Exhibit 10.24

PLEDGE AGREEMENT

(Fremont 3E)

BETWEEN

LAM RESEARCH CORPORATION

(“LRC”)

AND

BTMU CAPITAL LEASING & FINANCE, INC.

(“BTMUCLF”)

December 31, 2013

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TABLE OF CONTENTS

 

          Page  

1.

  

DEFINITIONS AND INTERPRETATION

     2       (A)   

Definitions

     2       (B)   

Rules of Interpretation

     11       (C)   

Attachments

     11   

2.

  

PLEDGE AND GRANT OF SECURITY INTEREST

     11   

3.

  

PROVISIONS CONCERNING THE DEPOSIT TAKERS

     12       (A)   

Deposit Taker Agreements

     12       (B)   

Qualification of Deposit Takers Generally

     12       (C)   

Substitutions for Disqualified Deposit Takers

     12       (D)   

Other Voluntary Substitutions of Deposit Takers

     13       (E)   

Delivery of Deposit Taker’s Agreements by LRC and BTMUCLF

     13       (F)   

Constructive Possession of Collateral

     13       (G)   

Attempted Setoff by Deposit Taker

     13   

4.

  

DELIVERY AND MAINTENANCE OF COLLATERAL

     14       (A)   

Delivery of Pre-lease Deposits by LRC

     14       (B)   

Delivery of Cash Collateral by LRC

     14       (C)   

Allocation of Cash Collateral Among Deposit Takers

     15       (D)   

Status of the Deposit Accounts Under the Reserve Requirement Regulations

     15       (E)   

Acknowledgment by LRC that Requirements of this Agreement are Commercially
Reasonable

     15   

5.

  

WITHDRAWAL OF COLLATERAL

     15       (A)   

Withdrawal and Management of Pre-lease Collateral

     15       (B)   

Withdrawal of Cash Collateral Upon the Occurrence and During the Continuance of
an Event of Default

     17       (C)   

Withdrawal and Application of Cash Collateral to Reduce or Satisfy the Secured
Obligations to BTMUCLF

     17       (D)   

Withdrawal and Return of Cash Collateral Following Satisfaction of all Secured
Obligations

     17       (E)   

No Other Right to Require or Make Withdrawals

     17       (F)   

BTMUCLF’s Covenant Not to Make Unauthorized Withdrawals

     18   

6.

  

REPRESENTATIONS AND COVENANTS OF LRC

     18   

 

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TABLE OF CONTENTS

(continued)

 

          Page      (A)   

Representations of LRC

     18       (B)   

Covenants of LRC

     19   

7.

  

AUTHORIZED ACTION BY BTMUCLF

     20   

8.

  

DEFAULT AND REMEDIES

     20       (A)   

Remedies

     21       (B)   

Recovery Not Limited

     23   

9.

  

MISCELLANEOUS

     23       (A)   

Payments by LRC to BTMUCLF

     23       (B)   

Payments by BTMUCLF to LRC

     24       (C)   

Cumulative Rights, etc

     24       (D)   

Survival of Agreements

     24       (E)   

Other Liable Party

     24       (F)   

Termination

     24   

 

-ii-

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PLEDGE AGREEMENT

(FREMONT 3E)

This PLEDGE AGREEMENT (Fremont 3E) (this “Agreement”), dated as of December 31,
2013 (the “Effective Date”), is made by and between BTMU CAPITAL LEASING &
FINANCE, INC. (“BTMUCLF”), a Delaware corporation, and LAM RESEARCH CORPORATION
(“LRC”), a Delaware corporation.

RECITALS

A. LRC, as lessee, and BTMUCLF, as lessor, are parties to that certain Amended
and Restated Lease Agreement (Fremont 3E), dated of even date herewith (as
amended, supplemented or otherwise modified from time to time pursuant thereto,
the “Lease”), pursuant to which the Lessee has agreed to lease from the Lessor,
and the Lessor has agreed to lease to the Lessee, the Leased Property described
therein.

B. LRC and BTMUCLF are also parties to that certain Participation Agreement,
dated of even date herewith (as amended, supplemented or otherwise modified, the
“Participation Agreement”) pursuant to which BTMUCLF commits to advance funds
for the acquisition of Site Fremont 3E and the construction of New Improvements
thereon and the Personal Property used thereon subject to the terms and
conditions set forth therein.

C. Pursuant to the Construction Agency Agreement, BTMUCLF will appoint LRC as
its agent to construct, and BTMUCLF will advance funds for the construction of,
the New Improvements described therein. Pursuant to the Lease, BTMUCLF will
lease to LRC such New Improvements and other property described in the Lease.

D. By this Agreement, BTMUCLF and LRC desire to establish the terms and
conditions upon which LRC is pledging cash collateral for its obligations to
BTMUCLF under the Lease, the Construction Agency Agreement and the Participation
Agreement.

AGREEMENTS

 

1. DEFINITIONS AND INTERPRETATION.

(A) Definitions. As provided in the recitals above, all capitalized terms used
in this Agreement which are defined in the Participation Agreement and not
otherwise defined herein shall have the same meanings herein as set forth in
Appendix I to the Participation Agreement. All terms used in this Agreement
which are defined in the UCC and not otherwise defined herein shall have the
same meanings herein as set forth therein, except where the context otherwise
requires. As used in this Agreement, the following terms shall have the
following respective meanings:

“Account Office” means, with respect to any Deposit Account maintained by any
Deposit Taker, the office of such Deposit Taker in California or New York at
which such Deposit Account is maintained as specified in the applicable Deposit
Taker’s Agreement.

 

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“BTMU” means The Bank of Tokyo-Mitsubishi UFJ, Ltd.

“BTMU Downgrade Event” means BTMU or any successor of BTMU fails to maintain a
debt rating of at least (i) BBB- (in the case of long term debt) by Standard and
Poor’s Corporation (the “S&P Rating”), and (ii) Baa3 (in the case of long term
debt) by Moody’s Investor Service, Inc. (the “Moody Rating”) and LRC shall elect
to require that the Collateral held by BTMU to be transferred to an Eligible
Deposit Taker pursuant to Section 3(C) hereof, provided that (i) such transferee
shall satisfy the requirements of an Eligible Deposit Taker and (ii) LRC, Lessor
and such replacement Eligible Deposit Taker have entered into a control
agreement in form reasonably acceptable to all parties thereto. The parties
hereto believe that it is improbable that the ratings systems used by Standard
and Poor’s Corporation and by Moody’s Investor Service, Inc. will be
discontinued or changed, but if such ratings systems are discontinued or
changed, LRC shall be entitled to select and use a comparable ratings systems as
a substitute for the S&P Rating or the Moody Rating, as the case may be, for
purposes of determining the status of BTMU or such successor as an Eligible
Deposit Taker.

“BTMUCLF” shall have the meaning given to that term in the introductory
paragraph hereof.

“Cash Collateral” means (i) all money of LRC which LRC or the Intermediary
delivers to BTMUCLF or as directed by it for deposit in the Deposit Accounts
maintained by the Deposit Takers pursuant to this Agreement, and (ii) all
amounts on deposit in any of the Deposit Accounts from time to time, which have
not been withdrawn or applied to Secured Obligations as provided in this
Agreement.

“Clearing System” means the Depository Trust Company (“DTC”) and such other
clearing or safekeeping system that may from time to time be used in connection
with transactions relating to or the custody of any Securities, and any
depository for any of the foregoing.

“Collateral” has the meaning indicated in Paragraph 2.

“Collateral Imbalance” means on any date prior to the Base Term Commencement
Date that the Value (without duplication) of Deposit Accounts maintained by the
Deposit Taker for BTMUCLF or any Participant (other than Disqualified Deposit
Takers) does not equal the Minimum Collateral Value in effect on such date and,
to the extent that there are any Participants, such Participant’s Percentage,
multiplied by the lesser of (1) the Minimum Collateral Value in effect on such
date, or (2) the aggregate Value of all Collateral subject to this Agreement on
such date. For purposes of determining whether a Collateral Imbalance exists,
the Value of any Deposit Accounts maintained by a bank that is acting as Deposit
Taker for two or more Participants will be deemed to be held for them in
proportion to their respective Percentages, and the Value of any Deposit
Accounts maintained by a bank as Deposit Taker for both a Participant and
BTMUCLF will be deemed to be held for the Participant only to the extent
necessary to prevent or mitigate a Collateral Imbalance and otherwise for
BTMUCLF.

 

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“Control Agreement” means the Initial Control Agreement and any future similar
agreement that may (i) supplement, modify or replace the Initial Control
Agreement as to any Pre-lease Collateral or (ii) be used by a Deposit Taker
following any credit impairment as provided in the definition of Eligible
Deposit Taker.

“Default” means any Event of Default and any default, event or condition which
would, with the giving of any requisite notices and the passage of any requisite
periods of time, constitute an Event of Default.

“Deposit Account” means a deposit account maintained by any Deposit Taker into
which Cash Collateral has been or may in the future be deposited as provided in
this Agreement.

“Deposit Taker” means, for BTMUCLF or any Participant, an Eligible Deposit Taker
designated by it to act as the Deposit Taker for it under this Agreement.
BTMUCLF has already designated BTMU as the Deposit Taker for BTMUCLF hereunder.
Any Participant which is an Eligible Deposit Taker will be deemed to have
designated itself to act as the Deposit Taker for it, unless some other
designation is expressly set forth in this Agreement. Any Participant which is
not an Eligible Deposit Taker will be expected to designate BTMU or, to the
extent BTMU is not an Eligible Deposit Taker, another Person which is an
Eligible Deposit Taker (as reasonably approved by LRC) prior to any delivery of
Cash Collateral by LRC pursuant to this Agreement. It is also understood,
however, that each of BTMUCLF and any Participants, for itself only, may from
time to time designate another Eligible Deposit Taker (as reasonably approved by
LRC) as provided in subparagraphs 3(C) and 3(D) below.

“Deposit Taker Prerequisites” means, with respect to any Deposit Taker: (1) the
requirement that such Deposit Taker establish a Deposit Account and provide to
LRC and BTMUCLF the account number and other information regarding such Deposit
Account which they must have to complete and submit a Deposit Taker’s Agreement
covering such Deposit Account; and (2) the requirement that such Deposit Taker
accept, execute and return a Deposit Taker’s Agreement covering each Deposit
Account to be maintained by such Deposit Taker. It is understood that any
Deposit Taker’s refusal or failure to satisfy the Deposit Taker Prerequisites
will cause it to be a Disqualified Deposit Taker.

“Deposit Taker’s Agreement” means a completed Deposit Agreement in the form
attached as Exhibit A, which specifically identifies a Deposit Account in which
a Deposit Taker shall hold Cash Collateral delivered to it pursuant to this
Agreement.

