
described in the Notice of Grant.

2. Payment of Purchase Price. The purchase price for the Shares may
be paid by delivery to the Company at the time of execution of this Agreement
of cash, a check, or some combination thereof.

3. Repurchase Option.

(a) In the event the Purchaser ceases to be a Service Provider
for any or no reason (including death or disability) before all of the Shares
are released from the Company's Repurchase Option (see Section 4), the Company
shall, upon the date of such termination (as reasonably fixed and determined by
the Company) have an irrevocable, exclusive option (the "Repurchase Option")
for a period of sixty (60) days from such date to repurchase up to that number
of shares which constitute the Unreleased Shares (as defined in Section 4) at
the original purchase price per share (the "Repurchase Price"). The Repurchase
Option shall be exercised by the Company by delivering written notice to the
Purchaser or the Purchaser's executor (with a copy to the Escrow Holder) AND,
at the Company's option, (i) by delivering to the Purchaser or the Purchaser's
executor a check in the amount of the aggregate Repurchase Price, or (ii) by
cancelling an amount of the Purchaser's indebtedness to the Company equal to
the aggregate Repurchase Price, or (iii) by a combination of (i) and (ii) so
that the combined payment and cancellation of indebtedness equals the aggregate
Repurchase Price. Upon delivery of such notice and the payment of the
aggregate Repurchase Price, the Company shall become the legal and beneficial
owner of the Shares being repurchased and all

-1-
<PAGE> 25
rights and interests therein or relating thereto, and the Company shall have
the right to retain and transfer to its own name the number of Shares being
repurchased by the Company.

(b) Whenever the Company shall have the right to repurchase
Shares hereunder, the Company may designate and assign one or more employees,
officers, directors or shareholders of the Company or other persons or
organizations to exercise all or a part of the Company's purchase rights under
this Agreement and purchase all or a part of such Shares. If the Fair Market
Value of the Shares to be repurchased on the date of such designation or
assignment (the "Repurchase FMV") exceeds the aggregate Repurchase Price of
such Shares, then each such designee or assignee shall pay the Company cash
equal to the difference between the Repurchase FMV and the aggregate Repurchase
Price of such Shares.

4. Release of Shares From Repurchase Option.

(a) _______________________ percent (______%) of the Shares
shall be released from the Company's Repurchase Option [one year] after
the Date of Grant and __________________ percent (______%) of the Shares [at
the end of each month thereafter], provided that the Purchaser does not cease
to be a Service Provider prior to the date of any such release.

(b) Any of the Shares that have not yet been released from the
Repurchase Option are referred to herein as "Unreleased Shares."

(c) The Shares that have been released from the Repurchase
Option shall be delivered to the Purchaser at the Purchaser's request (see
Section 6).

5. Restriction on Transfer. Except for the escrow described in
Section 6 or the transfer of the Shares to the Company or its assignees
contemplated by this Agreement, none of the Shares or any beneficial interest
therein shall be transferred, encumbered or otherwise disposed of in any way
until such Shares are released from the Company's Repurchase Option in
accordance with the provisions of this Agreement, other than by will or the
laws of descent and distribution.

6. Escrow of Shares.

(a) To ensure the availability for delivery of the Purchaser's
Unreleased Shares upon repurchase by the Company pursuant to the Repurchase
Option, the Purchaser shall, upon execution of this Agreement, deliver and
deposit with an escrow holder designated by the Company (the "Escrow Holder")
the share certificates representing the Unreleased Shares, together with the
stock assignment duly endorsed in blank, attached hereto as Exhibit A-2. The
Unreleased Shares and stock assignment shall be held by the Escrow Holder,
pursuant to the Joint Escrow Instructions of the Company and Purchaser attached
hereto as Exhibit A-3, until such time as the Company's Repurchase Option
expires. As a further condition to the Company's obligations under this
Agreement, the

-2-
<PAGE> 26
Company may require the spouse of Purchaser, if any, to execute and deliver to
the Company the Consent of Spouse attached hereto as Exhibit A-4.

(b) The Escrow Holder shall not be liable for any act it may
do or omit to do with respect to holding the Unreleased Shares in escrow while
acting in good faith and in the exercise of its judgment.

(c) If the Company or any assignee exercises the Repurchase
Option hereunder, the Escrow Holder, upon receipt of written notice of such
exercise from the proposed transferee, shall take all steps necessary to
accomplish such transfer.

(d) When the Repurchase Option has been exercised or expires
unexercised or a portion of the Shares has been released from the Repurchase
Option, upon request the Escrow Holder shall promptly cause a new certificate
to be issued for the released Shares and shall deliver the certificate to the
Company or the Purchaser, as the case may be.

(e) Subject to the terms hereof, the Purchaser shall have all
the rights of a shareholder with respect to the Shares while they are held in
escrow, including without limitation, the right to vote the Shares and to
receive any cash dividends declared thereon. If, from time to time during the
term of the Repurchase Option, there is (i) any stock dividend, stock split or
other change in the Shares, or (ii) any merger or sale of all or substantially
all of the assets or other acquisition of the Company, any and all new,
substituted or additional securities to which the Purchaser is entitled by
reason of the Purchaser's ownership of the Shares shall be immediately subject
to this escrow, deposited with the Escrow Holder and included thereafter as
"Shares" for purposes of this Agreement and the Repurchase Option.

