Exhibit 10.134

PLEDGE AGREEMENT
(LIVERMORE/PARCEL 6)
BETWEEN
LAM RESEARCH CORPORATION
(“LRC”)
AND
BNP PARIBAS LEASING CORPORATION
(“BNPPLC”)
December 18, 2007

 

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TABLE OF CONTENTS

                              Page  
 
                1   Definitions and Interpretation     1  
 
  (A)   Definitions     1  
 
      Account Office     2  
 
      Cash Collateral     2  
 
      Clearing System     2  
 
      Collateral     2  
 
      Collateral Imbalance     2  
 
      Control Agreement     2  
 
      Default     2  
 
      Deposit Account     2  
 
      Deposit Taker     3  
 
      Deposit Taker’s Agreement     3  
 
      Deposit Taker Prerequisites     3  
 
      Disqualified Deposit Taker     3  
 
      Eligible Deposit Taker     4  
 
      Eligible Investments     5  
 
      Event of Default     5  
 
      Initial Control Agreement     6  
 
      Intermediary     6  
 
      Lien     6  
 
      Minimum Collateral Value     7  
 
      Other Liable Party     7  
 
      Percentage     7  
 
      Pre-lease Account Assets     7  
 
      Pre-lease Collateral     7  
 
      Pre-lease Deposits     8  
 
      Qualified Pledge     8  
 
      Secured Obligations     8  
 
      Securities     8  
 
      Securities Account     8  
 
      Transition Account     8  
 
      UCC     8  
 
      Value     8  
 
  (B)   Other Definitions     9  
 
                2   Pledge and Grant of Security Interest     9  
 
                3   Provisions Concerning the Deposit Takers     10  
 
  (A)   Deposit Taker Agreements     10  
 
  (B)   Qualification of Deposit Takers Generally     11  
 
  (C)   Substitutions for Disqualified Deposit Takers     11  

 

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                              Page  
 
               
 
  (D)   Other Voluntary Substitutions of Deposit Takers     11  
 
  (E)   Delivery of Deposit Taker’s Agreements by LRC and BNPPLC     11  
 
  (F)   Replacement of Participants Proposed by LRC     11  
 
  (G)   Constructive Possession of Collateral     12  
 
  (H)   Attempted Setoff by Deposit Taker     12  
 
                4   Delivery and Maintenance of Collateral     13  
 
  (A)   Delivery of Pre-lease Deposits by LRC     13  
 
  (B)   Delivery of Cash Collateral by LRC     13  
 
  (C)   Transition Account     14  
 
  (D)   Allocation of Cash Collateral Among Deposit Takers     14  
 
  (E)   Status of the Deposit Accounts Under the Reserve Requirement Regulations
    15  
 
  (F)   Acknowledgment by LRC that Requirements of this Agreement are
Commercially Reasonable     15  
 
               
 
                5   Withdrawal of Collateral     15  
 
  (A)   Withdrawal and Management of Pre-lease Collateral     15  
 
  (B)   Withdrawal of Cash Collateral After the Base Rent Commencement Date and
Prior to the Designated Sale Date     17  
 
  (C)   Withdrawal and Application of Cash Collateral to Reduce or Satisfy the
Secured Obligations to BNPPLC     17  
 
  (D)   Withdrawal and Return of Cash Collateral Following Satisfaction of all
Secured Obligations     18  
 
  (E)   No Other Right to Require or Make Withdrawals     18  
 
  (F)   BNPPLC’s Covenant Not to Make Unauthorized Withdrawals     18  
 
                6   Representations and Covenants of LRC     18  
 
  (A)   Representations of LRC     18  
 
  (B)   Covenants of LRC     19  
 
                7   Authorized Action by BNPPLC     21  
 
                8   Default and Remedies     21  
 
  (A)   Remedies     21  
 
  (B)   Recovery Not Limited     23  
 
                9   Miscellaneous     24  
 
  (A)   Payments by LRC to BNPPLC     24  
 
  (B)   Payments by BNPPLC to LRC     24  
 
  (C)   Cumulative Rights, etc     25  
 
  (D)   Survival of Agreements     25  
 
  (E)   Other Liable Party     25  
 
  (F)   Termination     25  

 

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PLEDGE AGREEMENT
(LIVERMORE/PARCEL 6)
     This PLEDGE AGREEMENT (LIVERMORE/PARCEL 6) (this “Agreement”), dated as of
December 18, 2007 (the “Effective Date”), is made by and between BNP PARIBAS
LEASING CORPORATION (“BNPPLC”), a Delaware corporation, and LAM RESEARCH
CORPORATION (“LRC”), a Delaware corporation.
RECITALS
     BNPPLC, as a lessor and prospective seller, and LRC, as a lessee and
prospective buyer, have entered into a Construction Agreement (Livermore/Parcel
6), a Lease Agreement (Livermore/Parcel 6) and an Agreement Regarding Purchase
and Remarketing Options (Livermore/Parcel 6) (as from time to time supplemented,
amended or restated, the “Construction Agreement”, “Lease” and “Purchase
Agreement,” respectively), all dated as of the date hereof. BNPPLC and LRC have
also entered into a Common Definitions and Provisions Agreement
(Livermore/Parcel 6) dated as of the date hereof (as from time to time
supplemented, amended or restated, the “Common Definitions and Provisions
Agreement”), in which defined terms are set forth for incorporation by reference
into the Lease, the Purchase Agreement and other documents. As used in this
Agreement, capitalized terms defined in the Common Definitions and Provisions
Agreement and not otherwise defined in this Agreement are intended to have the
respective meanings assigned to them in the Common Definitions and Provisions
Agreement.
     Pursuant to the Construction Agreement, BNPPLC will authorize LRC to
construct, and BNPPLC will advance funds for the construction of, real property
improvements described therein. Pursuant to the Lease, BNPPLC will lease to LRC
such improvements and other property described in the Lease. Pursuant to the
Purchase Agreement, LRC may purchase or arrange for a purchase of BNPPLC’s
interest in such property.
     By this Agreement, BNPPLC and LRC desire to establish the terms and
conditions upon which upon which LRC is pledging cash collateral for its
obligations to BNPPLC under the Construction Agreement and the Purchase
Agreement.
AGREEMENTS
1 Definitions and Interpretation.
     (A) Definitions. As provided in the recitals above, capitalized terms which
are defined in the Common Definitions and Provisions Agreement, and which are
not otherwise defined in the body of this Agreement, are intended to have the
respective meanings assigned to

 

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them the Common Definitions and Provisions Agreement. As used in this Agreement:
     “Account Office” means, with respect to any Deposit Account maintained by
any Deposit Taker, the office of such Deposit Taker in California or New York at
which such Deposit Account is maintained as specified in the applicable Deposit
Taker’s Agreement.
     “Cash Collateral” means all money of LRC which LRC or the Intermediary
delivers to BNPPLC or as directed by it for deposit in the Deposit Accounts
maintained by the Deposit Takers pursuant to this Agreement, and all amounts on
deposit in any of the Deposit Accounts from time to time, which has not been
withdrawn or applied to Secured Obligations as provided in this Agreement.
     “Clearing System” means the Depository Trust Company (“DTC”) and such other
clearing or safekeeping system that may from time to time be used in connection
with transactions relating to or the custody of any Securities, and any
depository for any of the foregoing.
     “Collateral” has the meaning indicated in Paragraph 2.
     “Collateral Imbalance” means on any date prior to the Designated Sale Date
that the Value (without duplication) of Deposit Accounts maintained by the
Deposit Taker for any Participant (other than Disqualified Deposit Takers) does
not equal such Participant’s Percentage, multiplied by the lesser of (1) the
Minimum Collateral Value in effect on such date, or (2) the aggregate Value of
all Collateral subject to this Agreement on such date. For purposes of
determining whether a Collateral Imbalance exists, the Value of any Deposit
Accounts maintained by a bank that is acting as Deposit Taker for two or more
Participants will be deemed to be held for them in proportion to their
respective Percentages, and the Value of any Deposit Accounts maintained by a
bank as Deposit Taker for both a Participant and BNPPLC (as will be the case if
any Participant designates BNPPLC’s Parent as its Deposit Taker) will be deemed
to be held for the Participant only to the extent necessary to prevent or
mitigate a Collateral Imbalance and otherwise for BNPPLC.
     “Control Agreement” means the Initial Control Agreement and any future
similar agreement that may supplement, modify or replace the Initial Control
Agreement as to any Pre-lease Collateral.
     “Default” means any Event of Default and any default, event or condition
which would, with the giving of any requisite notices and the passage of any
requisite periods of time, constitute an Event of Default.
     “Deposit Account” means a deposit account maintained by any Deposit Taker
into which Cash Collateral has been or may in the future be deposited as
provided in this Agreement, excluding the Transition Account.

 

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     “Deposit Taker” means, for BNPPLC or any Participant, an Eligible Deposit
Taker designated by it to act as the Deposit Taker for it under this Agreement.
BNPPLC has already designated BNP Paribas as the Deposit Taker for BNPPLC
hereunder. Any Participant which is an Eligible Deposit Taker will be deemed to
have designated itself to act as the Deposit Taker for it, unless some other
designation is expressly set forth in this Agreement. Any Participant which is
not an Eligible Deposit Taker will be expected to designate BNP Paribas or
another Person which is an Eligible Deposit Taker prior to any delivery of Cash
Collateral by LRC pursuant to this Agreement. It is also understood, however,
that each of BNPPLC and the Participants, for itself only, may from time to time
designate another Deposit Taker as provided in subparagraphs 3(C) and 3(D)
below.
     “Deposit Taker’s Agreement” means a completed agreement in the form
attached as Exhibit B, which specifically identifies a Deposit Account in which
a Deposit Taker shall hold Cash Collateral delivered to it pursuant to this
Agreement.
     “Deposit Taker Prerequisites” means, with respect to any Deposit Taker:
(1) the requirement that such Deposit Taker establish a Deposit Account and
provide to LRC and BNPPLC the account number and other information regarding
such Deposit Account which they must have to complete and submit a Deposit
Taker’s Agreement covering such Deposit Account; and (2) the requirement that
such Deposit Taker accept, execute and return a Deposit Taker’s Agreement
covering each Deposit Account to be maintained by such Deposit Taker. It is
understood that any Deposit Taker’s refusal or failure to satisfy the Deposit
Taker Prerequisites will cause it to be a Disqualified Deposit Taker.
     “Disqualified Deposit Taker” means any Person that BNPPLC or any
Participant has designated as a Deposit Taker, but that has not satisfied or no
longer satisfies the following requirements:
     (a) With respect to each Deposit Account in which such Person holds or will
hold Collateral delivered to it pursuant to this Agreement, such Person must
have received from BNPPLC and LRC an executed Deposit Taker’s Agreement which
specifically identifies such Deposit Account and which designates an Account
Office with respect to such Deposit Account in New York, California or Illinois.
     (b) Such Person must have executed and returned to BNPPLC a Deposit Taker’s
Agreement with respect to each such Deposit Account and must have complied with
its Deposit Taker’s Agreements, and the representations set forth therein with
respect to such Person must continue to be true and correct (except that such
Person will not become a Disqualified Deposit Taker because of
 
