Exhibit 10.126

PLEDGE AGREEMENT
(FREMONT/BUILDING #3)
BETWEEN
LAM RESEARCH CORPORATION
(“LRC”)
AND
BNP PARIBAS LEASING CORPORATION
(“BNPPLC”)
December 21, 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  
 
      Default     2  
 
      Deposit Account     2  
 
      Deposit Taker     2  
 
      Deposit Taker’s Agreement     3  
 
      Deposit Taker Prerequisites     3  
 
      Disqualified Deposit Taker     3  
 
      Eligible Deposit Taker     4  
 
      Event of Default     5  
 
      Lien     6  
 
      Minimum Collateral Value     6  
 
      Other Liable Party     6  
 
      Percentage     6  
 
      Qualified Pledge     7  
 
      Secured Obligations     7  
 
      Transition Account     7  
 
      UCC     7  
 
      Value     7  
 
  (B)   Other Definitions     7  
 
                2   Pledge and Grant of Security Interest     8  
 
                3   Provisions Concerning the Deposit Takers     8  
 
  (A)   Deposit Taker Agreements     8  
 
  (B)   Qualification of Deposit Takers Generally     9  
 
  (C)   Substitutions for Disqualified Deposit Takers     9  
 
  (D)   Other Voluntary Substitutions of Deposit Takers     9  
 
  (E)   Delivery of Deposit Taker’s Agreements by LRC and BNPPLC     9  
 
  (F)   Replacement of Participants Proposed by LRC     10  
 
  (G)   Constructive Possession of Collateral     10  
 
  (H)   Attempted Setoff by Deposit Taker     11  
 
                4   Delivery and Maintenance of Collateral     11  
 
  (A)   Delivery of Cash Collateral by LRC     11  
 
  (B)   Transition Account     11  
 
  (C)   Allocation of Cash Collateral Among Deposit Takers     12  

 

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                              Page
 
  (D)   Status of the Deposit Accounts Under the Reserve Requirement Regulations
    12  
 
  (E)   Acknowledgment by LRC that Requirements of this Agreement are
Commercially Reasonable     13  
 
                5   Withdrawal of Collateral     13  
 
  (A)   Withdrawal of Cash Collateral Prior to the Designated Sale Date     13  
 
  (B)   Withdrawal and Application of Cash Collateral to Reduce or Satisfy the
Secured Obligations to BNPPLC     14  
 
  (C)   Withdrawal and Return of Cash Collateral Following Satisfaction of all
Secured Obligations     14  
 
  (D)   No Other Right to Require or Make Withdrawals     14  
 
  (E)   BNPPLC’s Covenant Not to Make Unauthorized Withdrawals     14  
 
                6   Representations and Covenants of LRC     14  
 
  (A)   Representations of LRC     15  
 
  (B)   Covenants of LRC     15  
 
                7   Authorized Action by BNPPLC     17  
 
                8   Default and Remedies     17  
 
  (A)   Remedies     17  
 
  (B)   Recovery Not Limited     19  
 
                9   Miscellaneous     19  
 
  (A)   Payments by LRC to BNPPLC     19  
 
  (B)   Payments by BNPPLC to LRC     20  
 
  (C)   Cumulative Rights, etc.     20  
 
  (D)   Survival of Agreements     20  
 
  (E)   Other Liable Party     20  
 
  (F)   Termination     21  

 

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PLEDGE AGREEMENT
(FREMONT/BUILDING #3)
     This PLEDGE AGREEMENT (FREMONT/BUILDING #3) (this “Agreement”), dated as of
December 21, 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 Lease Agreement (Fremont/Building #3) and
an Agreement Regarding Purchase and Remarketing Options (Fremont/Building #3)
(as from time to time supplemented, amended or restated, the “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
(Fremont/Building #3) 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 Lease, BNPPLC is leasing to LRC property described in the
Lease, and pursuant to the Purchase Agreement, LRC may purchase or arrange for a
purchase of BNPPLC’s interest in such property.
     As provided in the Closing Certificate, this Agreement and the other
Operative Documents are intended to amend, restate and replace entirely LRC’s
Prior Lease.
     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 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 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 Collateral, 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.
     “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.
     “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