7. Legends. The share certificate evidencing the Shares, if any,
issued hereunder shall be endorsed with the following legend (in addition to
any legend required under applicable state securities laws):

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS UPON TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH IN AN
AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE
WITH THE SECRETARY OF THE COMPANY.

8. Adjustment for Stock Split. All references to the number of
Shares and the purchase price of the Shares in this Agreement shall be
appropriately adjusted to reflect any stock split, stock dividend or other
change in the Shares which may be made by the Company after the date of this
Agreement.

9. Tax Consequences. The Purchaser has reviewed with the
Purchaser's own tax advisors the federal, state, local and foreign tax
consequences of this investment and the transactions contemplated by this
Agreement. The Purchaser is relying solely on such advisors and not on any
statements

-3-
<PAGE> 27
or representations of the Company or any of its agents. The Purchaser
understands that the Purchaser (and not the Company) shall be responsible for
the Purchaser's own tax liability that may arise as a result of the
transactions contemplated by this Agreement. The Purchaser understands that
Section 83 of the Internal Revenue Code of 1986, as amended (the "Code"), taxes
as ordinary income the difference between the purchase price for the Shares and
the Fair Market Value of the Shares as of the date any restrictions on the
Shares lapse. In this context, "restriction" includes the right of the Company
to buy back the Shares pursuant to the Repurchase Option. The Purchaser
understands that the Purchaser may elect to be taxed at the time the Shares are
purchased rather than when and as the Repurchase Option expires by filing an
election under Section 83(b) of the Code with the IRS within 30 days from the
date of purchase. The form for making this election is attached as Exhibit A-5
hereto.

THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER'S SOLE
RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION
83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO
MAKE THIS FILING ON THE PURCHASER'S BEHALF.

10. General Provisions.

(a) This Agreement shall be governed by the internal
substantive laws, but not the choice of law rules of Colorado. This Agreement,
subject to the terms and conditions of the Plan and the Notice of Grant,
represents the entire agreement between the parties with respect to the
purchase of the Shares by the Purchaser. Subject to Section 16(c) of the Plan,
in the event of a conflict between the terms and conditions of the Plan and the
terms and conditions of this Agreement, the terms and conditions of the Plan
shall prevail. Unless otherwise defined herein, the terms defined in the Plan
shall have the same defined meanings in this Agreement.

(b) Any notice, demand or request required or permitted to be
given by either the Company or the Purchaser pursuant to the terms of this
Agreement shall be in writing and shall be deemed given when delivered
personally or deposited in the U.S. mail, First Class with postage prepaid, and
addressed to the parties at the addresses of the parties set forth at the end
of this Agreement or such other address as a party may request by notifying the
other in writing.

Any notice to the Escrow Holder shall be sent to the Company's
address with a copy to the other party hereto.

(c) The rights of the Company under this Agreement shall be
transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by the
Company's successors and assigns. The rights and obligations of the Purchaser
under this Agreement may only be assigned with the prior written consent of the
Company.

(d) Either party's failure to enforce any provision of this
Agreement shall not in any way be construed as a waiver of any such provision,
nor prevent that party from thereafter enforcing

-4-
<PAGE> 28
any other provision of this Agreement. The rights granted both parties
hereunder are cumulative and shall not constitute a waiver of either party's
right to assert any other legal remedy available to it.

(e) The Purchaser agrees upon request to execute any further
documents or instruments necessary or desirable to carry out the purposes or
intent of this Agreement.

(f) PURCHASER ACKNOWLEDGES AND AGREES THAT THE VESTING OF
SHARES PURSUANT TO SECTION 4 HEREOF IS EARNED ONLY BY CONTINUING SERVICE AS A
SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING
HIRED OR PURCHASING SHARES HEREUNDER). PURCHASER FURTHER ACKNOWLEDGES AND
AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE
VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED
PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD,
FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH PURCHASER'S RIGHT OR
THE COMPANY'S RIGHT TO TERMINATE PURCHASER'S RELATIONSHIP AS A SERVICE PROVIDER
AT ANY TIME, WITH OR WITHOUT CAUSE.

By Purchaser's signature below, Purchaser represents that he or she is
familiar with the terms and provisions of the Plan, and hereby accepts this
Agreement subject to all of the terms and provisions thereof. Purchaser has
reviewed the Plan and this Agreement in their entirety, has had an opportunity
to obtain the advice of counsel prior to executing this Agreement and fully
understands all provisions of this Agreement. Purchaser agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Agreement.
Purchaser further agrees to notify the Company upon any change in the residence
indicated in the Notice of Grant.

DATED:
----------------------
PURCHASER: J. D. EDWARDS & COMPANY

- ------------------------------ ----------------------------------
Signature By

- ------------------------------ ----------------------------------
Print Name Title

-5-
<PAGE> 29
EXHIBIT A-2

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED I, __________________________, hereby sell, assign
and transfer unto
______________________________________________________________
_________________________________ (__________) shares of the Common Stock of
J.D. Edwards & Company standing in my name of the books of said corporation
represented by Certificate No. _____ herewith and do hereby irrevocably
constitute and appoint _____________________________________________ to
transfer the said stock on the books of the within named corporation with full
power of substitution in the premises.

This Stock Assignment may be used only in accordance with the Restricted
Stock Purchase Agreement (the "Agreement") between________________________ and
the undersigned dated ______________, 19__.