“Disqualified Deposit Taker” means any Person that BTMUCLF or any Participant
has designated as a Deposit Taker, but that has not satisfied or no longer
satisfies the following requirements:

(a) With respect to each Deposit Account in which such Person holds or will hold
Collateral delivered to it pursuant to this Agreement, such Person must have
received from BTMUCLF and LRC an executed Deposit Taker’s Agreement which
specifically identifies

 

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such Deposit Account and which designates, at such Person’s election, an Account
Office with respect to such Deposit Account in New York or California.

(b) Such Person must have executed and returned to BTMUCLF a Deposit Taker’s
Agreement with respect to each such Deposit Account and must have complied with
its Deposit Taker’s Agreements, and the representations set forth therein with
respect to such Person must continue to be true and correct (except that such
Person will not become a Disqualified Deposit Taker because of its failure to
comply with its Deposit Taker’s Agreement, or because any such representation
does not continue to be true and correct, if such failure is cured and all such
representations are made true and correct in all material respects before the
earlier of (i) thirty days after the Deposit Taker is notified thereof, and
(ii) any date upon which BTMUCLF’s security interest in any Collateral
maintained or held by such Deposit Taker is not a Qualified Pledge by reason of
such failure to comply or such representation not being true and correct). Such
Person must have complied in all material respects with the provisions in this
Agreement applicable to Deposit Takers.

(c) Such Person must be an Eligible Deposit Taker.

“Eligible Deposit Taker” means:

(1) (a) BTMU or any successor of BTMU, acting through any branch, office or
agency in New York or California that can lawfully maintain a Deposit Account as
a Deposit Taker hereunder so long as no BTMU Downgrade Event shall occur or
(b) Union Bank, N.A. or any successor of Union Bank, N.A., acting through any
branch, office or agency in New York or California that can lawfully maintain a
Deposit Account as a Deposit Taker hereunder so long as no Union Bank Downgrade
Event shall occur;

(2) any Participant or Affiliate of a Participant that is (a) a commercial bank,
organized under the laws of the United States of America or a state thereof or
under the laws of another country which is doing business in the United States
of America, (b) authorized to maintain deposit accounts for others through
Account Offices in New York or California (as specified in its Deposit Taker’s
Agreement) so long as no Participant Downgrade Event shall occur; or

(3) such Person that (a) has been designated by BTMUCLF or a Participant to act
as the Deposit Taker for it under this Agreement, (b) is one of the fifty
largest (measured by total assets) U.S. banks, or one of the one hundred largest
(measured by total assets) banks in the world, (c) is acting through any branch,
office or agency in New York or California that can lawfully maintain a Deposit
Account as a Deposit Taker hereunder, and (d) has a debt ratings of at least
(i) A- (in the case of long term debt) and A-1 (in the case of short term debt)
or the

 

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equivalent thereof by Standard and Poor’s Corporation (the “S&P Rating”), and
(ii) A3 (in the case of long term debt) and P-1 (in the case of short term debt)
or the equivalent thereof by Moody’s Investor Service, Inc. (the “Moody
Rating”), the parties hereto believing that it is improbable that the ratings
systems used by Standard and Poor’s Corporation and by Moody’s Investor Service,
Inc. will be discontinued or changed, but if such ratings systems are
discontinued or changed, LRC shall be entitled to select and use a comparable
ratings systems as a substitute for the S&P Rating or the Moody Rating, as the
case may be, for purposes of determining the status of any bank as an Eligible
Deposit Taker.

If at any time a Deposit Taker fails to satisfy the requirements of this
definition above, such Deposit Taker shall cease being an Eligible Deposit Taker
and LRC may, at its option, require that the Collateral held by such ineligible
Deposit Taker be transferred to an Eligible Deposit Taker, provided that
(i) such Eligible Deposit Taker satisfies the requirements of this definition
above and (ii) LRC, Lessor and such replacement Eligible Deposit Taker have
entered into a control agreement in form reasonably acceptable to all parties
thereto.

“Eligible Investments” with respect to Pre-Lease Collateral, shall have the
meaning set forth in the Initial Control Agreement.

“Event of Default” means the occurrence of any of the following:

(a) an Event of Default as defined in the Lease;

(b) any failure by LRC to provide funds as and when required by subparagraph
4(A) or 4(B) of this Agreement or under the Deposit Taker’s Agreement, on the
date due;

(c) the failure of the pledge or security interest contemplated herein in any
Pre-lease Collateral or any Deposit Account or Cash Collateral to be a Qualified
Pledge (regardless of the characterization of any Deposit Accounts or Cash
Collateral as deposit accounts, instruments or general intangibles under the
UCC); unless, within five days after LRC becomes aware of such failure, LRC both
(1) notifies BTMUCLF of such failure, and (2) cures such failure;

(d) the failure of any representation herein by LRC to be true (other than a
failure described in another clause of this definition of Event of Default) and
LRC and LRC shall fail to cure the underlying facts causing such representation,
warranty, certification or statement to be incorrect in all material respects
for a period of ten (10) Business Days after the earlier of Actual Knowledge or
notice thereof;

(e) the failure of any representation made by LRC in subparagraph 6(A)(1) to be
true, if within fifteen days after LRC becomes aware of such failure, LRC does
not (1) notify BTMUCLF of such failure, and (2) cure such failure; and

 

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(f) the failure by LRC timely and properly to observe, keep or perform any
covenant, agreement, warranty or condition herein required to be observed, kept
or performed (other than a failure described in another clause of this
definition of Event of Default), if diligent efforts are not being taken by LRC
to cure such Default and such failure is not cured within thirty (30) days after
the earlier of Actual Knowledge thereof by LRC or receipt of written notice
thereof; provided, however, that if such failure is capable of cure but cannot
be cured by payment of money or cannot be cured by diligent efforts within such
thirty (30) day period but such diligent efforts shall be properly commenced
within such thirty (30) day period and LRC is diligently pursuing, and shall
continue to pursue diligently remedy of such failure, such cure period shall be
extended for an additional period of time in excess of such cure period as may
be necessary to cure, not to extend beyond the earlier to occur of (i) the Lease
Expiration Date or (ii) one hundred and twenty (120) days after the earlier of
Actual Knowledge thereof or written notice thereof having been given to LRC.

Notwithstanding the foregoing, if ever the aggregate Value of Pre-lease
Collateral held by the Intermediary exceeds the Minimum Collateral Value then in
effect, a failure of the pledge or security interest contemplated herein in such
excess Pre-lease Collateral to be a valid, perfected, first priority pledge or
security interest shall not constitute an Event of Default under this Agreement.
Accordingly, to provide a cure as required to avoid an Event of Default under
clauses (c) or (e) of this definition prior to the Base Term Commencement Date,
LRC may deliver additional Pre-lease Collateral to the Intermediary - the pledge
of which or security interest in which created by this Agreement is a Qualified
Pledge - sufficient in amount to cause the aggregate Value of the Pre-lease
Collateral then held by the Intermediary subject to a Qualified Pledge hereunder
to equal or exceed the Minimum Collateral Value.

“Initial Control Agreement” means, the Securities Account Control Agreement
(Fremont 3E), dated as of the Effective Date, by and among LRC (as pledgor),
BTMUCLF (as secured party) and State Street Bank and Trust Company (as the bank
or intermediary).

“Intermediary” means State Street Bank and Trust Company and its successors and
assigns under the Initial Control Agreement or any other intermediary that
replaces it as provided therein if the Initial Control Agreement is terminated
pursuant to its express terms, the parties hereto agreeing that neither BTMUCLF
nor any Affiliate of BTMUCLF will replace State Street Bank and Trust Company as
an Intermediary prior to the Completion Date.

“Lien” means, with respect to any property or assets, any right or interest
therein of a creditor to secure indebtedness or other obligations of any kind
which is owed to him or any other arrangement with such creditor which provides
for the payment of such indebtedness or obligations out of such property or
assets or which allows him to have such indebtedness or obligations satisfied
out of such property or assets prior to the general creditors of any owner
thereof, including any lien, mortgage, security interest, pledge, deposit,
production payment, rights of a vendor under any title retention or conditional
sale agreement or lease substantially equivalent thereto, tax lien, mechanic’s
or materialman’s

 

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lien, or any other charge or encumbrance for security purposes, whether arising
by law or agreement or otherwise, but excluding any right of setoff which arises
without agreement in the ordinary course of business. “Lien” also means any
filed financing statement, any registration with an issuer of uncertificated
securities, or any other arrangement which would serve to perfect a Lien
described in the preceding sentence, regardless of whether such financing
statement is filed, such registration is made, or such arrangement is undertaken
before or after such Lien exists.

“Make Whole Amount” means the sum of the following:

(1) the amount (if any) by which the Lease Balance exceeds any Recourse
Deficiency Amount which was actually received by BTMUCLF on the Base Term
Expiration Date in accordance with Articles XXI and XXII of the Lease, together
with interest on such excess computed at the Overdue Rate for the period
commencing on the Base Term Expiration Date and ending on the date of an
Expiration True-Up; plus

(2) any unpaid Base Rent or other amounts due to BTMUCLF pursuant to the Lease
or other Operative Documents (except pursuant to Other Lease Documents); plus

(3) BTMUCLF’s Transaction Costs; plus

(4) the amount, but not less than zero, by which (i) all Taxes, insurance
premiums and other Claims of every kind suffered or incurred by BTMUCLF (whether
or not reimbursed in whole or in part by another Person) with respect to the
ownership, operation or maintenance of the Leased Property during the Extended
Remarketing Period, exceeds (ii) any rents or other sums collected by BTMUCLF
during such period from third parties as consideration for any lease or other
contracts made by BTMUCLF that authorize the use and enjoyment of the Leased
Property by such parties; together with interest on such excess computed at the
Overdue Rate for each day prior to the Base Term Expiration Date.

“Minimum Collateral Value” means as of the Base Term Commencement Date or any
prior date, an amount equal to the Lease Balance determined as of that date
(including any Advances or other amounts added to the Lease Balance on that date
as provided in the Participation Agreement).

“Other Liable Party” means any Person, other than LRC, who may now or may at any
time hereafter be primarily or secondarily liable for any of the Secured
Obligations or who may now or may at any time hereafter have granted to BTMUCLF
a Lien against any of its assets to secure any Secured Obligations.

“Participant” means, with respect to the Lease, any Participation Holder as
defined in Section 6.4 of the Participation Agreement.

“Participant Downgrade Event” means Participant or any successor of Participant
fails to maintain a debt rating of at least (i) BBB- (in the case of long term
debt) by Standard and Poor’s Corporation (the “S&P Rating”), and (ii) Baa3 (in
the case of long term debt) by Moody’s Investor Service, Inc. (the “Moody
Rating”) and LRC shall elect to require

 

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that the Collateral held by Participant to be transferred to an Eligible Deposit
Taker pursuant to Section 3(C) hereof, provided that (i) such transferee shall
satisfy the requirements of an Eligible Deposit Taker and (ii) LRC, Lessor and
such replacement Eligible Deposit Taker have entered into a control agreement in
form reasonably acceptable to all parties thereto. The parties hereto believe
that it is improbable that the ratings systems used by Standard and Poor’s
Corporation and by Moody’s Investor Service, Inc. will be discontinued or
changed, but if such ratings systems are discontinued or changed, LRC shall be
entitled to select and use a comparable ratings systems as a substitute for the
S&P Rating or the Moody Rating, as the case may be, for purposes of determining
the status of Participant or such successor as an Eligible Deposit Taker.