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its failure to comply with its Deposit Taker’s Agreement, or because any such
representation does not continue to be true and correct, if such failure is
cured and all such representations are made true and correct in all material
respects before the earlier of (i) thirty days after the Deposit Taker is
notified thereof, and (ii) any date upon which BNPPLC’s security interest in any
Collateral maintained or held by such Deposit Taker is not a Qualified Pledge by
reason of such failure to comply or such representation not being true and
correct).
     (c) Such Person must have complied in all material respects with the
provisions in this Agreement applicable to Deposit Takers.
     (d) Such Person must be an Eligible Deposit Taker.
     “Eligible Deposit Taker” means:
     (1) BNP Paribas or any successor of BNP Paribas, acting through any branch,
office or agency in New York or California that can lawfully maintain a Deposit
Account as a Deposit Taker hereunder;
     (2) any Participant or Affiliate of a Participant that is (a) a commercial
bank, organized under the laws of the United States of America or a state
thereof or under the laws of another country which is doing business in the
United States of America, (b) authorized to maintain deposit accounts for others
through Account Offices in New York, California or Illinois (as specified in its
Deposit Taker’s Agreement); or
     (3) any other Person that (a) has been designated by BNPPLC or a
Participant to act as the Deposit Taker for it under this Agreement, (b) is one
of the fifty largest (measured by total assets) U.S. banks, or one of the one
hundred largest (measured by total assets) banks in the world, (c) is acting
through any branch, office or agency in New York or California that can lawfully
maintain a Deposit Account as a Deposit Taker hereunder and (d) has a debt
ratings of at least (i) A- (in the case of long term debt) and A-1 (in the case
of short term debt) or the equivalent thereof by Standard and Poor’s Corporation
(the “S&P Rating”), and (ii) A3 (in the case of long term debt) and P-2 (in the
case of short term debt) or the equivalent thereof by Moody’s Investor Service,
Inc. (the “Moody Rating”). (The parties believe it improbable that the ratings
systems used by Standard and Poor’s Corporation and by Moody’s Investor Service,
Inc. will be discontinued or changed, but if such ratings systems are
discontinued or changed, LRC shall be entitled to select and use a comparable
ratings systems as a substitute for the S&P Rating or the Moody Rating, as the
case may be, for purposes of determining the status of any bank as an Eligible
Deposit Taker.)
 
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     “Eligible Investments” means cash balances and U.S. Treasury securities
with a maturity of less than ten years and other investments that satisfy all
applicable criteria listed in Exhibit A (as such Exhibit is amended, restated,
supplemented or otherwise modified from time to time by written agreement of
BNPPLC and LRC).
     “Event of Default” means the occurrence of any of the following:
     (a) a failure by LRC to pay or perform all or any part of the Secured
Obligations when first due or required;
     (b) any failure by LRC to provide funds as and when required by
subparagraph 4(A) or 4(B) of this Agreement, if within seven days after such
failure commences LRC does not cure such failure by delivering the required
funds;
     (c) the failure of the pledge or security interest contemplated herein in
any Pre-lease Collateral, the Transition Account or any Deposit Account or Cash
Collateral to be a Qualified Pledge (regardless of the characterization of the
Transition Account or any Deposit Accounts or Cash Collateral as deposit
accounts, instruments or general intangibles under the UCC); unless, within five
days after LRC becomes aware of such failure, LRC both (1) notifies BNPPLC of
such failure, and (2) cures such failure;
     (d) the failure of any representation herein by LRC to be true (other than
a failure described in another clause of this definition of Event of Default),
if such failure is not cured within thirty days after BNPPLC gives LRC written
notice thereof;
     (e) the failure of any representation made by LRC in subparagraph 6(A)(1)
to be true, if within fifteen days after LRC becomes aware of such failure, LRC
does not (1) notify BNPPLC of such failure, and (2) cure such failure; and
     (f) the failure by LRC timely and properly to observe, keep or perform any
covenant, agreement, warranty or condition herein required to be observed, kept
or performed (other than a failure described in another clause of this
definition of Event of Default), if such failure is not cured within thirty days
after BNPPLC gives LRC written notice thereof.
Notwithstanding the foregoing, if ever the aggregate Value of Pre-lease
Collateral held by the Intermediary or of Cash Collateral held by BNPPLC or the
Deposit Takers
 
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exceeds the Minimum Collateral Value then in effect, a failure of the pledge or
security interest contemplated herein in such excess Pre-lease Collateral or
Cash Collateral to be a valid, perfected, first priority pledge or security
interest shall not constitute an Event of Default under this Agreement.
Accordingly, to provide a cure as required to avoid an Event of Default under
clauses (c) or (e) of this definition prior to the Base Rent Commencement Date,
LRC may deliver additional Pre-lease Collateral to the Intermediary — the pledge
of which or security interest in which created by this Agreement is a Qualified
Pledge — sufficient in amount to cause the aggregate Value of the Pre-lease
Collateral then held by the Intermediary subject to a Qualified Pledge hereunder
to equal or exceed the Minimum Collateral Value. Similarly, to provide a cure as
required to avoid an Event of Default under clauses (c) or (e) of this
definition on or after the Base Rent Commencement Date, LRC may deliver
additional Cash Collateral to BNPPLC — the pledge of which or security interest
in which created by this Agreement is a Qualified Pledge - sufficient in amount
to cause the aggregate Value of the Cash Collateral then held by BNPPLC or the
Deposit Takers subject to a Qualified Pledge hereunder to equal or exceed the
Minimum Collateral Value.
     “Initial Control Agreement” means, collectively, the Securities Account
Control Agreement (Livermore/Parcel 6) and the Collateral Management Services
Schedule (Livermore/Parcel 6), both dated as of the Effective Date, and both
being agreements by and among LRC (as pledgor), BNPPLC (as secured party) and
State Street Bank and Trust Company (as the bank or intermediary).
     “Intermediary” means State Street Bank and Trust Company and its successors
and assigns under the Initial Control Agreement or any other intermediary that
replaces it as provided therein if the Initial Control Agreement is terminated
pursuant to its express terms. (It is understood, however, that neither BNPPLC
nor any Affiliate of BNPPLC will replace State Street Bank and Trust Company as
an Intermediary prior to the Completion Date.)
     “Lien” means, with respect to any property or assets, any right or interest
therein of a creditor to secure indebtedness or other obligations of any kind
which is owed to him or any other arrangement with such creditor which provides
for the payment of such indebtedness or obligations out of such property or
assets or which allows him to have such indebtedness or obligations satisfied
out of such property or assets prior to the general creditors of any owner
thereof, including any lien, mortgage, security interest, pledge, deposit,
production payment, rights of a vendor under any title retention or conditional
sale agreement or lease substantially equivalent thereto, tax lien, mechanic’s
or materialman’s lien, or any other charge or encumbrance for security purposes,
whether arising by law or agreement or otherwise, but excluding any right of
setoff which arises without agreement in the ordinary course of business. “Lien”
also means any filed
 
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financing statement, any registration with an issuer of uncertificated
securities, or any other arrangement which would serve to perfect a Lien
described in the preceding sentence, regardless of whether such financing
statement is filed, such registration is made, or such arrangement is undertaken
before or after such Lien exists.
     “Minimum Collateral Value” means (1) as of the Designated Sale Date or any
prior date, an amount equal to the Lease Balance determined as of that date
(including any Construction Advances or other amounts added to the Lease Balance
on that date as provided in the Construction Agreement) in accordance with the
definition thereof in the Common Definitions and Provisions Agreement; and
(2) as of any date after the Designated Sale Date, an amount equal to the Make
Whole Amount computed as of that date under and as defined in the Purchase
Agreement; except that after the Designated Sale Date, if any 97-10/Prepayment
or Supplemental Payment which may be required has been paid, and so long as no
97-1/Default (100%) (as defined in the Purchase Agreement) has occurred and is
continuing, the Minimum Collateral Value will be zero.
     “Other Liable Party” means any Person, other than LRC, who may now or may
at any time hereafter be primarily or secondarily liable for any of the Secured
Obligations or who may now or may at any time hereafter have granted to BNPPLC a
Lien against any of its assets to secure any Secured Obligations.
     “Percentage” means with respect to each Participant and the Deposit Taker
for such Participant, such Participant’s “Percentage” under and as defined in
the Participation Agreement for purposes of computing such Participant’s right
thereunder to receive payments of (or amounts equal to a percentage of) any
sales proceeds or Supplemental Payment received by BNPPLC under the Purchase
Agreement. Percentages may be adjusted from time to time as provided in the
Participation Agreement or as provided in supplements thereto executed as
provided in the Participation Agreement.
     “Pre-lease Account Assets” means all Pre-lease Deposits, Securities,
securities entitlements and any other assets held in trust for LRC or held in
any custody, subcustody, safekeeping, investment management accounts, or other
accounts of LRC with the Intermediary or any other custodian, trustee, Clearing
System or financial intermediary or securities intermediary (all of which shall
be considered “financial assets” under the UCC).
     “Pre-lease Collateral” means: (i) any and all Pre-lease Deposits,
Securities and other Pre-lease Account Assets that are listed on Exhibit C;
(ii) all additions to, and proceeds, renewals, investments, reinvestments and
substitutions of, the foregoing, whether or not listed on Exhibit C; and
(iii) all certificates, receipts and other instruments evidencing any of the
foregoing; excluding, however, Cash Collateral and the Deposit
 
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Accounts and proceeds thereof. Without limiting the foregoing, the Pre-lease
Collateral will include the Securities Account maintained by the Intermediary.
     “Pre-lease Deposits” means deposits made by or on behalf of LRC with the
Intermediary (whether or not held in trust, or in any custody, subcustody,
safekeeping, investment management accounts, or other accounts of LRC with the
Intermediary).
     “Qualified Pledge” means a pledge or security interest that constitutes a
valid, perfected, first priority pledge or security interest.
     “Secured Obligations” means and includes all obligations of LRC under the
Construction Agreement or the Purchase Agreement, including (i) LRC’s obligation
to pay any 97-10/Prepayment as provided in Paragraph 8 of the Construction
Agreement, (ii) LRC’s obligation to pay any Supplemental Payment as provided in
subparagraph 2(A)(3) of the Purchase Agreement, (iii) LRC’s obligation to pay
the Make Whole Amount as the purchase price for the Property if a purchase is
required by subparagraph 3(A) of the Purchase Agreement, and (iv) any damages
incurred by BNPPLC because of (A) LRC’s breach of the Construction Agreement or
Purchase Agreement or (B) the rejection by LRC of the Construction Agreement or
Purchase Agreement in any bankruptcy, insolvency or similar proceeding.
     “Securities” means the stocks, bonds and other securities, whether or not
held in trust or in any custody, subcustody, safekeeping, investment management
accounts or other accounts of LRC with the Intermediary or any other custodian,
trustee or Clearing System or held by any party as a financial intermediary or
securities intermediary.
     “Securities Account” has the meaning assigned to it in the Initial Control
Agreement.
     “Transition Account” shall have the meaning given it in subparagraph 4(C).
     “UCC” means the Uniform Commercial Code as in effect in the State of
California from time to time, and the Uniform Commercial Code as in effect in
any other jurisdiction which governs the perfection or non-perfection of the
pledge of and security interests in the Collateral created by this Agreement.
     “Value” means, with respect to any Collateral on any date, a dollar value
determined as follows (without duplication):
     (a) Cash held by BNPPLC other than in a Deposit Account shall be valued at
its face amount on such date.
 