Dated: _______________, 19__

Signature:
---------------------------

INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise the
Repurchase Option, as set forth in the Agreement, without requiring additional
signatures on the part of the Purchaser.
<PAGE> 30
EXHIBIT A-3

JOINT ESCROW INSTRUCTIONS

, 19
------------- --

[ESCROW AGENT]
[ADDRESS]

Dear :
-----------------

As Escrow Agent for both J.D. Edwards & Company, a Delaware corporation
(the "Company"), and the undersigned purchaser of stock of the Company (the
"Purchaser"), you are hereby authorized and directed to hold the documents
delivered to you pursuant to the terms of that certain Restricted Stock
Purchase Agreement ("Agreement") between the Company and the undersigned, in
accordance with the following instructions:

1. In the event the Company and/or any assignee of the Company
(referred to collectively as the "Company") exercises the Company's Repurchase
Option set forth in the Agreement, the Company shall give to Purchaser and you
a written notice specifying the number of shares of stock to be purchased, the
purchase price, and the time for a closing hereunder at the principal office of
the Company. Purchaser and the Company hereby irrevocably authorize and direct
you to close the transaction contemplated by such notice in accordance with the
terms of said notice.

2. At the closing, you are directed (a) to date the stock
assignments necessary for the transfer in question, (b) to fill in the number
of shares being transferred, and (c) to deliver same, together with the
certificate evidencing the shares of stock to be transferred, to the Company or
its assignee, against the simultaneous delivery to you of the purchase price
(by cash, a check, or some combination thereof) for the number of shares of
stock being purchased pursuant to the exercise of the Company's Repurchase
Option.

3. Purchaser irrevocably authorizes the Company to deposit with you
any certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as Purchaser's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and to complete any transaction herein contemplated,
including but not limited to the filing with any applicable state blue sky
authority of any required applications for consent to, or notice of transfer
of, the securities. Subject to the provisions of this paragraph 3, Purchaser
shall exercise all rights and privileges of a shareholder of the Company while
the stock is held by you.
<PAGE> 31
4. Upon written request of the Purchaser, but no more than once per
calendar year, unless the Company's Repurchase Option has been exercised, you
shall deliver to Purchaser a certificate or certificates representing so many
shares of stock as are not then subject to the Company's Repurchase Option.
Within 90 days after Purchaser ceases to be a Service Provider, you shall
deliver to Purchaser a certificate or certificates representing the aggregate
number of shares held or issued pursuant to the Agreement and not purchased by
the Company or its assignees pursuant to exercise of the Company's Repurchase
Option.

5. If at the time of termination of this escrow you should have in
your possession any documents, securities, or other property belonging to
Purchaser, you shall deliver all of the same to Purchaser and shall be
discharged of all further obligations hereunder.

6. Your duties hereunder may be altered, amended, modified or
revoked only by a writing signed by all of the parties hereto.

7. You shall be obligated only for the performance of such duties as
are specifically set forth herein and may rely and shall be protected in
relying or refraining from acting on any instrument reasonably believed by you
to be genuine and to have been signed or presented by the proper party or
parties. You shall not be personally liable for any act you may do or omit to
do hereunder as Escrow Agent or as attorney-in-fact for Purchaser while acting
in good faith, and any act done or omitted by you pursuant to the advice of
your own attorneys shall be conclusive evidence of such good faith.

8. You are hereby expressly authorized to disregard any and all
warnings given by any of the parties hereto or by any other person or
corporation, excepting only orders or process of courts of law, and are hereby
expressly authorized to comply with and obey orders, judgments or decrees of
any court. In case you obey or comply with any such order, judgment or decree,
you shall not be liable to any of the parties hereto or to any other person,
firm or corporation by reason of such compliance, notwithstanding any such
order, judgment or decree being subsequently reversed, modified, annulled, set
aside, vacated or found to have been entered without jurisdiction.

9. You shall not be liable in any respect on account of the
identity, authorities or rights of the parties executing or delivering or
purporting to execute or deliver the Agreement or any documents or papers
deposited or called for hereunder.

10. You shall not be liable for the outlawing of any rights under the
statute of limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.

11. You shall be entitled to employ such legal counsel and other
experts as you may deem necessary properly to advise you in connection with
your obligations hereunder, may rely upon the advice of such counsel, and may
pay such counsel reasonable compensation therefor.

-2-
<PAGE> 32
12. Your responsibilities as Escrow Agent hereunder shall terminate
if you shall cease to be an officer or agent of the Company or if you shall
resign by written notice to each party. In the event of any such termination,
the Company shall appoint a successor Escrow Agent.

13. If you reasonably require other or further instruments in
connection with these Joint Escrow Instructions or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.

14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by you hereunder, you are authorized and directed to retain in
your possession without liability to anyone all or any part of said securities
until such disputes shall have been settled either by mutual written agreement
of the parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or
defend any such proceedings.

15. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office, by registered or certified mail with
postage and fees prepaid, addressed to each of the other parties thereunto
entitled at the following addresses or at such other addresses as a party may
designate by ten days' advance written notice to each of the other parties
hereto.

COMPANY: J. D. Edwards & Company
8055 E. Tufts Avenue
Suite 1300
Denver, CO 80237

PURCHASER:
-------------------------------

-------------------------------

ESCROW AGENT: Corporate Secretary
[Company name]
[Company address]

16. By signing these Joint Escrow Instructions, you become a party
hereto only for the purpose of said Joint Escrow Instructions; you do not
become a party to the Agreement.

-3-
<PAGE> 33
17. This instrument shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and permitted assigns.

