Exhibit 10.74

PARTICIPATION AGREEMENT

This Participation Agreement

, dated as of December 6, 2000 (as amended, modified, extended, supplemented,
restated and/or replaced from time to time, this "Agreement"), is by and among
Lam Research Corporation, a Delaware corporation (the "Lessee" or the
"Guarantor"); the Cushing 2000 Trust, a Delaware business trust (the "Trust,"
"Borrower" or "Lessor"); Wilmington Trust Company, a banking corporation
organized under the laws of the State of Delaware ("Wilmington Trust Company");
Wilmington Trust FSB, a federal savings bank (together with Wilmington Trust
Company, the "Trust Companies"); Scotiabanc Inc., a Delaware corporation, and
the various banks and other lending institutions which are parties hereto from
time to time as holders of certificates issued with respect to the Cushing 2000
Trust (subject to the definition of Holders in Annex A hereto, individually, a
"Holder" and collectively, the "Holders"); The Bank of Nova Scotia and the
various banks and other lending institutions which are parties hereto from time
to time as lenders (subject to the definition of Lenders in Annex A hereto,
individually, a "Lender" and collectively, the "Lenders"); and The Bank of Nova
Scotia, as the administrative agent for the Lenders and with respect to the
Security Documents, as agent for the Lenders and the Holders, to the extent of
their interests (in such capacity, the "Agent"). Capitalized terms used but not
otherwise defined in this Agreement shall have the meanings set forth in Annex A
hereto.

In consideration of the mutual agreements herein contained and other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto hereby agree as follows:

THE LOANS

.

Subject to the terms and conditions of this Agreement and the other Operative
Agreements and in reliance on the representations and warranties of each of the
parties hereto contained herein or made pursuant hereto, the Lenders have agreed
to make Loans to the Trust from time to time in an aggregate principal amount of
up to the aggregate amount of the Commitments of the Lenders in order for the
Trust to acquire the Property and for the other purposes described herein, and
in consideration of the receipt of proceeds of the Loans, the Trust will issue
the Notes. The Loans shall be made and the Notes shall be issued pursuant to the
Credit Agreement. Pursuant to Section 5 of this Agreement and Section 2 of the
Credit Agreement, the Loans will be made to the Trust at the request of the
Lessee to acquire the Property, in consideration for the Lessee agreeing
pursuant to the Lease to lease the Property. The Loans and the obligations of
the Trust under the Credit Agreement shall be secured by the Collateral.

HOLDER ADVANCES

.

Subject to the terms and conditions of this Agreement and the other Operative
Agreements, and in reliance on the representations and warranties of each of the
parties hereto contained herein or made pursuant hereto, each Holder shall make
an advance of immediately available funds (a "Holder Advance") on a pro rata
basis to the Trust, based on such Holder's percentage commitment set forth on
Schedule 2.1 attached hereto (the "Holder Commitment"), provided, that Agent
shall have received a Requisition from Lessee in accordance with Section 5
hereof. The aggregate amount of all Holder Advances shall be four percent (4%)
of the amount of all Advances requested; provided, that no Holder shall be
obligated to make any Holder Advance in excess of its pro rata share of the
Available Holder Commitment. The aggregate amount of Holder Advances shall not
exceed the aggregate amount of the Holder Commitments. No prepayment or any
other payment with respect to any Advance shall be permitted such that the
Holder Advances equal less than four percent (4%) of the outstanding amount of
the Advances; except in connection with termination or expiration of the Term,
or in connection with the exercise of remedies relating to the occurrence of a
Lease Event of Default. To the extent the Trust, in its capacity as Borrower
under the Credit Agreement, shall have elected to terminate or reduce the amount
of the Lender Commitment pursuant to Section 2.4 of the Credit Agreement, a pro
rata election shall be deemed to have been made with respect to the Holder
Commitment. On any date on which the Lender Commitment shall be reduced to zero
as a result of a Credit Agreement Event of Default, the Holder Commitment shall
automatically be reduced to zero and the Trust shall prepay the Holder Advances
in full, together with accrued but unpaid Holder Yield thereon and all other
amounts owing under the Certificates.

The representations, warranties, covenants and agreements of the Holders herein
and in the other Operative Agreements are several, and not joint or joint and
several.

SUMMARY OF TRANSACTIONS

.

Operative Agreements

.

On the Closing Date, each of the respective parties hereto and thereto shall
execute and deliver this Agreement, the Lease, the Credit Agreement, the Notes,
the Trust Agreement, the Certificates, the Pledge Agreement, the Deed of Trust
and such other documents, instruments, certificates and opinions of counsel as
agreed to by the parties hereto.

Property Purchase

. On the Funding Date and subject to the terms and conditions of this Agreement
(a) the Holders will each make a Holder Advance in accordance with Sections 2
and 5 of this Agreement and the terms and provisions of the Trust Agreement; (b)
the Lenders will each make Loans in accordance with Sections 1 and 5 of this
Agreement and the terms and provisions of the Credit Agreement; (c) the Trust
will purchase and acquire good and marketable title to the Land and Improvements
identified by the Lessee pursuant to a Deed or Deeds, and grant the Agent a lien
on such Property by execution of the required Security Documents; (d) the Lessee
and the Lessor shall execute and deliver separate Lease Supplements relating to
the Land and the Improvements; and (e) the Term shall commence with respect to
the Land and the Improvements.

Interest on Loans

.

Each Loan shall accrue interest computed and payable in accordance with the
terms of the Credit Agreement. Each Loan shall become due and payable at the
dates and times provided under the Credit Agreement.

The Lessor shall distribute, in accordance with Section 13, the Lender Basic
Rent and all other amounts due with respect to the Loans paid to the Lessor by
the Lessee under the Lease from time to time.

Yield on Holder Certificates

.

The amount of the Holder Advances outstanding from time to time shall accrue
yield ("Holder Yield") at the Yield Rate, calculated using the actual number of
days elapsed and, when the Yield Rate is based on the Adjusted LIBOR, a 360-day
year basis and, if calculated at the ABR, a 360-day year basis if the ABR is
calculated at the Federal Funds Effective Rate, and a 365-, or, if applicable,
366-, day year basis if the ABR is calculated at the Base Rate.

Each Holder shall receive its pro rata portion of the Holder Yield on Holder
Advances from the Trust Estate. Payment of Holder Yield to each Holder shall be
made on each Scheduled Interest Payment Date, or as otherwise provided herein,
in the Trust Agreement, or in the Credit Agreement. If not repaid sooner, the
outstanding aggregate Holder Advances shall be due in full on the Maturity Date.
On the Maturity Date, the Trust shall pay to each Holder its portion of the
Holder Advances then due, together with all accrued but unpaid Holder Yield and
all other amounts due to such Holder from the Trust.

The calculation of Holder Yield shall be made by the Agent, such calculation
being conclusive and binding on the Trust and the Holders in the absence of
manifest error. The Agent shall distribute, in accordance with Section 13, the
Lessor Basic Rent and all other amounts due with respect to the Holder Advances
paid to the Agent by the Lessee under the Lease or the other Operative
Agreements from time to time.

If all or any portion of the Holder Advances, any Holder Yield payable thereon,
or any other amount payable hereunder shall not be paid when due (whether at
stated maturity, acceleration thereof or otherwise), such overdue amount shall,
without limiting the rights of the Holders under any Operative Agreement, bear
interest at a rate per annum equal to the Overdue Rate, in each case from the
date of nonpayment until paid (whether before or after judgment). Upon the
occurrence, and during the continuance of an Event of Default, the amount of,
and, to the extent permitted by law, interest on (or Holder Yield on) the Holder
Advances and any other amounts owing hereunder or under the other Operative
Agreements shall bear interest, payable on demand, at a per annum rate equal to
the Overdue Rate.

Interest Period Selection Elections

. By delivering an Interest Period Selection Notice to the Trust and Agent with
respect to Holder Advances and Loans, respectively, the Lessee may from time to
time during the Term irrevocably select, on not less than three (3) nor more
than five (5) Business Days' notice (other than the initial Interest Period with
respect to the Advance to be made on the Closing Date, where such Advance is to
bear interest at a rate equal to the ABR and notice may be given on the Closing
Date), the duration for the next succeeding Interest Period; provided, however,
that (a) in the absence of a delivery of an Interest Period Selection Notice
with respect to any Loan or Holder Advance at least three (3) Business Days
before the last day of the then current Interest Period with respect thereto,
the Lessee shall be deemed to have selected that such Loan or Holder Advance
have an Interest Period of one month, (b) each such selection shall be prorated
among the applicable outstanding Loans and Holder Advances of all Financing
Parties and (c) the outstanding Loans and Holder Advances may not be apportioned
into more than three (3) separate Interest Periods at any one time. Each
Interest Period Selection Notice so delivered or deemed delivered by the Lessee
shall be deemed an effective election by the Borrower of the method for
computing interest on the Loans under the Credit Agreement.

Prepayments

.

Voluntary Prepayments

. The Lessee shall have the right to prepay an amount equal to the aggregate
outstanding Land and/or Improvements Balance in whole, but not in part, pursuant
to the exercise of the purchase options permitted under the Lease without
premium or penalty.

Mandatory Prepayments

. If at any time the sum of the aggregate amount of outstanding Loans and Holder
Advances shall exceed the Aggregate Commitment Amount, the Lessee shall
immediately make payment on the Loans or Holders Advances in an amount
sufficient to eliminate such excess. Payments required to be made hereunder
shall be applied first to ABR Loans or ABR Holder Advances and second to LIBOR
Loans or LIBOR Holder Advances in direct order of their Interest Period
maturities.

Notice

. The Lessee will provide irrevocable notice to the Agent of any prepayment of
Loans or Holder Advances at least three (3) Business Days prior to the date of
prepayment.

THE CLOSING

.

All documents and instruments required to be delivered on the Closing Date shall
be delivered at the offices of Cooley Godward LLP, Palo Alto, California or at
such other location as may be determined by the Trust, the Agent and the Lessee.

FUNDING OF ADVANCES; PLEDGED COLLATERAL.

General

. To the extent funds have been made available to or advanced to the Borrower as
Loans by the Lenders and as Holder Advances by the Holders, the Trust will use
such funds from time to time in accordance with the terms and conditions of this
Agreement and the other Operative Agreements (i) at the direction of the Lessee
to acquire the Property in accordance with the terms of this Agreement and (ii)
to pay Transaction Expenses; and (iii) to pay all other Project Costs.

Procedures for Funding

.

The Lessee shall designate the date for Advances hereunder in accordance with
the terms and provisions hereof which date shall not be earlier than three (3)
Business Days following the Lessee's delivery to Agent of a Requisition in the
form of Exhibit A hereto with respect to any such Advance; provided, however, it
is understood and agreed that with respect to the Advance to be made on the
Funding Date, such Advance is to bear interest at a rate equal to the ABR and
notice may be given on the Funding Date.

Each Requisition shall: (i) be irrevocable, (ii) request funds in an amount that
is not in excess of the total aggregate amount of the Available Commitments at
such time, and (iii) request that the Holders make Holder Advances and that the
Lenders make Loans to the Trust for the payment of Transaction Expenses,
Property Acquisition Costs or other Property Costs that have previously been
incurred or are to be incurred on the date of such Advance to the extent such
were not subject to a prior Requisition, in each case as specified in the
Requisition.

Subject to the satisfaction of the conditions precedent set forth in Section
6.1, (i) the Lenders shall make Loans based on their respective Lender
Commitments to the Borrower in an aggregate amount equal to ninety-six percent
(96%) of the amount specified in any Requisition plus any additional amount of
Transaction Expenses as referenced in Sections 8.1(a) and 8.1(b) and any
additional amount respecting any indemnity payment as referenced in Section
12.6, unless any such funding of Transaction Expenses or any indemnity payment
is declined in writing by each Lender and each Holder (such decision to be in
the sole discretion of each Lender and each Holder) up to an aggregate principal
amount equal to the aggregate of the Available Lender Commitments; (ii) the
Holders shall make Holder Advances based on their respective Holder Commitments
in an aggregate amount equal to four percent (4%) of the amount specified in
such Requisition plus any additional amount of Transaction Expenses as
referenced in Sections 8.1(a) and 8.1(b) and any additional amount respecting
any indemnity payment as referenced in Section 12.6, unless any such funding of
Transaction Expenses or any indemnity payment is declined in writing by each
Lender and each Holder (such decision to be in the sole discretion of each
Lender and each Holder), up to an aggregate amount equal to the aggregate of the
Available Holder Commitments; and (iii) the total amount of such Loans and
Holder Advances made on such date shall (x) be used by the Trust to pay Project
Costs including Transaction Expenses or (y) be advanced by the Trust on the date
of such Advance to the Lessee to pay Property Costs, as applicable.
Notwithstanding that the Operative Agreements state that Advances shall be
directed to the Trust, each Advance shall in fact be directed to the Lessee (for
the benefit of the Trust) and applied by the Lessee (for the benefit of the
Trust) pursuant to the requirements imposed on the Trust under the Operative
Agreements.

All Operative Agreements which are to be delivered to the Trust, the Agent, the
Lenders or the Holders shall be delivered to the Agent, on behalf of the Trust,
the Agent, the Lenders or the Holders, and such items (except for Notes,
certificates, bills of sale, and chattel paper originals, with respect to which
in each case there shall be only one original) shall be delivered with originals
sufficient for the Trust, the Agent, each Lender and each Holder. All other
items which are to be delivered to the Trust, the Agent, the Lenders or the
Holders shall be delivered to the Agent, on behalf of the Trust, the Agent, the
Lenders or the Holders, and such other items shall be held by the Agent. To the
extent any such other items are requested in writing from time to time by the
Trust, any Lender or any Holder, the Agent shall provide a copy of such item to
the party requesting it.

Notwithstanding the completion of any closing under this Agreement pursuant to
Sections 6.1 or 6.2, each condition precedent in connection with any such
closing may be subsequently enforced by the Agent (unless such has been
expressly waived in writing by the Agent).

Allocation of Advances Between Land and Improvements.

In the event the Fair Market Sales Value of the Land leased pursuant to the
Lease as set forth in the Appraisal is greater than twenty-five percent of the
aggregate Fair Market Sales Value of the Property as set forth in the Appraisal,
Lessor shall determine a separate Project Cost for each of the Land and
Improvements, and Lessee shall execute and deliver a separate Lease Supplement
for each of the Land and Improvements.

Pledged Collateral.

Mandatory Pledged Collateral.

If as of the last day of any Fiscal Quarter (i) the Lessee's EBITDA equals an
amount less than $200,000,000, or (ii) the Lessee's Cash Balance equals an
amount less than $200,000,000, provided, that if as of the date six (6) months
prior to the Maturity Date, the Lessee has not refinanced the Subordinated
Notes, there shall be deducted from the Cash Balance at all times thereafter the
principal amount of such outstanding Subordinated Notes in determining the Cash
Balance under this clause (ii), then (x) in the case of clause (i), on or before
the third Business Day (or if such date is not a Business Day, the next
succeeding Business Day) (the "Deposit Date") following the date on which
financial statements are delivered pursuant to Section 9.3(b)(i) or (ii) hereof
until the third Business Day following the date on which financial statements
are delivered pursuant to Section 9.3(b)(i) or (ii) hereof for the Fiscal
Quarter when the Lessee shall satisfy such tests, and (y) in the case of clause
(ii), on such specified date (also, a "Deposit Date") for so long as any
Obligations remain outstanding or until the third Business Day following the
date on which financial statements are delivered pursuant to Section 9.3(b)(i)
or (ii) hereof for the second consecutive Fiscal Quarter when the Lessee shall
satisfy such tests, the Lessee shall deliver Pledged Collateral to the
Collateral Agent in an amount equal to 100% of the aggregate outstanding
Advances. Thereafter, the Lessee covenants to maintain the Value of the Pledged
Collateral at a level equal to 100% of the aggregate outstanding Advances, and
within two (2) Business Days after receipt of notice from the Collateral Agent
that the Value of the Pledged Collateral is less than 100% of the aggregate
outstanding Advances, the Lessee shall be obligated to deliver a portion of the
Pledged Collateral in an amount required to maintain the Value of the Pledged
Collateral at a level equal to 100% of the aggregate outstanding Advances. Each
such deposit (collectively, the "Pledge") shall be the property of the
Collateral Agent and shall be held and administered in accordance with the
Pledge Agreement.

Optional Pledged Collateral.

Notwithstanding the requirements of Section 5.4(a), from time to time, the
Lessee may make a deposit of additional Pledged Collateral to the Collateral
Agent in an amount equal to not less than 100% of the aggregate outstanding
Advances in order to have a lower Applicable Margin apply to the outstanding
Advances. In order to maintain a lower Applicable Margin, the Lessee covenants
to maintain the Value of the Pledged Collateral at a level equal to 100% of the
aggregate outstanding Advances, and within two (2) Business Days after receipt
of notice from the Collateral Agent that the Value of the Pledged Collateral is
less than 100% of the aggregate outstanding Advances, the Lessee shall deliver a
portion of Pledged Collateral in an amount required to maintain the Value of the
Pledged Collateral at a level equal to 100% of the aggregate outstanding
Advances. Each such deposit shall constitute part of the Pledge, shall be the
property of the Collateral Agent and shall be held and administered in
accordance with the Pledge Agreement.

CONDITIONS OF THE CLOSING AND ADVANCES.

General Conditions to the Closing Date

. The Closing Date is subject to the satisfaction, immediately prior to or
concurrently therewith, of the following conditions precedent:

Operative Agreements.