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     (b) Any Deposit Account shall be valued at the principal balance thereof on
such date.
     (c) Any Pre-lease Account Asset that qualifies as an Eligible Investment
shall be valued at 90% of its current value on such date. Current value will be
determined by the Intermediary (to the extent the Intermediary is willing to
provide a valuation in accordance with this Agreement) or by BNPPLC’s Parent (to
the extent the Intermediary does not provide the valuation for any reason) using
bid prices indicated by its standard and customary pricing sources, which it
believes to be reliable. For example, the current value of any corporate debt
obligation that meets the criteria listed in Exhibit A will be determined by
multiplying the remaining unpaid principal balance thereof by the bid price
therefor as suggested by the standard and customary pricing sources of the
Intermediary or of BNPPLC’s Parent, as the case may be, which it believes to be
reliable.
     (d) For purposes of calculating “Value” as such capitalized term is used in
this Agreement, any Collateral not described in the preceding clauses will be
assigned a value of zero.
     (B) Other Definitions. Reference is hereby made to the Construction
Agreement and the Purchase Agreement for a statement of the terms thereof. All
capitalized terms used in this Agreement, which are defined in the Construction
Agreement or the Purchase Agreement and not otherwise defined herein or in the
Common Definitions and Provisions Agreement, shall have the same meanings herein
as they would have in the Construction Agreement or the Purchase Agreement, as
applicable. All terms used in this Agreement which are defined in the UCC and
not otherwise defined herein shall have the same meanings herein as set forth
therein, except where the context otherwise requires.
2 Pledge and Grant of Security Interest.
     As security for the Secured Obligations, LRC hereby pledges and assigns to
BNPPLC and grants to BNPPLC a continuing security interest and lien in and
against all right, title and interest of LRC in and to the following property,
whether now or hereafter existing, whether tangible or intangible, whether
presently owned or vested in or hereafter acquired by LRC and wherever the same
may be located (collectively and severally, the “Collateral”):
     (a) all Pre-lease Collateral; and
     (b) all Cash Collateral, the Transition Account and all Deposit Accounts;
and all cash and other assets from time to time held in or on deposit in the
Transition Account
 
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or any Deposit Account and all general intangibles arising from or relating to
the Transition Account or any Deposit Account or such cash or other assets; and
all documents, instruments and agreements evidencing the same; and all
extensions, renewals, modifications and replacements of the foregoing; and any
interest or other amounts payable in connection therewith; and
     (c) all proceeds of the foregoing (including whatever is receivable or
received when Collateral or proceeds is invested, sold, collected, exchanged,
returned, substituted or otherwise disposed of, whether such disposition is
voluntary or involuntary, including rights to payment and return premiums and
insurance proceeds under insurance with respect to any Collateral, and all
rights to payment with respect to any cause of action affecting or relating to
the Collateral).
The pledge, assignment and grant of a security interest made by LRC hereunder is
for security of the Secured Obligations only; the parties to this Agreement do
not intend that LRC’s delivery or deposit of any Collateral, including the Cash
Collateral, as herein provided will constitute an advance payment of any Secured
Obligations or liquidated damages, nor do the parties intend that the Collateral
increase the dollar amount of the Secured Obligations.
3 Provisions Concerning the Deposit Takers.
     (A) Deposit Taker Agreements. At least ten days prior to any initial
deposit of Cash Collateral with any Deposit Taker required by this Agreement,
LRC must (1) ask BNP Paribas, as the designated Deposit Taker for BNPPLC, and
each Eligible Deposit Taker designated by any Participant to act as the Deposit
Taker for it under this Agreement, to satisfy the Deposit Taker Prerequisites;
and (2) execute and provide to BNPPLC a completed Deposit Taker’s Agreement for
BNPPLC’s execution and delivery to each Deposit Taker. Promptly after receipt of
a properly completed Deposit Taker’s Agreement executed by LRC and in form ready
to be executed by BNP Paribas or any other Eligible Deposit Taker named therein,
BNPPLC must execute such Deposit Taker’s Agreement and deliver it to the
appropriate Deposit Taker as necessary for the satisfaction of the Deposit Taker
Prerequisites.
Without limiting the foregoing, it is understood that (i) BNPPLC and any
Participant may designate BNP Paribas as its Deposit Taker, (ii) any Participant
may designate itself or any of its Affiliates as its Deposit Taker so long as
the Participant or its Affiliate, as the case may be, is an Eligible Deposit
Taker, and (iii) as provided in both the preceding provisions of this
subparagraph and in subparagraph 3(E), BNPPLC and LRC must promptly upon request
execute and deliver any properly completed Deposit Taker Agreement requested by
BNPPLC or any Participant to facilitate the designations of Deposit Takers
contemplated by this Agreement. If any Participant has not already designated an
Eligible Deposit Taker to act as Deposit Taker for it under this Agreement at
any time when such a designation is required, then BNPPLC may
 
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make the designation for such Participant; subject, however, to the
Participant’s rights under subparagraphs 3(D) and 3(E).
     (B) Qualification of Deposit Takers Generally. Notwithstanding anything
herein to the contrary, BNPPLC may decline to deposit or maintain Cash
Collateral hereunder with any Disqualified Deposit Taker.
     (C) Substitutions for Disqualified Deposit Takers.
     (1) Upon learning that any Deposit Taker has become a Disqualified Deposit
Taker, LRC or BNPPLC may request that the party for whom such Disqualified
Deposit Taker has been designated a Deposit Taker (i.e., BNPPLC or the
applicable Participant) (a) designate another Eligible Deposit Taker as its new,
substitute Deposit Taker, and (b) direct the substitute to satisfy the Deposit
Taker Prerequisites.
     (2) Pending the designation of a substitute Deposit Taker as provided in
this subparagraph 3(C) and its execution and delivery to BNPPLC of an
appropriate Deposit Taker’s Agreement, BNPPLC may withdraw Collateral held by
the Deposit Taker to be replaced and deposit such Collateral with other Deposit
Takers. If at any time no Deposit Takers have been designated other than
Disqualified Deposit Takers, then BNPPLC must itself select a new Eligible
Deposit Taker to act as a Deposit Taker for it and direct the new Eligible
Deposit Taker to satisfy the Deposit Taker Prerequisites.
     (D) Other Voluntary Substitutions of Deposit Takers. BNPPLC may, and with
the written approval of BNPPLC (which approval will not be unreasonably
withheld) any Participant may, at any time designate for itself a new Deposit
Taker (in replacement of any prior Deposit Taker acting for it hereunder);
provided, the Person so designated is not be a Disqualified Taker.
     (E) Delivery of Deposit Taker’s Agreements by LRC and BNPPLC. To the extent
required for the designation of a new Deposit Taker by BNPPLC or any Participant
pursuant to subparagraph 3(D), or to permit the substitution or replacement of a
Deposit Taker for BNPPLC or any Participant as provided in subparagraphs 3(C)
and 3(D), LRC and BNPPLC shall promptly execute and deliver any properly
completed Deposit Taker’s Agreement requested by BNPPLC or the applicable
Participant.
     (F) Replacement of Participants Proposed by LRC. So long as no Event of
Default has occurred and is continuing, BNPPLC shall not unreasonably withhold
its approval for a substitution under the Participation Agreement of a new
Participant proposed by LRC for any Participant, the Deposit Taker for whom
would no longer meet the requirements listed in clause (3) of the definition of
Eligible Deposit Taker above; provided, however, that (1) the proposed
substitution can be accomplished without a release or breach by BNPPLC of its
rights
 
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and obligations under the Participation Agreement; (2) the new Participant will
agree (by executing a Supplement and a supplement to the Participation Agreement
as contemplated therein and by other agreements as may be reasonably required by
BNPPLC and LRC) to become a party to the Participation Agreement and to this
Agreement, to designate an Eligible Deposit Taker as the Deposit Taker for it
under this Agreement and to accept a Percentage under the Participation
Agreement equal to the Percentage of the Participant to be replaced; (3) the new
Participant (or LRC) will provide the funds to pay the termination fee required
by subparagraph 6(D) of the Participation Agreement to accomplish the
substitution; (4) LRC or the new Participant agrees in writing to indemnify and
defend BNPPLC for any and all Losses incurred by BNPPLC in connection with or
because of the substitution, including the cost of preparing supplements to the
Participation Agreement and this Agreement and including any cost of defending
and paying any claim asserted by the Participant to be replaced because of the
substitution; and (5) the new Participant shall be a reputable financial
institution having a net worth of no less than seven and one half percent (7.5%)
of total assets and total assets of no less than $10,000,000,000 (all according
to then recent audited financial statements). BNPPLC shall attempt in good faith
to assist (and cause BNPPLC’s Parent to attempt in good faith to assist) LRC in
identifying a new Participant that LRC may propose to substitute for an existing
Participant pursuant to this subparagraph, as LRC may reasonably request from
time to time. However, in no event shall BNPPLC itself, or any of its
Affiliates, be required to take the Percentage of any Participant to be
replaced.
     (G) Constructive Possession of Collateral. The possession by a Deposit
Taker of any money, instruments, chattel paper, financial assets or other
property constituting Collateral or evidencing Collateral shall be deemed to be
possession by BNPPLC or a person designated by BNPPLC, for purposes of
perfecting the security interest granted to BNPPLC hereunder pursuant to the UCC
or other Applicable Law; and notifications to a Deposit Taker by other Persons
holding any such property, and acknowledgments, receipts or confirmations from
any such Persons delivered to a Deposit Taker, and control agreements made by
any such Person with Deposit Taker with respect to any such property, shall be
deemed notifications to, or acknowledgments, receipts or confirmations from, or
control agreements with, financial intermediaries, bailees or agents (as
applicable) of such Deposit Taker for the benefit of BNPPLC for the purposes of
perfecting such security interests under Applicable Law.
However, nothing in this subparagraph will be construed to permit or authorize
any replacement of Cash Collateral required by this Agreement with other types
of Collateral or any substitution of other types of Collateral for Cash
Collateral hereunder.
     (H) Attempted Setoff by Deposit Taker. By delivery of a Deposit Taker’s
Agreement, each Deposit Taker must agree not to setoff or attempt a setoff,
without in each case first obtaining the prior written authorization of BNPPLC
(which BNPPLC will not grant without the prior written consent of all
Participants), obligations owed to such Deposit Taker against any
 
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Collateral held by it from time to time. Nevertheless, LRC acknowledges and
agrees (without limiting its right to recover any resulting damages from any
Deposit Taker that violates such agreements) that BNPPLC shall not be
responsible for, or be deemed to have taken any action against LRC because of,
any violation of such agreement by any Deposit Taker. Further, and without
limiting the foregoing, as additional consideration for BNPPLC’s accommodations
to LRC, including BNPPLC’s acceptance of the Collateral in lieu of other forms
of security as collateral for the Secured Obligations, LRC hereby waives and
covenants not to assert any defense or claim arising out of (i) the California
antideficiency laws, including without limitation California Code of Civil
Procedure Sections 580a, 580b, 580d and 726, and (ii) without limiting the
generality of the foregoing, Walker v. Community Bank, 10 Cal. 3d 729, 111 Cal.
Rptr. 897, 518 P.2d 329 (1974), Security Pacific Nat’l Bank v. Wozab, 51 Cal. 3d
991, 275 Cal. Rptr. 201, 800 P.2d 557 (1990), and similar cases, to the extent
such claim arises out of or relates to the exercise of set off rights by any
Deposit Taker.
4 Delivery and Maintenance of Collateral.
     (A) Delivery of Pre-lease Deposits by LRC. On the Effective Date and on
each Advance Date prior to the Base Rent Commencement Date, if the Value of
Pre-lease Collateral does not already equal or exceed the Minimum Collateral
Value, LRC must deposit with the Intermediary, subject to the pledge and
security interest created hereby, additional funds as necessary to cause the
Value of the Pre-lease Collateral to be no less than the Minimum Collateral
Value. Together with any such required deposit, LRC must deliver instructions to
the Intermediary (with a copy to BNPPLC), directing the Intermediary to deposit
the funds into a specific account then pledged to BNPPLC hereunder and to use
such funds to purchase Eligible Investments, which will also be held and
maintained in such pledged account as Pre-lease Collateral. Each delivery of
funds required by this subparagraph must be received by the Intermediary no
later than 12:00 noon (California time) on the date it is required; if received
after 12:00 noon it will be considered for purposes of the Lease as received on
the next following Business Day. At least five days prior to any Advance Date
upon which it is expected that LRC will be required to deliver additional funds
pursuant to this subparagraph, LRC shall notify BNPPLC and the Intermediary
thereof and of the amount LRC expects to deliver to the Intermediary for deposit
as Pre-lease Collateral on the applicable Advance Date. In addition to required
deliveries of Pre-lease Deposits as provided in the foregoing provisions, LRC
may on any date (whether or not an Advance Date) deliver additional Pre-lease
Deposits as provided in the penultimate sentence of the definition of Event of
Default above.
     (B) Delivery of Cash Collateral by LRC. On the Base Rent Commencement Date
and each Business Day thereafter, including each Base Rent Date, LRC must
deliver to BNPPLC for deposit directly into the Transition Account, or (if
directed to do so by BNPPLC) deliver to Deposit Takers for deposit directly into
the Deposit Accounts, in either case subject to the pledge and security interest
created hereby, funds as Cash Collateral then needed (if any) to cause the
 