18. These Joint Escrow Instructions shall be governed by, and
construed and enforced in accordance with, the internal substantive laws, but
not the choice of law rules, of Colorado.

Very truly yours,

J. D. EDWARDS & COMPANY

-------------------------------------
By

-------------------------------------
Title

PURCHASER:

-------------------------------------
Signature

-------------------------------------
Print Name

ESCROW AGENT:

- ----------------------------------
Corporate Secretary

-4-
<PAGE> 34
EXHIBIT A-4

CONSENT OF SPOUSE

I, ____________________, spouse of ___________________, have read and
approve the foregoing Restricted Stock Purchase Agreement (the "Agreement").
In consideration of the Company's grant to my spouse of the right to purchase
shares of J. D. Edwards & Company, as set forth in the Agreement, I hereby
appoint my spouse as my attorney-in-fact in respect to the exercise of any
rights under the Agreement and agree to be bound by the provisions of the
Agreement insofar as I may have any rights in said Agreement or any shares
issued pursuant thereto under the community property laws or similar laws
relating to marital property in effect in the state of our residence as of the
date of the signing of the foregoing Agreement.

Dated: _______________, 19____

------------------------------------
Signature of Spouse
<PAGE> 35
EXHIBIT A-5
ELECTION UNDER SECTION 83(b)
OF THE INTERNAL REVENUE CODE OF 1986

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, to include in taxpayer's gross
income for the current taxable year the amount of any compensation taxable to
taxpayer in connection with his or her receipt of the property described below:

1. The name, address, taxpayer identification number and taxable year of
the undersigned are as follows:

NAME: TAXPAYER: SPOUSE:

ADDRESS:

IDENTIFICATION NO.: TAXPAYER: SPOUSE:

TAXABLE YEAR:

2. The property with respect to which the election is made is described as
follows: __________ shares (the "Shares") of the Common Stock of J. D.
Edwards & Company (the "Company").

3. The date on which the property was transferred is: ______________, 19__.

4. The property is subject to the following restrictions:

The Shares may be repurchased by the Company, or its assignee, upon
certain events. This right lapses with regard to a portion of the Shares
based on the continued performance of services by the taxpayer over
time.

5. The fair market value at the time of transfer, determined without regard
to any restriction other than a restriction which by its terms will
never lapse, of such property is: $_______________.

6. The amount (if any) paid for such property is:

$_______________.

The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.

The undersigned understands that the foregoing election may not be revoked
except with the consent of the Commissioner.

Dated: , 19
------------------- ---- --------------------------
Taxpayer

The undersigned spouse of taxpayer joins in this election.

Dated: , 19
------------------- ---- -------------------------
Spouse of Taxpayer

<PAGE> 1
EXHIBIT 10.23

J. D. EDWARDS & COMPANY

1997 EMPLOYEE STOCK PURCHASE PLAN FOR NON-U.S. EMPLOYEES

The following constitute the provisions of the 1997 Employee Stock
Purchase Plan for Non-U.S. Employees of J. D. Edwards & Company.

2. Definitions.

(a) "Applicable Law" shall mean legal requirements relating to
the administration of stock option plans under the applicable laws of any
country or jurisdiction to which the Plan is extended.

(b) "Board" shall mean the Board of Directors of the Company
or any of its committee's as shall be administering the Plan.

(d) "Common Stock" shall mean the Common Stock of the Company.

(e) "Company" shall mean J. D. Edwards & Company and any
Designated Subsidiary of the Company.

(f) "Compensation" shall mean all base straight gross
earnings, commissions, quarterly bonuses, year-end bonuses, overtime and shift
premium, but shall exclude other compensation.

(g) "Designated Subsidiary" shall mean any Subsidiary which
has been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.

(h) "Employee" shall mean any individual who is an Employee of
the Company for tax purposes. For purposes of the Plan, the employment
relationship may, pursuant to regulations established by the Board and as
permitted or required by Applicable Law, be treated as continuing intact while
the individual is on sick leave or other leave of absence approved by the
Company.

(i) "Enrollment Date" shall mean the first day of each
Offering Period.

(j) "Exercise Date" shall mean the last day of each Purchase
Period or Offering Period, as applicable, on which a purchase of shares shall
occur under the Plan.
<PAGE> 2
(k) "Fair Market Value" shall mean, as of any date, the value
of Common Stock determined as follows:

(1) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock
Market, its Fair Market Value shall be the closing sales price for such stock
(or the closing bid, if no sales were reported) as quoted on such exchange or
system on the date of such determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable, or;

(3) In the absence of an established market for the
Common Stock, the Fair Market Value thereof shall be determined in good faith
by the Board, or;

(4) For purposes of the Enrollment Date of the first
Offering Period under the Plan, the Fair Market Value shall be the initial
price to the public as set forth in the final prospectus included within the
registration statement on Form S-1 filed with the Securities and Exchange
Commission for the initial public offering of the Company's Common Stock (the
"Registration Statement").

(l) "Offering Periods" shall mean the periods of approximately
six (6) months during which an option granted pursuant to the Plan may be
exercised, commencing on the first Trading Day on or after January 1 and July 1
of each year and terminating on the last Trading Day in the periods ending six
(6) months later; provided, however, that the first Offering Period under the
Plan shall commence with the first Trading Day on or after the date on which
the Securities and Exchange Commission declares the Company's Registration
Statement effective and shall end on the last Trading Day on or before December
31, 1998; provided, further that the second Offering Period under the Plan
shall commence on the first Trading Day on or after January 1, 1998, and shall
end on the last Trading Day on or before December 31, 1998. The duration and
timing of Offering Periods may be changed pursuant to Section 4 of this Plan.