“Percentage” means with respect to each Participant and the Deposit Taker for
such Participant, the percentage obtained by dividing (x) the amount of the
Commitment and/or the outstanding Equity Investment assumed by such Participant
pursuant to Section 6.4 of the Participation Agreement by (y) the aggregate
amount of the Commitments and/or Equity Investment of the Participants.
Percentages may be adjusted from time to time as provided in the Participation
Agreement or as provided in supplements thereto executed as provided in the
Participation Agreement.

“Pre-lease” means the period prior to Completion, as defined in the Lease.

“Pre-lease Account Assets” means all Pre-lease Deposits, Securities, securities
entitlements and any other assets held in trust for LRC or held in any custody,
subcustody, safekeeping, investment management accounts, or other accounts of
LRC with the Intermediary or any other custodian, trustee, Clearing System or
financial intermediary or securities intermediary (all of which shall be
considered “financial assets” under the UCC).

“Pre-lease Collateral” means: (i) any and all Pre-lease Deposits, Securities and
other Pre-lease Account Assets that are listed on Exhibit B; (ii) all additions
to, and proceeds, renewals, investments, reinvestments and substitutions of, the
foregoing, whether or not listed on Exhibit B; and (iii) all certificates,
receipts and other instruments evidencing any of the foregoing; excluding,
however, Cash Collateral and the Deposit Accounts and proceeds thereof. Without
limiting the foregoing, the Pre-lease Collateral will include the Securities
Account maintained by the Intermediary.

“Pre-lease Deposits” means deposits made by or on behalf of LRC with the
Intermediary (whether or not held in trust, or in any custody, subcustody,
safekeeping, investment management accounts, or other accounts of LRC with the
Intermediary).

“Qualified Pledge” means a pledge or security interest that constitutes a valid,
perfected, first priority pledge or security interest.

“Secured Obligations” means and includes all obligations of LRC under the
Operative Documents (except with respect to the Other Lease Documents)
including, without limitation, (i) LRC’s obligation to pay the Construction
Recourse Amount as provided in Section 5.3 of the Construction Agency Agreement
and Section 18.5 of the Lease, (ii) LRC’s obligation to pay the Recourse
Deficiency Amount as provided in Article

 

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XXII of the Lease, (iii) LRC’s obligation to pay the Break Even Price as the
purchase price for the Leased Property pursuant to Sections 20.1, 20.2 or
21.1(a) of the Lease, and (iv) any damages incurred by BTMUCLF or other amounts
due under the Operative Documents (except with respect to the Other Lease
Documents) following a Construction Event of Default or an Event of Default
including any rejection by LRC of the Construction Agency Agreement, the Lease
or any other Operative Document (except with respect to the Other Lease
Documents) in any bankruptcy, insolvency or similar proceeding.

“Securities” means the stocks, bonds and other securities, whether or not held
in trust or in any custody, subcustody, safekeeping, investment management
accounts or other accounts of LRC with the Intermediary or any other custodian,
trustee or Clearing System or held by any party as a financial intermediary or
securities intermediary.

“Securities Account” has the meaning assigned to it in the Initial Control
Agreement.

“UCC” means the Uniform Commercial Code as in effect in the State of New York
from time to time, and the Uniform Commercial Code as in effect in any other
jurisdiction which governs the perfection or non-perfection of the pledge of and
security interests in the Collateral created by this Agreement.

“Union Bank Downgrade Event” means Union Bank, N.A. or any successor of Union
Bank, N.A. fails to maintain a debt rating of at least (i) BBB- (in the case of
long term debt) by Standard and Poor’s Corporation (the “S&P Rating”), and
(ii) Baa3 (in the case of long term debt) by Moody’s Investor Service, Inc. (the
“Moody Rating”) and LRC shall elect to require that the Collateral held by Union
Bank, N.A. to be transferred to an Eligible Deposit Taker pursuant to
Section 3(C) hereof, provided that (i) such transferee shall satisfy the
requirements of an Eligible Deposit Taker and (ii) LRC, Lessor and such
replacement Eligible Deposit Taker have entered into a control agreement in form
reasonably acceptable to all parties thereto. The parties hereto believe that it
is improbable that the ratings systems used by Standard and Poor’s Corporation
and by Moody’s Investor Service, Inc. will be discontinued or changed, but if
such ratings systems are discontinued or changed, LRC shall be entitled to
select and use a comparable ratings systems as a substitute for the S&P Rating
or the Moody Rating, as the case may be, for purposes of determining the status
of Union Bank, N.A. or such successor as an Eligible Deposit Taker.

“Value” means, with respect to any Collateral on any date prior to the Base Term
Commencement Date, a dollar value determined as follows (without duplication):

(a) Any Pre-lease Account Asset that qualifies as an Eligible Investment shall
be valued in accordance with the Advance Rate table set forth as a schedule to
the Initial Control Agreement on such date. Current value will be determined by
the Intermediary (to the extent the Intermediary is willing to provide a
valuation in accordance with this Agreement) or by BTMUCLF’s Parent (to the
extent the Intermediary does not provide the valuation for any reason) using bid
prices indicated by its standard and customary pricing sources, which it
believes to be reliable. For example, the current value of any corporate debt
obligation that meets

 

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the criteria listed in Exhibit B to the Initial Control Agreement will be
determined by multiplying the remaining unpaid principal balance thereof by the
bid price therefor as suggested by the standard and customary pricing sources of
the Intermediary or of BTMUCLF’s Parent, as the case may be, which it believes
to be reliable.

(b) For purposes of calculating “Value” as such capitalized term is used in this
Agreement, any Collateral not described in the preceding clauses will be
assigned a value of zero.

(B) Rules of Interpretation. The rules of interpretation set forth in Appendix I
to the Participation Agreement are hereby incorporated by reference.

(C) Attachments. All attachments to this Agreement are a part hereof for all
purposes.

 

2. PLEDGE AND GRANT OF SECURITY INTEREST.

As security for the Secured Obligations, LRC hereby pledges and assigns to
BTMUCLF and grants to BTMUCLF a continuing security interest and lien in and
against all right, title and interest of LRC in and to the following property,
whether now or hereafter existing, whether tangible or intangible, whether
presently owned or vested in or hereafter acquired by LRC and wherever the same
may be located (collectively and severally, the “Collateral”):

(a) all Pre-lease Collateral; and

(b) all Cash Collateral and all Deposit Accounts; and all cash and other assets
from time to time held in or on deposit in any Deposit Account and all general
intangibles arising from or relating to any Deposit Account or such cash or
other assets; and all documents, instruments and agreements evidencing the same;
and all extensions, renewals, modifications and replacements of the foregoing;
and any interest or other amounts payable in connection therewith; and

(c) all proceeds of the foregoing (including whatever is receivable or received
when Collateral or proceeds is invested, sold, collected, exchanged, returned,
substituted or otherwise disposed of, whether such disposition is voluntary or
involuntary, including rights to payment and return premiums and insurance
proceeds under insurance with respect to any Collateral, and all rights to
payment with respect to any cause of action affecting or relating to the
Collateral).

The pledge, assignment and grant of a security interest made by LRC hereunder is
for security of the Secured Obligations only; the parties to this Agreement do
not intend that LRC’s delivery or deposit of any Collateral, including the Cash
Collateral, as herein provided will constitute an advance payment of any Secured
Obligations or liquidated damages, nor do the parties intend that the Collateral
increase the dollar amount of the Secured Obligations.

 

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3. PROVISIONS CONCERNING THE DEPOSIT TAKERS.

(A) Deposit Taker Agreements. Prior to the Closing, LRC must (1) ask BTMU, as
the designated Deposit Taker for BTMUCLF, and each Eligible Deposit Taker
designated by any Participant to act as the Deposit Taker for it under this
Agreement, to satisfy the Deposit Taker Prerequisites; and (2) execute and
provide to BTMUCLF a completed Deposit Taker’s Agreement for BTMUCLF’s execution
and delivery to each Deposit Taker. Promptly after receipt of a properly
completed Deposit Taker’s Agreement executed by LRC and in form ready to be
executed by BTMU or any other Eligible Deposit Taker named therein, BTMUCLF must
execute such Deposit Taker’s Agreement and deliver it to the appropriate Deposit
Taker as necessary for the satisfaction of the Deposit Taker Prerequisites.

Without limiting the foregoing, it is understood that (i) BTMUCLF and any
Participant may designate BTMU as its Deposit Taker, (ii) any Participant may
designate itself or any of its Affiliates as its Deposit Taker so long as the
Participant or its Affiliate, as the case may be, is an Eligible Deposit Taker,
and (iii) as provided in both the preceding provisions of this subparagraph and
in subparagraph 3(E), BTMUCLF and LRC must promptly upon request execute and
deliver any properly completed Deposit Taker Agreement requested by BTMUCLF or
any Participant to facilitate the designations of Deposit Takers contemplated by
this Agreement. If any Participant has not already designated an Eligible
Deposit Taker to act as Deposit Taker for it under this Agreement at any time
when such a designation is required, then BTMUCLF may make the designation for
such Participant; subject, however, to such Participant’s rights under
subparagraphs 3(D) and 3(E).

(B) Qualification of Deposit Takers Generally. Notwithstanding anything herein
to the contrary, BTMUCLF may decline to deposit or maintain Cash Collateral
hereunder with any Disqualified Deposit Taker.

(C) Substitutions for Disqualified Deposit Takers.

(1) Upon learning that any Deposit Taker has become a Disqualified Deposit
Taker, LRC or BTMUCLF may request that the party for whom such Disqualified
Deposit Taker has been designated a Deposit Taker (i.e., BTMUCLF or the
applicable Participant) (a) designate another Eligible Deposit Taker as its new,
substitute Deposit Taker, and (b) direct the substitute to satisfy the Deposit
Taker Prerequisites.

(2) Pending the designation of a substitute Deposit Taker as provided in this
subparagraph 3(C) and its execution and delivery to BTMUCLF of an appropriate
Deposit Taker’s Agreement, BTMUCLF may withdraw Collateral held by the Deposit
Taker to be replaced and deposit such Collateral with other Deposit Takers. If
at any time no Deposit Takers have been designated other than Disqualified
Deposit Takers, then BTMUCLF must itself select a new Eligible Deposit Taker to
act as a Deposit Taker for it and direct the new Eligible Deposit Taker to
satisfy the Deposit Taker Prerequisites.

 

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(3) If, following a BTMU Downgrade Event, BTMU subsequently maintains the S&P
Rating and Moody Rating required by clauses (i) and (ii) of the definition of
BTMU Downgrade Event, BTMUCLF may designate BTMU as its new, substitute Deposit
Taker and to have Collateral previously withdrawn from BTMU promptly transferred
to BTMU to be held in accordance herewith and the Deposit Taker’s Agreement (or
a substitute Deposit Taker’s Agreement on the identical terms as that to which
such Collateral was previously subject).