Each of the Operative Agreements entered into on the Closing Date or
subsequently shall have been duly authorized, executed, acknowledged and
delivered by the parties thereto and shall be in full force and effect, and no
Default shall exist thereunder (both before and after giving effect to the
transactions contemplated by the Operative Agreements), and the Agent, Lenders,
Holders and Lessor shall have received a fully executed copy of each of the
Operative Agreements.

Taxes.

All taxes, fees and other charges in connection with the execution, delivery,
and, where applicable, recording, filing and registration of the Operative
Agreements shall have been paid or provisions for such payment shall have been
made to the reasonable satisfaction of the Agent and the Lessor.

Governmental Approvals.

All necessary (or, in the reasonable opinion of the Agent, the Lessor and their
respective counsel, advisable) Governmental Actions shall have been obtained or
made and be in full force and effect.

Litigation.

No action or proceeding shall have been instituted before any Governmental
Authority, nor shall any order, judgment or decree have been issued or proposed
to be issued by any Governmental Authority (i) to set aside, restrain, enjoin or
prevent the full performance of this Agreement, any other Operative Agreement or
any of the transactions contemplated hereby or thereby or (ii) other than as set
forth on Schedule 7.3, which is reasonably likely to have a Material Adverse
Effect.

Legal Requirements.

In the opinion of the Agent, the Lessor and their respective counsel, the
transactions contemplated by the Operative Agreements do not and will not
violate in any material respect any Legal Requirements and do not and will not
subject the Lenders, the Holders or the Lessor to any adverse regulatory
prohibitions or constraints.

Corporate Proceedings of the Lessee.

The Agent and the Lessor shall have received a copy of the resolutions or
minutes, in form and substance reasonably satisfactory to the Agent and the
Lessor, of the Board of Directors of the Lessee authorizing the execution,
delivery and performance of this Agreement and the other Operative Agreements to
which it is a party, certified by the Secretary or an Assistant Secretary of the
Lessee as of the Closing Date, which certificate shall be in form and substance
reasonably satisfactory to the Agent and the Lessor and shall state that the
resolutions or minutes thereby certified have not been amended, modified,
revoked or rescinded.

Lessee Incumbency Certificate.

The Agent and the Lessor shall have received a certificate of the Lessee, dated
the Closing Date, as to the incumbency and signature of the officers of the
Lessee executing any Operative Agreement reasonably satisfactory in form and
substance to the Agent and the Lessor, executed by the Secretary or any
Assistant Secretary of the Lessee.

Lessee's Officer's Certificate.

The Agent and the Lessor shall each have received a Certificate of the President
or any Vice President of the Lessee, dated as of the Closing Date, stating that
(i) each and every representation and warranty of the Lessee contained in the
Operative Agreements to which it is a party is true and correct on and as of the
Closing Date; (ii) no Default or Event of Default has occurred and is continuing
under any Operative Agreement; (iii) each Operative Agreement to which the
Lessee is a party is in full force and effect with respect to it; and (iv) the
Lessee has duly performed and complied with all covenants, agreements and
conditions contained herein or in any Operative Agreement required to be
performed or complied with by it on or prior to the Closing Date.

Good Standing

. The Agent and the Lessor shall have received (i) Certificates of the
Secretaries of State of the State of Delaware and the State of California dated
as of a recent date stating that the Lessee is a corporation in good legal
standing under the laws of such states, and (ii) Certificates of the Franchise
Tax Boards of the State of Delaware and the State of California dated as of a
recent date stating that the Lessee is in good standing under the laws of such
states.

Lessee's Corporate Documents.

The Agent and the Lessor shall have received true and complete copies of the
certificate or articles of incorporation and bylaws of the Lessee, certified as
of the Closing Date as complete and correct copies thereof by the Secretary or
an Assistant Secretary of the Lessee.

Consents, Licenses and Approvals.

The Agent and the Lessor shall have received a certificate of the President or a
Vice President of the Lessee stating that any consents, licenses and filings
required to consummate the transaction contemplated by this Agreement are in
full force and effect, and each such consent, authorization and filing shall be
in form and substance reasonably satisfactory to the Agent and the Lessor.

Legal Opinion.

The Agent and the Lessor shall have received the executed legal opinion of
Heller Ehrman White & McAuliffe LLP, special counsel to the Lessee.

Environmental Audit

.

The Lessor and the Agent shall have received not less than ten (10) days prior
to the Funding Date an Environmental Audit with respect to the Property being
acquired on the Funding Date, prepared by the Environmental Engineer, and the
results of the Environmental Audit shall be in form and substance satisfactory
to the Lessor and the Agent; and

the Lessor and the Agent shall have received letters from the Environmental
Engineer stating, among other things, that the Agent, the Lenders, the Holders
and the Lessor may rely in all respects on the Environmental Audit and other
environmental reports with respect to the Property which have been prepared by
such firm as if they were addressed to them.

Survey

. The Lessor and the Agent shall have received, and the Title Company shall have
received, a survey of the Property being acquired on the Funding Date, certified
to the Lessor and the Title Company in a manner satisfactory to them, dated as
of a date within three (3) months of the Funding Date, by an independent
professionally licensed land surveyor satisfactory to the Lessor, which survey
shall be made in accordance with the Minimum Standard Detail Requirements for
Land Title Surveys jointly established and adopted by the American Land Title
Association and the American Congress on Surveying and Mapping in 1999, and,
without limiting the generality of the foregoing, there shall be surveyed and
shown on such survey the following: (i) the locations on such Property of all
the buildings, structures and other improvements, if any, and the established
building setback lines; (ii) the lines of streets abutting such Property; (iii)
all access and other easements appurtenant to such Property; (iv) all roadways,
paths, driveways, easements, encroachments and overhanging projections and
similar encumbrances affecting such Property, whether recorded, apparent from a
physical inspection of the Property or otherwise known to the surveyor; (v) any
encroachments on any adjoining property by the building, structures and
improvements on such Property; and (vi) if such Property is described as being
on a filed map, a legend relating the survey to said map.

Appraisal

. The Lessor and the Agent shall have received an Appraisal of the Property,
which Appraisal shall show as of the Funding Date the Fair Market Sales Value of
the Property, and meet the other applicable requirements set forth in the
definition of the term "
Appraisal
" contained in Annex A.

Lien Searches.

The Lessor and the Agent shall have received the results of a recent search by a
Person reasonably satisfactory to the Lessor and the Agent, of the Uniform
Commercial Code, judgement and tax lien filings which may have been filed in
State of California with respect to personal property of the Lessee, and the
results of such search shall be satisfactory to the Lessor and the Agent.

Representations

. The representations and warranties of the Lessee and the Lessor contained
herein and in each of the other Operative Agreements shall be true and correct.

Performance of Agreements.

The parties hereto and thereto shall have performed their respective agreements
to be performed on or prior to the Closing Date contained herein and in the
other Operative Agreements on or prior to the Closing Date.

Fees.

The Lessor and the Holders and the Agent and the Lenders shall have received the
fees pursuant to the Fee Letter.

Lessor Certificate.

The Agent shall have received a certificate, executed by each Trust Company on
behalf of the Lessor, dated as of the Closing Date in such form as is acceptable
to the Agent, stating that (i) each and every representation and warranty of the
Lessor contained in the Operative Agreements to which it is a party is true and
correct on and as of the Closing Date, (ii) each Operative Agreement to which it
is a party is in full force and effect with respect to it, and (iii) Lessor has
duly performed and complied with all covenants, agreements and conditions
contained herein or in any Operative Agreement required to be performed or
complied with by it on or prior to the Closing Date.

Trust Company Certificates.

The Agent shall have received from each Trust Company (i) a certificate of the
Secretary, an Assistant Secretary, Trust Officer or vice president of the Trust
Company in such form as is acceptable to the Agent, attaching and certifying as
to (A) the signing resolutions duly authorizing the execution, delivery and
performance by such Trust Company of each of the Operative Agreements to which
it is or will be a party, (B) such Trust Company's articles of association or
other equivalent charter documents, and its bylaws, as the case may be,
certified as of a recent date by an appropriate officer of such Trust Company,
and (C) the incumbency and signature of persons authorized to execute and
deliver on such Trust Company's behalf the Operative Agreements to which it is a
party, and (ii) a good standing certificate from the Office of the Comptroller
of the Currency.

Lessor Legal Opinion

. Counsel for the Lessor acceptable to the Agent shall have issued to the
Lessee, the Holders, the Lenders and the Agent its opinion in such form as is
reasonably acceptable to the Agent.

Conditions to Lenders' and Holders' Obligations to Make Loans and Holder
Advances.

The agreement of each Lender to make the Loans to the Borrower, and of the
Holders to make the Holder Advances is further subject to the satisfaction,
immediately prior to or concurrently with the making of such Loans and Holder
Advances, of the following conditions precedent:

Title

. Title to the Property being acquired on the Funding Date shall conform to the
representations and warranties set forth in Section 7.3(w).

Title Insurance

.

The Lessor shall have received an owner's title policy, or marked up
unconditional binder for such insurance, dated the Funding Date, for the
Property being acquired on the Funding Date, insuring the Lessor that the Lien
of the Lease is a first and primary Lien in the Lessee's interest in the
Improvements and the Land; and the Lessor shall have received evidence
reasonably satisfactory to it that all premiums in respect of such policy have
been paid or provision made therefor.

The Agent shall have received with respect to the Deed of Trust a mortgage title
policy or marked up unconditional binder for such insurance dated the Funding
Date; such policies shall (i) be in an amount equal to the aggregate amount of
the Commitments (with a pending disbursements clause); (ii) be issued at
ordinary rates; (iii) insure that the Deed of Trust insured thereby creates a
valid first Lien on the Lessor's interest in the Lease and in the fee title to
the Property, free and clear of all defects and encumbrances, except Permitted
Exceptions; (iv) name the Agent for the benefit of the Lenders as the insured
thereunder; (v) be in the form of ALTA Loan Policy - 1992; (vi) contain such
endorsements and affirmative coverage as the Agent may reasonably request; and
(vii) be issued by the Title Company; and the Agent shall have received evidence
reasonably satisfactory to it that all premiums in respect of such policy, and
all charges for mortgage recording tax with respect to the Deed of Trust have
been paid or provision made therefor.

Title Documents

. The Lessor shall have received a copy of all recorded documents referred to,
or listed as exceptions to title in, the title policies referred to above.

Insurance.

The Lessor and the Agent shall have received evidence in form and substance
satisfactory to them that all of the requirements of Article 14 of the Lease
shall have been satisfied.

Lease.

The Lessor and the Agent shall have received each Lease Supplement, executed by
the Lessee, and assuming proper recordation of each Memorandum of Lease, each
Lease shall constitute a valid and perfected first lien on the Land and the
Improvements, subject only to Permitted Exceptions.

Actions to Perfect Liens.

The Lessor shall have received evidence in form and substance satisfactory to it
that all filings, recordings, registrations and other actions, including,
without limitation, the filing of duly executed financing statements on form
UCC-1, necessary or, in the opinion of the Lessor and the Agent, desirable to
perfect the Liens created by the Security Documents shall have been completed.

Bringdown Certificate

. The Lessor and the Agent shall have received an Officer's Certificate on
behalf of the Lessee dated as of the Funding Date (if different from the Closing
Date) stating that (i) the representations and warranties of the Lessee
contained herein and in each of the other Operative Agreements are true and
correct in all material respects as of the Funding Date as though made as of the
Funding Date, and (ii) no Default or Event of Default has occurred and is
continuing.

Performance of Agreements

. The parties hereto and thereto shall have performed their respective
agreements contained herein and in the other Operative Agreements on or prior to
such Funding Date.

Restrictions on Liens

.
On the date the Property is either sold to a third party in accordance with the
terms of the Operative Agreements or, pursuant to Section 22.1(a) of the Lease
Agreement, retained by the Lessor, the Lessee shall cause such Property to be
free and clear of all Liens (other than Lessor Liens and such other Liens that
are expressly set forth as title exceptions on the title commitment issued under
Section 6.2(b) with respect to such Property, to the extent such title
commitment has been approved by the Agent).

Payments

.
All payments of principal, interest, Holder Advances, Holder Yield and other
amounts to be made by the Lessee under this Agreement or any other Operative
Agreement (excluding Excepted Payments which shall be paid directly to the party
to whom such payments are owed) shall be made in Dollars and in immediately
available funds, without setoff, deduction, or counterclaim, to the Agent at the
address set forth on Schedule 6.4 hereto. Subject to the definition of "Interest
Period" in Annex A attached hereto, whenever any payment under this Agreement or
any other Operative Agreement shall be stated to be due on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time in such case shall be included in the computation of
interest, Holder Yield and fees payable pursuant to the Operative Agreements, as
applicable and as the case may be.

REPRESENTATIONS AND WARRANTIES

.

Representations and Warranties of the Trust Companies

.

Effective as of the Closing Date and the date of each Advance, each Trust
Company represents and warrants to each of the other parties hereto as follows:

Wilmington Trust Company is a banking corporation organized under the laws of
the State of Delaware and Wilmington Trust FSB is a federal savings bank, each
duly organized and validly existing and in good standing under the laws of the
State of Delaware and the United States of America, as applicable, and each has
the power and authority to enter into and perform its obligations under the
Trust Agreement and (assuming due authorization, execution and delivery of the
Trust Agreement by the Holders) each has the corporate and trust power and
authority to act as a trustee and to enter into and perform the obligations
under each of the other Operative Agreements to which it is or will be a party,
and each other agreement, instrument and document to be executed and delivered
by it on or before the Closing Date in connection with or as contemplated by
each such Operative Agreement to which such Trust Company is or will be a party;

The execution, delivery and performance of each Operative Agreement to which it
is or will be a party has been duly authorized by all necessary action on its
part and neither the execution and delivery thereof, nor the consummation of the
transactions contemplated thereby, nor compliance by it with any of the terms
and provisions thereof (i) does or will require any approval or consent of any
trustee or holders of any of its indebtedness or obligations, (ii) does or will
contravene any Legal Requirement relating to its banking or trust powers, (iii)
does or will contravene or result in any breach of or constitute any default
under, (A) its charter or bylaws, or (B) any indenture, mortgage, chattel
mortgage, deed of trust, conditional sales contract, bank loan or credit
agreement or other agreement or instrument to which it is a party, which
contravention, breach or default under clause (B) would materially and adversely
affect its ability to perform its obligations under the Operative Agreements to
which it is a party or (iv) does or will require any Governmental Action by any
Governmental Authority regulating its banking or trust powers;

This Agreement and each other Operative Agreement to which it is or will be a
party, if any, have been, or on or before such Closing Date will be, duly
executed and delivered by it, and the Trust Agreement constitutes, or upon
execution and delivery will constitute, a legal, valid and binding obligation
enforceable against it in accordance with the terms thereof;

There is no action or proceeding pending or, to its knowledge, threatened to
which it is or will be a party before any Governmental Authority that, if
adversely determined, would materially and adversely affect its ability to
perform its obligations under the Operative Agreements to which it is a party or
would question the validity or enforceability of any of the Operative Agreements
to which it is or will become a party;

Each Trust Company's principal place of business and chief executive office are
located at:

In the case of Wilmington Trust Company:

Rodney Square North

1100 North Market Street

Wilmington, DE 19890-0001

In the case of Wilmington Trust FSB:

100 Wilshire Boulevard, Suite 1230

Santa Monica, CA 90401

(f) All documents, accounts and records relating to the transactions
contemplated by this Agreement and the other Operative Agreements shall be
located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware,
19890- 0001.

Representations and Warranties of the Borrower

.
The Borrower represents and warrants to each of the other parties hereto as of
the Closing Date and the Funding Date as follows:

It is a business trust and is duly formed and validly existing and in good
standing under the laws of the State of Delaware and has the power and authority
to enter into and perform its obligations under the Operative Agreements to
which it is a party and (assuming due authorization, execution and delivery of
the Trust Agreement by the parties thereto) has the trust power and authority to
enter into and perform the obligations under each of the other Operative
Agreements to which it is or will be a party, and each other agreement,
instrument and document to be executed and delivered by it on or before the
Closing Date in connection with or as contemplated by each such Operative
Agreement to which it is or will be a party;

The execution, delivery and performance of each Operative Agreement to which it
is or will be a party (assuming due authorization, execution and delivery of the
Trust Agreement by the parties thereto) has been duly authorized by all
necessary action on its part and neither the execution and delivery thereof, nor
the consummation of the transactions contemplated thereby, nor compliance by it
with any of the terms and provisions thereof (i) does or will require any
approval or consent of any trustee or holders of any of its indebtedness or
obligations, (ii) does or will contravene any Legal Requirement relating to its
trust powers, (iii) does or will contravene or result in any breach of or
constitute any default under, or result in the creation of any Lien upon any of
its property under, (A) the Trust Agreement or Certificate of Trust, or (B) any
indenture, mortgage, chattel mortgage, deed of trust, conditional sales
contract, bank loan or credit agreement or other agreement or instrument to
which it is a party or by which it or its properties may be bound or affected,
which contravention, breach, default or Lien under clause (B) would materially
and adversely affect its ability to perform its obligations under the Operative
Agreements to which it is a party or (iv) does or will require any Governmental
Action by any Governmental Authority regulating its trust powers;

The Trust Agreement and, assuming the Trust Agreement is the legal, valid and
binding obligation of the parties hereto, each other Operative Agreement to
which the Borrower is or will be a party have been, or on or before such Closing
Date will be, duly executed and delivered by it, and each Operative Agreement to
which it is a party constitutes, or upon execution and delivery will constitute,
a legal, valid and binding obligation enforceable against it in accordance with
the terms thereof;

There is no action or proceeding pending or, to its knowledge, threatened to
which it is or will be a party before any Governmental Authority that, if
adversely determined, would materially and adversely affect its ability to
perform its obligations under the Operative Agreements to which it is a party or
would question the validity or enforceability of any of the Operative Agreements
to which it is or will become a party;

It has not assigned or transferred any of its right, title or interest in or
under the Lease or its interest in the Property or any portion thereof, except
in accordance with the Operative Agreements;

No Default or Event of Default under the Operative Agreements attributable to it
has occurred and is continuing;

Except as otherwise contemplated in the Operative Agreements, the proceeds of
the Loans and Holder Advances shall not be applied by it for any purpose other
than the purchase and/or lease of the Property and the payment of Transaction
Expenses and the fees, expenses and other disbursements referenced in Sections
8.1(a) and 8.1(b) of this Agreement;

Neither it nor any Person authorized by it to act on its behalf has offered or
sold any interest in the Trust Estate or the Notes, or in any similar security
relating to the Property, or in any security the offering of which for the
purposes of the Securities Act would be deemed to be part of the same offering
as the offering of the aforementioned securities to, or solicited any offer to
acquire any of the same from, any Person other than, in the case of the Notes,
the Agent, and neither it nor any Person authorized by it to act on its behalf
will take any action which would subject, as a direct result of such action
alone, the issuance or sale of any interest in the Trust Estate or the Notes to
the provisions of Section 5 of the Securities Act or require the qualification
of any Operative Agreement under the Trust Indenture Act of 1939, as amended;

The principal place of business, chief executive office and office where the
documents, accounts and records relating to the transactions contemplated by
this Agreement and the other Operative Agreements are located at Rodney Square
North, 1100 North Market Street, Wilmington, Delaware, 19890-0001;

It is not engaged principally in, and does not have as one of its important
activities, the business of extending credit for the purpose of purchasing or
carrying any margin stock (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System of the United States), and no part of
the proceeds of the Loans or the Holder Advances will be used by it to purchase
or carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock or for any purpose that violates,
or is inconsistent with, the provisions of Regulations T, U, or X of the Board
of Governors of the Federal Reserve System of the United States;

The Property is free and clear of all Lessor Liens attributable to it;

It is not (i) an "investment company" or a company controlled by an "investment
company" within the meaning of the Investment Company Act, or (ii) a "holding
company" as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935; and

It is not a party to any documents, instruments or agreements other than the
Operative Agreements executed by it.