(m) "Plan" shall mean this 1997 Employee Stock Purchase Plan
for Non-U.S. Employees.

(n) "Purchase Price" shall mean an amount equal to 85% of the
Fair Market Value of a share of Common Stock on the Enrollment Date or on the
Exercise Date, whichever is lower.

-2-
<PAGE> 3
(o) "Purchase Period" shall mean, as applicable:

(1) during the first Offering Period under the Plan,
(A) the period of approximately three (3) months commencing with the first
Trading Day on or after the date on which the Securities and Exchange
Commission declares the Company's Registration Statement effective and ending
on the last Trading Day on or before December 31, 1997, or (B) the period of
approximately six (6) months commencing with the first Trading Day on or after
January 1, 1998, and ending on the last Trading Day on or before June 30, 1998,
or (C) the period of approximately six (6) months commencing with the first
Trading Day on or after July 1, 1998, and ending on the last Trading Day on or
before December 31, 1998; or

(2) during the second Offering Period under the Plan,
the period of approximately six (6) months commencing on the first Trading Day
on or after January 1, 1998, and ending on the last Trading Day on or before
June 30, 1998, or (B) the period of approximately six (6) months commencing
with the first Trading Day on or after July 1, 1998, and ending on the last
Trading Day on or before December 31, 1998.

(p) "Reserves" shall mean the number of shares of Common Stock
covered by each option under the Plan which have not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but not yet placed under option.

(q) "Subsidiary" shall mean a corporation, domestic or
foreign, of which not less than 50% of the voting shares are held by the
Company or a Subsidiary, whether or not such corporation now exists or is
hereafter organized or acquired by the Company or a Subsidiary.

(r) "Trading Day" shall mean a day on which national stock
exchanges and the Nasdaq Stock Market are open for trading.

3. Eligibility.

(a) Any Employee who shall be employed by the Company on a
given Enrollment Date shall be eligible to participate in the Plan.

-3-
<PAGE> 4
at the fair market value of the shares at the time such option is granted) for
each calendar year in which such option is outstanding at any time.

4. Offering Periods. The Plan shall be implemented by consecutive
Offering Periods with a new Offering Period commencing on the first Trading Day
on or after January 1 and July 1 each year, or on such other date as the Board
shall determine, and continuing thereafter until terminated in accordance with
Section 20 hereof; provided, however, that the first Offering Period under the
Plan shall commence with the first Trading Day on or after the date on which
the Securities and Exchange Commission declares the Company's Registration
Statement effective and shall end on the last Trading Day on or before December
31, 1998; provided, further that the second Offering Period under the Plan
shall commence on the first Trading Day on or after January 1, 1998, and shall
end on the last Trading Day on or before December 31, 1998. The Board shall
have the power to change the duration of Offering Periods (including the
commencement dates thereof) with respect to future offerings without
shareholder approval if such change is announced at least five (5) days prior
to the scheduled beginning of the first Offering Period to be affected
thereafter.

5. Participation.

(a) An eligible Employee may become a participant in the Plan
by completing a Participation Agreement authorizing payroll deductions in the
form of Exhibit A to this Plan and filing it with the Company's human resources
office prior to the applicable Enrollment Date in accordance with the
applicable due dates established by the Company from time to time.

(b) Payroll deductions for a participant shall commence on the
first payroll following the Enrollment Date and shall end on the last payroll
in the Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10 hereof.

(c) Notwithstanding anything to the contrary contained herein,
an Employee's enrollment in the Plan shall also constitute enrollment in the
Company's 1997 Employee Stock Purchase Plan (the "U.S. ESPP") as of the
Enrollment Date of the current Offering Period under the U.S. ESPP. Such
Employee's payroll deductions with respect to the U.S. ESPP prior to the
effective date of a transfer of the Employee to the Company or a Designated
Subsidiary that results in the Employee becoming an Employee for U.S. tax
purposes shall be zero percent (0%), and such Employee's payroll deductions
with respect to the Non-U.S. ESPP following the effective date of the
Employee's transfer may be at the same rate as the Employee's rate of payroll
deductions with respect to this Plan prior to such transfer, or may be adjusted
by the Employee pursuant to Section 6 of the U.S. ESPP. Such Employee's
payroll deductions with respect to this Plan shall be zero percent (0%) as of
the effective date of such transfer.

-4-
<PAGE> 5
6. Payroll Deductions.

(a) At the time a participant files his or her Participation
Agreement, he or she shall elect to have payroll deductions made on each pay
day during the Offering Period in an amount not exceeding 10% of the
Compensation which he or she receives on each pay day during the Offering
Period.

(b) All payroll deductions made for a participant shall be
credited to his or her account under the Plan and shall be withheld in whole
percentages only. A participant may not make any additional payments into such
account.