(D) Other Voluntary Substitutions of Deposit Takers. BTMUCLF may, and with the
written approval of BTMUCLF (which approval will not be unreasonably withheld)
any Participant may, at any time designate for itself a new Deposit Taker (in
replacement of any prior Deposit Taker acting for it hereunder); provided, the
Person so designated is not be a Disqualified Taker.

(E) Delivery of Deposit Taker’s Agreements by LRC and BTMUCLF. To the extent
required for the designation of a new Deposit Taker by BTMUCLF or any
Participant pursuant to subparagraph 3(D), or to permit the substitution or
replacement of a Deposit Taker for BTMUCLF or any Participant as provided in
subparagraphs 3(C) and 3(D), LRC and BTMUCLF shall promptly execute and deliver
any properly completed Deposit Taker’s Agreement requested by BTMUCLF or the
applicable Participant.

(F) Constructive Possession of Collateral. The possession by a Deposit Taker of
any money, instruments, chattel paper, financial assets or other property
constituting Collateral or evidencing Collateral shall be deemed to be
possession by BTMUCLF or a person designated by BTMUCLF, for purposes of
perfecting the security interest granted to BTMUCLF hereunder pursuant to the
UCC or other Applicable Law; and notifications to a Deposit Taker by other
Persons holding any such property, and acknowledgments, receipts or
confirmations from any such Persons delivered to a Deposit Taker, and control
agreements made by any such Person with Deposit Taker with respect to any such
property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, or control agreements with, financial intermediaries,
bailees or agents (as applicable) of such Deposit Taker for the benefit of
BTMUCLF for the purposes of perfecting such security interests under Applicable
Law.

However, nothing in this subparagraph will be construed to permit or authorize
any replacement of Cash Collateral required by this Agreement with other types
of Collateral or any substitution of other types of Collateral for Cash
Collateral hereunder.

(G) Attempted Setoff by Deposit Taker. By delivery of a Deposit Taker’s
Agreement, each Deposit Taker must agree not to setoff or attempt a setoff,
without in each case first obtaining the prior written authorization of BTMUCLF
(which BTMUCLF will not grant without the prior written consent of all
Participants, if applicable), obligations owed to such Deposit Taker against any
Collateral held by it from time to time. Nevertheless, LRC acknowledges and
agrees (without limiting its right to recover any resulting damages from any
Deposit Taker that violates such agreements) that BTMUCLF shall not be
responsible for, or be deemed to have taken any action against LRC because of,
any violation of such agreement by any Deposit Taker. Further, and without
limiting the foregoing, as additional consideration for BTMUCLF’s accommodations
to LRC, including

 

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BTMUCLF’s acceptance of the Collateral in lieu of other forms of security as
collateral for the Secured Obligations, LRC hereby waives and covenants not to
assert any defense or claim arising out of (i) the California antideficiency
laws, including without limitation California Code of Civil Procedure Sections
580a, 580b, 580d and 726, and (ii) without limiting the generality of the
foregoing, Walker v. Community Bank, 10 Cal. 3d 729, 111 Cal. Rptr. 897, 518
P.2d 329 (1974), Security Pacific Nat’l Bank v. Wozab, 51 Cal. 3d 991, 275 Cal.
Rptr. 201, 800 P.2d 557 (1990), and similar cases, to the extent such claim
arises out of or relates to the exercise of set off rights by any Deposit Taker.

 

4. DELIVERY AND MAINTENANCE OF COLLATERAL.

(A) Delivery of Pre-lease Deposits by LRC. On the Effective Date and on each
Monthly Date prior to the Base Term Commencement Date, if the Value of Pre-lease
Collateral does not already equal or exceed the Minimum Collateral Value, LRC
must deposit with the Intermediary, subject to the pledge and security interest
created hereby, additional funds as necessary to cause the Value of the
Pre-lease Collateral to be no less than the Minimum Collateral Value. Together
with any such required deposit, LRC must deliver instructions to the
Intermediary (with a copy to BTMUCLF), directing the Intermediary to deposit the
funds into a specific account then pledged to BTMUCLF hereunder and to use such
funds to purchase Eligible Investments, which will also be held and maintained
in such pledged account as Pre-lease Collateral. Each delivery of funds required
by this subparagraph must be received by the Intermediary no later than 1:00pm
(New York time) on the date it is required; if received after 1:00pm it will be
considered for purposes of the Lease as received on the next following Business
Day. At least five days prior to any Advance Date upon which it is expected that
LRC will be required to deliver additional funds pursuant to this subparagraph,
LRC shall notify BTMUCLF and the Intermediary thereof and of the amount LRC
expects to deliver to the Intermediary for deposit as Pre-lease Collateral on
the applicable Advance Date. In addition to required deliveries of Pre-lease
Deposits as provided in the foregoing provisions, LRC may on any date (whether
or not an Advance Date) deliver additional Pre-lease Deposits as provided in the
penultimate sentence of the definition of Event of Default above. During any
period during which the Intermediary fails to timely deliver to BTMUCLF
confirmation statements pursuant to the Initial Control Agreement, LRC shall
provide BTMUCLF information regarding the Value of the Pre-lease Collateral as
may be reasonably requested by BTMUCLF including access to such Pre-lease
Collateral provided, further, however that unless such statements are timely
delivered to BTMUCLF without interruption, LRC shall replace the Intermediary
within forty-five (45) days of such cessation of delivery of such statements.

(B) Delivery of Cash Collateral by LRC. On the Base Term Commencement Date as a
condition precedent thereto under the Participation Agreement, LRC must deliver
or cause to be delivered to Deposit Takers for deposit directly into the Deposit
Accounts, in either case subject to the pledge and security interest created
hereby, funds as Cash Collateral then needed (if any) in an amount equal to the
Lease Balance (including any Advances or other amounts added to the Lease
Balance on that date as provided in the Participation Agreement).

 

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(C) Allocation of Cash Collateral Among Deposit Takers. Funds received by
BTMUCLF from or on behalf of LRC as Cash Collateral on or before the Base Term
Commencement Date will be allocated for deposit among the Deposit Takers (other
than Disqualified Deposit Takers) as follows:

first, to the extent possible the funds will be allocated to the Intermediary as
required to rectify and prevent any Collateral Imbalance; and

second, the funds will be allocated to the Deposit Taker for BTMUCLF, unless the
Deposit Taker for BTMUCLF has become a Disqualified Deposit Taker, in which case
the funds will be allocated to other Deposit Takers who are not Disqualified
Deposit Takers as BTMUCLF deems appropriate.

(D) Status of the Deposit Accounts Under the Reserve Requirement Regulations.
Each Deposit Taker shall be permitted to structure the Deposit Account
maintained by it as a nonpersonal time deposit under 12 C.F.R., Part II, Chapter
204 (commonly known as “Regulation D”). Accordingly, any Deposit Taker may
require at least seven days advance notice of any withdrawal or transfer of
funds from the Deposit Account maintained by it and, to the extent LRC has the
right to request withdrawals therefrom, may limit the number of withdrawals or
transfers from such Deposit Account to no more than six in any calendar month,
notwithstanding anything to the contrary herein or in any deposit agreement that
LRC and such Deposit Taker may enter into with respect to such Deposit Account.
As necessary to satisfy the seven days notice requirement with respect to
withdrawals by BTMUCLF when required by LRC pursuant to the provisions below,
BTMUCLF shall notify the affected Deposit Takers promptly after receipt of any
notice from LRC described in subparagraph 5(C).

(E) Acknowledgment by LRC that Requirements of this Agreement are Commercially
Reasonable. LRC acknowledges and agrees that the requirements set forth herein
concerning receipt, deposit, withdrawal, allocation, application and
distribution of Cash Collateral by BTMUCLF, including the requirements and time
periods set forth in the Paragraph 5, are commercially reasonable.

 

5. WITHDRAWAL OF COLLATERAL.

(A) Withdrawal and Management of Pre-lease Collateral. LRC may require BTMUCLF
to provide to the Intermediary approval of any directions to withdraw any
specified Pre-lease Collateral from any account maintained by the Intermediary
and pledged hereunder and to deliver the same to LRC (in the case of clause
(A)(1)(a) below) or as may otherwise be provided in those directions (which
delivery shall be free and clear of all liens and security interests hereunder
and any rights of LRC thereto shall be released, terminated and waived without
further action, except in the case of any delivery of funds by the Intermediary
to BTMUCLF on behalf of LRC to satisfy the requirements of subparagraph
5(A)(1)(b) below), if, but only if, in each case all four of the following
conditions are satisfied:

(1) Either:

 

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(a) such withdrawal and delivery of specified Pre-lease Collateral will not
cause the Value of the remaining Pre-lease Collateral, which is subject to a
Qualified Pledge hereunder, to be less than the Minimum Collateral Value; or

(b) the Completion Date shall have occurred and LRC shall already have delivered
sufficient Cash Collateral to BTMUCLF to satisfy the requirements of
subparagraph 4(B) above; or

(c) the directions to be approved by BTMUCLF will require the Intermediary to
withdraw and deliver funds directly to and only to BTMU as Eligible Deposit
Taker for BTUMCLF or such other Eligible Deposit Taker as may be directed by
BTMUCLF, on behalf of LRC, as Cash Collateral pledged pursuant to this
Agreement.

(2) LRC must give BTMUCLF notice of the required withdrawal three Business Days
prior to the date upon which the withdrawal is to occur, together a copy of the
directions to the Intermediary for which BTMUCLF’s approval will be required by
this subparagraph 5(A) to accomplish the withdrawal.

(3) No Default (under and as defined in this Agreement) shall have occurred and
be continuing, and no Default (as defined in the Lease) shall have occurred and
be continuing, at the time LRC gives the notice required by the preceding
subparagraph or on the date upon which the withdrawal is required. Furthermore,
in order to preserve BTMUCLF’s right to prohibit withdrawals when a Default (as
defined herein or in the Lease) has occurred and is continuing, the directions
to be approved by BTMUCLF must expressly confirm and provide that BTMUCLF may
terminate its approval, and thereby prohibit subsequent withdrawals without its
consent, by notice given to the Intermediary.

(4) LRC will not request BTMUCLF’s approval of more than one withdrawal of
Pre-lease Collateral during any one calendar month.

If the conditions listed in the preceding clauses (1), (3) and (4) are
satisfied, and if BTMUCLF receives from LRC the notice and the copy of
directions to the Intermediary described in the preceding clause (2) less than
three Business Days prior to, but at least one Business Day prior to, the date
upon which a withdrawal is expected to occur, then BTMUCLF will endeavor in good
faith to quickly evaluate and act upon the notice so as not to delay the
withdrawal; provided, however, in that event, BTMUCLF will suffer no liability
for failing to do so.