Representations and Warranties of the Lessee

.
Subject to
Schedule 7.3
hereto, the Lessee represents and warrants to each of the other parties hereto
as of the Closing Date and the Funding Date as follows:

Organization; Powers.

Each of the Lessee and its Subsidiaries (i) is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization,
(ii) has all requisite power and authority to own its property and assets and to
carry on its business as now conducted and as proposed to be conducted, (iii) is
qualified to do business in every jurisdiction where such qualification is
required, except where the failure so to qualify would not result in a Material
Adverse Effect, and (iv) has the power and authority to execute, deliver and
perform its obligations under each of the Operative Agreements and each other
agreement or instrument contemplated thereby to which it is or will be a party.

Authorization.

The execution, delivery and performance by the Lessee of each of the Operative
Agreements to which it is a party (i) have been duly authorized by all requisite
action on the part of the Lessee, including, if required, stockholder action and
(ii) will not (A) violate (1) any provision of law, statute, rule or regulation,
or of the certificate or articles of incorporation or other constitutive
documents or bylaws of the Lessee or any Subsidiary, (2) any order of any
Governmental Authority, or (3) any provision of any indenture, agreement or
other instrument to which the Lessee or any Subsidiary is a party or by which
any of them or any of their property is or may be bound, including, without
limitation, the Credit Facility and the Subordinated Notes, (B) be in conflict
with, result in a breach of or constitute (alone or with notice or lapse of time
or both) a default under any such indenture, agreement or other instrument, or
(C) result in the creation or imposition of any Lien upon or with respect to any
property or assets now owned or hereafter acquired by the Lessee or any
Subsidiary except in accordance with the Operative Agreements.

Enforceability.

This Agreement and each of the other Operative Agreements to which the Lessee is
a party has been duly executed and delivered by the Lessee and constitutes a
legal, valid and binding obligation of the Lessee enforceable against the Lessee
in accordance with its terms, subject, in each case as to enforceability, to
bankruptcy, insolvency, reorganization and other similar laws affecting
enforcement of creditor rights generally (insofar as any such law relates to the
bankruptcy, insolvency, reorganization or similar event of the Lessee) and, as
to the availability of specific performance or other injunctive relief, subject
to the discretionary power of a court to deny such relief and to general
equitable principles.

Governmental Approvals.

No action, consent or approval of, registration or filing with or any other
action by any Governmental Authority is or will be required by the Lessee in
connection with the purchase, leasing or financing of the Property (the
"Transactions"
), except such as have been made or obtained and are in full force and effect.

Financial Statements.

The consolidated balance sheet of the Lessee and its Subsidiaries as at June 25,
2000, and the related consolidated statements of income and cash flows of the
Lessee and its Subsidiaries for the fiscal year then ended, accompanied by an
opinion of Ernst & Young LLP, independent auditors, copies of which have been
furnished to the Lessor and the Agent, fairly present the consolidated financial
condition of the Lessee and its Subsidiaries as at such date and the
consolidated results of the Lessee and its Subsidiaries for the period ended on
such date, all in accordance with GAAP consistently applied. Since June 25,
2000, no event has occurred which could have a Material Adverse Effect.

No Material Adverse Change.

As of the Closing Date, there has been no material adverse change in the
business, assets, property or condition, financial or otherwise, of the Lessee
and its Subsidiaries since June 25, 2000.

Title to Properties; Possession Under Leases.

Each of the Lessee and its Subsidiaries has good and marketable title to, or
valid leasehold interests in, all its material properties and assets. All such
properties and assets are free and clear of Liens, other than Liens expressly
permitted by any of the Operative Agreements.

Each of the Lessee and its Subsidiaries has complied with all obligations under
all leases to which it is a party and all such leases are in full force and
effect. Each of the Lessee and its Subsidiaries enjoys peaceful and undisturbed
possession under all such leases, except to the extent that Lessee is a
sublandlord under a sublease of premises.

Litigation, Compliance with Laws.

There are not any actions, suits or proceedings at law or in equity or by or
before any Governmental Authority now pending or threatened against the Lessee
or any Subsidiary or any business, property or rights of any such person (A)
which involve any Operative Agreements or the Transactions or (B) to the
Lessee's knowledge, which might have a Material Adverse Effect.

Neither the Lessee nor any of its Subsidiaries is in violation of any law, rule
or regulation, or in default with respect to any judgment, writ, injunction or
decree of any Governmental Authority, where such violation or default could
reasonably be anticipated to result in a Material Adverse Effect.

Federal Reserve Regulations.

Neither the Lessee nor any of its Subsidiaries is engaged principally in, or has
as one of its most important activities, the business of extending credit for
the purpose of purchasing or carrying any margin stock (within the meaning of
Regulation U of the Board), and no part of the proceeds of the Advances will be
used by it to purchase or carry any margin stock or to extend credit to others
for the purpose of purchasing or carrying any such margin stock or for any
purpose that violates, or is inconsistent with, the provisions of Regulations T,
U or X of the Board.

Investment Company Act; Public Utility Holding Company Act.

Neither the Lessee nor any of its Subsidiaries is (i) an "investment company" or
a company controlled by an "investment company" within the meaning of the
Investment Company Act, or (ii) a "holding company" as defined in, or subject to
regulation under, the Public Utility Holding Company Act of 1935.

Agreements.

Neither the Lessee nor any of its Subsidiaries is a party to any agreement or
instrument or subject to any corporate or other restriction that has resulted or
could reasonably be anticipated to result in a Material Adverse Effect.

Neither the Lessee nor any of its Subsidiaries is in default in any manner under
any provision of any indenture or other agreement or instrument evidencing
Indebtedness, or any other material agreement or instrument to which it is a
party or by which it or any of its properties or assets are or may be bound,
where such default could reasonably be anticipated to result in a Material
Adverse Effect.

Tax Returns.

Each of the Lessee and its Subsidiaries has filed or caused to be filed all
Federal, state, local and foreign tax returns required to have been filed by it
and has paid or caused to be paid all taxes shown to be due and payable on such
returns or on any assessments received by it, except taxes that are being
contested in good faith by appropriate proceedings and for which the Lessee or
such Subsidiary shall have set aside on its books adequate reserves.

No Material Misstatements.

No information, report, financial statement, exhibit or schedule furnished by or
on behalf of the Lessee to the Lessor, the Holders, the Agent or any Lender in
connection with the negotiation of any Operative Agreement or included therein
or delivered pursuant thereto contained, contains or will contain any
misstatement of a material fact or omitted, omits or will omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were, are or will be made, not misleading.

Employee Benefit Plans.

Each of the Lessee and its ERISA Affiliates is in compliance in all material
respects with the applicable provisions of ERISA and the regulations and
published interpretations thereunder. No Reportable Event has occurred as to
which the Lessee or any ERISA Affiliate was required to file a report with the
PBGC, and the present value of all benefit liabilities under each Plan (based on
those assumptions used to fund such Plan) did not, as of the last annual
valuation date applicable thereto, exceed by more than $1,000,000 the value of
the assets of such Plan. Neither the Lessee nor any ERISA Affiliate has incurred
any Withdrawal Liability which remains unpaid and that could result in a
Material Adverse Effect. Neither the Lessee nor any ERISA Affiliate has received
any notification that any Multiemployer Plan is in reorganization or has been
terminated within the meaning of Title IV of ERISA, and to the best knowledge of
the Lessee no Multiemployer Plan is reasonably expected to be in reorganization
or to be terminated, where such reorganization or termination has resulted or
could reasonably be expected to result, through increases in the contributions
required to be made to such Plan or otherwise, in a Material Adverse Effect.

Environmental Matters.

To the best of Lessee's knowledge after due inquiry, the Property is free of
contamination from any Release of Hazardous Substances. Neither the Lessee nor
any of its Subsidiaries has any material contingent liability related to
noncompliance with any Environmental Laws, or related to any Release or
threatened Release of a Hazardous Substance or the generation, use, storage or
disposal of Hazardous Substances associated with the Property. The Lessee and
each Subsidiary is conducting its respective business in compliance with all
applicable Environmental Laws. Neither the Lessee nor any of its Subsidiaries
has received notice of any failure to so comply. The Lessee and its
Subsidiaries, at the Lessee's and its Subsidiaries' facilities, do not manage
any hazardous wastes, hazardous substances, hazardous materials, toxic
substances, toxic pollutants or substances similarly denominated, as those terms
or similar terms are used in the Environmental Laws, in violation of any such
law or any regulations promulgated pursuant thereto. Neither the Lessee nor any
of its Subsidiaries has caused or suffered to occur any Release with respect to
any Hazardous Substance at, under, above or upon any real property which it owns
or leases or to which it transported, disposed or arranged for disposal of
Hazardous Substances that would result in a Material Adverse Effect. Neither the
Lessee nor any of its Subsidiaries is involved in operations which are
reasonably likely to result in the imposition of any material liability on the
Lessee or any of its Subsidiaries under any Environmental Law, and neither the
Lessee nor any of its Subsidiaries has permitted any tenant or occupant of such
premises to engage in any such activities.

Insurance.

The Lessee has obtained insurance coverage covering the Property which meets the
requirements of Section 14.1 of Lease and such coverage is in full force and
effect.

Nature of the Property.

The Lessee shall use the Property for office, manufacturing and research and
development purposes.

Flood Zone.

No portion of the Property is located in an area identified as a special flood
hazard area by the Federal Emergency Management Agency or other applicable
agency, or if the Property is located in an area identified as a special flood
hazard area by the Federal Emergency Management Agency or other applicable
agency, then flood insurance has been obtained for such Property in accordance
with Section 14.2(b) of the Lease and in accordance with the National Flood
Insurance Act of 1968, as amended.

Legal Requirements.

The Property being acquired by the Trust complies with all Legal Requirements
(including all zoning and land use laws and Environmental Laws).

Consents, etc.

All consents, licenses and building permits required by all Legal Requirements
by the time required by such Legal Requirements for occupancy and operation of
the Property have been or will be obtained and are or will be in full force and
effect.

Solvency

. The fair salable value of Lessee's assets exceeds the fair value of its
liabilities; the Lessee is not left with unreasonably small capital after
consummation of the transactions contemplated by the Operative Agreements; and
Lessee is able to pay its debts (including trade debts) as they mature.

[intentionally omitted]

Title to Property.

As of the Funding Date, the Trust has a valid fee interest in the Land, subject
only to the Permitted Exceptions. The Trust will at all times have good and
marketable title to the Improvements, subject only to Permitted Exceptions.

Property-Related Matters.

The Property will comply with all Legal Requirements (including all applicable
zoning and land use laws and Environmental Laws) and Insurance Requirements. No
Improvements on the Property will encroach in any manner onto any adjoining land
(except as permitted by express written easements or variance) and such
Improvements and the use thereof by the Lessee and its agents, assignees,
employees, invitees, lessees, licensees and tenants will comply with all
applicable Legal Requirements (including all applicable Environmental Laws and
building, planning, zoning and fire codes). There are no defects to such
Improvements including, without limitation, the plumbing, heating, air
conditioning and electrical systems thereof, and all water, sewer, electric,
gas, telephone and drainage facilities and all other utilities required to
adequately service such Improvements for their intended use will be available
pursuant to adequate permits (including any that may be required under
applicable Environmental Laws). There is no action, suit or proceeding
(including any proceeding in condemnation or eminent domain or under any
applicable Environmental Law) pending or threatened which adversely affects the
title to, or the use, operation or value of, the Property. As of the Closing
Date, no fire or other casualty with respect to the Property has occurred which
fire or other casualty involves an uninsured loss in excess of $1,000,000. As of
each subsequent Funding Date, no fire or other casualty with respect to the
Property has occurred after the Closing Date which fire or other casualty
involves an uninsured loss in excess of $500,000. All utilities serving the
Property are located in, and in the future will be located in, and vehicular
access to the Improvements on the Property is provided by, either public
rights-of-way abutting the Property or Appurtenant Rights. All applicable
licenses, approvals, authorizations, consents, permits (including, without
limitation, building, demolition and environmental permits, licenses, approvals,
authorizations and consents), easements and rights- of-way, including proof of
dedication, required for the use and operation of the Improvements as permitted
pursuant to the Lease have been obtained from the appropriate Governmental
Authorities having jurisdiction or from private parties.

Lease Requirements

.
The Improvements will comply with all requirements and conditions set forth in
the Lease and all other conditions and requirements of the Operative Agreements.

PAYMENT OF CERTAIN EXPENSES

.

Transaction Expenses

.

The Lessee agrees to pay, or cause to be paid, on the Closing Date, all
Transaction Expenses arising from the Closing Date, including without limitation
all reasonable fees, expenses and disbursements of the various legal counsels
for the Lessor, the Trustees and the Agent in connection with the transactions
contemplated by the Operative Agreements and incurred in connection with such
Closing Date, the initial fees and expenses of the Trustees due and payable on
such Closing Date, all fees, taxes and expenses for the recording, registration
and filing of documents and all other reasonable fees, expenses and
disbursements incurred in connection with such Closing Date, including
syndication expenses and all expenses relating to the Appraisal.

All fees payable pursuant to the Operative Agreements shall be calculated on the
basis of a year of three hundred sixty (360) days for the actual days elapsed.

Brokers' Fees and Stamp Taxes.

Pay or cause to be paid brokers' fees and any and all stamp, transfer and other
similar taxes, fees and excises, if any, including any interest and penalties,
which are payable in connection with the transactions contemplated by this
Agreement and the other Operative Agreements.

Certain Fees and Expenses

. Lessee agrees to pay or to cause to be paid (a) the initial and annual fee of
the Trust Companies and all reasonable expenses of the Trust Companies and any
co-trustees (including without limitation reasonable counsel fees and expenses)
or any successor trustee and/or co-trustee, for acting as a trustee under the
Trust Agreement; (b) all costs and expenses incurred by the Lessee, the Agent,
the Lenders, the Holders or the Lessor in entering into any Lease Supplement and
any future amendments, modifications, supplements, restatements and/or
replacements with respect to any of the Operative Agreements, whether or not
such Lease Supplement, amendments, modifications, supplements, restatements
and/or replacements are ultimately entered into, or giving or withholding of
waivers of consents hereto or thereto, which have been requested by the Lessee;
(c) all costs and expenses incurred by the Agent, the Lenders, the Holders or
the Lessor in connection with any exercise of remedies under any Operative
Agreement or any purchase of the Property by the Lessee or any third party; and
(d) all reasonable costs and expenses incurred by the Agent, the Lenders, the
Holders or the Lessor in connection with any transfer or conveyance of Property,
whether or not such transfer or conveyance is ultimately accomplished.

Commitment Fee

. From the Closing Date until the Commitment Termination Date, the Lessee agrees
to pay or cause to be paid to the Agent for the account of the Lenders and the
Holders, a commitment fee (the "Commitment Fee") on the average daily undrawn
portion of the Aggregate Commitment Amount equal to the Commitment Fee
Percentage for the applicable Pricing Level.

Other Fees

. Lessee agrees to pay or cause to be paid to the Agent, Lenders and Holders the
fees set forth in the Fee Letter.

OTHER COVENANTS AND AGREEMENTS

.

Cooperation with the Lessee

.