(c) A participant may discontinue his or her participation in
the Plan as provided in Section 10 hereof. A participant may decrease the
rate of his or her payroll deductions for the Purchase Period or Offering
Period (if such Offering Period contains no Purchase Periods) in which he or
she is currently enrolled to zero percent (0%), but may not otherwise change
the rate of his or her payroll deductions for such Purchase Period or Offering
Period, by completing and filing with the Company a new subscription agreement
authorizing a change in payroll deduction rate. A participant may increase or
decrease the rate of his or her payroll deductions for future Purchase Periods
and Offering Periods by completing and filing with the Company a new
Participation Agreement authorizing a change in payroll deduction rate. The
Board may, in its discretion, limit the number of participation rate changes
during any Offering Period. A decrease in a participant's payroll deduction
rate during a Purchase Period or Offering Period shall be effective with the
first full payroll period following five (5) business days after the Company's
receipt of the new Participation Agreement, unless the Company elects to
process a given change in participation more quickly. A change in a
participant's payroll deduction rate for a future Purchase Period or Offering
Period shall be effective with the commencement of such Purchase Period or
Offering Period. A participant's Participation Agreement shall remain in
effect for successive Purchase Periods and Offering Periods unless terminated
as provided in Section 10 hereof.

(d) Notwithstanding the foregoing, to the extent necessary to
comply with Section 3(b) hereof, a participant's payroll deductions may be
decreased to zero percent (0%) at any time during an Offering Period. Payroll
deductions shall recommence at the rate provided in such participant's
Participation Agreement at the beginning of the first Purchase Period or
Offering Period which is scheduled to end in the following calendar year,
unless terminated by the participant as provided in Section 10 hereof.

(e) At the time the option is exercised, in whole or in part,
or at the time some or all of the Company's Common Stock issued under the Plan
is disposed of, the participant must make adequate provision for the Company's
federal, state, or other tax withholding obligations, if any, which arise upon
the exercise of the option or the disposition of the Common Stock. At any
time, the Company may, but shall not be obligated to, withhold from the
participant's compensation the amount necessary for the Company to meet
applicable withholding obligations, including any withholding

-5-
<PAGE> 6
required to make available to the Company any tax deductions or benefits
attributable to sale or disposition of Common Stock by the Employee.

7. Grant of Option. On the Enrollment Date of each Offering Period,
each eligible Employee participating in such Offering Period shall be granted
an option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock determined by dividing such Employee's payroll deductions accumulated
prior to such Exercise Date and retained in the Participant's account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall
an Employee be permitted to purchase during each Offering Period more than
30,000 shares of the Company's Common Stock (subject to any adjustment pursuant
to Section 19), and provided further that such purchase shall be subject to the
limitations set forth in Sections 3(b) and 12 hereof. Exercise of the option
shall occur as provided in Section 8 hereof, unless the participant has
withdrawn pursuant to Section 10 hereof. The option shall expire on the last
day of the Offering Period.

8. Exercise of Option. Unless a participant withdraws from the Plan
as provided in Section 10 hereof, notice of exercise of his or her option shall
be deemed to have been given by the participant and his or her option for the
purchase of shares shall be exercised automatically on the Exercise Date, and
the maximum number of full shares subject to option shall be purchased for such
participant at the applicable Purchase Price with the accumulated payroll
deductions in his or her account. No fractional shares shall be purchased; any
payroll deductions accumulated in a participant's account which are not
sufficient to purchase a full share shall be retained in the participant's
account for the subsequent Purchase Period or Offering Period, subject to
earlier withdrawal by the participant as provided in Section 10 hereof. Any
other monies left over in a participant's account after the Exercise Date shall
be returned to the participant. During a participant's lifetime, a
participant's option to purchase shares hereunder is exercisable only by him or
her.

9. Delivery. As promptly as practicable after each Exercise Date on
which a purchase of shares occurs, the Company shall (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) to each participant the shares purchased upon exercise of
his or her option.

10. Withdrawal.

(a) A participant may withdraw all but not less than all the
payroll deductions credited to his or her account and not yet used to exercise
his or her option under the Plan at any time by giving written notice to the
Company in the form of Exhibit B to this Plan at least 15 days prior to the end
of a Purchase Period or Offering Period, as applicable. All of the
participant's payroll deductions credited to his or her account shall be paid
to such participant within 45 days after receipt of notice of withdrawal and
such participant's option for the Offering Period shall be automatically
terminated, and no further payroll deductions for the purchase of shares shall
be made for such Offering Period. If a participant withdraws from an Offering
Period, payroll deductions shall not

-6-
<PAGE> 7
resume at the beginning of the succeeding Offering Period unless the
participant delivers to the Company a new Participation Agreement.

(b) A participant's withdrawal from an Offering Period shall
not have any effect upon his or her eligibility to participate in any similar
plan which may hereafter be adopted by the Company or in succeeding Offering
Periods which commence after the termination of the Offering Period from which
the participant withdraws.

11. Termination of Employment.

Upon a participant's ceasing to be an Employee, for any reason,
he or she shall be deemed to have elected to withdraw from the Plan and the
payroll deductions credited to such participant's account during the Offering
Period but not yet used to exercise the option shall be returned to such
participant or, in the case of his or her death, to the person or persons
entitled thereto under Section 15 hereof, and such participant's option shall
be automatically terminated. The preceding sentence notwithstanding, a
participant who receives payment in lieu of notice of termination of employment
(but not a participant who is receiving severance pay) shall be treated as
continuing to be an Employee for the participant's customary number of hours
per week of employment during the period in which the participant is subject to
such payment in lieu of notice.