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Value of the Cash Collateral to be no less than the Minimum Collateral Value. In
the case of deliveries required on any Base Rent Date, each delivery of funds
required by the preceding sentence must be received by BNPPLC no later than
12:00 noon (California time) on the date it is required; if received after 12:00
noon it will be considered for purposes of the Lease as received on the next
following Business Day. At least five days prior to any date upon which it is
expected that LRC will be required to deliver additional funds pursuant to this
subparagraph, LRC shall notify BNPPLC and the Participants thereof and of the
amount LRC expects to deliver to BNPPLC or Deposit Takers as Cash Collateral;
provided, however, such notice will not be required as a condition to the
delivery of additional Cash Collateral to prevent or cure an Event of Default as
provided in the last sentence of the definition of Event of Default above.
     (C) Transition Account. Pending deposit in the Deposit Accounts or other
application as provided herein, all Cash Collateral received by BNPPLC shall be
credited to and held by BNPPLC in an account maintained by BNPPLC in its own
name with BNPPLC’s Parent (the “Transition Account”), but held for the benefit
of BNP Paribas Leasing Corporation and the Participants separate and apart from
all other property and funds of BNPPLC, LRC or other Persons, and no other
property or funds shall be deposited in the Transition Account. The books and
records of BNPPLC shall reflect that the Transition Account and all Cash
Collateral on deposit therein are owned by LRC, subject to a pledge and security
interest in favor of BNPPLC for the benefit of BNPPLC and Participants.
     (D) Allocation of Cash Collateral Among Deposit Takers. Funds received by
BNPPLC from LRC as Cash Collateral will be allocated for deposit among the
Deposit Takers (other than Disqualified Deposit Takers) as follows:
first, to the extent possible the funds will be allocated as required to rectify
and prevent any Collateral Imbalance; and
second, the funds will be allocated to the Deposit Taker for BNPPLC, unless the
Deposit Taker for BNPPLC has become a Disqualified Deposit Taker, in which case
the funds will be allocated to other Deposit Takers who are not Disqualified
Deposit Takers as BNPPLC deems appropriate.
Further, if for any reason a Collateral Imbalance is determined by BNPPLC to
exist, BNPPLC shall, as required to rectify or mitigate the Collateral
Imbalance, promptly reallocate Collateral among Deposit Takers by withdrawing
Cash Collateral from some Deposit Accounts and redepositing it in other Deposit
Accounts or by transferring Cash Collateral directly from some Deposit Accounts
to others; except as otherwise provided in subparagraph 3(B). (If either party
to this Agreement believes that the Value of the Deposit Accounts held by a
particular Deposit Taker causes a Collateral Imbalance to exist, that party will
promptly notify the other party to this Agreement and the Participants.) Subject
to the foregoing, and provided that BNPPLC does
 
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not thereby create or exacerbate any Collateral Imbalance which is not excused
by subparagraph 3(B), BNPPLC may withdraw and redeposit Cash Collateral or cause
it to be transferred directly from one Deposit Account to another in order to
reallocate the same among Deposit Takers from time to time as BNPPLC deems
appropriate. For purposes of illustration only, examples of the allocations
required by this subparagraph are set forth in Exhibit D.
     (E) Status of the Deposit Accounts Under the Reserve Requirement
Regulations. Each Deposit Taker shall be permitted to structure the Deposit
Account maintained by it as a nonpersonal time deposit under 12 C.F.R., Part II,
Chapter 204 (commonly known as “Regulation D”). Accordingly, any Deposit Taker
may require at least seven days advance notice of any withdrawal or transfer of
funds from the Deposit Account maintained by it and may limit the number of
withdrawals or transfers from such Deposit Account to no more than six in any
calendar month, notwithstanding anything to the contrary herein or in any
deposit agreement that LRC and such Deposit Taker may enter into with respect to
such Deposit Account. As necessary to satisfy the seven days notice requirement
with respect to withdrawals by BNPPLC when required by LRC pursuant to the
provisions below, BNPPLC shall notify the affected Deposit Takers promptly after
receipt of any notice from LRC described in subparagraph 5(B)(4) or in
subparagraph 5(C).
     (F) Acknowledgment by LRC that Requirements of this Agreement are
Commercially Reasonable. LRC acknowledges and agrees that the requirements set
forth herein concerning receipt, deposit, withdrawal, allocation, application
and distribution of Cash Collateral by BNPPLC, including the requirements and
time periods set forth in the Paragraph 5, are commercially reasonable.
5 Withdrawal of Collateral.
     (A) Withdrawal and Management of Pre-lease Collateral. LRC may require
BNPPLC to provide to the Intermediary approval of any directions to withdraw any
specified Pre-lease Collateral from any account maintained by the Intermediary
and pledged hereunder and to deliver the same to LRC or as may otherwise be
provided in those directions (which delivery shall be free and clear of all
liens and security interests hereunder, except in the case of any delivery of
funds by the Intermediary to BNPPLC on behalf of LRC to satisfy the requirements
of subparagraph 5(B) below), if, but only if, in each case all four of the
following conditions are satisfied:
     (1) Either:
     (a) such withdrawal and delivery of specified Pre-lease Collateral will not
cause the Value of the remaining Pre-lease Collateral, which is subject to a
Qualified Pledge hereunder, to be less than the Minimum Collateral Value; or
 
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     (b) the Completion Date shall have occurred and LRC shall already have
delivered sufficient Cash Collateral to BNPPLC to satisfy the requirements of
subparagraph 5(B) below; or
     (c) the directions to be approved by BNPPLC will require the Intermediary
to withdraw and deliver funds directly to and only to BNPPLC, on behalf of LRC,
as Cash Collateral pledged pursuant to this Agreement.
     (2) LRC must give BNPPLC notice of the required withdrawal three Business
Days prior to the date upon which the withdrawal is to occur, together a copy of
the directions to the Intermediary for which BNPPLC’s approval will be required
by this subparagraph 5(A) to accomplish the withdrawal.
     (3) No Default (under and as defined in this Agreement) shall have occurred
and be continuing, and no Default (as defined in the Common Definitions and
Provisions Agreement) shall have occurred and be continuing, at the time LRC
gives the notice required by the preceding subparagraph or on the date upon
which the withdrawal is required. Furthermore, in order to preserve BNPPLC’s
right to prohibit withdrawals when a Default (as defined herein or in the Common
Definitions Agreement) has occurred and is continuing, the directions to be
approved by BNPPLC must expressly confirm and provide that BNPPLC may terminate
its approval, and thereby prohibit subsequent withdrawals without its consent,
by notice given to the Intermediary.
     (4) LRC will not request BNPPLC’s approval of more than eight withdrawals
of Pre-lease Collateral during any one calendar month.
If the conditions listed in the preceding clauses (1), (3) and (4) are
satisfied, and if BNPPLC receives from LRC the notice and the copy of directions
to the Intermediary described in the preceding clause (2) less than three
Business Days prior to, but at least one Business Day prior to, the date upon
which a withdrawal is expected to occur, then BNPPLC will endeavor in good faith
to quickly evaluate and act upon the notice so as not to delay the withdrawal;
provided, however, in that event, BNPPLC will suffer no liability for failing to
do so.
In addition to LRC’s right to arrange withdrawals of Pre-lease Collateral upon
satisfaction of the conditions specified above in this subparagraph, so long as
the Intermediary is State Street Bank and Trust Company and it remains bound by
the Initial Control Agreement, and prior to BNPPLC’s delivery of any Notice of
Control (under and as defined in the Initial Control Agreement), LRC may also
give Proper Instructions (under and as defined in the Initial Control Agreement)
directing the Intermediary to (i) allocate or reallocate investments held in the
Securities Account among Eligible Investments (including directions to liquidate
any Eligible Investment in whole or in part and then reinvest the proceeds
thereof in one or more other
 
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Eligible Investments) or (ii) substitute Eligible Investments with other
Eligible Investments in a manner that satisfies the conditions to substitutions
expressly set forth in the Initial Control Agreement.
     (B) Withdrawal of Cash Collateral After the Base Rent Commencement Date and
Prior to the Designated Sale Date. LRC may require BNPPLC to withdraw Cash
Collateral from one or more Deposit Accounts on any date prior to the Designated
Sale Date and to deliver such Cash Collateral to LRC (which delivery shall be
free and clear of all liens and security interests hereunder) if, but only if,
in each case all of the following conditions are satisfied:
     (1) Such withdrawal and delivery of the Collateral to LRC can be
accomplished without causing or exacerbating a Collateral Imbalance.
     (2) Such withdrawal and delivery of the Collateral to LRC will not cause
the Value of the remaining Cash Collateral, which is subject to a Qualified
Pledge hereunder, to be less than the Minimum Collateral Value.
     (3) Either:
     (a) such withdrawal and delivery of Collateral to LRC will occur on the
last day of a Base Rent Period (i.e., a Base Rent Date upon which a Base Rent
Period will end); or
     (b) the amount of such withdrawal will be limited in amount so as not to
include any interest that has accrued on any Deposit Account from the latest
Base Rent Date preceding such withdrawal.
     (4) LRC must give BNPPLC notice of the required withdrawal at least ten
days prior to the date upon which the withdrawal is to occur. If such notice
applies only to the periodic withdrawal of interest accruing on the Deposit
Accounts, it may be in the form of Exhibit E. Otherwise, such notice must be in
the form of Exhibit F.
     (5) No Default (under and as defined in this Agreement) shall have occurred
and be continuing, and no Default (as defined in the Common Definitions and
Provisions Agreement) shall have occurred and be continuing, at the time LRC
gives the notice required by the preceding subparagraph or on the date upon
which the withdrawal is required.
     (C) Withdrawal and Application of Cash Collateral to Reduce or Satisfy the
Secured Obligations to BNPPLC. To satisfy the Secured Obligations, LRC may
require BNPPLC to withdraw and retain any Cash Collateral held by any Deposit
Taker on the Designated Sale Date
 