In addition to LRC’s right to arrange withdrawals of Pre-lease Collateral upon
satisfaction of the conditions specified above in this subparagraph, so long as
the Intermediary is State Street Bank and Trust Company and it remains bound by
the Initial Control Agreement, and prior to BTMUCLF’s delivery of any Notice of
Control (under and as defined in the Initial Control Agreement), LRC may also
give Proper Instructions (under and as defined in the Initial Control Agreement)
directing the Intermediary to (i) allocate or reallocate

 

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investments held in the Securities Account among Eligible Investments (including
directions to liquidate any Eligible Investment in whole or in part and then
reinvest the proceeds thereof in one or more other Eligible Investments) or
(ii) substitute Eligible Investments with other Eligible Investments in a manner
that satisfies the conditions to substitutions expressly set forth in the
Initial Control Agreement.

(B) Withdrawal of Cash Collateral Upon the Occurrence and During the Continuance
of an Event of Default. Upon the occurrence and during the continuance of an
Event of Default, without any instruction or request of LRC, BTMUCLF may
withdraw and retain any Cash Collateral held by any Deposit Taker (which
retention by BTMUCLF shall be free and clear of all liens and security interests
hereunder and any rights of LRC thereto shall be released, terminated and waived
without further action) as a payment on behalf of LRC of any amounts then due
from LRC under Article XVIII of the Lease. To the extent BTMUCLF has exercised
its rights and remedies thereunder and has indefeasibly satisfied the Secured
Obligations in full in accordance with Article XVIII of the Lease, LRC may
require BTMUCLF to withdraw and promptly pay to LRC any Cash Collateral still
held by any Deposit Taker.

(C) Withdrawal and Application of Cash Collateral to Reduce or Satisfy the
Secured Obligations to BTMUCLF. Except following the occurrence and during the
continuance of an Event of Default, to satisfy the Secured Obligations in full,
LRC may require BTMUCLF to withdraw and retain any Cash Collateral held by any
Deposit Taker on the Base Term Expiration Date (which retention by BTMUCLF shall
be free and clear of all liens and security interests hereunder and any rights
of LRC thereto shall be released, terminated and waived without further action)
as a payment on behalf of LRC of any amounts then due from LRC under Articles
XX, XXI or XXII of the Lease; provided, that by a notice in the form of Exhibit
C, LRC must have notified BTMUCLF of the required withdrawal and payment to
BTMUCLF at least ten days prior to the date upon which it is to occur and when
no Event of Default (under and as defined in this Agreement or as defined in the
Lease) has occurred and is continuing. To the extent LRC has validly exercised
the Return Option under the Lease and the Recourse Deficiency Amount has been
indefeasibly satisfied in full on the Base Term Expiration Date in accordance
with Articles XXI and XXII of the Lease, LRC may require BTMUCLF to withdraw and
pay to LRC Cash Collateral held by any Deposit Taker on the Base Term Expiration
Date in an amount not to exceed the Make Whole Amount and when no Default or
Event of Default (under and as defined in this Agreement or as defined in the
Lease) has occurred and is continuing.

(D) Withdrawal and Return of Cash Collateral Following Satisfaction of all
Secured Obligations. Following the Base Term Expiration Date, when all Secured
Obligations have been indefeasibly satisfied in full, any remaining Cash
Collateral that has not been withdrawn and applied against the Secured
Obligations shall revert to LRC as provided in subparagraph 9(F), whereupon LRC
may require BTMUCLF to withdraw such remaining Cash Collateral then maintained
pursuant to this Agreement and promptly transfer such remaining Cash Collateral
to LRC.

(E) No Other Right to Require or Make Withdrawals. LRC may not withdraw or
require any withdrawal of Collateral from any account or deposit account pledged

 

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hereunder, including the Deposit Accounts, except as expressly provided in the
preceding subparagraphs of this Paragraph 5. LRC acknowledges that it will have
no check writing privileges or line of credit or credit card privileges under
any such pledged account or deposit account, including the Deposit Accounts.

(F) BTMUCLF’s Covenant Not to Make Unauthorized Withdrawals. Notwithstanding
provisions of any Control Agreement or of any Deposit Taker’s Agreement which
may state that BTMUCLF is entitled to withdraw Collateral held by the
Intermediary or any Deposit Taker without any prior consent or authorization of
LRC, BTMUCLF covenants to LRC (as between BTMUCLF and LRC) that BTMUCLF will not
exercise such rights to withdraw Collateral except (1) as required or permitted
by this Paragraph 5, (2) in the exercise of BTMUCLF’s rights or remedies as
otherwise herein provided, or (3) as may from time to time be requested or
approved by LRC.

 

6. REPRESENTATIONS AND COVENANTS OF LRC.

(A) Representations of LRC. LRC represents to BTMUCLF as follows:

(1) LRC is the legal and beneficial owner of the Collateral (or, in the case of
after-acquired Collateral, at the time LRC acquires rights in the Collateral,
will be the legal and beneficial owner thereof), subject to the pledge and
rights hereby granted in favor of BTMUCLF. No other Person has (or, in the case
of after-acquired Collateral, at the time LRC acquires rights therein, will
have) any right, title, claim or interest (by way of Lien, purchase option or
otherwise) in, against or to the Collateral, except for rights created
hereunder. The Collateral shall be deposited with the Deposit Taker hereunder
and under the Deposit Taker’s Agreement free and clear of any Lien.

(2) BTMUCLF has (or in the case of after-acquired Collateral, at the time LRC
acquires rights therein, will have) a valid, first priority, perfected pledge of
and security interest in the Collateral, regardless of the characterization of
the Collateral as deposit accounts, instruments or general intangibles under the
UCC, but assuming that the representations of each Deposit Taker in its Deposit
Taker’s Agreement are true.

(3) LRC has delivered to BTMUCLF, together with all necessary stock powers,
endorsements, assignments and other necessary instruments of transfer, the
originals of all documents, instruments and agreements evidencing the Collateral
in order to comply with Section 2 of the Initial Control Agreement.

(4) Neither the ownership or the intended use of the Collateral by LRC, nor the
pledge of Collateral or the grant of the security interest by LRC to BTMUCLF
herein, nor the exercise by BTMUCLF of its rights or remedies hereunder, will
(i) violate any provision of (a) Applicable Law, (b) the articles or certificate
of incorporation, charter or bylaws of LRC, or (c) any agreement, judgment,
license, order or permit applicable to or binding upon LRC or its properties, or
(ii) result in or require the creation of any Lien, charge or encumbrance upon
any assets or properties of LRC except as expressly

 

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contemplated in this Agreement. Except as expressly contemplated in this
Agreement, no consent, approval, authorization or order of, and no notice to or
filing with any court, governmental authority or third party is required in
connection with the pledge or grant by LRC of the security interest contemplated
herein or the exercise by BTMUCLF of its rights and remedies hereunder.

(B) Covenants of LRC. LRC hereby agrees as follows:

(1) LRC, at LRC’s expense, shall promptly procure, execute and deliver to
BTMUCLF all documents, instruments and agreements and perform all acts which are
necessary or desirable, or which BTMUCLF may request, to establish, maintain,
preserve, protect and perfect the Collateral, the pledge thereof to BTMUCLF or
the security interest granted to BTMUCLF therein and the first priority of such
pledge or security interest or to enable BTMUCLF to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the preceding sentence, LRC shall (A) procure, execute and
deliver to BTMUCLF all stock powers, endorsements, assignments, fmancing
statements and other instruments of transfer requested by BTMUCLF, (B) deliver
to BTMUCLF promptly upon receipt all originals of Collateral consisting of
instruments, documents and chattel paper, and (C) cause the security interest of
BTMUCLF in any Collateral consisting of securities to be recorded or registered
in the books of any financial intermediary or Clearing System requested by
BTMUCLF.

(2) When Applicable Law provides more than one method of perfection of BTMUCLF’s
security interest in the Collateral, BTMUCLF may choose the method(s) to be
used. LRC hereby authorizes BTMUCLF to file any financing statements or
financing statement amendment covering all or any portion of the Collateral or
relating to the security interest created herein.

(3) LRC shall not use or authorize or consent to any use of any Collateral in
violation of any provision of this Agreement or any other Operative Document or
any Applicable Law.

(4) LRC shall pay promptly when due all Taxes and other governmental charges,
Liens and other charges now or hereafter imposed upon, relating to or affecting
any Collateral or arising on any interest or earnings thereon.

(5) LRC shall appear in and defend, on behalf of BTMUCLF, any action or
proceeding which may affect LRC’s title to or BTMUCLF’s interest in the
Collateral.

(6) Subject to the express rights of LRC under Paragraph 5, LRC shall not
surrender or lose possession of (other than to BTMUCLF or an Intermediary or a
Deposit Taker pursuant hereto), encumber, lease, rent, option, or otherwise
dispose of or transfer any Collateral or right or interest therein, and LRC
shall keep the Collateral free of all Liens (other than Liens granted under this
Agreement). Without limiting the foregoing, LRC will not, with respect to any
Pre-lease

 

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Collateral, (i) file or permit to be filed any financing or like statement in
which BTMUCLF is not named as the sole secured party, (ii) consent or be a party
to any securities account control agreement or other similar agreement with any
Intermediary to which BTMUCLF is not also a party, (iii) pledge or otherwise
encumber such Pre-lease Collateral, or (iv) except as permitted by the last
sentence of subparagraph 5(A)(3) above, sell, assign, or otherwise dispose of,
or grant any option with respect to, such Pre-lease Collateral. The rights
granted to BTMUCLF pursuant to this Agreement are in addition to the rights
granted to BTMUCLF in any Control Agreement or other custody, investment
management, trust, account control agreement or similar agreement. In case of
conflict between the provisions of this Agreement and of any other such
agreement, the provisions of this Agreement will prevail.

(7) LRC will not take any action which would in any manner impair the value or
enforceability of BTMUCLF’s pledge of or security interest in any Collateral,
nor will LRC fail to take any action which is required to prevent (and which LRC
knows is required to prevent) an impairment of the value or enforceability of
BTMUCLF’s pledge of or security interest in any Collateral.

(8) Without limiting the foregoing, within five days after LRC becomes aware of
any failure of the pledge or security interest contemplated herein in any
Pre-lease Collateral or any Deposit Account or Cash Collateral to be a valid,
perfected, first priority pledge or security interest (regardless of the
characterization thereof as deposit accounts, securities accounts, instruments
or general intangibles under the UCC), LRC shall notify BTMUCLF of such failure.