 

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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 A, 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 a 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 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
 
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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) ABN Amro Bank, N.V. or any successor of ABN Amro Bank, N.V., acting
through any branch, office or agency in New York, Illinois or California that
can lawfully maintain a Deposit Account as a Deposit Taker hereunder;
     (3) Royal Bank of Scotland or any successor of Royal Bank of Scotland,
acting through any branch, office or agency in New York, Illinois or California
that can lawfully maintain a Deposit Account as a Deposit Taker hereunder;
     (4) 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
     (5) 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
 
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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.)
     “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) 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 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 Cash Collateral
held by BNPPLC or the Deposit Takers exceeds the Minimum Collateral Value then
in effect, a failure of the pledge or security interest contemplated herein in
such excess Cash Collateral to be a valid, perfected, first priority pledge or
security interest shall not
 
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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, 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.
     “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 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 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
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
 
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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.
     “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
Purchase Agreement, including (i) LRC’s obligation to pay any Supplemental
Payment as provided in subparagraph 2(A)(3) of the Purchase Agreement,
(ii) 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 (iii) any damages incurred by BNPPLC because of (A) LRC’s breach
of the Purchase Agreement or (B) the rejection by LRC of the Purchase Agreement
in any bankruptcy, insolvency or similar proceeding.
     “Transition Account” shall have the meaning given it in subparagraph 4(B).
     “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.
     (b) Any Deposit Account shall be valued at the principal balance thereof on
such date.
     (c) 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 Purchase Agreement
for a statement of the terms thereof. All capitalized terms used in this
Agreement, which are defined in the Purchase Agreement and not otherwise defined
herein or in the Common Definitions and
 
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Provisions Agreement, shall have the same meanings herein as they would have in
the Purchase Agreement. 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 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 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
     (b) 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. On or prior to the Effective Date, 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, has satisfied the Deposit Taker Prerequisites. Without limiting
the foregoing, BNPPLC Paribas and each Participant’s designated Deposit Taker
has received a completed, executed Deposit Taker’s Agreement from
 
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LRC and BNPPLC and has executed and returned the same to LRC and BNPPLC.
LRC acknowledges and agrees that (i) BNPPLC and any Participant may designate
BNP Paribas or any other Eligible Deposit Taker 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 subparagraph 3(E), BNPPLC and LRC must
promptly upon request execute and deliver any properly completed Deposit Taker’s
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 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
 
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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 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.
 
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However, nothing in this subparagraph will be construed to permit or authorize
any replacement by LRC 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 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 Cash Collateral by LRC. On the Effective 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 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.
 
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     (B) Transition Account. Pending deposit in the Deposit Accounts or other
application as provided herein, all Cash Collateral received by BNPPLC shall be
deposited directly into, and 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 BNPPLC 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.
     (C) 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 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 B.
     (D) 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
 
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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(A)(4) or in subparagraph 5(B).
     (E) 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 of Cash Collateral 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
 
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to the periodic withdrawal of interest accruing on the Deposit Accounts, it may
be in the form of Exhibit C. Otherwise, such notice must be in the form of
Exhibit D.
     (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.
     (B) Withdrawal and Application of Cash Collateral to Reduce or Satisfy the
Secured Obligations to BNPPLC. To satisfy the Secured Obligations, and provided
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, LRC
may require BNPPLC to withdraw and retain any Cash Collateral held by any
Deposit Taker on the Designated Sale Date (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 E, 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.
     (C) 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.
     (D) 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.
     (E) BNPPLC’s Covenant Not to Make Unauthorized Withdrawals. Notwithstanding
provisions of any Deposit Taker’s Agreement which may state that BNPPLC is
entitled to withdraw Collateral held by 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.
 
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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.
     (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
 
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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 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 a Deposit Taker
pursuant hereto), sell, 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).
The rights granted to BNPPLC pursuant to this Agreement are in addition to the
rights granted to BNPPLC in any 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.
 
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     (8) Without limiting the foregoing, within five days after LRC becomes
aware of any failure of the pledge or security interest contemplated herein in
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
 
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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 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, 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;
     (ii) 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
     (iii) 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.
 