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(which retention by BNPPLC shall be free and clear of all liens and security
interests hereunder) as a payment on behalf of LRC of any amounts then due from
LRC under the Purchase Agreement; provided, that by a notice in the form of
Exhibit G, LRC must have notified BNPPLC of the required withdrawal and payment
to BNPPLC at least ten days prior to the date upon which it is to occur and when
no Event of Default (under and as defined in this Agreement or as defined in the
Common Definitions and Provisions Agreement) has occurred and is continuing.
     (D) Withdrawal and Return of Cash Collateral Following Satisfaction of all
Secured Obligations. Following the Designated Sale Date, when all Secured
Obligations have been satisfied in full, any remaining Cash Collateral that has
not been withdrawn and applied against the Secured Obligations shall revert to
LRC as provided in subparagraph 9(F), whereupon LRC may require BNPPLC to
withdraw such remaining Cash Collateral then maintained pursuant to this
Agreement and promptly transfer such remaining Cash Collateral to LRC.
     (E) No Other Right to Require or Make Withdrawals. LRC may not withdraw or
require any withdrawal of Collateral from any account or deposit account pledged
hereunder, including the Deposit Accounts, except as expressly provided in the
preceding subparagraphs of this Paragraph 5. LRC acknowledges that it will have
no check writing privileges or line of credit or credit card privileges under
any such pledged account or deposit account, including the Deposit Accounts.
     (F) BNPPLC’s Covenant Not to Make Unauthorized Withdrawals. Notwithstanding
provisions of any Control Agreement or of any Deposit Taker’s Agreement which
may state that BNPPLC is entitled to withdraw Collateral held by the
Intermediary or any Deposit Taker without any prior consent or authorization of
LRC, BNPPLC covenants to LRC (as between BNPPLC and LRC) that BNPPLC will not
exercise such rights to withdraw Collateral except (1) as required or permitted
by this Paragraph 5, (2) in the exercise of BNPPLC’s rights or remedies as
otherwise herein provided, or (3) as may from time to time be requested or
approved by LRC.
6 Representations and Covenants of LRC.
     (A) Representations of LRC. LRC represents to BNPPLC as follows:
     (1) LRC is the legal and beneficial owner of the Collateral (or, in the
case of after-acquired Collateral, at the time LRC acquires rights in the
Collateral, will be the legal and beneficial owner thereof), subject to the
pledge and rights hereby granted in favor of BNPPLC. No other Person has (or, in
the case of after-acquired Collateral, at the time LRC acquires rights therein,
will have) any right, title, claim or interest (by way of Lien, purchase option
or otherwise) in, against or to the Collateral, except for rights created
hereunder.
 
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     (2) BNPPLC has (or in the case of after-acquired Collateral, at the time
LRC acquires rights therein, will have) a valid, first priority, perfected
pledge of and security interest in the Collateral, regardless of the
characterization of the Collateral as deposit accounts, instruments or general
intangibles under the UCC, but assuming that the representations of each Deposit
Taker in its Deposit Taker’s Agreement are true.
     (3) LRC has delivered to BNPPLC, together with all necessary stock powers,
endorsements, assignments and other necessary instruments of transfer, the
originals of all documents, instruments and agreements evidencing the
Collateral.
     (4) Neither the ownership or the intended use of the Collateral by LRC, nor
the pledge of Collateral or the grant of the security interest by LRC to BNPPLC
herein, nor the exercise by BNPPLC of its rights or remedies hereunder, will
(i) violate any provision of (a) Applicable Law, (b) the articles or certificate
of incorporation, charter or bylaws of LRC, or (c) any agreement, judgment,
license, order or permit applicable to or binding upon LRC, or (ii) result in or
require the creation of any Lien, charge or encumbrance upon any assets or
properties of LRC except as expressly contemplated in this Agreement. Except as
expressly contemplated in this Agreement, no consent, approval, authorization or
order of, and no notice to or filing with any court, governmental authority or
third party is required in connection with the pledge or grant by LRC of the
security interest contemplated herein or the exercise by BNPPLC of its rights
and remedies hereunder.
     (B) Covenants of LRC. LRC hereby agrees as follows:
     (1) LRC, at LRC’s expense, shall promptly procure, execute and deliver to
BNPPLC all documents, instruments and agreements and perform all acts which are
necessary or desirable, or which BNPPLC may request, to establish, maintain,
preserve, protect and perfect the Collateral, the pledge thereof to BNPPLC or
the security interest granted to BNPPLC therein and the first priority of such
pledge or security interest or to enable BNPPLC to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the preceding sentence, LRC shall (A) procure, execute and
deliver to BNPPLC all stock powers, endorsements, assignments, financing
statements and other instruments of transfer requested by BNPPLC, (B) deliver to
BNPPLC promptly upon receipt all originals of Collateral consisting of
instruments, documents and chattel paper, and (C) cause the security interest of
BNPPLC in any Collateral consisting of securities to be recorded or registered
in the books of any financial intermediary or Clearing System requested by
BNPPLC.
     (2) When applicable law provides more than one method of perfection of
BNPPLC’s security interest in the Collateral, BNPPLC may choose the method(s) to
be
 
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used. LRC hereby authorizes BNPPLC to file any financing statements or financing
statement amendment covering all or any portion of the Collateral or relating to
the security interest created herein.
     (3) LRC shall not use or authorize or consent to any use of any Collateral
in violation of any provision of this Agreement or any other Operative Document
or any Applicable Law.
     (4) LRC shall pay promptly when due all taxes and other governmental
charges, Liens and other charges now or hereafter imposed upon, relating to or
affecting any Collateral or arising on any interest or earnings thereon.
     (5) LRC shall appear in and defend, on behalf of BNPPLC, any action or
proceeding which may affect LRC’s title to or BNPPLC’s interest in the
Collateral.
     (6) Subject to the express rights of LRC under Paragraph 5, LRC shall not
surrender or lose possession of (other than to BNPPLC or an Intermediary or a
Deposit Taker pursuant hereto), encumber, lease, rent, option, or otherwise
dispose of or transfer any Collateral or right or interest therein, and LRC
shall keep the Collateral free of all Liens (other than Liens granted under this
Agreement). Without limiting the foregoing, LRC will not, with respect to any
Pre-lease Collateral, (i) file or permit to be filed any financing or like
statement in which BNPPLC is not named as the sole secured party, (ii) consent
or be a party to any securities account control agreement or other similar
agreement with any Intermediary to which BNPPLC is not also a party,
(iii) pledge or otherwise encumber such Pre-lease Collateral, or (iv) except as
permitted by the last sentence of subparagraph 5(A)(3) above, sell, assign, or
otherwise dispose of, or grant any option with respect to, such Pre-lease
Collateral. The rights granted to BNPPLC pursuant to this Agreement are in
addition to the rights granted to BNPPLC in any Control Agreement or other
custody, investment management, trust, account control agreement or similar
agreement. In case of conflict between the provisions of this Agreement and of
any other such agreement, the provisions of this Agreement will prevail.
     (7) LRC will not take any action which would in any manner impair the value
or enforceability of BNPPLC’s pledge of or security interest in any Collateral,
nor will LRC fail to take any action which is required to prevent (and which LRC
knows is required to prevent) an impairment of the value or enforceability of
BNPPLC’s pledge of or security interest in any Collateral.
     (8) Without limiting the foregoing, within five days after LRC becomes
aware of any failure of the pledge or security interest contemplated herein in
any Pre-lease
 
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Collateral, the Transition Account or any Deposit Account or Cash Collateral to
be a valid, perfected, first priority pledge or security interest (regardless of
the characterization thereof as deposit accounts, securities accounts,
instruments or general intangibles under the UCC), LRC shall notify BNPPLC of
such failure.
7 Authorized Action by BNPPLC.
     LRC hereby irrevocably appoints BNPPLC as LRC’s attorney-in-fact for the
purpose of authorizing BNPPLC to perform (but BNPPLC shall not be obligated to
and shall incur no liability to LRC or any third party for failure to perform)
any act which LRC is obligated by this Agreement to perform, and to exercise,
consistent with the other provisions of this Agreement, such rights and powers
as LRC might exercise with respect to the Collateral during any period in which
a Default has occurred and is continuing, including the right to (a) collect by
legal proceedings or otherwise and endorse, receive and receipt for all
dividends, interest, payments, proceeds and other sums and property now or
hereafter payable on or on account of the Collateral; (b) enter into any
extension, reorganization, deposit, merger, consolidation or other agreement
pertaining to, or deposit, surrender, accept, hold or apply other property in
exchange for the Collateral; (c) insure, process, preserve and enforce the
Collateral; (d) make any compromise or settlement, and take any action it deems
advisable, with respect to the Collateral; (e) pay any indebtedness of LRC
relating to the Collateral; and (f) execute UCC financing statements and other
documents, instruments and agreements required hereunder.
8 Default and Remedies.
     (A) Remedies. In addition to all other rights and remedies granted to
BNPPLC by this Agreement and other Operative Documents or by the UCC and other
Applicable Laws, BNPPLC may, upon the occurrence and during the continuance of
any Event of Default, exercise any one or more of the following rights and
remedies, all of which will be in furtherance of its rights as a secured party
under the UCC:
     (1) BNPPLC may collect, receive, appropriate or realize upon the Collateral
or otherwise foreclose or enforce the pledge of or security interests in any or
all Collateral in any manner permitted by Applicable Law or in this Agreement.
     (2) BNPPLC may notify any Deposit Taker to pay all or any portion of Cash
Collateral held by such Deposit Taker directly to BNPPLC up to an amount equal
to the then outstanding Secured Obligations. BNPPLC shall apply any Cash
Collateral or proceeds of other Collateral received by BNPPLC after the
occurrence of an Event of Default to the Secured Obligations in any order BNPPLC
believes to be in its best interest. If any such Cash Collateral or proceeds
received by BNPPLC remains after all Secured Obligations have been paid in full,
BNPPLC will deliver or direct the Deposit
 
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Takers to deliver the same to LRC or other Persons entitled thereto.
Without limiting the foregoing, when any Event of Default has occurred and is
continuing, BNPPLC may, without notice or demand, sell, redeem, offset, setoff,
debit, charge or otherwise dispose of or liquidate into cash any Collateral
and/or to apply it or the proceeds thereof to repay any or all of the Secured
Obligations in such order as BNPPLC believes to be in its best interest,
regardless of whether any such Secured Obligations are contingent, unliquidated
or unmatured or whether BNPPLC has any other recourse to LRC or any Other Liable
Party or any other collateral or assets (including the Property). Moreover,
regardless of whether BNPPLC commences any action to foreclose the lien and
security interest granted in Exhibit B to the Lease (a “Property Foreclosure”)
before, after or contemporaneously with any action BNPPLC may take under this
Pledge Agreement to collect Cash Collateral or proceeds of other Collateral, and
regardless of whether BNPPLC actually receives proceeds of a Property
Foreclosure before or after it receives Cash Collateral or proceeds of other
Collateral, BNPPLC will be entitled to apply Cash Collateral and proceeds of
other Collateral to satisfy or reduce the Secured Obligations before applying
the proceeds of a Property Foreclosure to other remaining obligations secured as
described in Exhibit B to the Lease. Also, BNPPLC may exercise its rights
without regard to any premium or penalty from liquidation of any Collateral and
without regard to LRC’s basis or holding period for any Collateral.
In connection with the exercise of its remedies under this Agreement, BNPPLC may
sell from its offices in Dallas, Texas, or elsewhere, in one or more sales, at
the price as BNPPLC deems best, for cash or on credit or for other property, for
immediate or future delivery, any item of the Collateral, at any broker’s board
or at public or private sale, in any reasonable manner permissible under the UCC
(except that, to the extent permissible under the UCC, LRC waives any
requirements of the UCC) and BNPPLC or anyone else may be the purchaser of the
Collateral and hold it free from any claim or right including, without
limitation, any equity of redemption of LRC, which right LRC expressly waives.
BNPPLC may in its sole discretion elect to conduct any sale (and related offers)
of any Collateral in such a manner as to avoid the need for registration or
qualification thereof under any Federal or state securities laws, that such
conduct may include restrictions (including as to potential purchasers) and
other requirements (such as purchaser representations) which may result in
prices or other terms less favorable than those which might have been obtained
through a public sale not subject to such restrictions and requirements and that
any offer and sale so conducted shall be deemed to have been made in a
commercially reasonable manner.
In connection with the exercise of its remedies, BNPPLC may also, in its sole
discretion, for its own benefit, acting either in its own name or in the name of
LRC:
     (i) hold any monies or proceeds representing the Collateral in a cash
collateral account in U.S. dollars or other currency that BNPPLC reasonably
selects and invest such monies or proceeds on behalf of LRC;
 