 

7. AUTHORIZED ACTION BY BTMUCLF.

LRC hereby irrevocably appoints BTMUCLF as LRC’s attorney-in-fact for the
purpose of authorizing BTMUCLF to perform (but BTMUCLF shall not be obligated to
and shall incur no liability to LRC or any third party for failure to perform)
any act which LRC is obligated by this Agreement to perform, and to exercise,
consistent with the other provisions of this Agreement, such rights and powers
as LRC might exercise with respect to the Collateral during any period in which
a Default has occurred and is continuing, including the right to (a) collect by
legal proceedings or otherwise and endorse, receive and receipt for all
dividends, interest, payments, proceeds and other sums and property now or
hereafter payable on or on account of the Collateral; (b) enter into any
extension, reorganization, deposit, merger, consolidation or other agreement
pertaining to, or deposit, surrender, accept, hold or apply other property in
exchange for the Collateral; (c) insure, process, preserve and enforce the
Collateral; (d) make any compromise or settlement, and take any action it deems
advisable, with respect to the Collateral; (e) pay any indebtedness of LRC
relating to the Collateral; and (f) execute UCC financing statements and other
documents, instruments and agreements required hereunder. Such appointment is
coupled with an interest and shall be valid and binding on LRC and its successor
and assigns.

 

8. DEFAULT AND REMEDIES.

 

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(A) Remedies. In addition to all other rights and remedies granted to BTMUCLF by
this Agreement and other Operative Documents (except under Other Lease
Documents) or by the UCC and other Applicable Laws, BTMUCLF may, upon the
occurrence and during the continuance of any Event of Default (as defined herein
and in the Lease), exercise any one or more of the following rights and
remedies, all of which will be in furtherance of its rights as a secured party
under the UCC:

(1) BTMUCLF may collect, receive, appropriate or realize upon the Collateral or
otherwise foreclose or enforce the pledge of or security interests in any or all
Collateral in any manner permitted by Applicable Law or in this Agreement.

(2) BTMUCLF may notify any Deposit Taker to pay all or any portion of Cash
Collateral held by such Deposit Taker directly to BTMUCLF up to an amount equal
to the then outstanding Secured Obligations. BTMUCLF shall apply any Cash
Collateral or proceeds of other Collateral received by BTMUCLF after the
occurrence of such an Event of Default to the Secured Obligations in any order
BTMUCLF believes to be in its best interest. If any such Cash Collateral or
proceeds received by BTMUCLF remains after all Secured Obligations have been
paid in full, BTMUCLF will deliver or direct the Deposit Takers to deliver the
same to LRC or other Persons entitled thereto.

Without limiting the foregoing, when any such Event of Default has occurred and
is continuing, BTMUCLF may, without notice or demand, sell, redeem, offset,
setoff, debit, charge or otherwise dispose of or liquidate into cash any
Collateral and/or to apply it or the proceeds thereof to repay any or all of the
Secured Obligations in such order as BTMUCLF believes to be in its best
interest, regardless of whether any such Secured Obligations are contingent,
unliquidated or unmatured or whether BTMUCLF has any other recourse to LRC or
any Other Liable Party or any other collateral or assets (including the
Property). Moreover, regardless of whether BTMUCLF commences any action to
foreclose the lien and security interest granted in the Lease or the Memorandum
of Lease (a “Property Foreclosure”) before, after or contemporaneously with any
action BTMUCLF may take under this Pledge Agreement to collect Cash Collateral
or proceeds of other Collateral, and regardless of whether BTMUCLF actually
receives proceeds of a Property Foreclosure before or after it receives Cash
Collateral or proceeds of other Collateral, BTMUCLF will be entitled to apply
Cash Collateral and proceeds of other Collateral to satisfy or reduce the
Secured Obligations before applying the proceeds of a Property Foreclosure to
other remaining obligations secured as described in the Lease and the Memo of
Lease. Also, BTMUCLF may exercise its rights without regard to any premium or
penalty from liquidation of any Collateral and without regard to LRC’s basis or
holding period for any Collateral.

In connection with the exercise of its remedies under this Agreement, BTMUCLF
may sell from its offices in Boston, Massachusetts, New York, New York or
elsewhere, in one or more sales, at the price as BTMUCLF deems best, for cash or
on credit or for other property, for immediate or future delivery, any item of
the Collateral, at any broker’s board or at public or private sale, in any
reasonable manner permissible under the UCC (except that, to the extent
permissible under the UCC, LRC waives any requirements of the UCC) and

 

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BTMUCLF or anyone else may be the purchaser of the Collateral and hold it free
from any claim or right including, without limitation, any equity of redemption
of LRC, which right LRC expressly waives. BTMUCLF may in its sole discretion
elect to conduct any sale (and related offers) of any Collateral in such a
manner as to avoid the need for registration or qualification thereof under any
Federal or state securities laws, that such conduct may include restrictions
(including as to potential purchasers) and other requirements (such as purchaser
representations) which may result in prices or other terms less favorable than
those which might have been obtained through a public sale not subject to such
restrictions and requirements and that any offer and sale so conducted shall be
deemed to have been made in a commercially reasonable manner.

In connection with the exercise of its remedies, BTMUCLF may also, in its sole
discretion, for its own benefit, acting either in its own name or in the name of
LRC:

(i) hold any monies or proceeds representing the Collateral in a cash collateral
account in U.S. dollars or other currency that BTMUCLF reasonably selects and
invest such monies or proceeds on behalf of LRC;

(ii) with respect to any deposits constituting Pre-lease Collateral: (x) renew
such deposits on terms and for periods BTMUCLF deems appropriate; (y) demand,
collect, and receive payment of any monies or proceeds due or to become due in
respect of such deposits; or (z) execute any instruments required for the
withdrawal or repayment of the such deposits;

(iii) with respect to any Securities constituting Pre-lease Collateral: A)
transfer such Securities to an account of BTMUCLF, whether in the possession of,
or registered in the name of, any Clearing System or held otherwise; B) transfer
any such Securities held in book entry form with any Federal Reserve
Administrative Agent to the account of BTMUCLF with such Federal Reserve
Administrative Agent; or C) transfer any such Securities registered in the name
of LRC to the name of BTMUCLF or its nominee and complete and deliver any
necessary stock powers or other transfer instruments;

(iv) convert any Collateral denominated in a currency other than U.S. dollars to
U.S. dollars at the spot rate of exchange for the purchase of U.S. dollars with
such other currency which is quoted by a branch or office of BTMUCLF’s Parent
selected by BTMUCLF (or, if no such rate is quoted by BTMUCLF’s Parent on any
relevant date, then at a rate estimated by BTMUCLF on the basis of other quoted
spot rates) or another prevailing rate that BTMUCLF reasonably deems more
appropriate; or

(v) apply any portion of the Collateral, first, to pay or reimburse all costs
and expenses of BTMUCLF and then to all or any portion of the Secured
Obligations in such order as BTMUCLF may believe to be in its best interest.

In any event, LRC will pay to BTMUCLF upon demand all expenses (including
reasonable, out-of-pocket fees, costs and expenses of counsel to BTMUCLF and any
Participant)

 

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incurred by BTMUCLF in connection with the exercise of any of BTMUCLF’s rights
or remedies under this Agreement.

Notwithstanding that BTMUCLF may continue to hold Collateral and regardless of
the value of the Collateral, LRC will remain liable for the payment in full of
any unpaid balance of the Secured Obligations.

In any case where notice of any sale or disposition of any Collateral is
required, LRC hereby agrees that ten (10) days notice of such sale or
disposition is reasonable.

(B) Recovery Not Limited. To the fullest extent permitted by Applicable Law, LRC
waives any right to require that BTMUCLF proceed against any other Person,
exhaust any Collateral or other security for the Secured Obligations, or to have
any Other Liable Party joined with LRC in any suit arising out of the Secured
Obligations or this Agreement, or pursue any other remedy in their power. LRC
waives any and all notice of acceptance of this Agreement.

LRC further waives notice of the creation, modification, rearrangement, renewal
or extension for any period of any of the Secured Obligations of any Other
Liable Party from time to time and any defense arising by reason of any
disability or other defense of any Other Liable Party or by reason of the
cessation from any cause whatsoever of the liability of any Other Liable Party.
Until all of the Secured Obligations shall have been paid in full, LRC shall
have no right to subrogation, reimbursement, contribution or indemnity against
any Other Liable Party and LRC waives the right to enforce any remedy which
BTMUCLF has or may hereafter have against any Other Liable Party, and waives any
benefit of and any right to participate in any other security whatsoever now or
hereafter held by or on behalf of BTMUCLF. LRC authorizes BTMUCLF, without
notice or demand and without any reservation of rights against LRC and without
affecting LRC’s liability hereunder or on the Secured Obligations, from time to
time to (a) take or hold any other property of any type from any other Person as
security for the Secured Obligations, and exchange, enforce, waive and release
any or all of such other property, (b) after and during the continuance of any
Event of Default (as defined herein or in the Lease), apply or require the
application of the Collateral (in accordance with this Agreement) or such other
property in any order they may determine and to direct the order or manner of
sale thereof as they may determine, (c) renew, extend for any period,
accelerate, modify, compromise, settle or release any of the obligations of any
Other Liable Party with respect to any or all of the Secured Obligations or
other security for the Secured Obligations, and (d) release or substitute any
Other Liable Party.

 

9. MISCELLANEOUS.

(A) Payments by LRC to BTMUCLF. All payments and deliveries of funds required to
be made by LRC to BTMUCLF hereunder shall be paid or delivered in immediately
available funds by wire transfer to the Deposit Account in accordance with
wiring instructions which will be provided by BTMUCLF to LRC. Time is of the
essence as to all payments and deliveries of funds by LRC to BTMUCLF under this
Agreement.

 

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(B) Payments by BTMUCLF to LRC. All payments of Cash Collateral withdrawn by
BTMUCLF from the Deposit Accounts and required to returned by BTMUCLF to LRC
hereunder shall be paid or delivered in immediately available funds by wire
transfer to:

 

Bank Name:         Bank Address:         ABA # (Domestic):         SWIFT ID
(Inn):         Account Name:         Account Number:         Bank Contact:     
                   Reference        

or at such other place and in such other manner as LRC may designate in a notice
sent to BTMUCLF. Time is of the essence as to all such payments by BTMUCLF to
LRC.

(C) Cumulative Rights, etc. Except as herein expressly provided to the contrary,
the rights, powers and remedies of BTMUCLF under this Agreement shall be in
addition to all rights, powers and remedies given to them by virtue of any
Applicable Law, any other Operative Document or any other agreement, all of
which rights, powers, and remedies shall be cumulative and may be exercised
successively or concurrently without impairing their respective rights
hereunder. LRC waives any right to require BTMUCLF to proceed against any Person
or to exhaust any Collateral or other collateral or security or to pursue any
remedy in BTMUCLF’s power.

(D) Survival of Agreements. All representations and warranties of LRC herein,
and all covenants and agreements herein shall survive the execution and delivery
of this Agreement, the execution and delivery of any other Operative Documents
and the creation of the Secured Obligations and continue until terminated or
released as provided herein.

(E) Other Liable Party. Neither this Agreement nor the exercise by BTMUCLF or
the failure of BTMUCLF to exercise any right, power or remedy conferred herein
or by law shall be construed as relieving LRC or any Other Liable Party from
liability on the Secured Obligations or any deficiency thereon. This Agreement
shall continue irrespective of the fact that the liability of any Other Liable
Party may have ceased or irrespective of the validity or enforceability of any
other agreement evidencing or securing the Secured Obligations to which LRC or
any Other Liable Party may be a party, and notwithstanding the reorganization,
death, incapacity or bankruptcy of any Other Liable Party, or any other event or
proceeding affecting any Other Liable Party.