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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 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
 
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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
 
  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
 
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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 LRC or 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 LRC or any Other Liable Party, or any other
event or proceeding affecting LRC or any Other Liable Party.
     (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.]
 
Pledge Agreement (Livermore/Parcel #3) — Page 21

 

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     IN WITNESS WHEREOF, this Pledge Agreement (Fremont/Building #3) is executed
to be effective as of December 21, 2007.

            BNP PARIBAS LEASING CORPORATION, a Delaware corporation
      By:   /s/ Lloyd G. Cox        Lloyd G. Cox, Managing Director             

 
Pledge Agreement (Fremont/Building #3) — Signature Page

 

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[Continuation of signature pages for Pledge Agreement (Fremont/Building #3)
dated as of December 21, 2007]

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

 
Pledge Agreement (Fremont/Building #3) — Signature Page

 

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Exhibit A
TO PLEDGE AGREEMENT
AGREEMENT RE: BLOCKED ACCOUNT
(FREMONT/BUILDING #3)
     This Agreement (the “Agreement”), among _________________ (the “Deposit
Taker”), LAM RESEARCH CORPORATION (“LRC”) and BNP PARIBAS LEASING CORPORATION
(“BNPPLC”) pursuant to the Pledge Agreement (Fremont/Building #3) dated as of
December 21, 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 parties hereby agree that Deposit Taker shall not be
liable for any action taken by it in
 
Exhibit A to Pledge Agreement (Fremont/Building #3) — Page 2

 

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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. Except for the direct damages
specifically described in the preceding sentence, 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 any other damages, including, without limitation, indirect, special,
punitive or consequential damages. LRC and BNPPLC jointly and severally agree 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,
 
Exhibit A to Pledge Agreement (Fremont/Building #3) — Page 3

 

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if any, caused by a withdrawal of funds from the Deposit Account and payment of
the same to 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 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, 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
 
Exhibit A to Pledge Agreement (Fremont/Building #3) — Page 4

 

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is located without regard to conflict of laws provisions. Any action in
connection with this Agreement shall be brought in the courts of the State of
Illinois, located in Cook County, or the courts of the United States of America
for the Northern District of Illinois; provided, however, that with respect to
an action brought by BNPPLC to enforce its rights with respect to the
Collateral, such action may be brought in the courts of the State of California,
located in the County of Alameda, or the courts of the United States of America
for the Northern District of California. Each party hereto irrevocably waives
any objection on the grounds of venue, forum non-conveniens or any similar
grounds, irrevocably consents to service of process by mail or in any other
manner permitted by applicable law and consents to the jurisdiction of said
courts. Each party hereto intentionally, 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)] and as
described in the Pledge Agreement. Deposit Taker may terminate this Agreement
upon ten (10) days’ prior written notice to BNPPLC and LRC in the event of a
material breach of this Agreement (including non-payment of any Charges or other
obligations under this Agreement), and which constitutes an Event of Default as
that term is defined in the Common Definitions and Provisions Agreement, by
either LRC or BNPPLC. 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.
 
Exhibit A to Pledge Agreement (Fremont/Building #3) — Page 5

 

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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: ___________________________     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 A to Pledge Agreement (Fremont/Building #3) — 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 A to Pledge Agreement (Fremont/Building #3) — Page 7

 

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Exhibit B
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(A) 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 C
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 (Fremont/Building #3) dated as of December 21, 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 (Fremont/Building #3) referenced above
(the “Pledge Agreement”). This letter constitutes notice to you, as secured
party under the Pledge Agreement, that pursuant to subparagraph 5(A) 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 C to Pledge Agreement (Fremont/Building #3) — Page 2

 

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Exhibit D
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 (Fremont/Building #3) dated as of December 21, 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 (Fremont/Building #3) referenced above
(the “Pledge Agreement”). This letter constitutes notice to you, as secured
party under the Pledge Agreement, that pursuant to subparagraph 5(A) 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 D to Pledge Agreement (Fremont/Building #3) — Page 2

 

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Exhibit E
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 (Fremont/Building #3) dated as of December 21, 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 (Fremont/Building #3) 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 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 E to Pledge Agreement (Fremont/Building #3) — Page 2