12. Interest. No interest shall accrue on the payroll deductions of
a participant in the Plan.

13. Stock.

(a) The maximum number of shares of the Company's Common Stock
which shall be made available for sale under the Plan shall be the available
pool of shares under the U.S. ESPP, subject to adjustment upon changes in
capitalization of the Company as provided in Section 17 hereof. If, on a given
Exercise Date, the number of shares with respect to which options are to be
exercised exceeds the number of shares then available under the Plan, the
Company shall make a pro rata allocation of the shares remaining available for
purchase in as uniform a manner as shall be practicable and as it shall
determine to be equitable.

(b) The participant shall have no interest or voting right in
shares covered by his option until such option has been exercised.

(c) Shares to be delivered to a participant under the Plan
shall be registered in the name of the participant or in the name of the
participant and his or her spouse.

14. Administration. The Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan and to prescribe, amend and
rescind rules and regulations relating to the Plan, including rules and
regulations necessary to conform

-7-
<PAGE> 8
the Plan to Applicable Law. Every finding, decision and determination made by
the Board or its committee shall, to the full extent permitted by law, be final
and binding upon all parties.

15. Designation of Beneficiary.

(a) Subject to Applicable Law, participant may file a written
designation of a beneficiary who is to receive any shares and cash, if any,
from the participant's account under the Plan in the event of such
participant's death subsequent to an Exercise Date on which the option is
exercised but prior to delivery to such participant of such shares and cash.
In addition, a participant may file a written designation of a beneficiary who
is to receive any cash from the participant's account under the Plan in the
event of such participant's death prior to exercise of the option. If a
participant is married and the designated beneficiary is not the spouse,
spousal consent shall be required for such designation to be effective.

19. Adjustments Upon Changes in Capitalization, Dissolution,
Liquidation, Merger or Asset Sale.

-8-
<PAGE> 9
(a) Changes in Capitalization. Subject to any required action
by the shareholders of the Company, the Reserves, the maximum number of shares
each participant may purchase each Purchase Period or Offering Period (pursuant
to Section 7), as well as the price per share and the number of shares of
Common Stock covered by each option under the Plan which has not yet been
exercised shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of shares of Common
Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration". Such
adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein,
no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an option.

(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, any Purchase Periods or Offering
Periods then in progress shall be shortened by setting a new Exercise Date (the
"New Exercise Date"), and shall terminate immediately prior to the consummation
of such proposed dissolution or liquidation, unless provided otherwise by the
Board. The New Exercise Date shall be before the date of the Company's
proposed dissolution or liquidation. The Board shall notify each participant
in writing, at least ten (10) business days prior to the New Exercise Date,
that the Exercise Date for the participant's option has been changed to the New
Exercise Date and that the participant's option shall be exercised
automatically on the New Exercise Date, unless prior to such date the
participant has withdrawn from the Offering Period as provided in Section 10
hereof.

(c) Merger or Asset Sale. In the event of a proposed sale of
all or substantially all of the assets of the Company, or the merger of the
Company with or into another corporation, each outstanding option shall be
assumed or an equivalent option substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the option, any
Purchase Periods or Offering Periods then in progress shall be shortened by
setting a new Exercise Date (the "New Exercise Date") and any Offering Periods
then in progress shall end on the New Exercise Date. The New Exercise Date
shall be before the date of the Company's proposed sale or merger. The Board
shall notify each participant in writing, at least ten (10) business days prior
to the New Exercise Date, that the Exercise Date for the participant's option
has been changed to the New Exercise Date and that the participant's option
shall be exercised automatically on the New Exercise Date, unless prior to such
date the participant has withdrawn from the Offering Period as provided in
Section 10 hereof.

-9-
<PAGE> 10
20. Amendment or Termination.

(a) The Board of Directors of the Company may at any time and
for any reason terminate or amend the Plan. Except as provided in Section 19
hereof, no such termination can affect options previously granted, provided
that an Offering Period may be terminated by the Board of Directors on any
Exercise Date if the Board determines that the termination of the Plan is in
the best interests of the Company and its shareholders. Except as provided in
Section 19 hereof, no amendment may make any change in any option theretofore
granted which adversely affects the rights of any participant. To the extent
necessary to comply with Applicable Law, the Company shall obtain shareholder
approval in such a manner and to such a degree as required.

(b) Without shareholder consent and without regard to whether
any participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Purchase Periods or
Offering Periods, limit the frequency and/or number of changes in the amount
withheld during an Offering Period, establish the exchange ratio applicable to
amounts withheld in a currency other than U.S. dollars, permit payroll
withholding in excess of the amount designated by a participant in order to
adjust for delays or mistakes in the Company's processing of properly completed
withholding elections, establish reasonable waiting and adjustment periods
and/or accounting and crediting procedures to ensure that amounts applied
toward the purchase of Common Stock for each participant properly correspond
with amounts withheld from the participant's Compensation, and establish such
other limitations or procedures as the Board (or its committee) determines in
its sole discretion advisable which are consistent with the Plan.

21. Notices. All notices or other communications by a participant to
the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.

22. Conditions Upon Issuance of Shares. Shares shall not be issued
with respect to an option unless the exercise of such option and the issuance
and delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.

23. Term of Plan. The Plan shall become effective upon the earlier
to occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company. It shall continue in effect for a term of ten
(10) years unless sooner terminated under Section 20 hereof.