The Holders, the Lenders, the Lessor (at the direction of the Majority Secured
Parties) and the Agent shall, at the expense of and to the extent reasonably
requested by the Lessee (but without assuming additional liabilities on account
thereof and only to the extent such is acceptable to the Holders, the Lenders,
the Lessor (at the direction of the Majority Secured Parties) and the Agent in
their reasonable discretion), cooperate with the Lessee in connection with the
Lessee satisfying its covenant obligations contained in the Operative Agreements
including without limitation at any time and from time to time, promptly and
duly executing and delivering any and all such further instruments, documents
and financing statements (and continuation statements related thereto) as the
Lessee may reasonably request in order to perform such covenants. The Lessor
agrees that, to the extent it shall obtain actual knowledge of the occurrence of
a Default caused by the Lessor or any of its Affiliates, it shall promptly
notify the Lessee describing the same in reasonable detail.

Covenants of the Trust Companies, the Trust, and the Holders

. Each of the Trust Companies, the Trust, and the Holders hereby agrees that so
long as this Agreement is in effect:

Neither the Trust Companies, the Trust nor any Holder will create or permit to
exist at any time, and each of them will, at its own cost and expense, promptly
take such action as may be necessary duly to discharge, or to cause to be
discharged, all Lessor Liens on the Property attributable to it; provided,
however, that the Trust Companies, the Trust and the Holders shall not be
required to so discharge any such Lessor Lien while the same is being contested
in good faith by appropriate proceedings diligently prosecuted so long as such
proceedings shall not materially and adversely affect the rights of the Lessee
under the Lease and the other Operative Agreements or involve any material
danger of impairment of the Liens of the Security Documents or of the sale,
forfeiture or loss of, and shall not interfere with the use or disposition of,
the Property or title thereto or any interest therein or the payment of Rent;

Without prejudice to any right under the Trust Agreement of the Trust Companies
to resign (subject to the requirement set forth in the Trust Agreement that such
resignation shall not be effective until a successor shall have agreed to accept
such appointment), or the Holders' rights under the Trust Agreement to remove
the institution acting as the trustee (after consent to such removal by the
Agent as provided in the Trust Agreement), each of the Trust Companies and the
Holders hereby agrees with the Lessee and the Agent (i) not to terminate or
revoke the trust created by the Trust Agreement except as permitted by Article X
of the Trust Agreement, (ii) not to amend, supplement, terminate or revoke or
otherwise modify any provision of the Trust Agreement in such a manner as to
adversely affect the rights of any such party without the prior written consent
of such party and (iii) to comply with all of the terms of the Trust Agreement,
the nonperformance of which would adversely affect such party;

The Trust Companies or any successor may resign or be removed by the Holders as
the trustee, a successor trustee may be appointed and a corporation may become
the trustee under the Trust Agreement, only in accordance with the provisions of
Article X of the Trust Agreement and, with respect to such appointment, with the
consent of the Lessee (so long as there shall be no Lease Event of Default that
shall have occurred and be continuing), which consent shall not be unreasonably
withheld or delayed;

The Trust shall not contract for, create, incur or assume any Indebtedness, or
enter into any business or other activity or enter into any contracts or
agreements, other than pursuant to or under the Operative Agreements;

The Holders will not instruct the Trust Companies or the Trust to take any
action in violation of the terms of any Operative Agreement;

Neither any Holder, the Trust Companies nor the Trust shall (i) commence any
case, proceeding or other action with respect to the Trust under any existing or
future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, arrangement, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (ii) seek
appointment of a receiver, trustee, custodian or other similar official with
respect to the Trust or for all or any substantial benefit of the creditors of
the Trust; and neither any Holder, the Trust Companies nor the Trust shall take
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in this paragraph;

Each Trust Company and the Trust shall give prompt notice to the Lessee, the
Holders and the Agent if such party's principal place of business or chief
executive office, or the office where the records concerning the accounts or
contract rights relating to the Property are kept, shall cease to be located at
the addresses set forth in Section 14.2 hereof, or if any such party shall
change its name; and

The Trust shall take or refrain from taking such actions and grant or refrain
from granting such approvals with respect to the Operative Agreements and/or
relating to the Property in each case as directed in writing by the Agent (until
such time as the Loans are paid in full, and then by the Majority Holders);
provided, however, that notwithstanding the foregoing provisions of this
subparagraph (h) the Trust Companies, the Trust, the Agent, the Lenders and the
Holders each acknowledge, covenant and agree that neither the Trust nor the
Agent shall act or refrain from acting, regarding each Unanimous Vote Matter,
until such party has received the approval of each Lender and each Holder
affected by such matter.

Lessee Covenants, Consent and Acknowledgment

.

Closure of Wells.

Lessee shall, at its sole cost and expense, on or before February 28, 2001,
cause all monitoring wells located on the Property, as more specifically
identified in the Environmental Audit, to be closed in full compliance with all
Environmental Laws, and any state, federal and local rules, regulations or
ordinances applicable thereto.

Information.

The Lessee will deliver to the Lessor and the Agent:

as soon as available and in any event within one hundred (100) days after the
end of each fiscal year of the Lessee a statement of financial position of the
Lessee and its consolidated subsidiaries as of the end of such fiscal year and
the related consolidated statements of income, shareholder's equity and cash
flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on by independent accountants
of nationally recognized standing, together with an Officer's Compliance
Certificate, in the form attached as Exhibit E hereto (the "Compliance
Certificate"), from the chief financial officer of the Lessee substantially
containing a computation of, and showing compliance with, each of the financial
ratios and restrictions contained in this Section 9.3 and stating that no
Default or Event of Default has occurred or is continuing or, if any Default or
Event of Default has occurred and is continuing, describing it and the steps, if
any, being taken to cure it;

as soon as available and in any event within fifty (50) days after the end of
each of the first three (3) quarters of each fiscal year of the Lessee, an
unaudited consolidated statement of financial position of the Lessee as of the
end of such period and the related consolidated statements of income,
shareholders' equity and cash flows for such period and for the portion of the
Lessee's fiscal year ended at the end of such period, setting forth in each case
in comparative form the figures for the same period in the previous fiscal year,
together with a Compliance Certificate of the chief financial officer of the
Lessee or other officer responsible for the financial affairs of the Lessee
containing a computation of, and showing compliance with, each of the financial
ratios and restrictions contained in this Section 9.3 and stating that no
Default or Event of Default has occurred or is continuing or, if any Default or
Event of Default has occurred and is continuing, describing it and the steps, if
any, being taken to cure it;

promptly after the filing thereof, if applicable, copies of all reports on Forms
10-K, 10-Q and 8-K (or their equivalents), prospectuses and registration
statements which the Lessee shall have filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended;

if and when any member of the ERISA Group (1) gives or is required to give
notice to the PBGC of any "reportable event" (as defined in Section 4043 of
ERISA) with respect to any Plan which might constitute grounds for a termination
of such Plan under Title IV or ERISA, or knows that the plan administrator of
any Plan has given or is required to give notice of any such reportable event, a
copy of the notice of such reportable event given or required to be given to the
PBGC; (2) receives notice of complete or partial withdrawal liability under
Title IV of ERISA or notice that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, a copy of such notice; (3) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or appoint a trustee to administer any Plan, a copy of such notice; (4) applies
for a waiver of the minimum funding standard under Section 412 of the Code, a
copy of such application; (5) gives notice of intent to terminate any Plan under
Section 4041(c) of ERISA, a copy of such notice and other information filed with
the PBGC; (6) gives notice of withdrawal from any Plan pursuant to Section 4063
of ERISA, a copy of such notice; or (7) fails to make any payment or
contribution to any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or Benefit Arrangement which has
resulted or could result in the imposition of a Lien or the posting of a bond or
other security, a certificate of the chief financial officer or the chief
accounting officer of the Lessee setting forth details as to such occurrence and
action, if any, which the Lessee or applicable member of the ERISA Group is
required or proposes to take;

promptly after the occurrence of any Default or Event of Default, notice thereof
in writing by an authorized officer of the Lessee, together with information
regarding the steps, if any, being taken or proposed to be taken to cure it;

at least ten (10) Business Days prior to the expiration of any policy of
insurance required by Section 14 of the Lease, confirmation of renewal;

within three days of the end of each month during which Lessee is required to
maintain Pledged Collateral pursuant to Section 5.4(a)(ii) hereof, a written
certification of the Chief Financial Officer of Lessee as to Lessee's Cash
Balance at the end of such month; and

from time to time such additional information regarding the Lessee or the
Property as the Lessor or the Agent, at the request of the Lessor or any Lender,
may reasonably request.

Compliance with Laws.

The Lessee will, and will cause its Subsidiaries to, comply in all material
respects with all applicable laws, ordinances, rules, regulations, orders and
requirements of governmental authorities (including, without limitation,
Environmental Laws and ERISA and the rules and regulations thereunder) except
where the necessity of compliance therewith is contested in good faith by
appropriate proceedings and such contest is not reasonably likely to result in a
Material Adverse Effect.

Further Assurances.

The Lessee shall take or cause to be taken from time to time all action
necessary to assure during the Term that title to the Property remains in the
Lessor as contemplated by Section 12.1 of the Lease, that the Lessor holds a
perfected Lien on the Property securing the Lease Balance as contemplated by
Section 7.1 of the Lease, and that the Lessor and the Agent for the benefit of
the Lenders hold a perfected Lien on the Pledged Collateral securing the
Obligations.

Existence; Franchises; Businesses.

Except as otherwise expressly permitted in this Agreement, the Lessee shall, and
shall cause each Subsidiary to (i) maintain in full force and effect its
separate existence and all rights, licenses, leases and franchises reasonably
necessary to the conduct of its business, and (ii) continue doing business as a
whole in the substantially the same types of business in which they were engaged
on the Closing Date.

Books and Records.

The Lessee shall, and shall cause each Subsidiary to, maintain its books and
records in accordance with GAAP, and permit the Lessor and the Agent to make or
cause to be made inspections and audits of any books, records and papers of the
Lessee and its Subsidiaries and to make extracts therefrom at all such
reasonable times and as often as any such Person may reasonably require.

Fundamental Changes.

The Lessee shall not, nor shall it permit any Subsidiary to, enter into any
merger, consolidation or amalgamation, where it is not the surviving entity, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution); convey, sell, assign, transfer or otherwise dispose of all or
substantially all of the property, business or assets of the Lessee and its
Subsidiaries;
provided, however,
that if (i) at least thirty (30) days prior to the consummation of such
transaction the Lessee shall have furnished to the Lessor and the Agent an
Officer's Certificate of the chief financial officer of the Lessee that no
Default or Event of Default shall occur after giving effect thereto, and (ii) no
Default or Event of Default shall have occurred before or after giving effect
thereto, then:

any Subsidiary of the Lessee may be merged or consolidated with or into the
Lessee (provided, however, that the Lessee shall be the continuing or surviving
corporation) or with or into any one or more wholly-owned Subsidiaries of the
Lessee (provided, however, that the wholly-owned Subsidiary or Subsidiaries
shall be the continuing or surviving corporation); and

any wholly-owned Subsidiary may sell, lease, transfer or otherwise dispose of
any or all of its assets (upon voluntary liquidation or otherwise) to the Lessee
or any other wholly-owned Subsidiary of the Lessee.

Liens

. The Lessee shall not create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired, except for:

any Lien existing on property of the Lessee on the Funding Date securing
Indebtedness outstanding on such date;

any Lien created under any Operative Agreement;

Liens for taxes, fees, assessments or other governmental charges which are not
delinquent or remain payable without penalty;

carrier's, warehousemen's, mechanics', landlords', materialmen's, repairmen's or
other similar Liens arising in the ordinary course of business which are not
delinquent or remain payable without penalty;

Liens (other than any Lien imposed by ERISA) consisting of pledges or deposits
required in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other social security legislation;

Liens on the property of the Lessee securing (A) the non-delinquent performance
of bids, trade contracts (other than for borrowed money), leases, statutory
obligations, (B) contingent obligations on surety and appeal bonds, and (C)
other non-delinquent obligations of a like nature; in each case, incurred in the
ordinary course of business;

Liens arising solely by virtue of any statutory or common law provisions
relating to banker's liens, rights of set-off or similar rights and remedies as
to deposit accounts or other funds maintained with a depository institution;
provided, however, that (A) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by the
Lessee in excess of those set forth by regulations promulgated by the Board, and
(B) such deposit account is not intended by the Lessee or any Subsidiary to
provide collateral to the depository institution;

Permitted Liens; and

Liens otherwise permitted under the Credit Facility.

Change in Name or Location.

The Lessee hereby covenants and agrees that it shall give prompt notice to the
Agent if the Lessee's principal place of business or chief executive office, or
the office where the records concerning the accounts or contract rights relating
to Property are kept, shall cease to be located at 4650 Cushing Parkway,
Fremont, California 94538, or if it shall change its name.

Financial Covenants of Lessee.

The Lessee and its Subsidiaries shall maintain, on a consolidated basis, all of
the following financial covenants. The Lessee agrees and understands that
(except as expressly provided herein) all covenants under this Section 9.3(j)
shall be subject to compliance as measured as of the last day of each Fiscal
Quarter.

Minimum Quick Ratio.

Maintain a Quick Ratio of not less than 1.35 to 1.0.

Maximum Senior Indebtedness Ratio.

Maintain a Senior Indebtedness Ratio of not greater than 0.25 to 1.0.

Minimum Tangible Net Worth.

Maintain Tangible Net Worth on any date of determination (such date to be
referred to herein as a "
determination date
") which occurs after December 27, 1998 (such date to be referred to herein as
the "
base date
") to be less than the
sum
on such determination date of the following: (A) $350,000,000;
plus
(B) Seventy-five percent (75%) of the sum of the Lessee's consolidated quarterly
net income (ignoring any quarterly losses) for each quarter ending after the
base date through and including the quarter ending immediately prior to the
determination date;
plus
(C) one hundred percent (100%) of the Net Issuance Proceeds of all Equity
Securities issued by the Lessee and its Subsidiaries during the period
commencing on the base date and ending on the determination date;
plus
(D) one hundred percent (100%) of the aggregate decrease in the total
liabilities of the Lessee and its Subsidiaries resulting from conversions of
convertible Subordinated Indebtedness or other liabilities of the Lessee and its
Subsidiaries into Equity Securities of the Lessee and its Subsidiaries during
the period commencing on the base date and ending on the determination date.

Minimum Debt Service Coverage Ratio.

Maintain a Debt Service Coverage Ratio of not less than 3.00 to 1.00

Agent to Act for Lessor.

The Lessor hereby instructs Lessee and Lessee hereby acknowledges and agrees,
that until such time as the Loans and the Holder Advances are paid in full and
the Liens evidenced by the Pledge Agreement, Security Agreement and the Deed of
Trust have been released (i) any and all Rent (excluding Excepted Payments which
shall be payable to each Holder or other Person as appropriate) and any and all
other amounts of any kind or type under any of the Operative Agreements due and
owing or payable to any Person shall instead be paid directly to the Agent
(excluding Excepted Payments which shall be payable to each Holder or other
Person as appropriate) or as the Agent may direct from time to time for
allocation and distribution in accordance with the procedures set forth in
Section 13 hereof, (ii) all rights of the Lessor under the Lease shall be
exercised by the Agent and (iii) Lessee shall cause all notices, certificates,
financial statements, communications and other information which are delivered,
or are required to be delivered, to the Lessor, to also to be delivered at the
same time to the Agent.

Appraisals.

The Lessee hereby covenants and agrees to cause an Appraisal or reappraisal (in
form and substance satisfactory to the Agent and from an appraiser selected by
the Agent) to be issued respecting the Property as requested by the Agent from
time to time (i) at each and every time as such shall be required to satisfy any
regulatory requirements imposed on the Agent, the Lessor, the Trust Company, any
Lender and/or any Holder and (ii) after the occurrence of an Event of Default.

Supplemental Rent.

The Lessee hereby covenants and agrees that, except for amounts payable as Basic
Rent, any and all payment obligations owing from time to time under the
Operative Agreements by any Person to the Agent, any Lender, any Holder or any
other Person shall (without further action) be deemed to be Supplemental Rent
obligations payable by the Lessee. Without limitation, such obligations of the
Lessee shall include the Supplement Rent obligations pursuant to Section 3.3 of
the Lease, arrangement fees, administrative fees, participation fees, commitment
fees, unused fees, prepayment penalties, breakage costs, indemnities, trustee
fees and transaction expenses incurred by the parties hereto in connection with
the transactions contemplated by the Operative Agreements.

Appointment of the Agent by the Lenders, the Holders and the Trust

.
The Holders hereby appoint the Agent to act as collateral agent for the Holders
in connection with the Lien granted by the Security Documents to secure the
Holder Amount and all other amounts due and owing to the Holders. The Lenders
and the Holders acknowledge and agree and direct that the rights and remedies of
the beneficiaries of the Lien of the Security Documents shall be exercised by
the Agent on behalf of the Lenders and the Holders as directed from time to time
by the Majority Secured Parties or, pursuant to Section 14.4, all of the Lenders
and the Holders, as the case may be; provided, in all cases, the Agent shall
allocate payments and other amounts received in accordance with Section 13. The
Agent is further appointed to provide notices under the Operative Agreements on
behalf of the Trust (as determined by the Agent, in its reasonable discretion),
to receive notices under the Operative Agreements on behalf of the Trust and
(subject to Section 10.2) to take such other action under the Operative
Agreements on behalf of the Trust as the Agent shall determine in its reasonable
discretion from time to time. The Agent hereby accepts such appointments. For
purposes hereof, the provisions of Section 7 of the Credit Agreement, together
with such other terms and provisions of the Credit Agreement and the other
Operative Agreements as required for the full interpretation and operation of
Section 7 of the Credit Agreement are hereby incorporated by reference as if
restated herein for the mutual benefit of the Agent and each Holder as if each
Holder were a Lender thereunder. Outstanding Holder Advances and outstanding
Loans shall each be taken into account for purposes of determining Majority
Secured Parties. Further, the Agent shall be entitled to take such action on
behalf of the Trust as is delegated to the Agent under any Operative Agreement
(whether express or implied) as may be reasonably incidental thereto. The
parties hereto hereby agree to the provisions contained in this Section 9.4. Any
appointment of a successor agent under Section 7.9 of the Credit Agreement shall
also be effective as an appointment of a successor agent for purposes of this
Section 9.4.