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     (ii) with respect to any deposits constituting Pre-lease Collateral:
(x) renew such deposits on terms and for periods BNPPLC deems appropriate;
(x) demand, collect, and receive payment of any monies or proceeds due or to
become due in respect of such deposits; or (z) execute any instruments required
for the withdrawal or repayment of the such deposits;
     (iii) with respect to any Securities constituting Pre-lease Collateral: A)
transfer such Securities to an account of BNPPLC, whether in the possession of,
or registered in the name of, any Clearing System or held otherwise; B) transfer
any such Securities held in book entry form with any Federal Reserve
Administrative Agent to the account of BNPPLC with such Federal Reserve
Administrative Agent; or C) transfer any such Securities registered in the name
of LRC to the name of BNPPLC or its nominee and complete and deliver any
necessary stock powers or other transfer instruments;
     (iv) convert any Collateral denominated in a currency other than U.S.
dollars to U.S. dollars at the spot rate of exchange for the purchase of U.S.
dollars with such other currency which is quoted by a branch or office of
BNPPLC’s Parent selected by BNPPLC
     (or, if no such rate is quoted by BNPPLC’s Parent on any relevant date,
then at a rate estimated by BNPPLC on the basis of other quoted spot rates) or
another prevailing rate that BNPPLC reasonably deems more appropriate; or
     (v) apply any portion of the Collateral, first, to pay or reimburse all
costs and expenses of BNPPLC and then to all or any portion of the Secured
Obligations in such order as BNPPLC may believe to be in its best interest.
In any event, LRC will pay to BNPPLC upon demand all expenses (including
Attorneys’ Fees) incurred by BNPPLC in connection with the exercise of any of
BNPPLC’s rights or remedies under this Agreement.
Notwithstanding that BNPPLC may continue to hold Collateral and regardless of
the value of the Collateral, LRC will remain liable for the payment in full of
any unpaid balance of the Secured Obligations.
In any case where notice of any sale or disposition of any Collateral is
required, LRC hereby agrees that seven (7) days notice of such sale or
disposition is reasonable.
     (B) Recovery Not Limited. To the fullest extent permitted by applicable
law, LRC waives any right to require that BNPPLC proceed against any other
Person, exhaust any Collateral or other security for the Secured Obligations, or
to have any Other Liable Party joined with LRC in any suit arising out of the
Secured Obligations or this Agreement, or pursue any
 
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other remedy in their power. LRC waives any and all notice of acceptance of this
Agreement. LRC further waives notice of the creation, modification,
rearrangement, renewal or extension for any period of any of the Secured
Obligations of any Other Liable Party from time to time and any defense arising
by reason of any disability or other defense of any Other Liable Party or by
reason of the cessation from any cause whatsoever of the liability of any Other
Liable Party. Until all of the Secured Obligations shall have been paid in full,
LRC shall have no right to subrogation, reimbursement, contribution or indemnity
against any Other Liable Party and LRC waives the right to enforce any remedy
which BNPPLC has or may hereafter have against any Other Liable Party, and
waives any benefit of and any right to participate in any other security
whatsoever now or hereafter held by or on behalf of BNPPLC. LRC authorizes
BNPPLC, without notice or demand and without any reservation of rights against
LRC and without affecting LRC’s liability hereunder or on the Secured
Obligations, from time to time to (a) take or hold any other property of any
type from any other Person as security for the Secured Obligations, and
exchange, enforce, waive and release any or all of such other property,
(b) after and during the continuance of any Event of Default, apply or require
the application of the Collateral (in accordance with this Agreement) or such
other property in any order they may determine and to direct the order or manner
of sale thereof as they may determine, (c) renew, extend for any period,
accelerate, modify, compromise, settle or release any of the obligations of any
Other Liable Party with respect to any or all of the Secured Obligations or
other security for the Secured Obligations, and (d) release or substitute any
Other Liable Party.
9 Miscellaneous.
     (A) Payments by LRC to BNPPLC. All payments and deliveries of funds
required to be made by LRC to BNPPLC hereunder shall be paid or delivered in
immediately available funds by wire transfer to the Transition Account in
accordance with wiring instructions which will be provided by BNPPLC to LRC.
Time is of the essence as to all payments and deliveries of funds by LRC to
BNPPLC under this Agreement.
     (B) Payments by BNPPLC to LRC. All payments of Cash Collateral withdrawn by
BNPPLC from the Deposit Accounts and required to returned by BNPPLC to LRC
hereunder shall be paid or delivered in immediately available funds by wire
transfer to:

              Lam Research Corporation
    USD Concentration Account B LaSalle Bank NA
 
       
 
  Bank Name:   LaSalle National Bank
 
  Bank Address:   135 S. LaSalle Street
 
      Chicago, Il 60603
 
  ABA # (Domestic):   071000505
 
  SWIFT ID (Int'l):   LASLUS44

 
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  Account Name:   Lam Research Corporation
 
  Account Number:   58000-68321
 
  Bank Contact:   Juliana Silvestri
 
      312-904-0445
 
      juliana.silvestri@abnamro.com
 
  Reference:   BNPPLC Lease (Return of Collateral -
 
      Livermore/Parcel 6)

or at such other place and in such other manner as LRC may designate in a notice
sent to BNPPLC. Time is of the essence as to all such payments by BNPPLC to LRC.
     (C) Cumulative Rights, etc. Except as herein expressly provided to the
contrary, the rights, powers and remedies of BNPPLC under this Agreement shall
be in addition to all rights, powers and remedies given to them by virtue of any
Applicable Law, any other Operative Document or any other agreement, all of
which rights, powers, and remedies shall be cumulative and may be exercised
successively or concurrently without impairing their respective rights
hereunder. LRC waives any right to require BNPPLC to proceed against any Person
or to exhaust any Collateral or other collateral or security or to pursue any
remedy in BNPPLC’s power.
     (D) Survival of Agreements. All representations and warranties of LRC
herein, and all covenants and agreements herein shall survive the execution and
delivery of this Agreement, the execution and delivery of any other Operative
Documents and the creation of the Secured Obligations and continue until
terminated or released as provided herein.
     (E) Other Liable Party. Neither this Agreement nor the exercise by BNPPLC
or the failure of BNPPLC to exercise any right, power or remedy conferred herein
or by law shall be construed as relieving LRC or any Other Liable Party from
liability on the Secured Obligations or any deficiency thereon. This Agreement
shall continue irrespective of the fact that the liability of any Other Liable
Party may have ceased or irrespective of the validity or enforceability of any
other agreement evidencing or securing the Secured Obligations to which LRC or
any Other Liable Party may be a party, and notwithstanding the reorganization,
death, incapacity or bankruptcy of any Other Liable Party, or any other event or
proceeding affecting any Other Liable Party.
 
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     (F) Termination. Following the Designated Sale Date, upon satisfaction in
full of all Secured Obligations (other than contingent indemnity obligations)
and upon written request for the termination of this Agreement delivered by LRC
to BNPPLC, BNPPLC will execute and deliver, at LRC’s expense, an acknowledgment
that this Agreement and the pledge and security interest created hereby are
terminated, whereupon all rights to any remaining Collateral that has not been
applied against Secured Obligations in accordance with this Agreement shall
revert to LRC.
[The signature pages follow.]
 
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     IN WITNESS WHEREOF, this Pledge Agreement (Livermore/Parcel 6) is executed
to be effective as of December 18, 2007.

            BNP PARIBAS LEASING CORPORATION, a
Delaware corporation
      By:   /s/ Barry Mendelsohn        Barry Mendelsohn, Director           

 
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[Continuation of signature pages for Pledge Agreement (Livermore/Parcel 6) dated
as of December 18, 2007]

            LAM RESEARCH CORPORATION, a
Delaware corporation
      By:   /s/ Roch LeBlanc        Roch LeBlanc, Treasurer             

 
Pledge Agreement (Livermore/Parcel 6) — Signature Page

 

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Exhibit A
TO PLEDGE AGREEMENT
CRITERIA FOR ELIGIBLE INVESTMENTS
1. Eligible Investments. Eligible Investments will include only the following
(and in the case of any of the following which are registered in the name of the
LRC, payable to the LRC’s order, or specifically endorsed to LRC, only those
which have been endorsed by LRC to the Intermediary or in blank):

  •   Direct obligations of the US government and federal agencies.     •  
Commercial paper and corporate notes including bonds and medium term notes.    
•   Bank instrument of top 100 (ranked by asset size) international banks or the
top 50 domestic banks ranked by American Banker. This may include Bankers
Acceptances and Bankers Notes.

2. Maturity. The maximum maturity of any single investment is as follows:

  •   Direct obligations of US government and federal agencies: 10 years     •  
Other Eligible Investments: 7 years

Maturity is defined as actual maturity, put, remarketing, auction, or
pre-refunding date from the date of settlement.
3. Acceptable Ratings. The following minimum rating rules apply to issuers of
Eligible Investments other than direct obligations of the US government:

                  Moody’s   S&P   Fitch
Short Term
  P-1   A-1   F1
Long Term
  A2   A   A

And such issuers must have a rating assigned by two of the following rating
agencies: Moody’s Investors Service, Standard & Poor’s, and/or Fitch Ratings. In
the event of a “split rating”, the lower rating must comply with the minimum
rating rules.