-10-
<PAGE> 11
24. Automatic Transfer to Low Price Offering Period. To the extent
permitted by Applicable Law, if the Fair Market Value of the Common Stock on
any Exercise Date in an Offering Period (if such Offering Period is not
terminating on such Exercise Date) is lower than the Fair Market Value of the
Common Stock on the Enrollment Date of such Offering Period, then all
participants in such Offering Period shall be automatically withdrawn from such
Offering Period immediately after the exercise of their option on such Exercise
Date and automatically re-enrolled in the immediately following Offering Period
as of the first day thereof.

-11-
<PAGE> 12
EXHIBIT A

J. D. EDWARDS & COMPANY

1997 EMPLOYEE STOCK PURCHASE PLAN FOR NON-U.S. EMPLOYEES

PARTICIPATION AGREEMENT

_____ Original Application Enrollment Date: ___________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)

1. _____________________________________________________ hereby elects to
participate in the J. D. Edwards & Company 1997 Employee Stock Purchase
Plan (the "Plan") and subscribes to purchase shares of the Company's
Common Stock in accordance with this Participation Agreement and the
Plan.

2. I hereby authorize payroll deductions from each paycheck in the amount
of ____% of my Compensation on each payday (from 0 to 10%) during the
Offering Period in accordance with the Plan. (I understand that no
fractional percentages are permitted.)

3. I understand that said payroll deductions shall be accumulated in order
to exercise the option(s) granted to me pursuant to the Plan and to
purchase shares of Common Stock at the applicable Purchase Price
determined in accordance with the Plan. I understand that if I do not
withdraw from an Offering Period, any accumulated payroll deductions
will be used to automatically exercise my option.

4. I have received a copy of the complete Plan. I understand that my
participation in the Plan is in all respects subject to the terms of the
Plan. I understand that my ability to exercise the option under this
Participation Agreement is subject to shareholder approval of the Plan.

5. Shares purchased for me under the Plan should be issued in the name(s)
of (Employee or Employee and Spouse only):
_____________________________
_________________________________________________________.

6. I understand and acknowledge that notwithstanding any other provision of
this Participation Agreement or the Plan:

(a) neither the Plan nor this Participation Agreement shall form any
part of any contract of employment between me and the Company or
any Designated Subsidiary, and it shall not confer on me any
legal or equitable rights (other than those constituting the
options granted under the Plan themselves) against the Company or
any Designated Subsidiary, directly or indirectly, or give rise
to any cause of action in law or in equity against the Company or
any subsidiary;
<PAGE> 13
(b) my benefits under the Plan shall not form any part of my wages,
pay or remuneration or count as wages, pay or remuneration for
pension fund or other purposes;

(c) in no circumstances shall I, upon ceasing to hold my office or
employment by virtue of which I am eligible to participate in the
Plan, be entitled to any compensation for any loss of any right
or benefit or prospective right or benefit under the Plan, which
I might otherwise have enjoyed, whether such compensation is
claimed by way of damages for wrongful dismissal or other breach
of contract or by way of compensation for loss of office or
otherwise.

(d) that the Company expressly retains the right to terminate the
Plan at any time and that I will have no right to continued
option grants under the Plan in such event.

7. I hereby agree to be bound by the terms of the Plan. The effectiveness
of this Participation Agreement is dependent upon my eligibility to
participate in the Plan.

8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due me under the
Plan:

NAME: (Please print)
----------------------------------------------
(First) (Middle) (Last)

- ------------------------------- -----------------------------------
Relationship

-----------------------------------
(Address)

-2-
<PAGE> 14
Employee's Social
Security Number:
------------------------------------

Employee's Address:
------------------------------------

------------------------------------

I UNDERSTAND THAT THIS PARTICIPATION AGREEMENT SHALL REMAIN IN EFFECT
THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated:
------------------------- ----------------------------------------
Signature of Employee

---------------------------------------
Spouse's Signature (If beneficiary other
than spouse)

-3-
<PAGE> 15
EXHIBIT B

J. D. EDWARDS & COMPANY

1997 EMPLOYEE STOCK PURCHASE PLAN FOR NON-U.S. EMPLOYEES

NOTICE OF WITHDRAWAL

The undersigned participant in the Offering Period of the J. D. Edwards
& Company 1997 Employee Stock Purchase Plan for Non-U.S. Employees which began
on ____________, 19____ (the "Enrollment Date") hereby notifies the Company
that he or she hereby withdraws from the Offering Period. He or she hereby
directs the Company to pay to the undersigned as promptly as practicable all
the payroll deductions credited to his or her account with respect to such
Offering Period. The undersigned understands and agrees that his or her option
for such Offering Period will be automatically terminated. The undersigned
understands further that no further payroll deductions will be made for the
purchase of shares in the current Offering Period and the undersigned shall be
eligible to participate in succeeding Offering Periods only by delivering to
the Company a new Participation Agreement.

Name and Address of Participant:

--------------------------------

Signature:

--------------------------------

Date:
--------------------------

<PAGE> 1

EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-1 of our report dated November 22, 1996,
relating to the financial statements of J.D. Edwards & Company, which appears in
such Prospectus. We also consent to the application of such report to the
Financial Statement Schedule for the three years ended October 31, 1996 listed
under Item 16(b) of the Registration Statement when such schedule is read in
conjunction with the financial statements referred to in our report. The audits
referred to in such report also included this schedule. We also consent to the
references to us under the headings "Selected Consolidated Financial Data" and
"Experts" in such Prospectus. However, it should be noted that Price Waterhouse
LLP has not prepared or certified such "Selected Consolidated Financial Data."

PRICE WATERHOUSE LLP

Boulder, Colorado

August 8, 1997