Release of Properties, etc.

If the Lessee shall at any time purchase any Property pursuant to the Lease or
if any Property shall be sold in accordance with Article XXII of the Lease,
then, upon satisfaction by the Trust of its obligation to prepay the Loans, and
Holder Advances in respect of such Property and all other amounts owing to the
Lenders and the Holders under the Operative Agreements, the Agent is hereby
authorized and directed to release such Property from the Liens created by the
Security Documents to the extent of its interest therein. In addition, upon the
termination of the Commitments and the Holder Commitments and the payment in
full of the Loans, the Holder Advances and all other amounts owing by the Trust
and the Lessee hereunder or under any other Operative Agreement the Agent is
hereby authorized and directed to release such Property from the Liens created
by the Security Documents to the extent of its interest therein. Upon request of
the Trust following any such release, the Agent shall, at the sole cost and
expense of the Lessee, execute and deliver to the Trust and the Lessee such
documents as the Trust or the Lessee shall reasonably request to evidence such
release.

Guaranty.

Guaranty of Payment and Performance

.
Guarantor hereby unconditionally guarantees to each of Agent, Holders and
Lenders (each a "Financing Party") the prompt payment and performance of the
Company Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration or otherwise) or when such is otherwise to be
performed; provided, notwithstanding the foregoing, the obligations of the
Guarantors under this Section 9.6 (i) shall not constitute a direct guaranty of
the indebtedness of the Borrower evidenced by the Notes but rather a guaranty of
the Company Obligations arising under the Operative Agreements, (ii) shall not
increase the obligations due under the Lease, and (iii) shall, to the extent
paid or performed by Guarantor under this Section 9.6, offset and be fully
credited against Lessee's obligations under the Lease. This Section 9.6 is a
guaranty of payment and performance and not of collection and is a continuing
guaranty and shall apply to all Company Obligations whenever arising. All rights
granted to the Financing Parties under this Section 9.6 shall be subject to the
provisions of Section 9.4.

Obligations Unconditional

.
Guarantor agrees that the obligations of the Guarantor hereunder are absolute
and unconditional, irrespective of the value, genuineness, validity, regularity
or enforceability of any of the Operative Agreements, or any other agreement or
instrument referred to therein, or any substitution, release or exchange of any
other guarantee of or security for any of the Company Obligations, and, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever which might otherwise constitute a legal or equitable
discharge or defense of a surety, guarantor or co-obligor, it being the intent
of this Section 9.6(b) that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances. Guarantor agrees
that this Section 9.6 may be enforced by the Financing Parties without the
necessity at any time of resorting to or exhausting any other security or
collateral and without the necessity at any time of having recourse to the
Notes, the Certificates or any other of the Operative Agreements or any
collateral, if any, hereafter securing the Company Obligations or otherwise and
Guarantor hereby waives the right to require the Financing Parties to proceed
against the Lessee or any other Person (including without limitation a
co-guarantor) or to require the Financing Parties to pursue any other remedy or
enforce any other right. Guarantor further agrees that it hereby waives any and
all right of subrogation, indemnity, reimbursement or contribution against the
Lessee or any other guarantor of the Company Obligations for amounts paid under
this Section 9.6 until such time as the Loans, Holder Advances, accrued but
unpaid interest, accrued but unpaid Holder Yield and all other amounts owing
under the Operative Agreements have been paid in full. Without limiting the
generality of the waiver provisions of this Section 9.6, Guarantor hereby waives
any rights to require the Financing Parties to proceed against the Lessee or any
co- guarantor or to require Lessor to pursue any other remedy or enforce any
other right. Guarantor further agrees that nothing contained herein shall
prevent the Financing Parties from suing on any Operative Agreement or
foreclosing any security interest in or Lien on any collateral, if any, securing
the Company Obligations or from exercising any other rights available to it
under any Operative Agreement, or any other instrument of security, if any, and
the exercise of any of the aforesaid rights and the completion of any
foreclosure proceedings shall not constitute a discharge of Guarantor's
obligations hereunder; it being the purpose and intent of Guarantor that its
obligations hereunder shall be absolute, independent and unconditional under any
and all circumstances; provided that any amounts due under this Section 9.6
which are paid to or for the benefit of any Financing Party shall reduce the
Company Obligations by a corresponding amount (unless required to be rescinded
at a later date). Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Company Obligations and notice of or proof of
reliance by any Financing Party upon this Section 9.6 or acceptance of this
Section 9.6. The Company Obligations shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon this Section 9.6. All dealings between the Lessee and the
Guarantor, on the one hand, and the Financing Parties, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon this Section 9.6.

Modifications

.
Guarantor agrees that (a) all or any part of the security now or hereafter held
for the Company Obligations, if any, may be exchanged, compromised or
surrendered from time to time; (b) no Financing Party shall have any obligation
to protect, perfect, secure or insure any such security interests, liens or
encumbrances now or hereafter held, if any, for the Company Obligations or the
properties subject thereto; (c) the time or place of payment of the Company
Obligations may be changed or extended, in whole or in part, to a time certain
or otherwise, and may be renewed or accelerated, in whole or in part; (d) Lessee
and any other party liable for payment under the Operative Agreements may be
granted indulgences generally; (e) any of the provisions of the Notes, the
Certificates or any of the other Operative Agreements may be modified, amended
or waived; (f) any party (including any co-guarantor) liable for the payment
thereof may be granted indulgences or be released; and (g) any deposit balance
for the credit of the Lessee or any other party liable for the payment of the
Company Obligations or liable upon any security therefor may be released, in
whole or in part, at, before or after the due date of the Company Obligations,
all without notice to or further assent by Guarantor, which shall remain bound
thereon, notwithstanding any such exchange, compromise, surrender, extension,
renewal, acceleration, modification, indulgence or release.

Waiver of Rights

.
Guarantor expressly waives to the fullest extent permitted by applicable law:
(a) notice of acceptance of this Section 9.6 by any Financing Party and of all
extensions of credit or other Advances to the Lessor or the Lessee by the
Lenders pursuant to the terms of the Operative Agreements; (b) presentment and
demand for payment or performance of any of the Company Obligations; (c) protest
and notice of dishonor or of default with respect to the Company Obligations or
with respect to any security therefor; (d) notice of any Financing Party
obtaining, amending, substituting for, releasing, waiving or modifying any
security interest, lien or encumbrance, if any, hereafter securing the Company
Obligations, or any Financing Party's subordinating, compromising, discharging
or releasing such security interests, liens or encumbrances, if any; and (e) all
other notices to which Guarantor might otherwise be entitled. Without limiting
the foregoing, Guarantor expressly waives, to the fullest extent permitted by
applicable law, any defense to the enforcement of its obligations hereunder, and
any rights and benefits which might otherwise be available to Guarantor, under
New York law and California Civil Code Sections 2809, 2810, 2819, 2822(a), 2839,
2845, 2848, 2849, 2850, 2899 and 3433. The Guarantor waives all rights and
defenses that the Guarantor may have because the Company Obligations may be
secured by real property. This means, among other things: (1) the creditor may
collect from the Guarantor without first foreclosing on any real or personal
property collateral pledged by the debtor; (2) if a creditor forecloses on any
real property collateral pledged by the debtor: (A) the amount of the debt may
be reduced only by the price for which that collateral is sold at the
foreclosure sale, even if the collateral is worth more than the sale price; (B)
the creditor may collect from the guarantor even if the creditor, by foreclosing
on the real property collateral, has destroyed any right the guarantor may have
to collect from the debtor. This is an unconditional and irrevocable waiver of
any rights and defenses the Guarantor may have because the Company Obligations
may be secured by real property. These rights and defenses include, but are not
limited to, any rights or defenses based upon Section 580a, 580b, 580d, or 726
of the California Code of Civil Procedure. Notwithstanding anything to the
contrary herein, Guarantor's payments hereunder shall be due five (5) Business
Days after written demand by the Agent for such payment (unless the Company
Obligations are automatically accelerated pursuant to the applicable provisions
of the Operative Agreements in which case the Guarantor's payments shall be
automatically due).

Reinstatement

.
The obligations of the Guarantors under this Section 9.6 shall be automatically
reinstated if and to the extent that for any reason any payment by or on behalf
of any Person in respect of the Company Obligations is rescinded or must be
otherwise restored by any holder of any of the Company Obligations, whether as a
result of any proceedings in bankruptcy or reorganization or otherwise, and
Guarantor agrees that it will indemnify each Financing Party on demand for all
reasonable costs and expenses (including, without limitation, reasonable fees of
counsel) incurred by any Financing Party in connection with such rescission or
restoration, including without limitation any such costs and expenses incurred
in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.

Payment of Amounts to the Agent

.
Each Financing Party hereby instructs Guarantor, and Guarantor hereby
acknowledges and agrees, that, until such time as the Loans and the Holder
Advances are paid in full and the Liens evidenced by the Pledge Agreement,
Security Agreement and the Deed of Trust have been released, any and all Rent
(excluding Excepted Payments which shall be payable to each Holder or other
Person as appropriate) and any and all other amounts of any kind or type under
any of the Operative Agreements due and owing or payable to any Person shall
instead be paid directly to the Agent (excluding Excepted Payments which shall
be payable to each Holder or other Person as appropriate) or as the Agent may
direct from time to time for allocation and distribution in accordance with the
procedures set forth in Section 13 hereof.

CREDIT AGREEMENT AND TRUST AGREEMENT

.

Lessee's Credit Agreement Rights

.

Notwithstanding anything to the contrary contained in the Credit Agreement, the
Agent, the Lenders, the Holders, and the Trust hereby agree that, prior to the
occurrence and continuation of any Default or Event of Default, the Lessee shall
have the following rights:

the right to designate an account to which amounts funded under the Operative
Agreements shall be credited pursuant to Section 2.3 of the Credit Agreement;

the right to terminate or reduce the Commitments pursuant to Section 2.4 of the
Credit Agreement;

the right to exercise the conversion and continuation options pursuant to
Section 2.6 of the Credit Agreement;

the right to approve any successor agent pursuant to Section 7.9 of the Credit
Agreement; and

the right to consent to any assignment by a Lender pursuant to the Credit
Agreement, which consent shall not be unreasonably withheld or delayed.

Lessee's Trust Agreement Rights

.
Notwithstanding anything to the contrary contained in the Trust Agreement, the
Trust and the Holders hereby agree that, prior to the occurrence and
continuation of any Default or Event of Default, the Lessee shall have the
following rights:

the right to exercise the removal options contained in Article IX of the Trust
Agreement; provided, however, that no removal of either Trust Company and
appointment of a successor trustee pursuant to such Article IX of the Trust
Agreement shall be made without the prior written consent (not to be
unreasonably withheld or delayed) of the Holders; and

the right to consent to any assignment by a Holder pursuant to the Trust
Agreement, which consent shall not be unreasonably withheld or delayed.

TRANSFER OF INTEREST

.

Restrictions on Transfer

.

Subject to Lessee's rights under Section 10 above, each Lender may participate,
assign or transfer all or a portion of its interest hereunder and under the
other Operative Agreements in accordance with Section 9 of the Credit Agreement.
The Holders may, directly or indirectly, assign, convey or otherwise transfer
any of their right, title or interest in or to the Trust Estate or the Trust
Agreement and in accordance with the terms of Section 11.15 of the Trust
Agreement. The Lessor may, subject to the rights of the Lessee under the Lease
and the other Operative Agreements and to the Lien of the applicable Security
Documents but only with the prior written consent of the Agent (which consent
may be withheld by the Agent in its sole discretion) and (provided, no Default
or Event of Default has occurred and is continuing) with the consent of the
Lessee, directly or indirectly, assign, convey, appoint an agent with respect to
enforcement of, or otherwise transfer any of its right, title or interest in or
to the Property, the Lease, the Trust Agreement and the other Operative
Agreements (including without limitation any right to indemnification
thereunder), or any other document relating to the Property or any interest in
the Property as provided in the Trust Agreement and the Lease. The provisions of
the immediately preceding sentence shall not apply to the obligations of the
Lessor to transfer the Property to the Lessee or a third party purchaser
pursuant to Article XXII of the Lease upon payment for such Property in
accordance with the terms and conditions of the Lease. Lessee may not assign any
of the Operative Agreements or any of its rights or obligations thereunder or
with respect to the Property in whole or in part to any Person without the prior
written consent of the Agent, the Lenders, the Holders and the Lessor. Any
participation, assignment or transfer effected in breach of this Section 11
shall be void.

Effect of Transfer

. From and after any transfer effected in accordance with this Section 11, the
transferor shall be released, to the extent of such transfer, from its liability
hereunder and under the other documents to which it is a party in respect of
obligations to be performed on or after the date of such transfer; provided,
however, that any transferor shall remain liable hereunder and under such other
documents to the extent that the transferee shall not have assumed the
obligations of the transferor thereunder. Upon any transfer by the Lessor, a
Holder or a Lender as above provided, any such transferee shall assume the
obligations of the Lessor, the Holder or the Lender, as the case may be, and
shall be deemed the "Lessor," or a "Holder" or "Lender," as the case may be, for
all purposes of such documents and each reference herein to the transferor shall
thereafter be deemed a reference to such transferee for all purposes, except as
provided in the preceding sentence. Notwithstanding any transfer of all or a
portion of the transferor's interest as provided in this Section 11, the
transferor shall be entitled to all benefits accrued and all rights vested prior
to such transfer including without limitation rights to indemnification under
any such document.

INDEMNIFICATION

.

General Indemnity.

The Lessee, whether or not any of the transactions contemplated hereby shall be
consummated, hereby assumes liability for and agrees to defend, indemnify and
hold harmless each Indemnified Person on an After Tax Basis from and against any
Claims which may be imposed on, incurred by or asserted against an Indemnified
Person in any way relating to or arising or alleged to arise out of (a) the
financing, refinancing, ground lease, purchase, acceptance, rejection,
ownership, design, construction, delivery, acceptance, nondelivery, leasing,
subleasing, possession, use, operation, repair, maintenance, modification,
transportation, condition, operation, sale, return, repossession (whether by
summary proceedings or otherwise), or any other disposition of the Property or
any part thereof, (b) any latent or other defects in any property whether or not
discoverable by an Indemnified Person or the Lessee; (c) a violation of any
Legal Requirement or Requirement of Law, including any violation of
Environmental Laws, the Release, presence or use of Hazardous Substances on, at,
under or emanating from the Property or other loss of or damage relating to the
Property; (d) the Operative Agreements, or any transaction contemplated thereby;
(e) any breach by the Lessee of any of its representations or warranties under
the Operative Agreements or failure by the Lessee to perform or observe any
covenant or agreement to be performed by it under any of the Operative
Agreements; (f) the invalidation of Lessee's insurance policies related to the
Property; (g) personal injury, death or property damage relating to the
Property, including Claims based on strict liability in tort; (h) the existence
of any Lien on or with respect to the Property, the Improvements, the Equipment,
any Basic Rent or Supplemental Rent, title thereto, or any interest therein,
including any Liens which arise out of the possession, use, occupancy,
construction, repair or rebuilding of the Property or by reason of labor or
materials furnished or claimed to have been furnished to the Lessee, the Lessor,
or any of their contractors or agents or by reason of the financing of the
Property or any personally or equipment purchased or leased by the Lessee or
Improvements or Modifications constructed by the Lessee, except Lessor Liens and
Liens in favor of the Agent or the Lessor; and (i) the Transactions contemplated
hereby or by any other Operative Agreement, in respect of the application of
Parts 4 and 5 of Subtitle B of Title I of ERISA and any prohibited transaction
described in Section 4975(c) of the Code; but in any event excluding (x) Claims
to the extent such Claims arise solely out of events occurring after the
expiration of the Term and after the Lessee's discharge of all its obligations
under the Lease and the other Operative Agreements or (y) as to any Indemnified
Person, any Claim to the extent resulting from the willful misconduct or gross
negligence of such Indemnified Person. The Lessee shall be entitled to control,
and shall assume full responsibility for the defense of, any Claim; provided,
however, that any Indemnified Person named in such Claim may retain separate
counsel reasonably acceptable to the Lessee at the expense of the Lessee in the
event of and to the extent of an actual conflict. The Lessee and each
Indemnified Person agree to give each other prompt written notice of any Claim
hereby indemnified against but the giving of any such notice by an Indemnified
Person shall not be a condition to the Lessee's obligations under this Section
12.1, except to the extent failure to give such notice materially prejudices the
Lessee's rights hereunder. After an Indemnified Person has been fully
indemnified for a Claim pursuant to this Section 12.1, and so long as no Event
of Default shall have occurred and be continuing, the Lessee shall be subrogated
to any right of such Indemnified Person with respect to such Claim. None of the
Indemnified Persons shall settle a Claim without the consent of the Lessee,
which consent shall not be unreasonably withheld or delayed.

General Impositions Indemnity.

Indemnification.

The Lessee shall pay and assume liability for, and does hereby agree to
indemnify, protect and defend the Property and all Indemnified Persons, and hold
them harmless against, all Impositions on an After Tax Basis.

Payments.

Subject to the terms of Section 12.2(f), the Lessee shall pay or cause to be
paid all Impositions directly to the taxing authorities where feasible and
otherwise to the Indemnified Person, as appropriate, and the Lessee shall at its
own expense, upon such Indemnified Person's reasonable request, furnish to such
Indemnified Person copies of official receipts or other satisfactory proof
evidencing such payment.

In the case of Impositions for which no contest is conducted pursuant to Section
12.2(f) and which the Lessee pays directly to the taxing authorities, the Lessee
shall pay such Impositions thirty (30) days prior to the latest time permitted
by the relevant taxing authority for timely payment. In the case of Impositions
for which the Lessee reimburses an Indemnified Person, the Lessee shall do so
within twenty (20) days after receipt by the Lessee of demand by such
Indemnified Person describing in reasonable detail the nature of the Imposition
and the basis for the demand (including the computation of the amount payable),
but in no event shall the Lessee be required to pay such reimbursement prior to
thirty (30) days before the latest time permitted by the relevant taxing
authority for timely payment. In the case of Impositions for which a contest is
conducted pursuant to Section 12.2(f), the Lessee shall pay such Impositions or
reimburse such Indemnified Person for such Impositions, to the extent not
previously paid or reimbursed pursuant to subsection (a), thirty (30) days prior
to the latest time permitted by the relevant taxing authority for timely payment
after conclusion of all contests under Section 12.2(f).

Impositions imposed with respect to the Property for a billing period during
which the Lease expires or terminates (unless a Renewal Term is to apply or the
Lessee has exercised the Purchase Option or the Maturity Date Purchase Option
with respect to the Property) shall be adjusted and prorated on a daily basis
between the Lessee and the Lessor, whether or not such Imposition is imposed
before or after such expiration or termination and each party shall pay or
reimburse the other for each party's pro rata share thereof.

At the Lessee's request, the amount of any indemnification payment by the Lessee
pursuant to subsection (a) shall be verified and certified by an independent
public accounting firm mutually acceptable to the Lessee and the Indemnified
Person. The fees and expenses of such independent public accounting firm shall
be paid by the Lessee unless such verification shall result in an adjustment in
the Lessee's favor of 10% or more of the payment as computed by the Indemnified
Person, in which case such fee shall be paid by the Indemnified Person.

Reports and Returns.

(i) The Lessee shall be responsible for preparing and filing any real and
personal property or ad valorem tax returns in respect of the Property. In case
any other report or tax return shall be required to be made with respect to any
obligations of the Lessee under or arising out of subsection (a) and of which
the Lessee has knowledge or should have knowledge, the Lessee, at its sole cost
and expense, shall notify the relevant Indemnified Person of such requirement
and (except if such Indemnified Person notifies the Lessee that such Indemnified
Person intends to file such report or return) (A) to the extent required or
permitted by and consistent with applicable law, make and file in its own name
such return, statement or report; and (B) in the case of any other such return,
statement or report required to be made in the name of such Indemnified Person,
advise such Indemnified Person of such fact and prepare such return, statement
or report for filing by such Indemnified Person or, where such return, statement
or report shall be required to reflect items in addition to any obligations of
the Lessee under or arising out of subsection (a), provide such Indemnified
Person at the Lessee's expense with information sufficient to permit such
return, statement or report to be properly made with respect to any obligations
of the Lessee under or arising out of subsection (a). Such Indemnified Person
shall, upon the Lessee's request and at the Lessee's expense, provide any data
maintained by such Indemnified Person (and not otherwise available to or within
the control of the Lessee) with respect to the Property which the Lessee may
reasonably require to prepare any required tax returns or reports. Each
Indemnified Person agrees to use commercially reasonable efforts to send to the
Lessee a copy of any written request or other notice that the Indemnified Person
receives with respect to any reports or returns required to be filed with
respect to the Property or the transactions contemplated by the Operative
Agreements, it being understood that no Indemnified Person shall have any
liability for failure to provide such copies.

Income Inclusions.

If as a result of the payment or reimbursement by the Lessee of any expenses of
any Lessor or the payment of any Transaction Expenses incurred in connection
with the transactions contemplated by the Operative Agreements, the Lessor or
any Lender shall suffer a net increase in any federal, state or local income tax
liability, the Lessee shall indemnify such Persons (without duplication of any
indemnification required by subsection (a)) on an After Tax Basis for the amount
of such increase. The calculation of any such net increase shall take into
account any current or future tax savings realized or reasonably expected to be
realized by such person in respect thereof, as well as any interest, penalties
and additions to tax payable by the Lessor, the Lender or such Affiliate, in
respect thereof.

Withholding Taxes.

As between the Lessee on one hand, and any Financing Party on the other hand,
the Lessee shall be responsible for, and, subject to the provisions of Sections
12.2(g) and (h), the Lessee shall indemnify and hold harmless the Financing
Parties (without duplication of any indemnification required by subsection (a))
on an After Tax Basis against, any obligation for United States or foreign
withholding taxes imposed in respect of payments with respect to the Lender
Advances or the Lessor Contribution or with respect to Rent payments under the
Lease or payments of the Termination Value or the Purchase Option Price (and, if
any Financing Party receives a demand for such payment from any taxing
authority, the Lessee shall discharge such demand on behalf of such Financing
Party).

Contests of Impositions.

If a written claim is made against any Indemnified Person or if any proceeding
shall be commenced against such Indemnified Person (including a written notice
of such proceeding), for any Impositions, such Indemnified Person shall promptly
notify the Lessee in writing and shall not take action with respect to such
claim or proceeding without the consent of the Lessee for thirty (30) days after
the receipt of such notice by the Lessee; provided, however, that, in the case
of any such claim or proceeding, if action shall be required by law or
regulation to be taken prior to the end of such 30-day period, such Indemnified
Person shall, in such notice to the Lessee, inform the Lessee of such shorter
period, and no action shall be taken with respect to such claim or proceeding
without the consent of the Lessee before two days before the end of such shorter
period; provided, further, that the failure of such Indemnified Person to give
the notices referred to in this sentence shall not diminish the Lessee's
obligation hereunder except to the extent such failure precludes the Lessee from
contesting all or part of such claim.

If, within thirty (30) days of receipt after such notice from the Indemnified
Person (or such shorter period as the Indemnified Person has notified the Lessee
as required by law or regulation for the Indemnified Person to commence such
contest), the Lessee shall request in writing that such Indemnified Person
contest such Imposition, the Indemnified Person shall, at the expense of the
Lessee, in good faith conduct and control such contest (including, without
limitation, by pursuit of appeals) relating to the validity, applicability or
amount of such Impositions (provided, however, that (A) if such contest involves
a tax other than a tax on net income and can be pursued independently from any
other proceeding involving a tax liability of such Indemnified Person, the
Indemnified Person, at the Lessee's request, shall allow the Lessee to conduct
and control such contest and (B) in the case of any contest, the Indemnified
Person may request the Lessee to conduct and control such contest) by, in the
sole discretion of the Person conducting and controlling such contest, (1)
resisting payment thereof, (2) not paying the same except under protest, if
protest is necessary and proper, or (3) if the payment be made, using reasonable
efforts to obtain a refund thereof in appropriate administrative and judicial
proceedings.

The party controlling any contest shall consult in good faith with the
non-controlling party and shall keep the non-controlling party reasonably
informed as to the conduct of such contest; provided, that all decisions
ultimately shall be made in the sole discretion of the controlling party. The
parties agree that an Indemnified Person may at any time decline to take further
action with respect to the contest of any Imposition and may settle such contest
if such Indemnified Person shall waive its rights to any indemnity from the
Lessee that otherwise would be payable in respect of such claim and shall pay to
the Lessee any amount previously paid or advanced by the Lessee pursuant to this
Section 12.2 by way of indemnification or advance for the payment of an
Imposition other than expenses of such contest.

Notwithstanding the foregoing provisions of this Section 12.2, an Indemnified
Person shall not be required to take any action and the Lessee shall not be
permitted to contest any Impositions in its own name or that of the Indemnified
Person unless (A) the Lessee shall have agreed to pay in writing and shall pay
to such Indemnified Person on demand and on an After Tax Basis all reasonable
costs, losses and expenses that such Indemnified Person actually incurs in
connection with contesting such Impositions, including, without limitation, all
reasonable legal, accounting and investigatory fees and disbursements and the
contested claim if ultimately required to be paid, (B) in the case of a claim
that must be pursued in the name of an Indemnified Person (or an Affiliate
thereof), the amount of the potential indemnity exceeds $50,000, (C) the
Indemnified Person shall have reasonably determined that the action to be taken
will not result in any material danger of sale, forfeiture or loss of the
Property or the Pledged Collateral, or any part thereof or interest therein,
will not interfere with the payment of Rent, and will not result in risk of
criminal liability, (D) if such contest shall involve the payment of the
Imposition prior to the contest, the Lessee shall provide to the Indemnified
Person an interest-free advance in an amount equal to the Imposition that the
Indemnified Person is required to pay (with no additional net after-tax cost to
such Indemnified Person), (E) the Lessee shall have provided to such Indemnified
Person an opinion of independent tax counsel selected by the Lessee and
reasonably satisfactory to the Indemnified Person stating that a reasonable
basis exists to contest such claim (or, in the case of an appeal of an adverse
determination, an opinion of such counsel to the effect that the position
asserted in such appeal will more likely than not prevail), and (F) no Event of
Default shall have occurred and be continuing. In no event shall an Indemnified
Person be required to appeal an adverse judicial determination to the United
States Supreme Court. In addition, an Indemnified Person shall not be required
to contest any claim in its name (or that of an Affiliate) if the subject matter
thereof shall be of a continuing nature and shall have previously been decided
adversely by a court of competent jurisdiction pursuant to the contest
provisions of this Section 12.2, unless there shall have been a change in law
(or interpretation thereof) and the Indemnified Person shall have received, at
the Lessee's expense, an opinion of independent tax counsel selected by the
Indemnified Person and reasonably acceptable to the Lessee stating that as a
result of such change in law (or interpretation thereof), it is more likely than
not that the Indemnified Person will prevail in such contest.

Documentation of Withholding Status.

Each Financing Party (or any successor thereto or transferee thereof) that is
organized under the laws of a jurisdiction outside of the United States of
America shall:

on or before the date it becomes a party to any Operative Agreement, deliver to
the Lessee any certificates, documents or other evidence that shall be required
by the Code or Treasury Regulations issued pursuant thereto to establish its
exemption from United States Federal withholding requirements, including (A) two
(2) valid, duly completed, original copies of Internal Revenue Service Form
W-8BEN or successor applicable form, properly and duly executed, certifying in
each case that such party is entitled to receive payments pursuant to the
Operative Agreements without deduction or withholding of United States Federal
income taxes, and (B) a valid, duly completed, original copy of Internal Revenue
Service Form W-8 or Form W-9 or applicable successor form, properly and duly
executed, certifying that such party is entitled to an exemption from United
States of America backup withholding tax; and

or before the date that any such form described above expires or becomes
obsolete, or after the occurrence of any event requiring a change in the most
recent such form previously delivered to the Lessee, deliver to the Lessee two
(2) further valid, duly completed, original copies of any such form or
certification, properly and duly executed.

Limitation on Tax Indemnification.

The Lessee shall not be required to indemnify any Indemnified Person, or to pay
any increased amounts to any Indemnified Person or tax authority with respect to
any Impositions pursuant to this Section 12.2 to the extent that (i) any
obligation to withhold, deduct, or pay amounts with respect to Tax existed on
the date such Indemnified Person became a party to any Operative Agreement (and,
in such case, the Lessee may deduct and withhold such Tax from payments pursuant
to the Operative Agreements), or (ii) such Indemnified Person fails to comply
with the provisions of Section 12.2(g) (and, in such case, the Lessee may deduct
and withhold all Taxes required by law as a result of such noncompliance from
payments made by the Lessee pursuant to the Operative Agreements). With respect
to any transferee of any Financing Party (including a transfer resulting from
any change in the designation of the lending office of a Financing Party), the
transferee shall not be entitled to any greater payment or indemnification under
this Section 12.2 than the transferor would have been entitled to.

LIBOR Lending Unlawful.

Notwithstanding any other provision herein, if the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof occurring
after the Closing Date shall make it unlawful for any Financing Party to make,
continue or maintain LIBOR Loans or LIBOR Holder Advances as contemplated by the
Operative Agreements, (a) such Financing Party shall promptly give written
notice of such circumstances to the Lessee, the Lessor and the Agent (which
notice shall be withdrawn whenever such circumstances no longer exist), (b) such
Financing Party shall undertake reasonable efforts to propose a money rate
comparable to LIBOR (the "
LIBOR Alternative
"), (c) the commitment of such Lender or Holder, as the case may be, hereunder
to make, continue or maintain LIBOR Loans or LIBOR Holder Advances shall
forthwith be canceled and, until such time as it shall no longer be unlawful for
such Financing Party to make, continue or maintain LIBOR Loans or LIBOR Holder
Advances, such Financing Party shall then have a commitment only to make or
maintain Loans or the Holder Advances based on ABR or the LIBOR Alternative, if
any, when a LIBOR Loan or LIBOR Holder Advance is requested and (d) such
Financing Party's Loans and Holder Advances then outstanding as LIBOR Loans or
LIBOR Holder Advances, if any, shall be converted automatically to Loans or
Holder Advances based on ABR or the LIBOR Alternative, if any, on the respective
last days of the then current Interest Periods with respect to such Loans and
Holder Advances or within such earlier period as required by law. If any such
conversion of LIBOR Loans or LIBOR Holder Advances occurs on a day which is not
the last day of the then current Interest Period with respect thereto, the
Lessee shall pay to such Financing Party such amounts, if any, as may be
required pursuant to Section 12.6. In any such case, interest and principal (if
any) shall be payable contemporaneously with the related LIBOR Loans or LIBOR
Holder Advances of the other Financing Parties.

Deposits Unavailable.

If any of the Financing Parties shall have determined that:

Dollar deposits in the relevant amount and for the relevant Interest Period are
not available to the Financing Party in its relevant market; or

by reason of circumstances affecting the Financing Party's relevant market,
adequate means do not exist for ascertaining the interest rate or Yield, as the
case may be, applicable to such Financing Party's LIBOR Loans or LIBOR Holder
Advances;

then, upon notice from such Financing Party to the Lessee and the other
Financing Parties, (x) the obligations of the Financing Parties to make or
continue any Loans or the Holder Advances as, or to convert any Loans or the
Holder Advance into, LIBOR Loans or LIBOR Holder Advances shall be suspended,
and (y) each outstanding LIBOR Loan or LIBOR Holder Advance shall automatically
convert into a Loan or Holder Advance based on ABR or the LIBOR Alternative, if
any, on the last day of the current Interest Period applicable thereto.

Increased Costs, etc.

If the adoption of or any change in a Requirement of Law or in the
interpretation or application thereof applicable to any Financing Party, or
compliance by any Financing Party with any request or directive (whether or not
having the force of law) from any central bank or other Governmental Authority,
in each case made subsequent to the Closing Date (or, if later, the date on
which such Financing Party becomes a Financing Party):

shall subject such Financing Party to any tax of any kind whatsoever with
respect to any LIBOR Loans or LIBOR Holder Advances made, continued or
maintained by it or its obligation to make, continue or maintain LIBOR Loans or
LIBOR Holder Advances, or change the basis of taxation of payments to such
Financing Party in respect thereof; or

shall impose, modify or hold applicable any reserve, special deposit, compulsory
loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, Loans and the Holder Advances, advances or
other extensions of credit by, or any other acquisition of funds by, any office
of such Financing Party which is not otherwise included in the determination of
the Adjusted LIBOR hereunder; or

shall impose on such Financing Party any other condition (excluding any Tax of
any kind) whatsoever in connection with the Operative Agreements;

and the result of any of the foregoing is to increase the cost to such Financing
Party, by an amount which such Financing Party reasonably deems to be material,
of making, continuing or maintaining LIBOR Advances or LIBOR Holder Advances or
to reduce any amount receivable hereunder in respect thereof, then, in any such
case, upon notice to the Lessee from such Financing Party, through the Lessor or
the Agent, in accordance herewith, the Lessee shall pay such Financing Party any
additional amounts necessary to compensate such Financing Party for such
increased cost or reduced amount receivable; provided, that, in any such case,
the Lessee may elect to convert the LIBOR Loans or LIBOR Holder Advances made by
such Financing Party hereunder to Loans or Holder Advances based on ABR or the
LIBOR Alternative, if any, by giving the Lessor and the Agent at least one
(1) Business Day's notice of such election, in which case the Lessee shall
promptly pay to such Financing Party, upon demand, without duplication, such
amounts, if any, as may be required pursuant to Section 12.6. All payments
required by this Section 12.5 shall be made by the Lessee within ten
(10) Business Days after demand by the affected Financing Party. The Lessee
shall not be obligated to reimburse any Financing Party for any increased cost
or reduced return incurred more than one hundred eighty (180) days after the
date that such Financing Party receives actual notice of such increased cost or
reduced return unless such Financing Party gives notice thereof to the Lessee in
accordance with this Section 12.5 during such one hundred eighty (180) day
period. If any Financing Party becomes entitled to claim any additional amounts
pursuant to this subsection, it shall provide prompt notice thereof to the
Lessee, through the Lessor and Agent, certifying (x) that one of the events
described in this clause (a) has occurred and describing in reasonable detail
the nature of such event, (y) as to the increased cost or reduced amount
resulting from such event, and (z) as to the additional amount demanded by such
Financing Party and a reasonably detailed explanation of the calculation thereof
(including the method by which such Financing Party allocated such amounts to
the Lessee). Such a certificate as to any additional amounts payable pursuant to
this clause submitted by such Financing Party, through the Agent and the Lessor,
to the Lessee shall be conclusive in the absence of manifest error. This
covenant shall survive the termination of this Agreement and the payment of the
Loans and the Holder Advance and all other amounts payable hereunder.

Each Financing Party shall use its reasonable efforts to reduce or eliminate any
claim for compensation pursuant to this Section 12.5, including, without
limitation, a change in the office of such Financing Party at which its
obligations related to this Agreement are maintained if such change will avoid
the need for or reduce the amount of, such compensation and will not, in the
reasonable judgment of such Financing Party, be otherwise disadvantageous to it.
If any such claim for compensation shall not be eliminated or waived, the Lessee
shall have the right to replace the affected Financing Party with a new
financial institution that shall succeed to the rights of such Financing Party
under this Participation Agreement; provided, that such Financing Party shall
not be replaced hereunder until it has been paid in full such claim and all
other amounts owed to it hereunder.

Indemnifications Provided by the Lessor in Favor of the Other Indemnified
Persons

.
To the extent the Indemnity Provider is not obligated to indemnify each
Indemnified Person with respect to the various matters described in this Section
12, the Lessor shall provide such indemnities (but only to the extent amounts
sufficient to pay such indemnity are funded by the Lenders and the Holders) in
favor of each Indemnified Person in accordance with this Section 12.6 and shall
pay all such amounts owed with respect to this Section 12.6 with amounts
advanced by the Lenders and the Holders (a) to the extent, but only to the
extent, amounts are available therefor with respect to the Available Commitments
and the Available Holder Commitments and (b) unless each Lender and each Holder
has declined in writing to fund such amount. Notwithstanding any other provision
in any other Operative Agreement to the contrary, all amounts so advanced shall
be deemed added to the Property Cost.

Whether or not any of the transactions contemplated hereby shall be consummated,
the Trust hereby assumes liability for and agrees to defend, indemnify and hold
harmless each Indemnified Person on an After Tax Basis from and against any
Claims, which may be imposed on, incurred by or asserted against an Indemnified
Person by any third party, including without limitation Claims arising from the
negligence of an Indemnified Person (but not to the extent such Claims arise
from the gross negligence or willful misconduct of such Indemnified Person
itself, as determined by a court of competent jurisdiction, as opposed to gross
negligence or willful misconduct imputed to such Indemnified Person or breach of
such Indemnified Person's obligations under this Agreement, the Lease or any
other Operative Agreement) in any way relating to or arising or alleged to arise
out of the execution, delivery, performance or enforcement of this Agreement,
the Lease or any other Operative Agreement or on or with respect to any Property
or any component thereof, including without limitation Claims in any way
relating to or arising or alleged to arise out of the matters set forth in
Sections 12.1(a) through 12.1(i).

The Trust shall pay and assume liability for, and does hereby agree to
indemnify, protect and defend each Property and all Indemnified Persons, and
hold them harmless against, all Impositions on an After Tax Basis, and all
payments pursuant to the Operative Agreements shall be made free and clear of
and without deduction for any and all present and future Impositions.
Notwithstanding anything to the contrary in this paragraph, the Excluded Taxes
shall be excluded from the indemnity provisions afforded by this paragraph.

DISTRIBUTION

Basic Rent.

Each payment of Basic Rent (and any payment of interest on overdue installments
of Basic Rent) received by the Lessor shall be distributed by the Agent first to
the Lenders
pro rata
for application to the interest then due and payable on the Loans until such
amounts are paid in full, and then to the Lessor in an amount equal to the
Holder Yield then due and payable under the Operative Agreements.

Purchase Payments by the Lessee.

Any payment received by the Lessor as a result of:

the purchase of the Property in connection with the exercise of the Purchase
Option or Maturity Date Purchase Option under Section 20.1 or 20.2 of the Lease;
or

compliance with the obligation to purchase the Property in accordance with
Section 17.2 of the Lease; or

the payment of the Termination Value in accordance with Section 16.1 of the
Lease;

shall be distributed by the Lessor to the Lessor and the Lenders in the
following order of priority:

First, to the Lenders, pro rata, to pay the Lease Balance Debt; and

Second, to the Lessor to pay the Lease Balance Equity.

Payment of Lease Balance Debt.

In accordance with Section 21.1 of the Lease upon the exercise of the
remarketing option, the payment of the Maximum Residual Guarantee Amount
received by the Lessor shall be distributed to the Agent on behalf of the
Lenders for application to pay in full the Lease Balance Debt of each Lender,
pro rata
among the Lenders without priority of one over the other in the proportion that
the Lease Balance Debt of each such Lender bears to the aggregate Lease Balance
Debt of all Lenders.

Sales Proceeds of Remarketing of Property.

Any payments received by the Lessor as proceeds from the sale of the Property
sold pursuant to the exercise of the remarketing option pursuant to
Article 21 of the Lease, together with any payment made as a result of an
appraisal pursuant to Section 21.3 of the Lease, shall be distributed by the
Lessor in the funds so received in the following order of priority:

First, to cover the costs and expenses of such sale;

Second, to the extent not previously paid as required by Section 13.3 hereof, an
amount equal to the amount of the Lease Balance Debt remaining unpaid shall be
distributed to the Lenders, pro rata, as set forth in Section 13.3;

Third, an amount equal to the aggregate Lease Balance Equity shall be
distributed to the Holders, pro rata; and

Fourth, the balance, if any, shall be promptly paid to the Lessee.

Supplemental Rent.

All payments of Supplemental Rent received by the Lessor (excluding any amounts
payable pursuant to the preceding provisions of this Section 13) shall be
distributed promptly by the Lessor upon receipt thereof to the Persons entitled
thereto pursuant to the Operative Agreements.

Distribution of Payments after Event of Default.

During the continuance of an Event of Default and subject to clause (b) below,
all proceeds received by the Lessor from the sale of the Property shall be
distributed by the Lessor in the following order of priority:

First, so much of such payment or amount as shall be required to pay or
reimburse the Lessor and the Agent for any tax, fees, expense, indemnification
or other loss incurred by the Lessor or the Agent (to the extent incurred in
connection with any duties as the Lessor or as the Agent), shall be distributed
to the Lessor for its own account and that of the Agent in accordance with the
amount of such payment or amount payable to such Person;

Second, so much of such payments or amounts as shall be required to pay the
Financing Parties and the Lessor the amounts payable to them pursuant to any
expense reimbursement or indemnification provisions of the Operative Agreements
shall be distributed to each such Financing Party and the Lessor without
priority of one over the other in accordance with the amount of such payment or
payments payable to each such Person;

Third, to the Lenders for application to pay in full the Lease Balance Debt, pro
rata among the Lenders without priority of one over the other in the proportion
that the Lease Balance Debt of each such Lender bears to the aggregate Lease
Balance Debt of all Lenders and, in the case where the amounts so distributed
shall be insufficient to pay in full as aforesaid, then pro rata among the
Lenders without priority of one over the other in the proportion that the Lease
Balance Debt of each such Lender bears to the aggregate Lease Balance Debt of
all Lenders;

Fourth, to the Lessor in an amount equal to the aggregate Lease Balance Equity
for application to pay in full the Lease Balance Equity; and

Fifth, the balance, if any, of such payment or amounts remaining thereafter
shall be promptly distributed to, or as directed by, the Lessee.

All payments received and amounts realized by the Lessor in connection with any
Casualty or Condemnation during the continuance of an Event of Default shall be
distributed by the Lessor as follows:

in the event that the Lessor elects to pay all or a portion of such amounts to
the Lessee for the repair of damage caused by such Casualty or Condemnation,
then such amounts shall be distributed to the Lessee; and

in the event that the Lessor elects to apply all or a portion of such amounts to
the purchase price of the Property, then such amounts shall be distributed in
accordance with clause (a) above.

Other Payments.

Except as otherwise provided in Sections 13.1, 13.2, 13.6 and clause (b) below,
any payment received by the Lessor for which no provision as to the application
thereof is made in the Operative Agreements or elsewhere in this Section 13
(including any balance remaining after the application in full of amounts to
satisfy any expressed provision) shall be distributed pro rata among the Lenders
and the Lessor for the Holders without priority of one over the other, in the
proportion that the Lease Balances of each, as applicable, bears to the
aggregate of all the Lease Balances, as applicable.

Except as otherwise provided in Sections 13.1, 13.2 and 13.6, all payments
received and amounts realized by the Lessor under the Lease or otherwise with
respect to the Property to the extent received or realized at any time after the
indefeasible payment in full of the Lease Balances of all of the Lenders and the
Holders and any other amounts due and owing to the Lenders or the Holders, shall
be distributed forthwith by the Lessor, in the order of priority set forth in
Section 13.6(a).

Except as otherwise provided in Sections 13.1 and 13.2, any payment received by
the Lessor for which provisions as to the application thereof is made in an
Operative Agreement but not elsewhere in this Section 13 shall be distributed
forthwith by the Lessor to the Person and for the purpose for which such payment
was made in accordance with the terms of such Operative Agreement.

Casualty and Condemnation Amounts.

Subject to Section 13.6(b), any amounts payable to and received by the Lessor as
a result of a Casualty or Condemnation pursuant to Section 15.1 of the Lease
shall be distributed as follows:

all amounts payable to and received by the Lessee for the repair of damage
caused by such Casualty or Condemnation in accordance with Section 15.1(a) of
the Lease shall be distributed to the Lessee; and

all amounts that are to be applied to the purchase price of the Property in
accordance with Article 16 of the Lease shall be distributed by the Lessor upon
receipt thereof to the Lenders and the Lessor in the following order of
priority:

First, to the Lenders, pro rata, to pay the Lease Balance Debt; and

Second, to the Lessor to pay the Lease Balance Equity.

Order of Application.

To the extent any payment made to any Lender or the Lessor for any Holder
pursuant to Sections 13.2, 13.3, 13.4, 13.6 or 13.7 is insufficient to pay in
full the Lease Balance of such Lender or Holder, then each such payment shall
first be applied to accrued interest and then to principal on the Loans or the
Holder Advances, as applicable.

MISCELLANEOUS

.

Survival of Agreements

.

The representations, warranties, covenants, indemnities and agreements of the
parties provided for in the Operative Agreements, and the parties' obligations
under any and all thereof, shall survive the execution and delivery of this
Agreement, the transfer of any Property to the Trust, the acquisition of the
Property, any disposition of any interest of the Trust in the Property or any
interest of the Holders in the Trust Estate, the payment of the Notes and any
disposition thereof and shall be and continue in effect notwithstanding any
investigation made by any party and the fact that any party may waive compliance
with any of the other terms, provisions or conditions of any of the Operative
Agreements. Except as otherwise expressly set forth herein or in other Operative
Agreements, the indemnities of the parties provided for in the Operative
Agreements shall survive the expiration or termination of any thereof.

Notices

.
All notices required or permitted to be given under any Operative Agreement
shall be in writing. Notices may be served by certified or registered mail,
postage paid with return receipt requested; by private courier, prepaid; by
telex, facsimile, or other telecommunication device capable of transmitting or
creating a written record; or personally. Mailed notices shall be deemed
delivered five (5) days after mailing, properly addressed. Couriered notices
shall be deemed delivered when delivered as addressed, or if the addressee
refuses delivery, when presented for delivery notwithstanding such refusal.
Telex or telecommunicated notices shall be deemed delivered when receipt is
either confirmed by confirming transmission equipment or acknowledged by the
addressee or its office. Personal delivery shall be effective when accomplished.
Unless a party changes its address by giving notice to the other party as
provided herein, notices shall be delivered to the parties at the following
addresses:

If to the Lessee or the Guarantor, to such entity at the following address:

Lam Research Corporation

4650 Cushing Parkway

Fremont, CA 94538

Attention: Craig Garber, Treasurer

Telephone: (510) 572-1875

Facsimile: (510) 572-1586

If to the Trust, to it at the following address:

c/o Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, DE 19890-0001

Attention: Corporate Trust Officer

Telephone: (302) 651-8856

Facsimile: (302) 651-8882

If to Wilmington Trust Company, to it at the following address:

Rodney Square North

1100 North Market Street

Wilmington, DE 19890-0001

Attention: Corporate Trust Administration

Telephone: (302) 651-8856

Facsimile: (302) 651-8882

If to Wilmington Trust FSB, to it at the following address:

100 Wilshire Boulevard, Suite 1230

Santa Monica, CA 90401

Attention: Daniel Reser, Vice President

Telephone: (310) 899-7022

Facsimile: (310) 899-7005

If to the Holder, to it at the following address:

Scotiabanc Inc.

600 Peachtree Street, Suite 2700

Atlanta, GA 30308

Attention: William Brown, Managing Director

Telephone: (404) 877-1501

Facsimile: (404) 888-8998

If to the Agent, to it at the following address:

The Bank of Nova Scotia

580 California Street, Suite 2100

San Francisco, CA 94104

Attention: Chris Osborn

Telephone: (415) 986-1100

Facsimile: (415) 397-0791

If to any Lender, to it at the address set forth for such Lender in Schedule 2.1
of the Credit Agreement.

From time to time any party may designate additional parties and/or another
address for notice purposes by notice to each of the other parties hereto. Each
notice hereunder shall be effective upon receipt or refusal thereof.

Counterparts

.
This Agreement may be executed by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument.

Terminations, Amendments, Waivers, Etc.; Unanimous Vote Matters

.
Each Operative Agreement may be terminated, amended, supplemented, waived or
modified only by an instrument in writing signed by, subject to Article X of the
Trust Agreement regarding termination of the Trust Agreement, the Majority
Secured Parties and the Lessee (to the extent Lessee is a party to such
Operative Agreement, and to the extent Lessee is not a party to such Operative
Agreement but is expressly accorded rights in a particular provision therein,
such provision may be terminated, amended, supplemented, waived or modified only
by an instrument in writing signed by the Majority Secured Parties and Lessee).
In addition, the Unanimous Vote Matters shall require the consent of each Lender
and each Holder affected by such matter.

Notwithstanding the foregoing, no such termination, amendment, supplement,
waiver or modification shall, without the consent of the Agent and, to the
extent affected thereby, each Lender and each Holder (collectively, the
"Unanimous Vote Matters") (i) reduce the amount of any Note or any Certificate,
extend the scheduled date of maturity of any Note, extend the scheduled
Expiration Date, extend any payment date of any Note or Certificate, reduce the
stated rate of interest payable on any Note, reduce the stated Holder Yield
payable on any Certificate (other than as a result of waiving the applicability
of any post- default increase in interest rates or Holder Yields), modify the
priority of or release any Lien in favor of the Agent under any Security
Document, subordinate any obligation owed to any Lender or Holder, elect to
decline the funding of any Transaction Expense with respect to Sections 8.1(a)
or 8.1(b), elect to decline the funding of any indemnity payment by the Trust
with respect to Section 12.8 or increase the amount or extend the expiration
date of any Lender's Commitment or the Holder Commitment of any Holder; or (ii)
terminate, amend, supplement, waive or modify any provision of this Section 14.4
or reduce the percentages specified in the definitions of Majority Lenders,
Majority Holders or Majority Secured Parties, or consent to the assignment or
transfer by the Trust of any of its rights and obligations under any Credit
Document or release a material portion of the Collateral (except in accordance
with Section 9.5) or release Lessee from its obligations under any Operative
Agreement or otherwise alter any payment obligations of Lessee to the Lessor or
any Financing Party under the Operative Agreements; or (iii) terminate, amend,
supplement, waive or modify any provision of Section 9.1 of the Credit Agreement
(which shall also require the consent of the Agent). Any such termination,
amendment, supplement, waiver or modification shall apply equally to each of the
Lenders and the Holders and shall be binding upon all the parties to this
Agreement. In the case of any waiver, each party to this Agreement shall be
restored to its former position and rights under the Operative Agreements, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.

If at a time when the conditions precedent set forth in the Operative Agreements
to any Loan are, in the opinion of the Agent, satisfied, any Lender shall fail
to fulfill its obligations to make such Loan (any such Lender, a "Defaulting
Lender") then, for so long as such failure shall continue, the Defaulting Lender
shall (unless the Lessee and the Majority Lenders, determined as if the
Defaulting Lender were not a "Lender," shall otherwise consent in writing) be
deemed for all purposes relating to terminations, amendments, supplements,
waivers or modifications under the Operative Agreements to have no Loans, shall
not be treated as a "Lender" when performing the computation of Majority Lenders
or Majority Secured Parties, and shall have no rights under this Section 14.4;
provided that any action taken pursuant to the second paragraph of this Section
14.4 shall not be effective as against the Defaulting Lender.

If at a time when the conditions precedent set forth in the Operative Agreements
to any Holder Advance are, in the opinion of the Majority Holders, satisfied,
any Holder shall fail to fulfill its obligations to make such Holder Advance
(any such Holder, a "Defaulting Holder") then, for so long as such failure shall
continue, the Defaulting Holder shall (unless the Lessee and the Majority
Holders, determined as if the Defaulting Holder were not a "Holder," shall
otherwise consent in writing) be deemed for all purposes relating to
terminations, amendments, supplements, waivers or modifications under the
Operative Agreements to have no Holder Advances, shall not be treated as a
"Holder" when performing the computation of Majority Holders or Majority Secured
Parties, and shall have no rights under this Section 14.4; provided that any
action taken pursuant to the second paragraph of this Section 14.4 shall not be
effective as against the Defaulting Holder.

Headings, etc.

The Table of Contents and headings of the various Articles and Sections of this
Agreement are for convenience of reference only and shall not modify, define,
expand or limit any of the terms or provisions hereof.

Parties in Interest

.
Except as expressly provided herein, none of the provisions of this Agreement
are intended for the benefit of any Person except the parties hereto.

GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL; VENUE

.

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK. Any legal action or proceeding with respect to this
Agreement or any other Operative Agreement may be brought in the courts of the
State of New York in the City of New York or of the United States for the
Southern District of New York, and, by execution and delivery of this Agreement,
each of the parties to this Agreement hereby irrevocably accepts for itself and
in respect of its property, generally and unconditionally, the nonexclusive
jurisdiction of such courts. Each of the parties to this Agreement further
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to it at the address set out for
notices pursuant to Section 14.2, such service to become effective three (3)
days after such mailing. Nothing herein shall affect the right of any party to
serve process in any other manner permitted by Law or to commence legal
proceedings or to otherwise proceed against any party in any other jurisdiction.

EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY, TO THE FULLEST
EXTENT ALLOWED BY APPLICABLE LAW, WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, ANY OTHER OPERATIVE AGREEMENT AND FOR ANY
COUNTERCLAIM THEREIN.

Each of the parties to this Agreement hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Agreement or any other Operative Agreement brought in the courts referred to in
subsection (a) above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.

The Agent on behalf of the Lenders and the Holders shall have the right to
proceed in any court of proper jurisdiction or by self-help to exercise or
prosecute the following remedies, as applicable (i) all rights to foreclose
against any real or personal property or other security by exercising a power of
sale granted under any Operative Agreement or under applicable Law or by
judicial foreclosure and sale, including without limitation a proceeding to
confirm the sale; (ii) all rights of self-help including without limitation
peaceful occupation of real property and collection of rents, set-off and
peaceful possession of personal property; (iii) obtaining provisional or
ancillary remedies including without limitation injunctive relief,
sequestration, garnishment, attachment, appointment of receiver and filing an
involuntary bankruptcy proceeding; and (iv) when applicable, a judgment by
confession of judgment. Preservation of these remedies does not limit the power
of an arbitrator to grant similar remedies that may be requested by a party in a
Dispute.

The parties to this Agreement and/or any other Operative Agreement agree that
they shall not have a remedy of special, punitive or exemplary damages against
any other party in any Dispute and hereby waive any right or claim to special,
punitive or exemplary damages they have now or which may arise in the future in
connection with any Dispute.

Severability

. Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

Liability Limited

.

The Lenders, the Agent, the Lessee, the Trust Companies, the Trust and the
Holders each acknowledge and agree that the Trust Companies shall not be liable
or accountable under any circumstances whatsoever for or on account of any
statements, representations, warranties, covenants or obligations stated to be
those of the Trust, Borrower or Lessor except for their own gross negligence or
willful misconduct and as otherwise expressly provided herein or in the other
Operative Agreements.

Anything to the contrary contained in this Agreement, the Credit Agreement, the
Notes or in any other Operative Agreement notwithstanding, no Exculpated Person
shall be personally liable in any respect for any liability or obligation
arising hereunder or in any other Operative Agreement including without
limitation the payment of the principal of, or interest on, the Notes, or for
monetary damages for the breach of performance of any of the covenants contained
in the Credit Agreement, the Notes, this Agreement, the Security Documents or
any of the other Operative Agreements. The Lenders, the Holders and the Agent
agree that, in the event any remedies under any Operative Agreement are pursued,
neither the Lenders, the Holders nor the Agent shall have any recourse against
any Exculpated Person, for any deficiency, loss or Claim for monetary damages or
otherwise resulting therefrom and recourse shall be had solely and exclusively
against the Trust Estate (excluding Excepted Payments) and the Lessee and the
Guarantor (with respect to the Lessee's obligations under the Operative
Agreements and the Guarantor's obligations under Section 9.6 hereof); but
nothing contained herein shall be taken to prevent recourse against or the
enforcement of remedies against the Trust Estate (excluding Excepted Payments)
in respect of any and all liabilities, obligations and undertakings contained
herein and/or in any other Operative Agreement. Notwithstanding the provisions
of this Section, nothing in any Operative Agreement shall: (i) constitute a
waiver, release or discharge of any indebtedness or obligation evidenced by the
Notes and/or the Certificates arising under any Operative Agreement or secured
by any Operative Agreement, but the same shall continue until paid or
discharged; (ii) relieve any Exculpated Person from liability and responsibility
for (but only to the extent of the damages arising by reason of): active waste
knowingly committed by any Exculpated Person with respect to any Property, any
fraud, gross negligence or willful misconduct on the part of any Exculpated
Person; (iii) relieve any Exculpated Person from liability and responsibility
for (but only to the extent of the moneys misappropriated, misapplied or not
turned over) (A) except for Excepted Payments, misappropriation or
misapplication by the Lessor (i.e., application in a manner contrary to any of
the Operative Agreements) of any insurance proceeds or condemnation award paid
or delivered to the Lessor by any Person other than the Agent, or (B) except for
Excepted Payments, any rent or other income received by the Lessor from Lessee
that is not turned over to the Agent; or (iv) affect or in any way limit the
Agent's rights and remedies under any Operative Agreement with respect to the
Rents and rights and powers of the Agent under the Operative Agreements or to
obtain a judgment against the Lessee's interest in the Properties or the Agent's
rights and powers to obtain a judgment against the Lessor or the Lessee or
Guarantor (provided, that no deficiency judgment or other money judgment shall
be enforced against any Exculpated Person except to the extent of the Lessor's
interest in the Trust Estate (excluding Excepted Payments) or to the extent the
Lessor may be liable as otherwise contemplated in clauses (ii) and (iii) of this
Section 14.9(b)).

Rights of the Lessee

. If at any time all obligations (i) of the Borrower under the Credit Agreement,
the Security Documents and the other Operative Agreements and (ii) of the Lessee
under the Operative Agreements have in each case been satisfied or discharged in
full, then the Lessee shall be entitled to (a) terminate the Lease and the
Guaranty and (b) receive all amounts then held under the Operative Agreements
and all proceeds with respect to the Property. Upon the termination of the Lease
and Guaranty pursuant to the foregoing clause (a), the Trust shall transfer to
the Lessee all of its right, title and interest free and clear of the Lien of
the Lease, the Lien of the Security Documents and all Lessor Liens in and to the
Property then subject to the Lease and any amounts or proceeds referred to in
the foregoing clause (b) shall be paid over to the Lessee.

Further Assurances

. The parties hereto shall promptly cause to be taken, executed, acknowledged or
delivered, at the sole expense of the Lessee, all such further acts,
conveyances, documents and assurances as the other parties may from time to time
reasonably request in order to carry out and effectuate the intent and purposes
of this Participation Agreement, the other Operative Agreements and the
transactions contemplated hereby and thereby (including without limitation the
preparation, execution and filing of any and all Uniform Commercial Code
financing statements, filings of the Deed of Trust and other filings or
registrations which the parties hereto may from time to time request to be filed
or effected). The Lessee, at its own expense and without need of any prior
request from any other party, shall take such action as may be necessary
(including without limitation any action specified in the preceding sentence),
or (if the Trust shall so request) as so requested, in order to maintain and
protect all security interests provided for hereunder or under any other
Operative Agreement. In addition, in connection with the sale or other
disposition of any Property or any portion thereof, the Lessee agrees to execute
such instruments of conveyance as may be reasonably required in connection
therewith.

Financial Reporting/Tax Characterization

. Lessee agrees to obtain advice from its own accountants and tax counsel
regarding the financial reporting treatment and the tax characterization of the
transactions described in the Operative Agreements. Lessee further agrees that
Lessee shall not rely upon any statement of any Financing Party or any of their
respective Affiliates and/or Subsidiaries regarding any such financial reporting
treatment and/or tax characterization.

Successors and Assigns.

This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.

RENEWALS.

Extensions of Maturity Date and Expiration Date.

So long as the Lessee has not elected the remarketing option, and no Default or
Event of Default shall then exist, the Lessee may, not earlier than one (1) year
after the Closing Date and not later than one hundred eighty (180) days prior to
the Maturity Date, direct a written request to the Lessor and the Agent that the
Expiration Date then in effect under the Lease be extended on terms mutually
agreeable to Lessor, Agent, Lenders and Lessee. Any renewal term shall be
effective only upon the consent of all Financing Parties and each Financing
Party may grant or deny its consent to a renewal of the Lease in its sole
discretion.

[The signature pages follow.]

In Witness Whereof,

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

Lessee and Guarantor:

Lam Research Corporation, a Delaware corporation, as the Lessee and as the
Guarantor

By: /s/ Craig Garber

Name: Craig Garber

Title: Vice-President, Corporate Finance and

Treasurer

Trust, Borrower and Lessor:

Cushing 2000 Trust, a Delaware business trust

By: Wilmington Trust FSB, a federal savings bank, not in its individual capacity
but solely as trustee

By: /s/ Daniel M. Reser

Name: Daniel M. Reser

Title: Vice President

The Agent and the

Lenders: The Bank of Nova Scotia, as a Lender and as the Agent

By: /s/ Chris Osborn

Name: Chris Osborn

Title: Director

Fleet National Bank, as a Lender

By: /s/ Wm Rurodl

Name: Wm Rurodl

Title: MD

The

Holders:

Scotiabanc Inc., a Delaware corporation

By: /s/ W.J. Brown

Name: W.J. Brown

Title: Managing Director

With respect to Section 7.1 of the

Participation Agreement only:

The Trust Companies:

Wilmington Trust Company, a banking corporation organized under the laws of the
State of Delaware

By: /s/ Joseph B. Feil

Name: Joseph B. Feil

Title: Senior Financial Services Officer

Wilmington Trust FSB, a federal savings bank

By: /s/ Daniel M. Reser

Name: Daniel M. Reser

Title: Vice President

Schedule 2.1

HOLDER COMMITMENTS AND ADDRESSES

Name and Address of Holder

Amount of Holder Commitment

Scotiabanc Inc. $1,200,000 - 100%

600 Peachtree Street, Suite 2700

Atlanta, GA 30308

 

 

Schedule 6.4

AGENT'S PAYMENT ADDRESS

The Bank of Nova Scotia

One Liberty Plaza

New York, NY 10006

Telephone: (404) 877-1500

Facsimile: (404) 888-8998

Attn: Eudia Smith

Schedule 7.3

DISCLOSURE SCHEDULE

1. 4650 Cushing: Lessee recently completed various internal alterations to the
building at 4650 Cushing Parkway. The City of Fremont approved the alterations
on the condition that the Lessee subsequently complete one or more firewall or
other fire suppression measures in order to remain in compliance with the City
of Fremont Building Code. The alternatives Lessee is currently evaluating in
order to meet City requirements are (1) installation of a deluge system over
windows in a firewall that currently exists in the building, (2) installation of
drop shutters over such windows and an upgrade of certain existing sprinkler
lines, or (3) construction of another "functionally equivalent alternative
method" of achieving the same level of fire protection as would be provided by
the traditional firewalls under the Building Code.

2. Varian: In October 1993, Varian Associates, Inc. brought suit against Lessee
in the United States District Court, Northern District of California, seeking
monetary damages and injunctive relief based on Lessee's alleged infringement of
certain patents held by Varian. Lessee has asserted defenses of invalidity and
unenforceability of the patents that are the subject of the lawsuit, as well as
non-infringement of such patents by Lessee's products. A trial date was
tentatively scheduled in the action for March 2000; however, it is likely that
that date will be re-scheduled pending the outcome of certain motions under
consideration by the Court. While litigation is subject to inherent
uncertainties and no assurance can be given that Lessee will prevail in such
litigation, or will obtain a license under such patents on commercially
reasonable terms or at all if such patents are held valid and infringed by
Lessee's products, Lessee believes that the Varian lawsuit will not have a
material adverse effect on Lessee's consolidated financial statements.

3. Tegal Corporation: On September 1, 1999, Tegal Corporation brought suit
against Lessee in the United States District Court for the Eastern District of
Virginia, seeking monetary damages and injunctive relief based on Lessee's
alleged infringement of certain patents held by Tegal. Tegal specifically
identified Lessee's 4520XL and Exelan products as infringing the asserted
patents. By recent court ruling, this action is being transferred to the United
States District Court for the Northern District of California. Lessee has
reviewed the asserted patents and believes they do not apply to Lessee
equipment. While litigation is subject to inherent uncertainties and no
assurance can be given that Lessee will prevail in such litigation, or will
obtain a license under such patents on commercially reasonable terms or at all
if such patents are held valid and infringed by Lessee's products, Lessee
believes that the Tegal lawsuit will not have a material adverse effect on
Lessee's consolidated financial statements.

 

472718 v02.SF (@4R202!.DOC)
2/6/01 10:10 AM (19594.0012)

 

Distribution List

The Bank of Nova Scotia, as the Agent and a Lender

Fleet National Bank, as a Lender

Scotiabanc, Inc., as a Holder

The various banks and other lending institutions which are parties to the
Participation Agreement from time to time, as additional Holders

The various banks and other lending institutions which are parties to the
Participation Agreement from time to time, as additional Lenders

Lam Research Corporation, as the Lessee and the Guarantor

The Cushing 2000 Trust

Wilmington Trust Company

Wilmington Trust FSB

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PARTICIPATION AGREEMENT

Dated as of December 6, 2000

among

LAM RESEARCH CORPORATION,

as the Lessee,

CUSHING 2000 TRUST,

as the Lessor,

WILMINGTON TRUST COMPANY,

WILMINGTON TRUST FSB,

THE VARIOUS BANKS AND OTHER LENDING INSTITUTIONS WHICH ARE PARTIES HERETO FROM
TIME TO TIME, as the Holders,

THE VARIOUS BANKS AND OTHER LENDING INSTITUTIONS WHICH ARE PARTIES HERETO FROM
TIME TO TIME, as the Lenders,

and

THE BANK OF NOVA SCOTIA,

as the Administrative Agent for the Lenders and the Holders

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Table Of Contents

 

 

Page

SECTION 1.

THE LOANS

1

SECTION 2.

HOLDER ADVANCES

1

SECTION 3.

SUMMARY OF TRANSACTIONS

2

3.1

Operative Agreements

2

3.2

Property Purchase

2

3.3

Yield on Holder Certificates

3

SECTION 4.

THE CLOSING

4

SECTION 5.

FUNDING OF ADVANCES; PLEDGED COLLATERAL

4

5.1

General

4

5.2

Procedures for Funding

4

5.3

Allocation of Advances Between Land and Improvements

6

5.4

Pledged Collateral

6

SECTION 6.

CONDITIONS OF THE CLOSING AND ADVANCES

7

6.1

General Conditions to the Closing Date

7

6.2

Conditions to Lenders' and Holders' Obligations to Make Loans and Holder
Advances

10

6.3

Restrictions on Liens

11

6.4

Payments

11

SECTION 7.

REPRESENTATIONS AND WARRANTIES

12

7.1

Representations and Warranties of the Trust Companies

12

7.2

Representations and Warranties of the Borrower

13

7.3

Representations and Warranties of the Lessee

15

7.4

Lease Requirements

19

SECTION 8.

PAYMENT OF CERTAIN EXPENSES

19

8.1

Transaction Expenses

19

8.2

Brokers' Fees and Stamp Taxes

20

8.3

Certain Fees and Expenses

20

8.4

Commitment Fee

20

8.5

Other Fees

20

SECTION 9.

OTHER COVENANTS AND AGREEMENTS

20

9.1

Cooperation with the Lessee

20

9.2

Covenants of the Trust Companies, the Trust, and the Holders

21

9.3

Lessee Covenants, Consent and Acknowledgment

22

9.4

Appointment of the Agent by the Lenders, the Holders and the Trust

27

9.5

Release of Properties, etc.

27

9.6

Guaranty

27

SECTION 10.

CREDIT AGREEMENT AND TRUST AGREEMENT

30

10.1

Lessee's Credit Agreement Rights

30

10.2

Lessee's Trust Agreement Rights

31

SECTION 11.

TRANSFER OF INTEREST

31

11.1

Restrictions on Transfer

31

11.2

Effect of Transfer

32

SECTION 12.

INDEMNIFICATION

32

12.1

General Indemnity

32

12.2

General Impositions Indemnity

33

12.3

LIBOR Lending Unlawful

37

12.4

Deposits Unavailable

38

12.5

Increased Costs, etc.

38

12.6

Indemnifications Provided by the Lessor in Favor of the Other Indemnified
Persons

39

SECTION 13.

DISTRIBUTION

40

13.1

Basic Rent

40

13.2

Purchase Payments by the Lessee

40

13.3

Payment of Lease Balance Debt

41

13.4

Sales Proceeds of Remarketing of Property

41

13.5

Supplemental Rent

41

13.6

Distribution of Payments after Event of Default

41

13.7

Other Payments

42

13.8

Casualty and Condemnation Amounts

43

13.9

Order of Application

43

SECTION 14.

MISCELLANEOUS

43

14.1

Survival of Agreements

43

14.2

Notices

43

14.3

Counterparts

45

14.4

Terminations, Amendments, Waivers, Etc.; Unanimous Vote Matters

45

14.5

Headings, etc.

46

14.6

Parties in Interest

46

14.7

Governing Law; Submission to Jurisdiction; Waiver of Jury Trial; Venue

46

14.8

Severability

47

14.9

Liability Limited

48

14.10

Rights of the Lessee

49

14.11

Further Assurances

49

14.12

Financial Reporting/Tax Characterization

49

14.13

Successors and Assigns

49

SECTION 15.

RENEWALS

49

15.1

Extensions of Maturity Date and Expiration Date

49

SCHEDULES

2.1 - Holder Commitments and Addresses

6.4 - Agent's Payment Address

7.3 - Disclosure Schedule

EXHIBITS

A - Form of Requisition

B - Form of Officer's Certificate - Section 6.1(h)

C - Form of Secretary's Certificate - Section 6.1(f), (g) and (j)

D- Form of Officer's Certificate - Section 6.1(s)

E - Form of Officer's Compliance Certificate - Section 9.3(b)(i)

Annex A - Rules of Usage and Definitions

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