 

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Exhibit B
TO PLEDGE AGREEMENT
AGREEMENT RE: BLOCKED ACCOUNT
(LIVERMORE/PARCEL 6)
          This Agreement (the “Agreement”),
among                                          (the “Deposit Taker”), LAM
RESEARCH CORPORATION (“LRC”) and BNP PARIBAS LEASING CORPORATION (“BNPPLC”)
pursuant to the Pledge Agreement (Livermore/Parcel 6) dated as of December 18,
2007, as amended from time to time (the “Pledge Agreement”), is dated as
of                     , 20___, and shall serve as instructions regarding the
following deposit account established by LRC at the Deposit Taker (the “Deposit
Account”):

                  Account   Account     Account   Type   Office     Number  
Time Deposit
               
 
           

The Deposit Account is styled “LAM RESEARCH CORPORATION, pledged to BNP Paribas
Leasing Corporation” or some abbreviation thereof made by Deposit Taker for
operational purposes.
     1. Lien. As provided in the Pledge Agreement, LRC has granted to BNPPLC a
continuing lien on and security interest in the Deposit Account and all amounts
from time to time on deposit therein. The parties hereto agree that this
Agreement complies with [Section 9-104(a)(2) of the Illinois Uniform Commercial
Code]. (Unless otherwise defined herein, all capitalized terms used in this
Agreement have the respective meanings given to those terms in the Pledge
Agreement.)
     2. Duties. Deposit Taker agrees to take such action with respect to the
Deposit Account as shall from time to time be specified in any writing
purportedly from BNPPLC as provided herein. LRC and BNPPLC agree that:
(a) Deposit Taker has no duty to monitor the balance of the Deposit Account;
(b) BNPPLC may at any time make withdrawals from the Deposit Account and take
any and all actions with respect to the Deposit Account, and Deposit Taker is
hereby authorized to honor any instructions with respect to the Deposit Account
(including withdrawals therefrom) which purport to be from BNPPLC (in each case
without notifying or obtaining the consent of LRC); (c) Deposit Taker may,
without further inquiry, rely on and act in accordance with any instructions it
receives from (or which purport to be from) BNPPLC, notwithstanding any
conflicting or contrary instructions it may receive from LRC, and Deposit Taker
shall have no liability to BNPPLC, LRC or any other person in relying on and
acting in accordance with any such instructions; (d) Deposit Taker shall have no
responsibility to inquire as to the form, execution, sufficiency or validity of
any notice or instructions delivered to it hereunder, nor to inquire as to the
identity, authority or rights of the person or persons executing or delivering
the same, and (e) Deposit Taker shall have a reasonable period of time

 

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within which to act in accordance with any notice or instructions from BNPPLC
with respect to the Deposit Account. Notwithstanding the preceding terms of this
Section, it is expressly understood and agreed that any direction or request by
BNPPLC with respect to the Deposit Account will apply only to available funds on
deposit in the Deposit Account and BNPPLC shall make withdrawals from the
Deposit Account only via fedwire or by electronic funds transfer.
     3. Interest on the Deposit Account. Deposit Taker will have no obligation
to pay any interest on the Deposit Account except as follows: on each Base Rent
Date accrued interest on each Deposit Account maintained by Deposit taker will
be added to the Deposit Account for the period (the “Interest Period”) since the
preceding Base Rent Date (or if there was no preceding Base Rent Date, since the
Base Rent Commencement Date) equal to the product of:

  •   the lesser of (i) an amount, computed as of the first day of the Base Rent
Period that includes or coincides with such Interest Period, equal to a fraction
of the Lease Balance, the numerator of which fraction equals the funds held in
the Deposit Account on such first day and the denominator of which fraction
equals the total of all Cash Collateral pledged to BNPPLC on such first day, or
(ii) the principal balance of the Deposit Account on the first day of such
Interest Period, times     •   the Collateral Percentage for the Base Rent
Period that includes or coincides with such Interest Period, times     •   LIBID
for such Interest Period, times     •   the number of days in such Interest
Period, divided by     •   three hundred sixty.

(As used in this Section 3, capitalized terms defined in the Common Definitions
and Provisions Agreement are intended to have the respective meanings assigned
to them in the Common Definitions and Provisions Agreement.)
     4. Information. Deposit Taker shall provide BNPPLC with such information
with respect to the Deposit Account and all items (and proceeds thereof)
deposited in the Deposit Account as BNPPLC may from time to time reasonably
request, and LRC hereby consents to such information being provided to BNPPLC
and agrees to pay all expenses in connection therewith.
     5. Exculpation; Indemnity. Deposit Taker undertakes to perform only such
duties as are expressly set forth herein. Notwithstanding any other provisions
of this Agreement, the
 
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parties hereby agree that Deposit Taker shall not be liable for any action taken
by it in accordance with this Agreement, including, without limitation, any
action so taken at BNPPLC’s request, except direct damages attributable to the
Deposit Taker’s gross negligence or willful misconduct. In no event shall
Deposit Taker be liable for any (i) losses or delays resulting from acts of God,
war, computer malfunction, interruption of communication facilities, labor
difficulties or other causes beyond Deposit Taker’s reasonable control, or
(ii) for indirect, special, punitive or consequential damages. LRC agrees to
indemnify and hold Deposit Taker harmless from and against all costs, damages,
claims, judgments, reasonable attorneys’ fees, expenses, obligations and
liabilities of every kind and nature (collectively, “Losses”) which Deposit
Taker may incur, sustain or be required to pay (other than those attributable to
Deposit Taker’s gross negligence or willful misconduct) in connection with or
arising out of this Agreement or the Deposit Account (including without
limitation, the amount of any overdraft created in the Deposit Account resulting
from a Chargeback or from debiting the Deposit Account for Charges (defined
below) owed to the Deposit Taker), and to pay to Deposit Taker on demand the
amount of all such Losses. Nothing in this Section, and no indemnification of
Deposit Taker hereunder, shall affect in any way the indemnification obligations
of LRC to BNPPLC under the Pledge Agreement or other Operative Documents. The
provisions of this Section shall survive termination of this Agreement.
     6. Chargebacks. All items deposited in, and electronic funds transfers
credited to, the Deposit Account and then returned unpaid or returned (or not
finally settled) for any reason (collectively, “Chargebacks”) will be charged
back to the Deposit Account, including (a) any item which is returned because of
insufficient or uncollected funds or otherwise dishonored for any reason, and
(b) any returns or reversals relating to electronic funds transfers or deposits
into the Deposit Account.
The Deposit Taker will notify LRC and BNPPLC of any and all Chargebacks which
have been charged back to the Deposit Account by reporting the return of such
items (or electronic funds transfers) to the persons identified in, or as
otherwise designated pursuant to, the Section regarding Notices in this
Agreement. The returned item will be sent to LRC along with a debit advice.
BNPPLC will also receive a copy of each such returned item and the debit advice,
provided, however, that after receipt of written notice from BNPPLC, Deposit
Taker will send the returned item directly to BNPPLC.
In the event there are insufficient funds in the Deposit Account to cover such
Chargebacks, upon receipt of notice from Deposit Taker of the occurrence of such
Chargebacks and the failure of LRC to pay Deposit Taker such Chargebacks, BNPPLC
agrees to pay the amount of the Chargebacks to Deposit Taker, in immediately
available funds, within one Business Day after receipt of such notice, provided
that (A) in no event will BNPPLC’s obligation to pay any Chargeback to Deposit
Taker exceed the amount of insufficient funds described in this provision, if
any, caused by a withdrawal of funds from the Deposit Account and payment of the
same to
 
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BNPPLC, and (B) any such liability of BNPPLC to Deposit Taker shall in no way
release LRC from liability to BNPPLC and shall not impair BNPPLC’s rights and
remedies against LRC, by way of subrogation or otherwise, to collect all such
Chargebacks.
     7. Charges. In consideration of the services of Deposit Taker in
establishing, maintaining, and conducting transactions through the Deposit
Account, Deposit Taker has established, and LRC hereby agrees to pay the
reasonable and customary fees and other charges for the Deposit Account and
services related thereto, together with any and all other expenses incurred by
Deposit Taker in connection with this Agreement or the Deposit Account and
related services, including without limitation amounts paid or incurred by
Deposit Taker in enforcing its rights and remedies under this Agreement, or in
connection with defending any claim made against Deposit Taker in connection
with this Agreement or the Deposit Account (collectively, the “Charges”).
However, no Charges will be debited to or offset against funds in the Deposit
Account without the prior written consent of BNPPLC. If LRC fails to pay the
amount of the Charges within five (5) Business Days of receipt of a billing
statement detailing such Charges, BNPPLC agrees to pay Deposit Taker, via wire
transfer or other immediately available funds, the amount of such Charges within
two (2) Business Days after receipt of a billing statement detailing such
Charges. Deposit Taker will bill LRC directly, and LRC agrees to pay Deposit
Taker, via wire transfer or other immediately available funds, the amount of
such Charges. Deposit Taker reserves the right to change any or all of the fees
and charges according to annual review, upon not less than ten (10) days written
notice to LRC and BNPPLC.
     8. Irrevocable Agreement. LRC acknowledges that the agreements made by it
and the authorizations granted by it herein are irrevocable and that the
authorizations granted in Section 2 are powers coupled with an interest.
     9. Set-off. Deposit Taker waives all of its existing and future rights of
set-off and banker’s liens against the Deposit Account and all items (and
proceeds thereof) that come into possession of Deposit Taker in connection with
the Deposit Account, except those rights of set-off and banker’s liens arising
in connection with Chargebacks.
     10. Miscellaneous. This Agreement is binding upon the parties hereto and
their respective successors and assigns (including any trustee of LRC appointed
or elected in any action under the Bankruptcy Code) and shall inure to their
benefit. Neither LRC nor BNPPLC may assign their respective rights hereunder
unless the prior written consent of the Deposit Taker is obtained. Neither this
Agreement nor any provision hereof may be changed, amended, modified or waived,
except by an instrument in writing signed by the parties hereto. Any provision
of this Agreement that may prove unenforceable under any law or regulation shall
not affect the validity of any other provision hereof. This Agreement shall be
governed by, and interpreted in accordance with, the laws of the state in which
the account office identified above is located without regard to conflict of
laws provisions. Each party hereto intentionally,
 
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     knowingly and voluntarily irrevocably waives any right to trial by jury in
any proceeding related to this Agreement. This Agreement may be executed in any
number of counterparts which together shall constitute one and the same
instrument.
     11. Termination and Resignation. This Agreement may be terminated by
agreement of BNPPLC and LRC upon fifteen (15) days’ prior written notice to
Deposit Taker; provided, however, that this Agreement shall terminate
immediately upon notice from BNPPLC that all of LRC’s obligations secured by the
Pledge Agreement are satisfied. Deposit Taker may, at any time upon thirty
(30) days’ prior written notice to BNPPLC and LRC, terminate this Agreement and
close the Deposit Account; provided, however, that a substitute deposit taker
has been appointed for [BNPPLC or name of Participant] [if name of Participant
is inserted, then also insert: “(in its capacity as a Participant)”] under and
as described in the Pledge Agreement.. Upon termination of this Agreement any
funds in the Deposit Account shall be subject to the direction of BNPPLC,
including any direction given by BNPPLC that such funds be wired to another
“Deposit Taker” designated for [BNPPLC or name of Participant] under and as
defined in the Pledge Agreement.
     12. Notices. Unless otherwise specifically provided herein, any notice or
other communication required or permitted to be given shall be in writing
addressed to the respective party as set forth below and may be personally
served, telecopied or sent by overnight courier service and shall be deemed to
have been given: (a) if delivered in person, when delivered; (b) if delivered by
telecopy, on the date of transmission if transmitted on a Business Day before
4:00 P.M. (Central time) (but only if such telecopied document is also delivered
by another method permitted by this Agreement by the next banking business day),
or, if not, on the next succeeding Business Day; or (c) if delivered by
reputable overnight courier, the banking business day on which such delivery is
made by such courier.
     Notices shall be addressed as follows:

         
     BNPPLC:
  BNP Paribas Leasing Corporation    
 
  12201 Merit Drive, Suite 860    
 
  Dallas, Texas 75251    
 
  Attention: Lloyd G. Cox, Managing Director    
 
       
 
  Telecopy: (972) 788-9140    
 
  Email: lloyd.cox@americas.bnpparibas.com    
 
       
     Deposit Taker:
       
 
       
 
       
 
       
 
       
 
       
 
  Attn:    
 
 
 
   

 
 Exhibit B to Pledge Agreement (Livermore/Parcel 6) — Page 5

 

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  Telecopy:    
 
 
   
 
       
     LRC:
  Lam Research Corporation    
 
  4300 Cushing Parkway    
 
  Fremont, California 94538    
 
  Attention: Roch LeBlanc, Treasurer    
 
       
 
  Telecopy: (512) 572-1586
   
 
  Email: Roch.Leblanc@lamrc.com    

or in any case, to such other address as the party addressed shall have
previously designated by written notice to the serving party, given in
accordance with this Section.
[signature page follows.]
 
 Exhibit B to Pledge Agreement (Livermore/Parcel 6) — Page 6

 

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     This Agreement has been executed and delivered by each of the parties
hereto by a duly authorized officer of each such party on the date first set
forth above.

            LAM RESEARCH CORPORATION,
a Delaware corporation
      By:           Name:           Title:        

            BNP PARIBAS LEASING CORPORATION,
a Delaware corporation
      By:           Name:           Title:        

ACCEPTED AND AGREED TO as of this
______ day of                     , ______.

          [DEPOSIT TAKER]
      By:           Name:           Title:          

 
 Exhibit B to Pledge Agreement (Livermore/Parcel 6) — Page 7

 

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Exhibit C
TO PLEDGE AGREEMENT
DESCRIPTION OF INITIAL PRE-LEASE COLLATERAL
All assets held or to be held in the following custody or subcustody accounts,
safekeeping accounts, investment management accounts and/or other account with
the Intermediary:

          Type of Account   Account Number   Entity/Location
 
       
Securities Account
  [_______________]   State Street Bank and Trust Company
 
       
 
       
 
       
 
       
 
       
 
       
 
       
 
       

 

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Exhibit D
TO PLEDGE AGREEMENT
EXAMPLES OF CALCULATIONS REQUIRED
TO AVOID A COLLATERAL IMBALANCE
     The examples below are provided to illustrate the calculations required for
allocations of Cash Collateral in a manner that will avoid a Collateral
Imbalance. The examples are not intended to reflect actual numbers under this
Agreement or actual Percentages of BNPPLC or any of the Participants; nor are
the examples intended to provide a formula for the allocations that would be
appropriate in every case.
EXAMPLE NO. 1
Assumptions:

1.   Two Participants (“Participant A” and “Participant B”) are parties to the
Participation Agreement with BNPPLC. Participant A’s Percentage is 50% and
Participant B’s Percentage is 45%, leaving BNPPLC with a Percentage of 5%.   2.
  The Initial Advance was $12,000,000, resulting in a Lease Balance of
$12,000,000, allocable as follows:

             
     A.
  BNPPLC’s Parent (providing BNPPLC’s share) (5%)   $ 600,000  
     B.
  Participant A (50%)     6,000,000  
     C.
  Participant B (45%)     5,400,000  
 
           
 
  TOTAL   $ 12,000,000  

3.   The initial Minimum Collateral Value was $12,000,000   4.   As of the
Effective Date, LRC had delivered to BNPPLC Cash Collateral of $12,000,000,
equal to the Minimum Collateral Value, as required by subparagraph 4(B) of this
Agreement.

Allocation of Cash Collateral Required: To avoid a Collateral Imbalance under
these assumptions, BNPPLC would be required to allocate the $12,000,000 to the
Deposit Takers for BNPPLC and the Participants as follows:

             
     A.
  BNPPLC’s Deposit Taker (5% of Minimum Collateral Value)   $ 600,000  
     B.
  Participant A’s Deposit Taker (50% of Minimum Collateral Value)   $ 6,000,000
 
     C.
  Participant B’s Deposit Taker (45% of Minimum Collateral Value)   $ 5,400,000
 
 
           
 
  TOTAL   $ 12,000,000  

 

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EXAMPLE NO. 2
Assumptions: Assume the same facts as in Example No. 1, and in addition assume
that:

1.   Effective as of the first Base Rent Date, a new Participant approved by LRC
(“Participant C”) became a party to this Agreement and the Participation
Agreement, taking a Percentage of 20%. Simultaneously, Participant A and
Participant B voluntarily entered into supplements to the Participation
Agreement which reduced their Percentages to 40% and 35%, respectively, in
return for appropriate payments made to them.

Allocation of Cash Collateral Required: To avoid a Collateral Imbalance under
these assumptions, BNPPLC would be required to allocate the Cash Collateral as
required to leave the Deposit Takers for BNPPLC and the Participants with the
following amounts:

             
     A.
  BNPPLC’s Deposit Taker (5% of Minimum Collateral Value)   $ 600,000  
     B.
  Participant A’s Deposit Taker (40% of Minimum Collateral Value)   $ 4,800,000
 
     C.
  Participant B’s Deposit Taker (35% of Minimum Collateral Value)   $ 4,200,000
 
     D.
  Participant C’s Deposit Taker (20% of Minimum Collateral Value)   $ 2,400,000
 
 
           
 
  TOTAL   $ 12,000,000  

 

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Exhibit E
TO PLEDGE AGREEMENT
NOTICE OF LRC’s REQUIREMENT TO
WITHDRAW AND PAY INTEREST
EARNED ON CASH COLLATERAL
[____________, ___]
BNP Paribas Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox, Managing Director

      Re:   Pledge Agreement (Livermore/Parcel 6) dated as of December 18, 2007
between Lam Research Corporation and BNP Paribas Leasing Corporation

Gentlemen:
     Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Livermore/Parcel 6) referenced above
(the “Pledge Agreement”). This letter constitutes notice to you, as secured
party under the Pledge Agreement, that pursuant to subparagraph 5(B) of the
Pledge Agreement, LRC requires you to withdraw the interest that has accrued on,
and been added to, the Deposit Accounts on the last day of each Base Rent Period
and to return the same to LRC on the date of withdrawal.
     We understand that each withdrawal and return of interest accrued on the
Deposit Accounts will be subject to the conditions that:
     (i) You may limit the withdrawal and payment of such interest to LRC as
necessary to cause the Value of the remaining Cash Collateral, which is subject
to a Qualified Pledge under the Pledge Agreement, to be no less than the Minimum
Collateral Value on the date of withdrawal.
     (ii) You may decline to withdraw and pay any such interest to LRC when any
Default has occurred and is continuing.
NOTE: WE UNDERSTAND THAT YOU MAY BECOME ENTITLED TO LIMIT THE AMOUNT OF, OR
DECLINE TO MAKE, ANY WITHDRAWAL AND PAYMENT OF INTEREST EXPECTED

 

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PURSUANT TO THIS NOTICE BY REASON OF THE FOREGOING CONDITIONS. IN THE EVENT,
HOWEVER, YOU SHOULD DETERMINE THAT YOU WILL EXERCISE THAT RIGHT, WE ASK THAT YOU
PROMPTLY NOTIFY LRC AND ADVISE LRC OF THE REASONS YOU BELIEVE THAT YOU ARE NOT
REQUIRED TO WITHDRAW AND PAY THE INTEREST ON THE DEPOSIT ACCOUNT AS PROVIDED
ABOVE.
     Please remember that the express terms of the Pledge Agreement permit the
Deposit Takers to require notice of withdrawal at least seven days before Cash
Collateral is withdrawn from the Deposit Accounts. Accordingly, you must notify
the Deposit Takers seven days prior to each withdrawal of Cash Collateral
required by this notice.

            Lam Research Corporation
      By:           Name:           Title:        

 
 Exhibit E to Pledge Agreement (Livermore/Parcel 6) — Page 2

 

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Exhibit F
TO PLEDGE AGREEMENT
NOTICE OF LRC’s REQUIREMENT TO
WITHDRAW EXCESS CASH COLLATERAL
[____________, ___]
BNP Paribas Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox, Managing Director

      Re:   Pledge Agreement (Livermore/Parcel 6) dated as of December 18, 2007
between Lam Research Corporation and BNP Paribas Leasing Corporation

Gentlemen:
     Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Livermore/Parcel 6) referenced above
(the “Pledge Agreement”). This letter constitutes notice to you, as secured
party under the Pledge Agreement, that pursuant to subparagraph 5(B) of the
Pledge Agreement, LRC requires you to withdraw from the Deposit Accounts and
return to LRC the following amount:
                                                                  Dollars ($ 
                   )
on the following date:
                         , ___
     To assure you that LRC has satisfied the conditions to its right to require
such withdrawal, and to induce you to comply with this notice, LRC certifies to
you that:
     (iii) You may withdraw funds from any number of Deposit Accounts so as to
accomplish the withdrawal of an aggregate amount as required by this notice
without creating any Collateral Imbalance,
     (iv) Your withdrawal and delivery of the amount specified above to LRC will
not cause the Value of the remaining Cash Collateral, which is subject to a
Qualified

 

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Pledge under the Pledge Agreement, to be less than the Minimum Collateral Value.
After giving effect to such withdrawal, the Cash Collateral remaining in the
Deposit Accounts will be:
                                                                  Dollars ($ 
                   ).
     (v) Either:
     (A) the date of withdrawal specified above is the last day of a Base Rent
Period (i.e., a Base Rent Date upon which a Base Rent Period will end); or
     (B) the amount of the withdrawal required above is not so large as to
require any withdrawal of any interest that has accrued on any of the Deposit
Accounts since the latest Base Rent Date preceding such withdrawal.
     (vi) LRC is giving this notice to you at least ten days prior to the
expected date of withdrawal specified above.
     (vii) No Event of Default has occurred and is continuing as of the date of
this notice, and LRC does not anticipate that a Default will have occurred and
be continuing on the date upon which the withdrawal is required.
NOTE: YOU SHALL BE ENTITLED TO DISREGARD THIS NOTICE IF THE STATEMENTS ABOVE ARE
NOT CORRECT OR IF THE DATE FOR WITHDRAWAL SPECIFIED ABOVE IS LESS THAN TEN DAYS
AFTER YOUR RECEIPT OF THIS NOTICE. HOWEVER, WE ASK THAT YOU NOTIFY LRC
IMMEDIATELY IF FOR ANY REASON YOU BELIEVE THIS NOTICE IS DEFECTIVE.
     Please remember that the express terms of the Pledge Agreement permit the
Deposit Takers to require notice of withdrawal at least seven days before Cash
Collateral is withdrawn from the Deposit Accounts. Accordingly, you must notify
the Deposit Takers seven days prior to the withdrawal of Cash Collateral
required by this notice.

            Lam Research Corporation
      By:           Name:           Title:        

 
 Exhibit F to Pledge Agreement (Livermore/Parcel 6) — Page 2

 

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Exhibit G
TO PLEDGE AGREEMENT
NOTICE OF LRC’S REQUIREMENT OF
DIRECT PAYMENT TO BNPPLC
[____________, ___]
BNP Paribas Leasing Corporation
12201 Merit Drive, Suite 860
Dallas, Texas 75251
Attention: Lloyd G. Cox, Managing Director

      Re:   Pledge Agreement (Livermore/Parcel 6) dated as of December 18, 2007
between Lam Research Corporation and BNP Paribas Leasing Corporation

Gentlemen:
     Capitalized terms used in this letter are intended to have the meanings
assigned to them in the Pledge Agreement (Livermore/Parcel 6) referenced above
(the “Pledge Agreement”). This letter constitutes notice to you, as secured
party under the Pledge Agreement, that pursuant to subparagraph 5(C) of the
Pledge Agreement, LRC requires you to withdraw from the Deposit Account and to
retain, as a payment from LRC required by the Purchase Agreement, the following
amount:
                                                                  Dollars ($ 
                   )
     on the following date (which, LRC acknowledges, must be the Designated Sale
Date):
                         , ___
     LRC acknowledges that its right to require such withdrawal is subject to
the condition that LRC must give this notice to you at least ten days prior to
the date of required withdrawal and payment specified above, and also to the
condition that no Event of Default (under and as defined in the Pledge Agreement
or as defined in the Common Definitions and Provisions Agreement referenced
therein) has occurred and is continuing.

 

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     Please remember that the express terms of the Pledge Agreement allow the
Deposit Takers to require notice of withdrawal at least seven days before Cash
Collateral is to be withdrawn from the Deposit Accounts. Accordingly, you must
notify the Deposit Takers seven days prior to the withdrawal of Cash Collateral
required by this notice.

            Lam Research Corporation
      By:           Name:           Title:        

 
 Exhibit G to Pledge Agreement (Livermore/Parcel 6) — Page 2