(F) Termination. Following the Base Term Expiration Date, upon indefeasible
satisfaction in full of all Secured Obligations (other than contingent indemnity
obligations for which no Claim has been made or are not due and payable) and
upon written request for

 

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the termination of this Agreement delivered by LRC to BTMUCLF, BTMUCLF will
execute and deliver, at LRC’s expense, an acknowledgment that this Agreement and
the pledge and security interest created hereby are terminated, whereupon all
rights to any remaining Collateral that has not been applied against Secured
Obligations in accordance with this Agreement shall revert to LRC.

[Signature pages to follow]

 

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IN WITNESS WHEREOF, this Agreement is executed to be effective as of the date
first written above.

 

BTMU CAPITAL LEASING & FINANCE, INC., a Delaware corporation By:  

/s/ Michael D. Doyle

Name:   Michael D. Doyle Title:   President

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

LAM RESEARCH CORPORATION, a Delaware Corporation By:  

/s/ Odette Go

Name:   Odette Go Title:   Treasurer

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Exhibit A

TO PLEDGE AGREEMENT

DEPOSIT AGREEMENT

(FREMONT 3E)

Dated as of December 31, 2013

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Global Markets Division for the Americas

1251 Avenues of the Americas

New York, New York 10020-1104

Dear Ladies and Gentlemen:

LAM Research Corporation, a Delaware corporation (“LRC”), refers to that certain
Pledge Agreement (Fremont 3E), dated as of December 31, 2013 (as amended or
otherwise modified from time to time, the “Pledge Agreement”), between BTMU
Capital Leasing & Finance, Inc. (“BTMUCLF”) and LRC. All capitalized terms used
herein and not otherwise defined herein shall have the same meanings herein as
set forth in the Pledge Agreement. All terms used in this Agreement which are
defined in the UCC and not otherwise defined herein shall have the same meanings
herein as set forth therein, except where the context otherwise requires.

This Deposit Agreement (this “Agreement”), is among The Bank of Tokyo-Mitsubishi
UFJ, Ltd. (“Deposit Taker”), LRC and BTMUCLF and shall serve as instructions
regarding the following deposit account established by LRC at the Deposit Taker
(the “Deposit Account”):

 

Account
Type

  

Account
Office

    

Account/IMMS/WSS
Numbers

       

 

  

 

    

 

On the Base Term Commencement Date, LRC will delivered to Deposit Taker for
deposit initially in such Deposit Account (or such other account as BTMUCLF
shall notify LRC in writing), which may not necessarily bear any special title
or which may be entitled: “LAM RESEARCH CORPORATION COLLATERAL ACCOUNT FOR THE
BENEFIT OF BTMU CAPITAL LEASING & FINANCE INC.” or such other title as may be
acceptable to Deposit Taker the sums required under Section 4(B) of the Pledge
Agreement in immediately available funds and which may thereafter be held in
(but are not necessarily limited to) the

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

form of one or more time deposits, certificates of deposit, other deposits or
instruments of any type which at all times shall be under the dominion and
control of the Deposit Taker (such funds, whether now or at any time hereafter
on deposit with or payable or withdrawable from the Deposit Taker (whether from
the Deposit Account or any other deposit account, or any time deposit,
certificate of deposit, or any other deposit or instrument of any type)),
together with any amounts or accruals subsequently added to or earned, including
interest, by such funds and all additional funds hereafter deposited into the
Deposit Account hereunder or otherwise or given in substitution for such funds,
being referred to herein as the “Deposited Funds”). Any such Deposited Funds and
any funds or deposits which at any time derive from, consist of or represent
Deposited Funds (including, but not limited to, time deposits, certificates of
deposit, other deposits or instruments of any type), all proceeds, income and
profits thereon and therefrom, and the Deposit Account and any deposit account
in which any of the foregoing is deposited or held, and all of LRC’s rights and
interests therein and claims against Deposit Taker with respect thereto, are
collectively referred to herein as, the “Cash Collateral”. Without limiting any
of Deposit Taker’s other rights or remedies Deposit Taker shall have all the
rights and remedies of a secured party under the Uniform Commercial Code and all
other applicable law with respect to the Cash Collateral and each such deposit
account, all of which LRC acknowledges is to be deemed a “deposit account”
defined by the Uniform Commercial Code. LRC understands that Deposit Taker may
combine the Deposited Funds and Cash Collateral with other funds and will not be
required to keep them separate and identifiable and that the Deposited Funds and
Cash Collateral may be invested, reinvested, held or otherwise utilized by the
Deposit Taker without any direction of the Parties. If such commingling occurs,
Deposit Taker may consider the Deposited Funds to consist at any time of any and
all funds in any relevant account up to the amount required to be held by
Deposit Taker pursuant hereto.

1. Lien. As security for immediate payment and performance when due of all of
the Secured Obligations as defined in the Pledge Agreement owing by LRC,
whensoever arising, whether now existing or hereafter incurred, of every kind
and character, including, without limitation, arising or otherwise existing
under or with respect to the Amended and Restated Lease Agreement (Fremont 3),
dated as of December 31, 2013 (as amended or otherwise modified from time to
time, the “Lease Agreement”), between BTMUCLF and LRC and the Operative
Documents (except with respect to the Other Lease Documents) (all such
obligations, liabilities and indebtedness being referred to herein collectively
as the “Secured Obligations”), LRC hereby pledges and assigns to BTMUCLF and
grants to BTMUCLF a continuing first priority security interest in the following
(the “Collateral”): (i) the Deposit Account, (ii) the Cash Collateral, (iii) all
Deposited Funds, (iv) any and all accounts to which the Deposited Funds or the
proceeds thereof are credited, (v) all amounts, money and other property
standing to the credit of any such accounts, together with any and all documents
evidencing or constituting such amounts, money and other property, (vi) all
instruments, investment property and the like in which such property is from
time to time invested or reinvested and all interest, distributions, other
income and the like payable with respect thereto, and (vii) all replacements,
renewals, substitutions, products, profits and proceeds of the foregoing in
whatever form. The parties hereto agree that this Agreement complies with
Section 9-104(a)(2) of the New York Uniform Commercial Code. So long as

 

2

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this Agreement remains in full force and effect, LRC shall have no right to be
paid or to draw upon, transfer or otherwise dispose of any of the Cash
Collateral, and Deposit Taker shall have exclusive dominion and control of all
Cash Collateral. Deposit Taker has and shall have “control”, as contemplated by
Article 9 of the Uniform Commercial Code, including Section 9-104 thereof, of
the Deposit Account, the Deposited Funds, the Cash Collateral and of any deposit
account in which any Cash Collateral is deposited.

2. Duties. Deposit Taker agrees to take such action with respect to the Deposit
Account as shall from time to time be specified in any writing purportedly from
BTMUCLF as provided herein. LRC and BTMUCLF agree that: (a) Deposit Taker has no
duty to monitor the balance of the Deposit Account; (b) BTMUCLF may at any time
make withdrawals from the Deposit Account and take any and all actions with
respect to the Deposit Account, and Deposit Taker is hereby authorized to honor
any instructions with respect to the Deposit Account (including withdrawals
therefrom) which purport to be from BTMUCLF (in each case without notifying or
obtaining the consent of LRC); (c) Deposit Taker may, without further inquiry,
rely on and act in accordance with any instructions it receives from (or which
purport to be from) BTMUCLF, notwithstanding any conflicting or contrary
instructions it may receive from LRC, and Deposit Taker shall have no liability
to BTMUCLF, LRC or any other person in relying on and acting in accordance with
any such instructions; (d) Deposit Taker shall have no responsibility to inquire
as to the form, execution, sufficiency or validity of any notice or instructions
delivered to it hereunder, nor to inquire as to the identity, authority or
rights of the person or persons executing or delivering the same, and
(e) Deposit Taker shall have a reasonable period of time within which to act in
accordance with any notice or instructions from BTMUCLF with respect to the
Deposit Account. Deposit Taker is hereby authorized immediately, and without
demand upon or notice to LRC or other formality, to take direction from BTMUCLF
acting in accordance with the terms and conditions of the Pledge Agreement to
(i) withdraw and deliver any and all Cash Collateral and Deposited Funds to LRC,
(ii) withdraw and apply any and all Cash Collateral and Deposited Funds to
reduce or satisfy any and all Secured Obligations in any order and first toward
any expenses Deposit Taker incurs in Deposit Taker’s discretion, as and when
they arise or are due, without resort to LRC, any other collateral or any other
obligor, or (iii) withdraw and return Cash Collateral and Deposited Funds to
LRC.

3. Interest on the Deposit Account. Deposit Taker will have no obligation to pay
any interest on the Deposit Account except as follows: on each Payment Date
accrued interest on each Deposit Account maintained by Deposit taker will be
paid by wire transfer to the LRC for the period (the “Interest Period”) since
the preceding Payment Date (or if there was no preceding Payment Date, since the
Base Term Commencement Date) equal to the product of:

 

  •   the Deposited Funds on deposit with the Deposit Taker on the first day of
such Interest Period, times

 

  •   LIBOR Rate less 0.125% (but in no event less than zero) for such Interest
Period, times

 

  •   the number of days in such Interest Period, divided by;

 

3

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  •   three hundred sixty.

As used in this Section 3, capitalized terms defined in the Participation
Agreement are intended to have the respective meanings assigned to them in the
Participation Agreement.

All payments of interest by Deposit Taker hereunder to LRC hereunder shall be
paid or delivered in immediately available funds by wire transfer to:

 

Bank Name:         Bank Address:         ABA # (Domestic):         SWIFT ID
(Inn):         Account Name:         Account Number:         Bank Contact:     
                   Reference        

or at such other place and in such other manner as LRC may designate in a notice
sent to the Deposit Taker. Time is of the essence as to all such payments by
Deposit Taker to LRC.

4. Remedies. LRC agrees that, at any time after an Event of Default has occurred
or any Secured Obligation arises or comes due, Deposit Taker may, without notice
or demand (all of which LRC hereby waives), to take direction from BTMUCLF
acting in its sole discretion to realize upon and apply all or any part of the
Cash Collateral to the payment of all or any part of the Secured Obligations, in
such order and manner as BTMUCLF may elect and Deposit Taker is authorized to
take direction from BTMUCLF acting in its sole discretion to break any time
deposit or certificate deposit prior to its stated maturity and for which LRC
shall have responsibility for any loss of interest or early withdrawal penalties
resulting therefrom. BTMUCLF shall not be required to pursue any other right or
remedy against LRC, or any other person liable for any part of the Secured
Obligations, or enforce its security interest in or liens on any other property
securing the Secured Obligations, prior to enforcing Deposit Taker’s rights
against the Cash Collateral. Without limiting the foregoing, Deposit Taker is
hereby authorized immediately, and without demand upon or notice to LRC or other
formality, to take direction from BTMUCLF acting in its sole discretion on and
during the continuance of an Event of Default (as such term is defined in the
Pledge Agreement), apply and setoff against the Cash Collateral and the
Deposited Funds the aggregate amount of all principal of, interest on and other
amounts payable with respect to all Secured Obligations existing or payable as
of such date, whether or not then due.

5. Representations, Warranties and Covenants. LRC hereby represents, warrants
and covenants to Deposit Taker and BTMUCLF that: (i) the Collateral is and will
be owned by LRC free and clear of all claims, liens, security interests, pledges
and encumbrances of any kind, except in Deposit Taker’s favor; (ii) LRC is a
corporation, duly organized and validly existing in good standing under the laws
of State of Delaware, and have the right and power to execute, deliver and
perform this Agreement, and to pledge, assign and grant a security

 

4

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interest in the Collateral in accordance herewith; (iii) this Agreement has been
duly authorized, executed and delivered by LRC (and those individuals who have
signed on its behalf have the authority to do so consistent with resolutions on
file in Deposit Taker’s offices) and constitutes its legal, valid, binding and
enforceable obligation; (iv) Deposit Taker has and will continue at all times to
have a first priority perfected and enforceable lien and security interest in
the Collateral, subject to no other liens, security interests or encumbrances;
(v) LRC shall not take any action or otherwise make any attempt to draw upon,
transfer or otherwise dispose of the Collateral or permit the amount of
Collateral to decrease at any time; and (vi) LRC shall from time to time at
Deposit Taker’s request, execute, deliver, acknowledge, file and record such
agreements, documents, statements and certificates (including, without
limitation, Uniform Commercial Code financing statements), and do such acts and
things as are necessary or appropriate to effectuate the purposes of this
Agreement. LRC hereby authorizes Deposit Taker to file any Uniform Commercial
Code financing statements, amendments thereto or continuations thereof, and any
other appropriate security documents or instruments and to give any notices
necessary or desirable to perfect any lien or security interest granted hereby,
all without the signature of the LRC or to execute such items as
attorney-in-fact for the LRC, as may be necessary to further the purposes
described herein. Deposit Taker shall at all times have the exclusive right to
hold and possess any certificates, instruments or documents included in the
Collateral. Should LRC at any time receive any such certificates, instruments or
documents LRC shall hold the same in trust for, and immediately deliver them to,
Deposit Taker. Any breach of any representation, warranty, covenant or agreement
made by LRC herein or elsewhere shall be an “Event of Default”. An “Event of
Default” shall also be as defined in the Pledge Agreement.

6. Information. Deposit Taker shall provide BTMUCLF with such information with
respect to the Deposit Account and all items (and proceeds thereof) deposited in
the Deposit Account as BTMUCLF may from time to time reasonably request, and LRC
hereby consents to such information being provided to BTMUCLF and agrees to pay
all expenses in connection therewith.

7. Exculpation; Indemnity. Deposit Taker undertakes to perform only such duties
as are expressly set forth herein. Notwithstanding any other provisions of this
Agreement, the parties hereby agree that Deposit Taker shall not be liable for
any action taken by it in accordance with this Agreement, including, without
limitation, any action so taken at BTMUCLF’s request or direction, except direct
damages attributable to the Deposit Taker’s gross negligence or willful
misconduct. In no event shall Deposit Taker be liable for any (i) losses or
delays resulting from acts of God, war, computer malfunction, interruption of
communication facilities, labor difficulties or other causes beyond Deposit
Taker’s reasonable control, or (ii) for indirect, special, punitive or
consequential damages. LRC agrees to indemnify and hold Deposit Taker harmless
from and against all costs, damages, claims, judgments, reasonable attorneys’
fees, expenses, obligations and liabilities of every kind and nature
(collectively, “Losses”) which Deposit Taker may incur, sustain or be required
to pay (other than those attributable to Deposit Taker’s gross negligence or
willful misconduct) in connection with or arising out of this Agreement or the
Deposit Account (including without limitation, the amount of any overdraft
created in the Deposit Account resulting from a Chargeback, and to pay to
Deposit Taker on demand the amount of all such Losses. Nothing

 

5

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in this Section, and no indemnification of Deposit Taker hereunder, shall affect
in any way the indemnification obligations of LRC to BTMUCLF under the Pledge
Agreement or other Operative Documents. The provisions of this Section shall
survive termination of this Agreement.

8. Irrevocable Agreement. LRC acknowledges that the agreements made by it and
the authorizations granted by it herein are irrevocable and that the
authorizations granted in Section 2 are powers coupled with an interest.

9. Set-off. Deposit Taker waives all of its existing and future rights of
set-off and banker’s liens against the Deposit Account and all items (and
proceeds thereof) that come into possession of Deposit Taker in connection with
the Deposit Account.

10. Miscellaneous. This Agreement is binding upon the parties hereto and their
respective successors and assigns (including any trustee of LRC appointed or
elected in any action under the Bankruptcy Code) and shall inure to their
benefit. Neither LRC nor BTMUCLF may assign their respective rights hereunder
unless the prior written consent of the Deposit Taker is obtained. Neither this
Agreement nor any provision hereof may be changed, amended, modified or waived,
except by an instrument in writing signed by the parties hereto. Any provision
of this Agreement that may prove unenforceable under any law or regulation shall
not affect the validity of any other provision hereof. This Agreement shall be
governed by the laws of the State of New York, without giving effect to the
conflicts of laws provisions of such State (including, without limitation,
Section 5-1401 of the New York General Secured Obligations Law). LRC hereby
irrevocably submits to the jurisdiction of the courts of the U.S. Federal and
New York State courts sitting in the Borough of Manhattan, New York and waives
any objection to or based upon personal jurisdiction, venue, inconvenient forum
or service of process in connection with any action or proceeding arising out of
or in connection with this Agreement. LRC hereby irrevocably consents to service
of process by first class or certified mail, or recognized courier for which a
receipt is available, sent to the address shown in Deposit Taker’s records. This
Agreement may be executed in any number of counterparts which together shall
constitute one and the same instrument. LRC HEREBY IRREVOCABLY WAIVES ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR OTHER PROCEEDING BASED UPON OR ARISING OUT
OF THIS AGREEMENT, THE PLEDGE AGREEMENT OR ANY RELATED TRANSACTION.

11. Termination and Resignation. This Agreement may be terminated by agreement
of BTMUCLF and LRC upon fifteen (15) days’ prior written notice to Deposit
Taker; provided, however, that this Agreement shall terminate immediately upon
notice from BTMUCLF that all of LRC’s obligations secured by the Pledge
Agreement are satisfied. Deposit Taker may, at any time upon thirty (30) days’
prior written notice to BTMUCLF and LRC, terminate this Agreement and close the
Deposit Account; provided, however, that a substitute deposit taker has been
appointed for BTMUCLF under and as described in the Pledge Agreement. Upon
termination of this Agreement any funds in the Deposit Account shall be subject
to the direction of BTMUCLF, including any direction given by BTMUCLF that such
funds be wired to another “Deposit Taker” designated for BTMUCLF under and as
defined in the Pledge Agreement.

 

6

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12. Notices. Unless otherwise specifically provided herein, any notice or other
communication required or permitted to be given shall be in writing addressed to
the respective party as set forth below and may be personally served, telecopied
or sent by overnight courier service and shall be deemed to have been given:
(a) if delivered in person, when delivered; (b) if delivered by telecopy, on the
date of transmission if transmitted on a Business Day before 4:00 P.M. (New York
time) (but only if such telecopied document is also delivered by another method
permitted by this Agreement by the next banking business day), or, if not, on
the next succeeding Business Day; or (c) if delivered by reputable overnight
courier, the banking business day on which such delivery is made by such
courier.

Notices shall be addressed as follows:

 

BTMUCLF:    BTMU Capital Leasing & Finance, Inc.    111 Huntington Avenue   
Boston, Massachusetts 02199    Attention: Portfolio Servicing    Telecopy:
                                 Deposit Taker:    The Bank of Tokyo-Mitsubishi
UFJ, Ltd.    Global Markets Division for the Americas    1251 Avenues of the
Americas    New York, New York 10020-1104    Attn: Charles Catalano, Director –
Institutional Sales Department    Telecopy:                                    
Email:                                          LRC:    Lam Research Corporation
  

4300 Cushing Parkway

Fremont, California 94538

   Attention: Odette Go, Treasurer    Telecopy:                                 
   Email:                                         

or in any case, to such other address as the party addressed shall have
previously designated by written notice to the serving party, given in
accordance with this Section.

[signature page follows.]

 

7

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Please countersign below to indicate your acceptance of our agreement herein.

 

Very truly yours,

LAM RESEARCH CORPORATION,

a Delaware corporation

By:  

 

Name:  

 

Title:  

 

 

ACCEPTED AND AGREED TO as of this

             day of             ,         

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. By:  

 

Name:  

 

Title:  

 

ACKNOWLEDGED AND AGREED TO as of this              day of             ,         
BTMU CAPITAL LEASING & FINANCE, INC., a Delaware corporation By:  

 

Name:  

 

Title:  

 

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Exhibit B

TO PLEDGE AGREEMENT

DESCRIPTION OF INITIAL PRE-LEASE COLLATERAL

All assets held or to be held in the following custody or subcustody accounts,
safekeeping accounts, investment management accounts and/or other account with
the Intermediary:

 

Type of Account

  

Account Number

  

Entity/Location

Securities Account    NJT5    State Street Bank and Trust Company Securities
Account    NJTP    State Street Bank and Trust Company Cash Account       State
Street Bank and Trust Company

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Exhibit C

TO PLEDGE AGREEMENT

NOTICE OF LRC’S REQUIREMENT OF

DIRECT PAYMENT TO BTMUCLF

BTMU Capital Leasing & Finance, Inc.

111 Huntington Avenue

Boston, Massachusetts 02199

Attention: Portfolio Servicing

 

  Re: Pledge Agreement (Fremont 3E) dated as of December 31, 2013 between Lam
Research Corporation and BTMU Capital Leasing & Finance, Inc.

Gentlemen:

Capitalized terms used in this letter are intended to have the meanings assigned
to them in the Pledge Agreement (Fremont 3E) referenced above (the “Pledge
Agreement”). This letter constitutes notice to you, as secured party under the
Pledge Agreement, that pursuant to subparagraph 5(C) of the Pledge Agreement,
LRC requires you to withdraw from the Deposit Account and to retain, as a
payment from LRC required by Articles XX, XXI or XXII of the Lease, the
following amount:

                     Dollars ($        )

on the following date (which, LRC acknowledges, must be the Base Term Expiration
Date):

LRC acknowledges that its right to require such withdrawal is subject to the
condition that LRC must give this notice to you at least ten days prior to the
date of required withdrawal and payment specified above, and also to the
condition that no Event of Default (under and as defined in the Pledge Agreement
or as defined in the Lease referenced therein) has occurred and is continuing.

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

 

Lam Research Corporation By:  

 

Name:  

 

Title: