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                                                                    EXHIBIT 10.4
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                             PARTICIPATION AGREEMENT


                                      AMONG


                             NOVELLUS SYSTEMS, INC.


                                       AND


                             LEASE PLAN U.S.A., INC.


                                       AND


                          THE PARTICIPANTS NAMED HEREIN


                                       AND


                               ABN AMRO BANK N.V.,
                          AS AGENT FOR THE PARTICIPANTS


                                OCTOBER 15, 1997






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                                TABLE OF CONTENTS
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                                                                                PAGE

<S>           <C>                                                                <C>
SECTION 1.    INTERPRETATION......................................................2

     1.01     Definitions.........................................................2
     1.02     Rules of Construction...............................................2

SECTION 2.    LEASE FACILITIES....................................................2

     2.01     Acquisition, Lease, Etc.............................................2
     2.02     Participation Agreement.............................................3
     2.03     Advance Requests....................................................4
     2.04     Fees................................................................6
     2.05     Funding of Advances.................................................6
     2.06     Sharing of Payments.................................................7
     2.07     Other Payment Terms................................................10
     2.08     Commitment Reductions..............................................11
     2.09     Extensions.........................................................11
     2.10     Nature of the Transactions.........................................13
     2.11     Security...........................................................14
     2.12     Change of Circumstances............................................15
     2.13     Taxes on Payments..................................................18
     2.14     Funding Loss Indemnification.......................................19
     2.15     Replacement of Participants........................................19

SECTION 3.    CONDITIONS PRECEDENT...............................................20

     3.01     Acquisition Advances...............................................20
     3.02     Improvement/Expense Advances.......................................20
     3.03     Other Conditions Precedent.........................................20
     3.04     Covenant to Deliver................................................21

SECTION 4.    REPRESENTATIONS AND WARRANTIES.....................................21

     4.01     Lessee's Representations and Warranties............................21
     4.02     Lessor's Representations and Warranties............................26
     4.03     Participants' Representations and Warranties.......................27

SECTION 5.    COVENANTS..........................................................28

     5.01     Lessee's Affirmative Covenants.....................................28
     5.02     Lessee's Negative Covenants........................................32
     5.03     Lessee's Financial Covenants.......................................38
     5.04     Lessor's Covenants.................................................40
     5.05     Participants' Covenants............................................41

SECTION 6.    LESSOR, AGENT AND THEIR RELATIONS WITH PARTICIPANTS................41

     6.01     Appointment of Agent...............................................41
     6.02     Powers and Immunities..............................................41
     6.03     Reliance...........................................................41
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                               TABLE OF CONTENTS
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<S>           <C>                                                                <C>
     6.04     Defaults...........................................................42
     6.05     Indemnification....................................................42
     6.06     Non-Reliance.......................................................42
     6.07     Resignation or Removal of Agent....................................43
     6.08     Authorization......................................................43
     6.09     Lessor and Agent in their Individual Capacities....................43

SECTION 7.    MISCELLANEOUS......................................................43

     7.01.    Notices............................................................43
     7.02.    Expenses...........................................................45
     7.03.    Indemnification....................................................45
     7.04.    Waivers; Amendments................................................46
     7.05.    Successors and Assigns.............................................46
     7.06.    Setoff.............................................................51
     7.07.    No Third Party Rights..............................................51
     7.08.    Partial Invalidity.................................................51
     7.09.    JURY TRIAL.........................................................51
     7.10.    Counterparts.......................................................51
     7.11.    No Joint Venture, Etc..............................................51
     7.12.    Usury Savings Clause...............................................51
     7.13.    Confidentiality....................................................52
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<TABLE>
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SCHEDULES
         <S>                   <C>

          I                    Participants (Preamble, 7.01, Schedule 1.01)
          II                   Pricing Grid (Schedule 3.01)
          1.01                 Definitions
          1.02                 Rules of Construction
          3.01                 Initial Conditions Precedent
          4.01(g)              Litigation
          4.01(q)              Subsidiaries
          4.01(t)              Individual Property Representations
          5.02(a)              Existing Indebtedness
          5.02(b)              Existing Liens
          5.02(e)              Existing Investments


EXHIBITS

           A                   Land (2.01(a))
           B(1)                Facility 1 Lease Agreement (2.01(a))
           B(2)                Facility 2 Lease Agreement (2.01(b))
           C(1)                Facility 1 Purchase Agreement (2.01(a))
           C(2)                Facility 2 Purchase Agreement (2.01(b))
           D                   Facility 2 Construction Agency Agreement (2.01(b))
           E                   Acquisition Request (2.03(a))
           F                   Improvement/Expense Advance Request (2.03(b))
           G(1)                Commitment Extension Request (2.09(a))
           G(2)                Lease Extension Request (2.09(b))
           H                   Assignment of Construction Agreements (2.11(a))
           I                   Cash Collateral Agreement (2.11(a))
           J                   Assignment of Lease (2.11(b))
           K                   Lessor Deed of Trust (2.11(b))
           L                   Lessor Security Agreement (2.11(b))
           M                   Assignment Agreement (7.05(b))

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                             PARTICIPATION AGREEMENT

           THIS PARTICIPATION AGREEMENT (this "Agreement" herein), dated as of
October 15, 1997, is entered into by and among:

                     (1)   NOVELLUS SYSTEMS, INC., a California corporation
           ("Lessee");

                     (2)   LEASE PLAN U.S.A., INC., a Georgia corporation
           ("Lessor");

                     (3) Each of the Persons from time to time listed in
           Schedule 1 hereto, as amended from time to time (such Persons to be
           referred to collectively as the "Participants"); and

                     (4) ABN AMRO BANK N.V., acting through its San Francisco
           International Branch, as agent for the Participants (in such
           capacity, "Agent").

                                    RECITALS

           A.  Lessee has requested Lessor and the Participants to provide to
Lessee two lease facilities as follows:

                     (1) Pursuant to the first facility ("Facility 1"), Lessor
           would (a) purchase certain land designated by Lessee, (b) lease such
           land to Lessee, (c) make advances to finance certain related expenses
           and (d) grant to Lessee the right to purchase such property.

                     (2) Pursuant to the second facility ("Facility 2"), Lessor
           would (a) purchase the improvements to the Facility 1 Land and other
           property designated by Lessee, (b) lease such property to Lessee, (c)
           appoint Lessee as Lessor's agent to make certain improvements to such
           property and certain of the Facility 1 Land, (d) make advances to
           finance such improvements and to pay certain related expenses and (e)
           grant to Lessee the right to purchase such property.

                     (3) The Participants would participate in such lease
           facilities by (a) funding the purchase prices and other advances to
           be made by Lessor and (b) acquiring participation interests in the
           rental and certain other payments to be made by Lessee.

           B. Lessor and the Participants are willing to provide such lease
facilities upon the terms and subject to the conditions set forth herein.

                                    AGREEMENT

           NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:


<PAGE>   7

SECTION 1. INTERPRETATION.

           1.01. Definitions. Unless otherwise indicated in this Agreement or
any other Operative Document, each term set forth in Schedule 1.01, when used in
this Agreement or any other Operative Document, shall have the respective
meaning given to that term in Schedule 1.01 or in the provision of this
Agreement or other document, instrument or agreement referenced in Schedule
1.01.

           1.02. Rules of Construction. Unless otherwise indicated in this
Agreement or any other Operative Document, the rules of construction set forth
in Schedule 1.02 shall apply to this Agreement and the other Operative
Documents.

SECTION 2. LEASE FACILITIES.

           2.01.     Acquisition, Lease, Etc.

                     (a) Facility 1. Subject to the terms and conditions of this
           Agreement (including the limitations set forth in Subparagraph
           2.01(c)):

                               (i) Lessor shall, on the Closing Date, purchase
                     (with funds provided by the Participants) the Tracts of
                     land described in Exhibit A as the Tract 1 Land and the
                     Tract 2 Land (as more fully defined in Schedule 1.01, the
                     "Facility 1 Land"), together with any Appurtenant Rights
                     thereto; and

                               (ii) Immediately upon the purchase by Lessor of
                     the Facility 1 Land on the Closing Date, Lessor and Lessee
                     shall execute (A) a Facility 1 Lease Agreement in the form
                     of Exhibit B(1) (the "Facility 1 Lease Agreement"),
                     pursuant to which Lessor will lease to Lessee such property
                     and (B) a Facility 1 Purchase Agreement in the form of
                     Exhibit C(1) (the "Facility 1 Purchase Agreement"),
                     pursuant to which Lessor grants to Lessee the right to
                     purchase such property.

                     (b) Facility 2. Subject to the terms and conditions of this
           Agreement (including the limitations set forth in Subparagraph
           2.01(c)):

                               (i) Lessor shall, on the Closing Date, purchase
                     (with funds provided by the Participants) (A) the
                     Improvements to the Facility 1 Land (as more fully defined
                     in Schedule 1.01, the "Facility 2 Improvements"), together
                     with any Appurtenant Rights thereto and any other related
                     property;

                               (ii) Immediately upon the purchase by Lessor of
                     the Facility 2 Improvements on the Closing Date, Lessor and
                     Lessee shall execute (A) a Facility 2 Lease Agreement in
                     the form of Exhibit B(2) (the "Facility 2 Lease
                     Agreement"), pursuant to which Lessor will lease to Lessee
                     such property, (B) a Facility 2 Purchase Agreement in the
                     form of Exhibit C(2) (the "Facility 2 Purchase Agreement"),
                     pursuant to which Lessor grants to Lessee the right to

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                     purchase such property and (C) a Facility 2 Construction
                     Agency Agreement in the form of Exhibit D (the "Facility 2
                     Construction Agency Agreement"), pursuant to which Lessee
                     agrees to construct certain improvements to the Facility 2
                     Improvements; and

                               (iii) During the period beginning on the Closing
                     Date and ending on the first Business Day of the first full
                     calendar month immediately succeeding the earliest of (A)
                     September 30, 1998 (the "Outside Completion Date"), (B) the
                     Completion Date and (C) the date on which the Unused Total
                     Commitment is $0 (such first Business Day to be referred to
                     as the "Commitment Termination Date"), Lessor shall, at the
                     request of Lessee, make additional advances (with funds
                     provided by the Participants) to pay Permitted Improvement
                     Costs and Permitted Transaction Expenses under Facility 2
                     ("Improvement/Expense Advances").

                     (c) Advance Limitations. The advances made by Lessor to
           purchase property under the Facilities (collectively, the
           "Acquisition Advances") and the Improvement/Expense Advances made by
           Lessor under Facility 2 (the Acquisition Advances and the
           Improvement/Expense Advances to be referred to collectively as the
           "Advances") shall be made during the period commencing on the date of
           this Agreement and ending on the Commitment Termination Date (such
           period to be referred to as the "Commitment Period") and shall be
           subject to the following limitations:

                               (i)    The aggregate amount of all Advances made
                     by Lessor under Facility 1 shall not exceed $23,000,000;

                               (ii)   The aggregate amount of all Advances made
                     by Lessor under Facility 2 shall not exceed $30,000,000; 
                     and

                               (iii) The aggregate amount of all Advances made
                     by Lessor under both Facilities shall not exceed Fifty
                     Million Dollars ($50,000,000) (the "Total Commitment").

           Each Advance shall consist of a Tranche A Portion, a Tranche B
           Portion and a Tranche C Portion. For accounting purposes, the Tranche
           A Portion and Tranche B Portion of each Advance shall constitute debt
           and the Tranche C Portion shall constitute equity.

           2.02.     Participation Agreement.

                     (a) Advances. Each Participant severally, unconditionally
           and irrevocably agrees with Lessor to participate in each Advance
           made by Lessor in an amount equal to such Participant's Proportionate
           Share of such Advance; provided, however, that the aggregate amount
           of each Participant's Proportionate Share of all Advances shall not
           exceed such Participant's Commitment. Each Participant shall fund its
           Proportionate Share of each Advance as provided in Subparagraph
           2.05(a). Each Participant's 

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           Proportionate Share of each Advance shall consist of such
           Participant's Tranche A Portion, Tranche B Portion and Tranche C
           Portion of such Advance.

                     (b) Payments. In consideration of each Participant's
           participation in each Advance made by Lessor, such Participant shall
           participate in the payments made by Lessee under this Agreement and
           the other Operative Documents as provided in Paragraph 2.06.

                     (c)       Other Rights of Participants and Agent.

                               (i) Until all amounts payable to Agent and
                     Participants under this Agreement and the other Operative
                     Documents are paid in full, Lessee shall deliver all
                     notices for Lessor under this Agreement and the other
                     Operative Documents to Agent at the office or facsimile
                     number and during the hours specified in Paragraph 7.01.
                     Agent shall promptly furnish to Lessor and each Participant
                     copies of each such notice and, in the case of each request
                     for an Advance, shall notify each Participant of the amount
                     of such Participant's Proportionate Share of the Advance
                     requested thereby.

                               (ii) Lessor is not an agent for Participants or
                     Agent and may exercise or refrain from exercising its
                     rights under this Agreement and the other Operative
                     Documents in its discretion; provided, however that, until
                     all amounts payable to Agent and Participants under this
                     Agreement and the other Operative Documents are paid in
                     full, (A) Lessor shall, subject to the limitations set
                     forth in Section VI, be required to act or to refrain from
                     acting upon instructions of the Required Participants as
                     provided in Paragraph 6.03 and (B) Agent may exercise any
                     or all of the rights and remedies of Lessor, and shall be
                     entitled to the other benefits afforded Lessor, under this
                     Agreement and the other Operative Documents.

                               (iii) Neither Agent nor any Participant shall
                     have any right, title or interest in the Property except
                     for the Lien therein granted to Agent, for the benefit of
                     the Participants, in the Lessor Deed of Trust and the
                     Lessor Security Agreement.

           2.03.     Advance Requests.

                     (a) Acquisition Requests. Lessee shall request Lessor to
           make each purchase of property under this Agreement by delivering to
           Agent an irrevocable written request in the form of Exhibit E,
           appropriately completed (an "Acquisition Request"), which specifies,
           among other things:

                               (i)    The Facility under which such purchase is
                     to be made;

                               (ii)   The Property to be purchased;

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                               (iii)  The amount of the requested Acquisition
                     Advance to be made for such property, including the amount
                     of the Acquisition Price for such property and the
                     Permitted Transaction Expenses included in such Acquisition
                     Advance; and

                               (iv) The Acquisition Date for such property,
                     which shall be a Business Day not later than October 31,
                     1997. (The Facility 1 Land and Facility 2 Improvements
                     shall be acquired on the same Acquisition Date.)

                     (b) Improvement/Expense Advance Requests. Lessee shall
           request Lessor to make each Improvement/Expense Advance under
           Facility 2 by delivering to Lessor:

                               (i) An irrevocable written request in the form of
                     Exhibit F, appropriately completed (an "Improvement/Expense
                     Advance Request"), which specifies, among other things:

                                          (A)  The amount of such Advance, which
                               shall be an integral multiple of $10,000;

                                          (B)  The date of such Advance, which
                               shall be the Closing Date or the first Business
                               Day of a month; and

                                          (C) The Permitted Improvement Costs
                               and Permitted Transaction Expenses to be paid by
                               such Advance; and

                               (ii) If the proceeds of such Advance are to be
                     used to purchase Related Goods:

                                          (A) A Supplement to Exhibit B to the
                               Facility 2 Lease Agreement in the form of Exhibit
                               B(1) to the Lease Agreement (an "Exhibit B
                               Supplement"), which contains a detailed
                               description of such Related Goods; and

                                          (B) Bills of sale for all such Related
                               Goods showing Lessor as the purchaser.

           Lessee shall not request more than one (1) Improvement/Expense
           Advance in any calendar month.

                     (c) Delivery of Advance Requests. Etc. Lessee shall deliver
           each Acquisition Request for each Acquisition Advance to Lessor at
           least one (1) Business Days before the Closing Date. Lessee shall
           deliver each Improvement/Expense Advance Request to Lessor at least
           three (3) Business Days before the date of such Advance. The
           Acquisition Requests and Improvement/Expense Advance Requests
           (collectively, "Advance Requests") shall be delivered by first-class
           mail or facsimile as required by Subparagraph 

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           2.02(c) and Paragraph 7.01; provided, however, that Lessee shall 
           promptly deliver to Lessor the original of any Advance Request 
           initially delivered by facsimile.

                     (d) Capitalization of Base Rent During Commitment Period.
           On each Scheduled Rent Payment Date occurring under Facility 2 during
           the Commitment Period, the Base Rent due under the Facility 2 Lease
           Agreement on such Scheduled Rent Payment Date shall be capitalized by
           automatically treating the amount of such Base Rent as an
           Improvement/Expense Advance made under Facility 2 on such Scheduled
           Rent Payment Date. Agent shall notify Lessor and each Participant of
           the amount of the Base Rent due on each such Scheduled Rent Payment
           Date and so treated as an Improvement/Expense Advance. Each such
           Improvement/Expense Advance shall be allocated to the Improvements to
           Tract 2.

           2.04.     Fees.

                     (a) Agent's Fees. Lessee shall pay to Agent, for its own
           account, agent's fees in the amounts and at the times set forth in
           the Agent's Fee Letter (the "Agent's Fees").

                     (b) Commitment Fees. Lessee shall pay to Agent, for the
           ratable benefit of the Participants as provided in clause (ii) of
           Subparagraph 2.06(c), commitment fees (the "Commitment Fees") of
           fifteen hundredths of one percent (0.15%) per annum on the daily
           average Unused Total Commitment for the period beginning on the
           Closing Date and ending on the Commitment Termination Date. Lessee
           shall pay the Commitment Fees in arrears on the first Business Day in
           each January, April, July and October (commencing January 1, 1998)
           and on the Commitment Termination Date (or if the Total Commitment is
           cancelled on a date prior to such day, on such prior date).

                     (c) Commitment Extension Fee. If Lessor and the
           Participants consent to any extension of the Commitment Termination
           Date requested by Lessee pursuant to Subparagraph 2.09(a), Lessee
           shall pay to Agent, for the ratable benefit of the Participants as
           provided in clause (iii) of Subparagraph 2.06(c), an extension fee
           (the "Commitment Extension Fee") equal to ten hundredths of one
           percent (0.10%) of the Unused Total Commitment on the date Lessee is
           notified by Agent of such consent. Lessee shall pay the Commitment
           Extension Fee on or prior to the Business Day immediately preceding
           the original Commitment Termination Date.

           2.05.     Funding of Advances.

                     (a) Participant Funding and Disbursement. Each Participant
           shall, before 11:00 a.m. on the date of each Advance, make available
           to Agent at its office specified in Paragraph 7.01, in same day or
           immediately available funds, such Participant's Proportionate Share
           of such Advance. After Agent's receipt of such funds and upon
           fulfillment of the applicable conditions set forth in Section III,
           Agent will promptly disburse such funds on behalf of Lessor, in same
           day or immediately available funds, as follows:

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                         (i) Agent shall disburse each Acquisition Advance on
                    the Closing Date to an escrow or other account established
                    for payment of the applicable Acquisition Price and any
                    related Permitted Transaction Expenses pursuant to the
                    applicable Acquisition Agreement or otherwise as directed by
                    Lessee in the Advance Request for such Acquisition Advance
                    to pay such amounts.

                         (ii) Agent shall disburse each Improvement/Expense
                    Advance as directed by Lessee in the Advance Request for
                    such Improvement/Expense Advance.

                     (b) Participant Failure to Fund. Unless Agent shall have
           received notice from a Participant prior to the date of any Advance
           that such Participant will not make available to Agent such
           Participant's Proportionate Share of such Advance, Agent may assume
           that such Participant has made such portion available to Agent on the
           date of such Advance in accordance with Subparagraph 2.05(a), and
           Agent may, in reliance upon such assumption, disburse the full amount
           of such Advance on such date; provided, however, that neither Agent
           nor Lessor shall have any obligation to make an Advance requested
           hereunder in an amount which exceeds the aggregate amount of funds
           actually received by Agent from the Participants on account of their
           respective Proportionate Shares of such Advance. If any Participant
           does not make the amount of its Proportionate Share of any Advance
           available to Agent on or prior to the date such Advance is made, such
           Participant shall pay to Agent, on demand, interest which shall
           accrue on such amount until made available to Agent at rates equal to
           (i) the daily Federal Funds Rate during the period from the date of
           such Advance through the third Business Day thereafter and (ii) the
           Base Rate plus two percent (2.0%) thereafter. A certificate of Agent
           submitted to any Participant with respect to any amounts owing under
           this Subparagraph 2.05(b) shall be conclusive absent manifest error.
           If any Participant's Proportionate Share of any Advance is not in
           fact made available to Agent by such Participant within three (3)
           Business Days after the date of such Advance, Lessee shall pay to
           Agent, on demand, an amount equal to such Proportionate Share
           together with interest thereon, for each day from the date such
           amount was made available to Lessee until the date such amount is
           repaid to Agent, at a per annum rate equal to the Base Rate plus two
           percent (2.0%).

                     (c) Participants' Obligations Several. The failure of any
           Participant to fund its Proportionate Share of any Advance shall not
           relieve any other Participant of its obligation hereunder to fund its
           Proportionate Share of such Advance, and no Participant shall be
           responsible for the failure of any other Participant to fund its
           Proportionate Share of any Advance on the date of such Advance.

           2.06.     Sharing of Payments.

                     (a) Outstanding Lease Amount. Payments applied to reduce 
           the Outstanding Lease Amount under each Facility shall be shared as
           follows:


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                         (i) Each payment of the Outstanding Lease Amount under
                    a Facility derived from the purchase price paid by Lessee to
                    purchase the Property under such Facility pursuant to the
                    Purchase Agreement for such Facility shall be shared by the
                    Participants pro rata according to their respective
                    Outstanding Participation Amounts under such Facility at the
                    time of such payment.

                         (ii) Each payment of the Outstanding Lease Amount under
                    a Facility derived from:

                              (A) The Residual Value Guaranty Amount paid by 
                          Lessee pursuant to the Purchase Agreement for such 
                          Facility; or

                              (B) The Principal Component of Base Rent;

                    Shall be shared first by the Tranche A Participants pro rata
                    according to their respective Outstanding Tranche A
                    Participation Amounts at the time of such payment; second,
                    if any amounts remain after all Outstanding Tranche A
                    Participation Amounts are paid in full, by the Tranche B
                    Participants pro rata according to their respective
                    Outstanding Tranche B Participation Amounts at the time of
                    such payment; and third, if any amounts remain after all
                    Outstanding Tranche A Participation Amounts and all
                    Outstanding Tranche B Participation Amounts are paid in
                    full, by the Tranche C Participants pro rata according to
                    their respective Outstanding Tranche C Participation Amounts
                    at the time of such payment.

                         (iii) Each payment of the Outstanding Lease Amount
                    under a Facility derived from:

                                          (A) the purchase price paid by a
                               Designated Purchaser to purchase the Property
                               under such Facility pursuant to the Purchase
                               Agreement for such Facility;

                                          (B) the Indemnity Amount paid by
                               Lessee pursuant to the Purchase Agreement for
                               such Facility; or

                                          (C) Casualty Proceeds or Condemnation
                               Proceeds related to any of the Property under
                               such Facility;

                     Shall be shared first by the Tranche B Participants pro
                     rata according to their respective Outstanding Tranche B
                     Participation Amounts at the time of such payment; second,
                     if any amounts remain after all Outstanding Tranche B
                     Participation Amounts are paid in full, by the Tranche C
                     Participants pro rata according to their respective
                     Outstanding Tranche C Participation Amounts at the time of
                     such payment; and third, if any amounts remain after all
                     Outstanding Tranche B Participation Amounts and all
                     Outstanding Tranche C Participation 

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<PAGE>   14

                     Amounts are paid in full, by the Tranche A Participants 
                     pro rata according to their respective Outstanding Tranche 
                     A Participation Amounts at the time of such payment.

                               (iv) Each payment of the Outstanding Lease Amount
                     under a Facility derived from the purchase price paid by
                     any other Person to purchase the Property under such
                     Facility (whether after the retention of such Property by
                     Lessor following the Expiration Date of the Lease Agreement
                     for such Facility, upon foreclosure or otherwise) shall be
                     shared first by the Tranche B Participants pro rata
                     according to their respective Outstanding Tranche B
                     Participation Amounts at the time of such payment; second,
                     if any amounts remain after all Outstanding Tranche B
                     Participation Amounts are paid in full, by the Tranche A
                     Participants pro rata according to their respective
                     Outstanding Tranche A Participation Amounts at the time of
                     such payment; and third, if any amounts remain after all
                     Outstanding Tranche B Participation Amounts and all
                     Outstanding Tranche A Participation Amounts are paid in
                     full, by the Tranche C Participants pro rata according to
                     their respective Outstanding Tranche C Participation
                     Amounts at the time of such payment.

                     (b)       Interest Component of Base Rent.

                               (i) Each payment applied to the Interest
                     Component of Base Rent under either Facility and
                     attributable to the Outstanding Tranche A Amount and
                     Outstanding Tranche B Amount under such Facility shall be
                     shared by the Tranche A Participants and Tranche B
                     Participants which funded such Outstanding Tranche A Amount
                     and Outstanding Tranche B Amounts pro rata according to (i)
                     the respective Outstanding Tranche A Participation Amounts
                     and Outstanding Tranche B Participation Amounts of such
                     Participants and (ii) the dates on which such Participants
                     so funded such amounts.

                               (ii) Each payment applied to the Interest
                     Component of Base Rent under either Facility and
                     attributable to the Outstanding Tranche C Amount under such
                     Facility shall be shared by the Tranche C Participants
                     which funded such Outstanding Tranche C Amount pro rata
                     according to (i) the respective Outstanding Tranche C
                     Participation Amounts of such Participants and (ii) the
                     dates on which such Participants so funded such amounts.

                     (c) Supplemental Rent. Each payment applied to Supplemental
           Rent under either Facility shall be shared by the Lessor Parties as
           follows:

                              (i) Each payment applied to Agent's Fees shall be
                     solely for the account of Agent.

                             (ii) Each payment applied to Commitment Fees shall
                    be shared by the Participants pro rata according to (A) 
                    their respective Proportionate Shares and 
 

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                    (B) in the case of each Participant which becomes a
                    Participant hereunder after the date hereof, the date upon
                    which such Participant so became a Participant.

                            (iii) Each payment applied to the Commitment 
                    Extension Fee shall be shared by the Participants pro rata
                    according to their respective Proportionate Shares on the
                    date of such payment.

                            (iv) Each payment applied to reimburse any Lessor
                    Party for any fees, costs and expenses incurred by such 
                    Lessor Party shall be solely for the account of such Lessor
                    Party.

                             (v) Each payment of interest (other than Base Rent)
                    shall be shared among the Lessor Parties owed the amount
                    upon which such interest accrues pro rata according to (A)
                    the respective amounts so owed such Lessor Parties and (B)
                    the dates on which such amounts became owing to such Lessor
                    Parties.

                             (vi) All other payments under this Agreement and
                    the other Operative Documents shall be for the benefit of
                    the Person or Persons specified.

                     (d) Disproportionate Payments, Etc. If any Participant
           shall obtain any payment (whether voluntary, involuntary, through the
           exercise of any right of setoff, or otherwise) on account of amounts
           owed to it in excess of its ratable share of payments on account of
           such amounts obtained by all Participants entitled to such payments,
           such Participant shall forthwith purchase from the other Participants
           such participations in the payments to be made under the Operative
           Documents as shall be necessary to cause such purchasing Participant
           to share the excess payment ratably with each of them; provided,
           however, that if all or any portion of such excess payment is
           thereafter recovered from such purchasing Participant, such purchase
           shall be rescinded and each other Participant shall repay to the
           purchasing Participant the purchase price to the extent of such
           recovery together with an amount equal to such other Participant's
           ratable share (according to the proportion of (i) the amount of such
           other Participant's required repayment to (ii) the total amount so
           recovered from the purchasing Participant) of any interest or other
           amount paid or payable by the purchasing Participant in respect of
           the total amount so recovered. Lessee agrees that any Participant so
           purchasing a participation from another Participant pursuant to this
           Subparagraph 2.06(d) may, to the fullest extent permitted by law,
           exercise all its rights of payment (including the right of setoff)
           with respect to such participation as fully as if such Participant
           were the direct creditor of Lessee in the amount of such
           participation.

           2.07.     Other Payment Terms.

                     (a) Place and Manner of Payments by Lessee. Lessee shall
           make all payments due to any Lessor Party under this Agreement and
           the other Operative Documents by payments to Agent, for the account
           of such Person, at Agent's office, located at the address specified
           in Paragraph 7.01, with each payment due to a Participant to be for
           the 

                                       10
<PAGE>   16

          account of such Participant's Applicable Participating Office. Lessee
          shall make all payments in lawful money of the United States and in
          same day or immediately available funds not later than 11:00 a.m. on
          the date due. Agent shall promptly disburse to the appropriate Person
          each such payment received by Agent for such Person.

                     (b) Date. Whenever any payment due under this Agreement or
           any other Operative Document shall fall due on a day other than a
           Business Day, such payment shall be made on the next succeeding
           Business Day, and such extension of time shall be included in the
           computation of Rent, interest or fees, as the case may be.

                     (c) Late Payments. If any amounts required to be paid by
           Lessee under this Agreement or any other Operative Document
           (including Rent, interest, fees or other amounts) remain unpaid after
           such amounts are due, Lessee shall pay interest on the aggregate,
           outstanding balance of such amounts from the date due until those
           amounts are paid in full at a per annum rate equal to the Base Rate
           plus two percent (2.0%), such rate to change from time to time as the
           Base Rate shall change.

                     (d) Application of Payments. All payments under this
           Agreement and the other Operative Documents on account of either
           Facility shall be applied first to unpaid fees, costs and expenses
           then due and payable under this Agreement or any other Operative
           Document on account of such Facility, second to the accrued Interest
           Component of Base Rent then due and payable under this Agreement or
           any other Operative Document on account of such Facility and finally
           to the Principal Component of Base Rent or otherwise to reduce the
           Outstanding Lease Amount under such Facility. If any payments are not
           clearly on account of either Facility, Lessor may apply such payments
           to either Facility in its discretion; provided, however, that Lessee
           may direct Lessor to apply such payments to the Facility designated
           by Lessee if no Default has occurred and is continuing.

                     (e) Failure to Pay Agent. Unless Agent shall have received
           notice from Lessee at least one (1) Business Day prior to the date on
           which any payment is due to Lessor or the Participants under this
           Agreement or the other Operative Documents that Lessee will not make
           such payment in full, Agent may assume that Lessee has made such
           payment in full to Agent on such date and Agent may, in reliance upon
           such assumption, cause to be distributed to the appropriate Persons
           on such due date an amount equal to the amount then due such Persons.
           If and to the extent Lessee shall not have so made such payment in
           full to Agent, each such Person shall repay to Agent forthwith on
           demand such amount distributed to such Person together with interest
           thereon, for each day from the date such amount is distributed to
           such Person until the date such Person repays such amount to Agent,
           at (i) the Federal Funds Rate for the first three (3) days and (ii)
           the Base Rate plus two percent (2.0%) thereafter, such rate to change
           from time to time as the Base Rate shall change. A certificate of
           Agent submitted to any Person with respect to any amounts owing by
           such Person under this Subparagraph 2.07(e) shall be conclusive
           absent manifest error.

                                       11
<PAGE>   17

           2.08.     Commitment Reductions.

                     (a) Reduction or Cancellation of Commitments. Lessee may,
           at any time prior to the Commitment Termination Date, upon five (5)
           Business Days written notice to Lessor, permanently reduce the Total
           Commitment by the amount of Five Million Dollars ($5,000,000) or an
           integral multiple of One Million Dollars ($1,000,000) in excess
           thereof or cancel the Total Commitment in its entirety.

                     (b) Effect of Commitment Reductions. From the effective
           date of any reduction of the Total Commitment, the Commitment Fees
           shall be computed on the basis of the Total Commitment as so reduced.
           Once reduced or cancelled, the Total Commitment may not be increased
           or reinstated without the prior written consent of Lessor and all
           Participants. Any reduction of the Total Commitment pursuant to this
           Paragraph 2.08 shall be applied ratably to reduce each Participant's
           Commitment pro rata in accordance with its Proportionate Share.

           2.09.     Extensions.

                     (a) Commitment Extension. Lessee may request Lessor to
           extend the Commitment Termination Date for an additional period of
           six (6) months by appropriately completing, executing and delivering
           to Agent a written request in the form of Exhibit G(1) (a "Commitment
           Extension Request"). Lessee shall deliver the Commitment Extension
           Request to Agent not more than three (3) months and not less than two
           (2) months before the original Commitment Termination Date. Agent
           shall promptly deliver to Lessor and each Participant three (3)
           copies of each Commitment Extension Request received by Agent. If
           Lessor or a Participant, in its sole and absolute discretion,
           consents to the Commitment Extension Request, such Person shall
           evidence such consent by executing and returning two (2) copies of
           the Commitment Extension Request to Agent not later than the last
           Business Day which is not less than twelve (12) Business Days prior
           to the original Commitment Termination Date. Any failure by Lessor or
           any Participant so to execute and return a Commitment Extension
           Request shall be deemed a denial thereof. If Lessee shall deliver a
           Commitment Extension Request to Lessor pursuant to the first sentence
           of this Subparagraph 2.09(a), then not later than ten (10) Business
           Days prior to the original Commitment Termination Date, Agent shall
           notify Lessee, Lessor and the Participants in writing whether (i)
           Agent has received a copy of the Commitment Extension Request
           executed by Lessor and each Participant, in which case the definition
           of "Commitment Termination Date" set forth in Subparagraph 2.01(i) of
           this Agreement shall be deemed extended to the date which is six (6)
           months after the original Commitment Termination Date (subject to
           receipt by Agent of the Commitment Extension Fee), or (ii) Agent has
           not received a copy of the Commitment Extension Request executed by
           Lessor and each Participant, in which case such Commitment Extension
           Request shall be deemed denied. Lessee acknowledges that neither
           Lessor nor any Participant has promised (either expressly or
           implicitly), or has any obligation or commitment, to extend or
           consent to the extension of the Commitment Termination Date at any
           time.

                                       12

<PAGE>   18

                     (b) Lease Extension. Lessee may request Lessor to extend
           the original Scheduled Expiration Date of each Lease Agreement for an
           additional period of three (3) years by appropriately completing,
           executing and delivering to Agent a written request in the form of
           Exhibit G(2), together with an attachment thereto setting forth the
           terms upon which Lessee would propose for the requested extension (a
           "Lease Extension Request"). Lessee shall deliver each Lease Extension
           Request to Agent not more than twelve (12) months and not less than
           nine (9) months before the original Scheduled Expiration Date. Agent
           shall promptly deliver to Lessor and each Participant three (3)
           copies of each Lease Extension Request received by Agent. If Lessor
           or a Participant, in its sole and absolute discretion, consents to a
           Lease Extension Request, such Person shall evidence such consent by
           executing and returning two (2) copies of such Lease Extension
           Request to Agent not later than the last Business Day which is not
           less than seven (7) months prior to the original Scheduled Expiration
           Date for the applicable Lease Agreement. Any failure by Lessor or any
           Participant so to execute and return a Lease Extension Request shall
           be deemed a denial thereof. If Lessee shall deliver a Lease Extension
           Request to Lessor pursuant to the first sentence of this Subparagraph
           2.09(b), then not later than the last Business Day which is not less
           than six (6) months prior to the original Scheduled Expiration Date
           for the applicable Lease Agreement, Agent shall notify Lessee, Lessor
           and the Participants in writing whether (i) Agent has received a copy
           of the Lease Extension Request executed by Lessor and each
           Participant, in which case the definition of "Scheduled Expiration
           Date" set forth in Subparagraph 2.02(a) of the applicable Lease
           Agreement shall be deemed extended to the date which is three (3)
           years after the original Scheduled Expiration Date (subject to the
           receipt by Agent of any amounts payable by Lessee in connection with
           such extension), or (ii) Agent has not received a copy of the Lease
           Extension Request executed by Lessor and each Participant, in which
           case such Lease Extension Request shall be deemed denied. Lessee
           acknowledges that neither Lessor nor any Participant has promised
           (either expressly or implicitly), or has any obligation or
           commitment, to extend or consent to the extension of the Scheduled
           Expiration Date for either Lease Agreement at any time.

           2.10. Nature of the Transactions. Lessee and the Lessor Parties
intend that the transactions evidenced by this Agreement and the other Operative
Documents constitute operating leases for accounting purposes and loans secured
by the Property for all other purposes, including federal, state and local
income tax purposes and commercial, real estate and bankruptcy law purposes. To
the extent that this Agreement and the other Operative Documents reflect the
lease form alone, they do so for convenience only. Lessee and the Lessor Parties
intend that the Operative Documents have the dual form referred to in the first
sentence of this paragraph, notwithstanding the use of the lease form alone.

                     (a) Tax Treatment. For purposes of all income, franchise
           and other taxes imposed upon or measured by income, Lessee and Lessor
           Parties intend that the transactions evidenced by the Operative
           Documents shall be treated as loans by the Participants (through
           Lessor) to Lessee secured by the Property, with Lessee as owner of
           the Property. Lessee and the Lessor Parties may only take deductions,
           credits, allowances 

                                       13

<PAGE>   19

          and other reporting positions on their respective returns, reports and
          statements which are consistent with such treatment, unless required
          to do otherwise by an appropriate taxing authority or after a clearly
          applicable change in applicable Governmental Rules; provided, however,
          that if an appropriate taxing authority or a clearly applicable change
          in applicable Governmental Rules requires any Lessor Party to take
          such an inconsistent position, such Lessor Party shall promptly notify
          Lessee.

                     (b) Other Legal Treatment. For purposes of commercial law,
           real property law, bankruptcy law and other applicable laws, Lessee
           and Lessor Parties also intend that the transactions evidenced by the
           Operative Documents shall be treated as loans by the Participants
           (through Lessor) to Lessee secured by the Property, with Lessee as
           owner of the Property. Consistent with such treatment, Lessee and the
           Lessor Parties intend that, among other things for such purposes, (i)
           the Advances be treated as loans to Lessee by the Participants
           (through Lessor); (ii) the Advances be secured by the Property and
           the Lessor Parties have the rights and remedies of secured lenders;
           (iii) Base Rent be treated as interest on the Advances; (iv) Lessee
           be required to pay on the applicable Expiration Date only the
           Residual Value Guaranty Amount, the Indemnity Amount and the other
           amounts required by Subparagraph 4.06(b) of the applicable Purchase
           Agreement (or Subparagraph 4.06(c) if Lessor is retaining the
           Property) if Lessee exercises the Marketing Option in accordance with
           the applicable Purchase Agreement; and (v) Lessee be required to pay
           on the applicable Expiration Date the applicable Outstanding Lease
           Amount and all other amounts outstanding under this Agreement and the
           other Operative Documents (including amounts required by Subparagraph
           4.06(a) of the applicable Purchase Agreement) if the applicable Lease
           Agreement is terminated prior to its Scheduled Expiration Date after
           an Event of Default occurs under such Lease Agreement or if Lessee
           fails to or is otherwise not entitled to exercise the Marketing
           Option in accordance with the applicable Purchase Agreement.

                     (c) No Reliance by Lessee. Lessee acknowledges and agrees
           that no Lessor Party has made any representations or warranties to
           Lessee concerning the tax, accounting or legal characteristics of the
           Operative Documents and that Lessee has obtained and relied upon such
           tax, accounting and legal advice concerning the Operative Documents
           as it deems appropriate.

           2.11.   Security.

                   (a)   Lessee Obligations.

                         (i) To the extent that the transaction evidenced by the
                    Lease Agreement, Purchase Agreement and other Operative
                    Documents for either Facility is treated as a loan by the
                    Participants (through Lessor) to Lessee secured by the
                    Property for such Facility, with Lessee as owner of such
                    Property pursuant to Paragraph 2.10, the Lessee Obligations
                    under such Facility shall be secured by such Property and
                    the other Real Property Collateral for such Facility and, in
                    the case of Facility 2, Personal Property Collateral for
                    such Facility (collectively, the 

                                       14
<PAGE>   20

                    "Property Collateral") as provided in Subparagraphs 2.07(a)
                    and 2.07(b) of the applicable Lease Agreement and, in the
                    case of Facility 2, in an Assignment of Construction
                    Agreements in the form of Exhibit H, duly executed by Lessee
                    (the "Assignment of Construction Agreements").

                         (ii) In addition to the Property Collateral for each
                    Facility, the Lessee Obligations under each Facility may be
                    secured, at Lessee's election, by a Cash Collateral
                    Agreement in the form of Exhibit I, duly executed by Lessee
                    (the "Cash Collateral Agreement") , and Cash Collateral
                    delivered to Agent or Participants pursuant to the Cash
                    Collateral Agreement. If Lessee elects to deliver any Cash
                    Collateral pursuant to the Cash Collateral Agreement to
                    decrease the Applicable Margin for the LIBOR Rental Rate
                    under a Lease Agreement, Lessee shall deliver to Agent, five
                    (5) Business Days' prior to the delivery of such Cash
                    Collateral, notice of such election and an opinion of its
                    counsel in form and substance reasonably satisfactory to
                    Lessor regarding the Cash Collateral Agreement and such Cash
                    Collateral and shall deliver such Cash Collateral only on a
                    Scheduled Rent Payment Date under the applicable Lease
                    Agreement. Lessee may withdraw any Cash Collateral held
                    pursuant to the Cash Collateral Agreement only as provided
                    in the Cash Collateral Agreement.

                         (iii) Lessee shall deliver to Lessor and Agent such
                    additional mortgages, deeds of trust, security agreements,
                    pledge agreements, lessor consents and estoppels (containing
                    appropriate mortgagee and lender protection language) and
                    other instruments, agreements, certificates, opinions and
                    documents (including Uniform Commercial Code financing
                    statements and fixture filings and landlord waivers) as
                    Lessor or Agent may reasonably request to (A) grant,
                    perfect, maintain, protect and evidence security interests
                    in favor of Lessor or Agent in the Property Collateral and
                    Cash Collateral prior to the Liens or other interests of any
                    Person, except in the case of the Property Collateral for
                    Permitted Property Liens; and (B) otherwise establish,
                    maintain, protect and evidence the rights provided to Lessor
                    and Agent in the Property Collateral and Cash Collateral.
                    Lessee shall fully cooperate with Lessor and Agent and
                    perform all additional acts reasonably requested by Lessor
                    or Agent to effect the purposes of this Subparagraph
                    2.11(a).

                     (b) Lessor Obligations.

                         (i) The Lessor Obligations shall be secured by the
                    following:

                              (A) An Assignment of Lease Agreement and Purchase
                         Agreement in the form of Exhibit J, duly executed by
                         Lessor (the "Assignment of Lease");

                              (B) A Construction Deed of Trust with Assignment 
                         of Rents, Security Agreement and Fixture Filing in the
                         form of Exhibit K, duly executed by Lessor (the "Lessor
                         Deed of Trust"); and


                                       15

<PAGE>   21

                              (C) A Security Agreement in the form of Exhibit L,
                         duly executed by Lessor (the "Lessor Security 
                         Agreement").

                         (ii) Lessor shall deliver to Agent such additional
                    mortgages, deeds of trust, security agreements, pledge
                    agreements, lessor consents and estoppels (containing
                    appropriate mortgagee and lender protection language) and
                    other instruments, agreements, certificates, opinions and
                    documents (including Uniform Commercial Code financing
                    statements and fixture filings and landlord waivers) as
                    Agent may reasonably request to (A) grant, perfect,
                    maintain, protect and evidence security interests in favor
                    of Agent in Lessor's rights in the Property Collateral and
                    Cash Collateral; and (B) otherwise establish, maintain,
                    protect and evidence the rights provided to Agent in the
                    Property Collateral and Cash Collateral. Lessor shall fully
                    cooperate with Agent and perform all additional acts
                    reasonably requested by Agent to effect the purposes of this
                    Subparagraph 2.11(b).

                         (iii) Lessee hereby consents to the Assignment of
                    Lease, the Lessor Deed of Trust and the Lessor Security
                    Agreement; the Liens granted to Agent therein; and all other
                    Liens granted to Agent in any of the Operative Documents and
                    the Property to secure the Lessor Obligations.

           2.12.     Change of Circumstances.

                     (a) Inability to Determine Rates. If, on or before the
           first day of any Rental Period, (i) any Participant shall advise
           Agent that the LIBOR Rental Rate for such Rental Period cannot be
           adequately and reasonably determined due to the unavailability of
           funds in or other circumstances affecting the London interbank market
           or (ii) any Participant shall advise Agent that the LIBOR Rental Rate
           for such Rental Period does not adequately and fairly reflect the
           cost to such Participant of funding its portion of the Outstanding
           Lease Amount under the applicable Facility, Agent shall immediately
           give notice of such condition to Lessee, Lessor and the other
           Participants. After the giving of any such notice (and until Agent
           shall otherwise notify Lessee and Lessor that the circumstances
           giving rise to such condition no longer exist), the LIBOR Rental Rate
           shall be unavailable and the Rental Rate for each Rental Period shall
           be the Alternate Rental Rate.

                     (b) Illegality. If, after the date of this Agreement, the
           adoption of any Governmental Rule, any change in any Governmental
           Rule or the application or requirements thereof (whether such change
           occurs in accordance with the terms of such Governmental Rule as
           enacted, as a result of amendment or otherwise), any change in the
           interpretation or administration of any Governmental Rule by any
           Governmental Authority, or compliance by Lessor or any Participant
           with any request or directive (whether or not having the force of
           law) of any Governmental Authority (a "Change of Law") shall make it
           unlawful or impossible for any Participant to fund or maintain its


                                       16
<PAGE>   22

           portion of the Outstanding Lease Amount under either Facility at the
           LIBOR Rental Rate, such Participant shall immediately notify Agent
           and Agent shall immediately notify Lessee, Lessor and the other
           Participants of such Change of Law. After the giving of any such
           notice (and until Agent shall otherwise notify Lessee and Lessor that
           such Change of Law is no longer in effect), the LIBOR Rental Rate
           shall be unavailable and the Rental Rate under both Facilities for
           each Rental Period shall be the Alternate Rental Rate.

                     (c) Increased Costs. If, after the date of this Agreement,
           any Change of Law:

                         (i) Shall subject Lessor or any Participant to any tax,
                    duty or other charge with respect to the Outstanding Lease
                    Amount under either Facility, or shall change the basis of
                    taxation of Base Rent payments by Lessee to Lessor or any
                    Participant under this Agreement or any other Operative
                    Document (except for changes in the rate of taxation on the
                    overall net income of Lessor or any Participant imposed by
                    its jurisdiction of incorporation, the jurisdiction in which
                    its principal executive office is located or, in the case of
                    any Participant, the jurisdiction in which its Applicable
                    Participating Office is located); or

                         (ii) Shall impose, modify or hold applicable any
                    reserve (excluding any Reserve Requirement or other reserve
                    to the extent included in the calculation of the LIBOR
                    Rental Rate), special deposit or similar requirement against
                    assets held by, deposits or other liabilities in or for the
                    account of, advances or loans by, or any other acquisition
                    of funds by Lessor or any Participant for its portion of the
                    Outstanding Lease Amount under either Facility; or

                         (iii) Shall impose on Lessor or any Participant any
                    other condition related to the Outstanding Lease Amount
                    under either Facility, Base Rent under either Facility or
                    Lessor's or such Participant's commitments hereunder;

           And the effect of any of the foregoing is to increase the cost to
           Lessor or such Participant of funding or maintaining its portion of
           the Outstanding Lease Amount under either Facility or commitments or
           to reduce any amount receivable by Lessor or such Participant
           hereunder; then Lessee shall from time to time within five (5)
           Business Days after demand by Lessor or such Participant, pay to
           Lessor or such Participant additional amounts sufficient to reimburse
           Lessor or such Participant for such increased costs or to compensate
           Lessor or such Participant for such reduced amounts. A certificate as
           to the amount of such increased costs or reduced amounts, submitted
           by Lessor or such Participant to Lessee shall, in the absence of
           manifest error, be conclusive and binding on Lessee for all purposes.
           The obligations of Lessee under this Subparagraph 2.12(c) shall
           survive the payment and performance of the Lessee Obligations and the
           termination of this Agreement.

                     (d) Capital Requirements. If, after the date of this
           Agreement, Lessor or any Participant determines that (i) any Change
           of Law affects the amount of capital required or expected to be
           maintained by such Person or any other Person controlling such Person

                                       17

<PAGE>   23

           (a "Capital Adequacy Requirement") and (ii) the amount of capital
           maintained by such Person or such other Person which is attributable
           to or based upon the Advances, the commitments or this Agreement must
           be increased as a result of such Capital Adequacy Requirement (taking
           into account such Person's or such other Person's policies with
           respect to capital adequacy), Lessee shall pay to such Person or such
           other Person, within five (5) Business Days after demand of such
           Person, such amounts as such Person or such other Person shall
           determine are necessary to compensate such Person or such other
           Person for the increased costs to such Person or such other Person of
           such increased capital. A certificate of Lessor or any Participant
           setting forth in reasonable detail the computation of any such
           increased costs, delivered by such Person to Lessee shall, in the
           absence of manifest error, be conclusive and binding on Lessee for
           all purposes. The obligations of Lessee under this Subparagraph
           2.12(d) shall survive the payment and performance of the Lessee
           Obligations and the termination of this Agreement.

                     (e) Mitigation. If Lessor or any Participant becomes aware
           of (i) any Change of Law which will make it unlawful or impossible
           for such Person to fund or maintain its portion of the Outstanding
           Lease Amount under either Facility at the LIBOR Rental Rate or (ii)
           any Change of Law or other event or condition which will obligate
           Lessee to pay any amount pursuant to Subparagraph 2.12(c) or
           Subparagraph 2.12(d), such Person shall notify Lessee and Agent
           thereof as promptly as practical. If any Person has given notice of
           any such Change of Law or other event or condition and thereafter
           becomes aware that such Change of Law or other event or condition has
           ceased to exist, such Person shall notify Lessee and Agent thereof as
           promptly as practical. Each Person affected by any Change of Law
           which makes it unlawful or impossible for such Person to fund or
           maintain its portion of the Outstanding Lease Amount under either
           Facility at the LIBOR Rental Rate or to which Lessee is obligated to
           pay any amount pursuant to Subparagraph 2.12(c) or Subparagraph
           2.12(d) shall use reasonable commercial efforts (including changing
           the jurisdiction of its Applicable Participating Office) to avoid the
           effect of such Change of Law or to avoid or materially reduce any
           amounts which Lessee is obligated to pay pursuant to Subparagraph
           2.12(c) or Subparagraph 2.12(d) if, in the reasonable opinion of such
           Person, such efforts would not be disadvantageous to such Person or
           contrary to such Person's normal banking practices.

           2.13.     Taxes on Payments.

                     (a) Payments Free of Taxes. All payments made by Lessee
           under this Agreement and the other Operative Documents shall be made
           free and clear of, and without deduction or withholding for or on
           account of, any present or future Indemnified Taxes, now or hereafter
           imposed, levied, collected, withheld or assessed by any Governmental
           Authority. If any Indemnified Taxes are required to be withheld from
           any amounts payable to any Lessor Party hereunder or under the other
           Operative Documents, the amounts so payable to such Lessor Party
           shall be increased to the extent necessary to yield to such Lessor
           Party (after payment of all Indemnified Taxes) the Base Rent or any
           such other amounts payable hereunder at the rates or in the amounts
           specified in this Agreement and the other Operative Documents.
           Whenever any Indemnified Taxes are 

                                       18
<PAGE>   24

           payable by Lessee, as promptly as possible thereafter, Lessee shall
           send to Agent for its own account or for the account of Lessor or
           such Participant, as the case may be, a certified copy of an original
           official receipt received by Lessee showing payment thereof. If
           Lessee fails to pay any Indemnified Taxes when due to the appropriate
           taxing authority or fails to remit to Agent the required receipts or
           other required documentary evidence, Lessee shall indemnify the
           Lessor Parties for any incremental taxes, interest or penalties that
           may become payable by the Lessor Parties as a result of any such
           failure. The obligations of Lessee under this Subparagraph 2.13(a)
           shall survive the payment and performance of the Lessee Obligations
           and the termination of this Agreement.

                     (b) Withholding Exemption Certificates. On or prior to the
           Closing Date or, if such date does not occur within thirty (30) days
           after the date of this Agreement, by the end of such 30-day period,
           Lessor, if it is not incorporated under the laws of the United States
           of America or a state thereof, and each Participant which is not
           incorporated under the laws of the United States of America or a
           state thereof shall deliver to Lessee and Agent two duly completed
           copies of United States Internal Revenue Service Form 1001 or 4224
           (or successor applicable form), as the case may be, certifying in
           each case that Lessor or such Participant, as the case may be, is
           entitled to receive payments under this Agreement and the other
           Operative Documents without deduction or withholding of any United
           States federal income taxes. Each Person which delivers to Lessee and
           Agent a Form 1001 or 4224 pursuant to the immediately preceding
           sentence further undertakes to deliver to Lessee and Agent two
           further copies of Form 1001 or 4224 (or successor applicable forms),
           or other manner of certification or procedure, as the case may be, on
           or before the date that any such form expires or becomes obsolete or
           after the occurrence of any event requiring a change in the most
           recent form previously delivered by it to Lessee and Agent, and such
           extensions or renewals thereof as may reasonably be requested by
           Lessee or Agent, certifying in the case of a Form 1001 or 4224 that
           such Person is entitled to receive payments under this Agreement and
           the other Operative Documents without deduction or withholding of any
           United States federal income taxes, unless in any such cases an event
           (including without limitation any change in treaty, law or
           regulation) has occurred prior to the date on which any such delivery
           would otherwise be required which renders all such forms inapplicable
           or which would prevent Lessor or a Participant from duly completing
           and delivering any such form with respect to it and Lessor or such
           Participant advises Lessee and Agent that it is not capable of
           receiving payments without any deduction or withholding of United
           States federal income tax.

                     (c) Mitigation. If any Lessor Party claims any additional
           amounts to be payable to it pursuant to this Paragraph 2.13, such
           Lessor Party shall use reasonable commercial efforts to file any
           certificate or document requested in writing by Lessee (including
           copies of Internal Revenue Service Form 1001 (or successor forms)
           reflecting a reduced rate of withholding) or to change the
           jurisdiction of its Applicable Participating Office if the making of
           such a filing or such change in the jurisdiction of its Applicable
           Participating Office would avoid the need for or materially reduce
           the amount of any such additional amounts which may thereafter accrue
           and if, in the reasonable opinion of a Participant, in the case of a
           change in the jurisdiction of its Applicable Participating 

                                       19

<PAGE>   25

           Office, such change would not be disadvantageous to such Person or
           contrary to such Person's normal banking practices.

                     (d) Tax Returns. Nothing contained in this Paragraph 2.13
           shall require any Lessor Party to make available any of its tax
           returns (or any other information relating to its taxes which it
           deems to be confidential).

           2.14. Funding Loss Indemnification. If Lessee shall (a) pay any
portion of the Outstanding Lease Amount under either Facility on any day other
than the last day of a Rental Period (whether an optional payment, a mandatory
payment or otherwise) or (b) cancel or otherwise fail to consummate any Advance
Request which has been delivered to Agent (whether as a result of the failure to
satisfy any applicable conditions or otherwise), Lessee shall, upon demand by
Lessor or any Participant, reimburse such Person for and hold such Person
harmless from all costs and losses incurred by such Person as a result of such
payment, cancellation or failure. Lessee understands that such costs and losses
may include, without limitation, losses incurred by Lessor or a Participant as a
result of funding and other contracts entered into by such Person to fund its
portion of the Outstanding Lease Amount under the applicable Facility. Each
Person demanding payment under this Paragraph 2.14 shall deliver to Lessee, with
a copy to Agent, a certificate setting forth the amount of costs and losses for
which demand is made, which certificate shall set forth in reasonable detail the
calculation of the amount demanded. Such a certificate so delivered to Lessee
shall constitute prima facie evidence of such costs and losses. The obligations
of Lessee under this Paragraph 2.14 shall survive the payment and performance of
the Lessee Obligations and the termination of this Agreement.

           2.15. Replacement of Participants. If any Participant shall (a)
become a Defaulting Participant more than two (2) times in a period of twelve
(12) consecutive months, (b) continue as a Defaulting Participant for more than
five (5) Business Days at any time, (c) deliver, pursuant to Subparagraph
2.12(b), a notice of a Change of Law which does not affect Required
Participants, or (d) demand any payment under Subparagraph 2.12(c), 2.12(d) or
2.13(a) for a reason which is not applicable to Required Participants, then
Agent may (or upon the written request of Lessee if no Event of Default has
occurred and is continuing, shall) replace such Participant (the "affected
Participant"), or cause such affected Participant to be replaced, with another
Person (the "replacement Participant") satisfying the requirements of an
Eligible Assignee under Subparagraph 7.05(b), by having the affected Participant
sell and assign all of its rights and obligations under this Agreement and the
other Operative Documents to the replacement Participant pursuant to
Subparagraph 7.05(b); provided, however, that if Lessee seeks to exercise such
right, it must do so within sixty (60) days after it first knows or should have
known of the occurrence of the event or events giving rise to such right, and no
Lessor Party shall have any obligation to identify or locate a replacement
Participant for Lessee. Upon receipt by any affected Participant of a written
notice from Agent stating that Agent is exercising the replacement right set
forth in this Paragraph 2.15, such affected Participant shall sell and assign
all of its rights and obligations under this Agreement and the other Operative
Documents to the replacement Participant pursuant to an Assignment Agreement and
Subparagraph 7.05(b) for a purchase price equal to the sum of its portion of the
Outstanding Lease Amount, the accrued 

                                       20

<PAGE>   26

and unpaid portion of the Base Rent relating to such portion and its ratable
share of all fees to which it is entitled.

SECTION 3.  CONDITIONS PRECEDENT

           3.01. Acquisition Advances. The obligation of Lessor to make the
Acquisition Advances (and the obligations of the Participants to fund their
respective Proportionate Shares of the Acquisition Advances) on the Closing Date
is (are) subject to receipt by Agent, on or prior to the Closing Date, of each
item listed in Schedule 3.01, each in form and substance satisfactory to Lessor,
Agent and each Participant, and with sufficient copies for, Lessor, Agent and
each Participant.

           3.02. Improvement/Expense Advances. The obligation of Lessor to make
each Improvement/Expense Advance for each Tract of Property (and the obligations
of the Participants to fund their respective Proportionate Shares of such
Advance) is (are) subject to (a) satisfaction of the conditions set forth in
Paragraph 3.01; (b) receipt by Agent pursuant to Paragraph 2.03 of the Advance
Request for such Advance, appropriately completed and duly executed by Lessee;
and (c) receipt by Agent of date-down endorsements to Agent's and Lessor's title
insurance policies covering such Tract or binders acceptable to Agent and
Lessor.

           3.03. Other Conditions Precedent. The occurrence of each Credit Event
(including the making of each Advance by Lessor and the funding of each Advance
by the Participants) is subject to the further conditions that, on the date such
Credit Event is to occur and after giving effect to such Credit Event, the
following shall be true and correct:

                     (a) The representations and warranties of Lessee set forth
           in Paragraph 4.01 and in the other Operative Documents are true and
           correct in all material respects as if made on such date (except for
           representations and warranties expressly made as of a specified date,
           which shall be true as of such date);

                     (b) No Default has occurred and is continuing or will
result from such Credit Event; and

                     (c) All of the Operative Documents are in full force and
effect.

The submission by Lessee to Lessor and Agent of each Advance Request, each
Notice of Rental Period Selection and a Notice of Marketing Option Exercise
shall be deemed to be a representation and warranty by Lessee that each of the
statements set forth above in this Paragraph 3.03 is true and correct as of the
date of such request and notice.

           3.04. Covenant to Deliver. Lessee agrees (not as a condition but as a
covenant) to deliver to Lessor and Agent each item required to be delivered to
Lessor and Agent as a condition to each Advance if such Advance is made. Lessee
expressly agrees that the making of any Advance prior to the receipt by Lessor
and Agent of any such item shall not constitute a 


                                       21
<PAGE>   27

waiver by Lessor, Agent or any Participant of Lessee's obligation to deliver
such item, unless expressly waived in writing.

SECTION 4. REPRESENTATIONS AND WARRANTIES

           4.01. Lessee's Representations and Warranties. In order to induce the
Lessor Parties to enter into this Agreement and the other Operative Documents to
which they are parties, Lessee hereby represents and warranties to the Lessor
Parties as follows:

                     (a) Due Incorporation, Qualification, etc. Each of Lessee
           and Lessee's Subsidiaries (i) is a corporation duly organized,
           validly existing and in good standing under the laws of its state of
           incorporation; (ii) has the power and authority to own, lease and
           operate its properties and carry on its business as now conducted;
           and (iii) is duly qualified, licensed to do business and in good
           standing as a foreign corporation in each jurisdiction where the
           failure to be so qualified or licensed is reasonably likely to have a
           Material Adverse Effect.

                     (b) Authority. The execution, delivery and performance by
           Lessee of each Operative Document executed, or to be executed, by
           Lessee and the consummation of the transactions contemplated thereby
           (i) are within the power of Lessee and (ii) have been duly authorized
           by all necessary actions on the part of Lessee.

                     (c) Enforceability. Each Operative Document executed, or to
           be executed, by Lessee has been, or will be, duly executed and
           delivered by Lessee and constitutes, or will constitute, a legal,
           valid and binding obligation of Lessee, enforceable against Lessee in
           accordance with its terms, except as limited by bankruptcy,
           insolvency or other laws of general application relating to or
           affecting the enforcement of creditors' rights generally and general
           principles of equity.

                     (d) Non-Contravention. The execution and delivery by Lessee
           of the Operative Documents executed by Lessee and the performance and
           consummation of the transactions contemplated thereby do not (i)
           violate any Requirement of Law applicable to Lessee; (ii) violate any
           provision of, or result in the breach or the acceleration of, or
           entitle any other Person to accelerate (whether after the giving of
           notice or lapse of time or both), any Contractual Obligation of
           Lessee; or (iii) result in the creation or imposition of any Lien (or
           the obligation to create or impose any Lien) upon any property, asset
           or revenue of Lessee (except such Liens as may be created in favor of
           Lessor or Agent pursuant to this Agreement or the other Operative
           Documents).

                     (e) Approvals. No consent, approval, order or authorization
           of, or registration, declaration or filing with, any Governmental
           Authority or other Person (including, without limitation, the
           shareholders of any Person) is required in connection with the
           execution and delivery of the Operative Documents executed by Lessee
           and the performance and consummation by Lessee of the transactions
           contemplated thereby, except such as have been made or obtained and
           are in full force and effect.

                                       22
<PAGE>   28

                     (f) No Violation or Default. Neither Lessee nor any of its
           Subsidiaries is in violation of or in default with respect to (i) any
           Requirement of Law applicable to such Person; (ii) any Contractual
           Obligation of such Person (nor is there any waiver in effect which,
           if not in effect, would result in such a violation or default),
           where, in each case, such violation or default is reasonably likely
           to have a Material Adverse Effect. Without limiting the generality of
           the foregoing, neither Lessee nor any of its Subsidiaries (A) has
           violated any Environmental Laws, (B) has any liability under any
           Environmental Laws or (C) has received notice or other communication
           of an investigation or is under investigation by any Governmental
           Authority having authority to enforce Environmental Laws, where such
           violation, liability or investigation is reasonably likely to have a
           Material Adverse Effect. No Default has occurred and is continuing.

                     (g) Litigation. Except as set forth in Schedule 4.01(g), no
           actions (including, without limitation, derivative actions), suits,
           proceedings or investigations are pending or, to the knowledge of
           Lessee, threatened against Lessee or any of its Subsidiaries at law
           or in equity in any court or before any other Governmental Authority
           which (i) is reasonably likely (alone or in the aggregate) to have a
           Material Adverse Effect or (ii) seeks to enjoin, either directly or
           indirectly, the execution, delivery or performance by Lessee of the
           Operative Documents or the transactions contemplated thereby. The
           representations and warranties set forth in Schedule 4.01(g) are true
           and correct.

                     (h) Title; Possession Under Leases. Except as set forth in
           Schedule 4.01(g), Lessee and its Subsidiaries own and have good and
           marketable title, or a valid leasehold interest in, all their
           respective properties and assets as reflected in the most recent
           Financial Statements delivered to Agent (except those assets and
           properties disposed of in the ordinary course of business or
           otherwise in compliance with this Agreement since the date of such
           Financial Statements) and all respective assets and properties
           acquired by Lessee and its Subsidiaries since such date (except those
           disposed of in the ordinary course of business or otherwise in
           compliance with this Agreement), except in any case where the failure
           so to own or to have such title is not reasonably likely to have a
           Material Adverse Effect. Such assets and properties are subject to no
           Lien, except for Permitted Liens. Each of Lessee and its Subsidiaries
           has complied with all material obligations under all material leases
           to which it is a party and all such leases are in full force and
           effect. Each of Lessee and its Subsidiaries enjoys peaceful and
           undisturbed possession under such leases.

                     (i) Financial Statements. The Financial Statements of
           Lessee and its Subsidiaries which have been delivered to Agent, (i)
           are in accordance with the books and records of Lessee and its
           Subsidiaries, which have been maintained in accordance with good
           business practice; (ii) have been prepared in conformity with GAAP;
           and (iii) fairly present the financial conditions and results of
           operations of Lessee and its Subsidiaries as of the date thereof and
           for the period covered thereby. Neither Lessee nor any of its
           Subsidiaries has any Contingent Obligations, liability for taxes or
           other outstanding obligations which are material in the aggregate,
           except as disclosed in the audited 


                                       23

<PAGE>   29


           Financial Statements dated December 31, 1996, furnished by Lessee to
           Agent prior to the date hereof, or in the Financial Statements
           delivered to Agent pursuant to clause (i) or (ii) of Subparagraph
           5.01(a).

                     (j) Equity Securities. All outstanding Equity Securities of
           Lessee are duly authorized, validly issued, fully paid and
           non-assessable. All Equity Securities of Lessee have been offered and
           sold in compliance with all federal and state securities laws and all
           other Requirements of Law.

                     (k) No Agreements to Sell Assets; Etc. Neither Lessee nor
           any of its Subsidiaries has any legal obligation, absolute or
           contingent, to any Person to sell the assets of Lessee or any of its
           Subsidiaries (other than sales in the ordinary course of business),
           or to effect any merger, consolidation or other reorganization of
           Lessee or any of its Subsidiaries or to enter into any agreement with
           respect thereto, except for sales permitted by Subparagraph 5.02(c).

                     (l)       Employee Benefit Plans.

                               (i) Based on the latest valuation of each
                     Employee Benefit Plan that either Lessee or any ERISA
                     Affiliate maintains or contributes to, or has any
                     obligation under (which occurred within twelve months of
                     the date of this representation), the aggregate benefit
                     liabilities of such plan within the meaning of Section 4001
                     of ERISA did not exceed the aggregate value of the assets
                     of such plan. Neither Lessee nor any ERISA Affiliate has
                     any liability with respect to any post-retirement benefit
                     under any Employee Benefit Plan which is a welfare plan (as
                     defined in section 3(1) of ERISA), other than liability for
                     health plan continuation coverage described in Part 6 of
                     Title I(B) of ERISA, which liability for health plan
                     contribution coverage is not reasonably likely to have a
                     Material Adverse Effect.

                               (ii) Each Employee Benefit Plan complies, in both
                     form and operation, in all material respects, with its
                     terms, ERISA and the IRC, and no condition exists or event
                     has occurred with respect to any such plan which would
                     result in the incurrence by either Lessee or any ERISA
                     Affiliate of any material liability, fine or penalty. Each
                     Employee Benefit Plan, related trust agreement, arrangement
                     and commitment of Lessee or any ERISA Affiliate is legally
                     valid and binding and in full force and effect. No Employee
                     Benefit Plan is being audited or investigated by any
                     government agency or is subject to any pending or
                     threatened claim or suit. Neither Lessee nor any ERISA
                     Affiliate nor any fiduciary of any Employee Benefit Plan
                     has engaged in a prohibited transaction under section 406
                     of ERISA or section 4975 of the IRC.

                               (iii) Neither Lessee nor any ERISA Affiliate
                     contributes to or has any material contingent obligations
                     to any Multiemployer Plan. Neither Lessee nor any ERISA
                     Affiliate has incurred any material liability (including
                     secondary 

                                       24
<PAGE>   30

                      liability) to any Multiemployer Plan as a result of a
                      complete or partial withdrawal from such Multiemployer
                      Plan under Section 4201 of ERISA or as a result of a sale
                      of assets described in Section 4204 of ERISA. Neither
                      Lessee nor any ERISA Affiliate has been notified that any
                      Multiemployer Plan is in reorganization or insolvent under
                      and within the meaning of Section 4241 or Section 4245 of
                      ERISA or that any Multiemployer Plan intends to terminate
                      or has been terminated under Section 4041A of ERISA.

                     (m) Other Regulations. Lessee is not subject to regulation
           under the Investment Company Act of 1940, the Public Utility Holding
           Company Act of 1935, the Federal Power Act, the Interstate Commerce
           Act, any state public utilities code or to any other Governmental
           Rule limiting its ability to incur indebtedness.

                     (n) Patent and Other Rights. Except as set forth in
           Schedule 4.01(g), Lessee and its Subsidiaries own, license or
           otherwise have the right to use, under validly existing agreements,
           all patents, licenses, trademarks, trade names, trade secrets,
           service marks, copyrights and all rights with respect thereto, which
           are required to conduct their businesses as now conducted.

                     (o) Governmental Charges. Lessee and its Subsidiaries have
           filed or caused to be filed all tax returns which are required to be
           filed by them. Lessee and its Subsidiaries have paid, or made
           provision for the payment of, all taxes and other Governmental
           Charges which have or may have become due pursuant to said returns or
           otherwise and all other indebtedness, except such Governmental
           Charges or indebtedness, if any, which are being contested in good
           faith and as to which adequate reserves (determined in accordance
           with GAAP) have been provided or which are not reasonably likely to
           have a Material Adverse Effect if unpaid.

                     (p) Margin Stock. Lessee owns no Margin Stock which, in the
           aggregate, would constitute a substantial part of the assets of
           Lessee, and no proceeds of any Loan will be used to purchase or
           carry, directly or indirectly, any Margin Stock or to extend credit,
           directly or indirectly, to any Person for the purpose of purchasing
           or carrying any Margin Stock.

                     (q) Subsidiaries, etc. Set forth in Schedule 4.01(q) (as
           supplemented by Lessee from time to time in a written notice to
           Agent) is a complete list of all of Lessee's Subsidiaries, the
           jurisdiction of incorporation of each, the classes of Equity
           Securities of each and the number of shares and percentages of shares
           of each such class owned directly or indirectly by Lessee. Except for
           such Subsidiaries, Lessee has no Subsidiaries, is not a partner in
           any partnership or a joint venturer in any joint venture.

                     (r) Catastrophic Events. Neither Lessee nor any of its
           Subsidiaries and none of their properties is or has been affected by
           any fire, explosion, accident, strike, lockout or other labor
           dispute, drought, storm, hail, earthquake, embargo, act of God or
           other casualty that is reasonably likely to have a Material Adverse
           Effect. There are no 

                                       25
<PAGE>   31


           disputes presently subject to grievance procedure, arbitration or
           litigation under any of the collective bargaining agreements,
           employment contracts or employee welfare or incentive plans to which
           Lessee or any of its Subsidiaries is a party, and there are no 


           strikes, lockouts, work stoppages or slowdowns, or, to the best
           knowledge of Lessee, jurisdictional disputes or organizing activities
           occurring or threatened which alone or in the aggregate are
           reasonably likely to have a Material Adverse Effect.

                     (s) No Material Adverse Effect. No event has occurred and
           is continuing and no condition exists which is reasonably likely to
           have a Material Adverse Effect.

                     (t) The Property. The representations and warranties
           relating to each Tract set forth in Parts 1 and 2 of Schedule 4.01(t)
           are true and correct. The following representations and warranties
           apply to all of the Property:

                               (i) All of the Property complies and will comply
                     at all times (whether before commencement of any
                     construction, during any construction or after completion
                     of construction of any New Improvements) with all
                     applicable Governmental Rules (including Title III of the
                     Americans with Disabilities Act; Environmental Laws; and
                     zoning, land use, building, planning and fire laws, rules,
                     regulations and codes) and Insurance Requirements, except
                     for violations which are not reasonably likely to have a
                     Material Adverse Effect. None of the Property is or has
                     been a site for the use, generation, manufacture, storage,
                     treatment, release, discharge, disposal or transportation
                     of any Hazardous Materials, and no Hazardous Materials
                     (except as set forth in Schedule 1 to each Lease Agreement)
                     are located on any of the Property. There are no claims or
                     actions pending or, to Lessee's knowledge, threatened
                     against any of the Property by any Governmental Authority
                     or any other Person relating to Hazardous Materials or
                     pursuant to any Environmental Laws.

                               (ii) None of the Improvements (whether before
                     commencement of any construction, during any construction
                     or after completion of construction of any New
                     Improvements) encroach or will at any time encroach in any
                     manner onto any adjoining land, except as permitted by
                     express written and recorded encroachment agreements
                     approved by Agent or as affirmatively insured against by
                     appropriate title insurance.

                               (iii) All licenses, approvals, authorizations,
                     consents, permits, easements and rights-of-way required for
                     the use of any of the Property have been obtained or, if
                     not yet required, will be obtained before required.

                               (iv) After the purchase of each Tract of Property
                     on the Acquisition Date therefor, Lessor will have good and
                     valid fee simple title to such Property, subject to no
                     Liens except for Permitted Property Liens.

                                       26
<PAGE>   32

                     (u) Chief Place of Business. Lessee's chief place of
           business is located at 3970 North First Street, San Jose, California.

                     (v) Accuracy of Information Furnished. None of the
           Operative Documents and none of the other certificates, statements or
           information furnished to Lessor, Agent or any Participant by or on
           behalf of Lessee or any of its Subsidiaries in connection with the
           Operative Documents or the transactions contemplated thereby contains
           or will contain any untrue statement of a material fact or omits or
           will omit to state a material fact necessary to make the statements
           therein, in light of the circumstances under which they were made,
           not misleading.

Lessee shall be deemed to have reaffirmed, for the benefit of the Lessor
Parties, each representation and warranty contained in this Paragraph 4.01 on
and as of the date of each Credit Event (except for representations and
warranties expressly made as of a specified date, which shall be true as of such
date).

           4.02. Lessor's Representations and Warranties. In order to induce
Lessee, Agent and the Participants to enter into this Agreement and the other
Operative Documents to which they are parties, Lessor hereby represents and
warranties to Lessee, Agent and the Participants as follows:

                     (a) Due Incorporation, Qualification, etc. Lessor (i) is a
           corporation duly organized, validly existing and in good standing
           under the laws of its state of incorporation and (ii) has the power
           and authority to own, lease and operate its properties and carry on
           its business as now conducted.

                     (b) Authority. The execution, delivery and performance by
           Lessor of each Operative Document executed, or to be executed, by
           Lessor and the consummation of the transactions contemplated thereby
           (i) are within the power of Lessor and (ii) have been duly authorized
           by all necessary actions on the part of Lessor.

                     (c) Enforceability. Each Operative Document executed, or to
           be executed, by Lessor has been, or will be, duly executed and
           delivered by Lessor and constitutes, or will constitute, a legal,
           valid and binding obligation of Lessor, enforceable against Lessor in
           accordance with its terms, except as limited by bankruptcy,
           insolvency or other laws of general application relating to or
           affecting the enforcement of creditors' rights generally and general
           principles of equity.

                     (d) Non-Contravention. The execution and delivery by Lessor
           of the Operative Documents executed by Lessor and the performance and
           consummation of the transactions contemplated thereby do not (i)
           violate any Requirement of Law applicable to Lessor; (ii) violate any
           provision of, or result in the breach or the acceleration of, or
           entitle any other Person to accelerate (whether after the giving of
           notice or lapse of time or both), any Contractual Obligation of
           Lessor; or (iii) result in the creation or imposition of any Lien (or
           the obligation to create or impose any Lien) upon any property, asset
           or 



                                       27
<PAGE>   33

           revenue of Lessor (except such Liens as may be created in favor of
           Agent pursuant to this Agreement or the other Operative Documents).

                     (e) Approvals. No consent, approval, order or authorization
           of, or registration, declaration or filing with, any Governmental
           Authority or other Person (including, without limitation, the
           shareholders of any Person) is required in connection with the
           execution and delivery of the Operative Documents executed by Lessor
           and the performance and consummation of the transactions contemplated
           thereby, except such as have been made or obtained and are in full
           force and effect.

                     (f) Litigation. No actions (including, without limitation,
           derivative actions), suits, proceedings or investigations are pending
           or, to the knowledge of Lessor, threatened against Lessor at law or
           in equity in any court or before any other Governmental Authority
           which (i) is reasonably likely (alone or in the aggregate) to
           materially and adversely affect the ability of Lessor to perform its
           obligations under the Operative Documents to which it is a party or
           (ii) seeks to enjoin, either directly or indirectly, the execution,
           delivery or performance by Lessor of the Operative Documents or the
           transactions contemplated thereby.

                     (g) Other Regulations. Lessor is not subject to regulation
           under the Investment Company Act of 1940, the Public Utility Holding
           Company Act of 1935, the Federal Power Act, the Interstate Commerce
           Act, any state public utilities code or to any other Governmental
           Rule limiting its ability to incur indebtedness.

                     (h) Chief Place of Business. Lessor's chief place of
           business is located at 180 Interstate Parkway North, Atlanta, Georgia
           30339.

           4.03. Participants' Representations and Warranties. In order to
induce Lessee, Lessor and Agent to enter into this Agreement and the other
Operative Documents to which they are parties, each Participant hereby
represents and warranties to Lessee, Lessor and Agent as follows:

                     (a) Due Incorporation, Qualification, etc. Such Participant
           (i) is a corporation duly organized, validly existing and in good
           standing under the laws of its jurisdiction of incorporation and (ii)
           has the power and authority to own, lease and operate its properties
           and carry on its business as now conducted.

                     (b) Authority. The execution, delivery and performance by
           such Participant of each Operative Document executed, or to be
           executed, by such Participant and the consummation of the
           transactions contemplated thereby (i) are within the power of such
           Participant and (ii) have been duly authorized by all necessary
           actions on the part of such Participant.

                     (c) Enforceability. Each Operative Document executed, or to
           be executed, by such Participant has been, or will be, duly executed
           and delivered by such Participant and 

                                       28
<PAGE>   34

           constitutes, or will constitute, a legal, valid and binding
           obligation of such Participant, enforceable against such Participant
           in accordance with its terms, except as limited by bankruptcy,
           insolvency or other laws of general application relating to or
           affecting the enforcement of creditors' rights generally and general
           principles of equity.

                     (d) Non-Contravention. The execution and delivery by such
           Participant of the Operative Documents executed by such Participant
           and the performance and consummation of the transactions contemplated
           thereby do not (i) violate any Requirement of Law applicable to such
           Participant; (ii) violate any provision of, or result in the breach
           or the acceleration of, or entitle any other Person to accelerate
           (whether after the giving of notice or lapse of time or both), any
           Contractual Obligation of such Participant; or (iii) result in the
           creation or imposition of any Lien (or the obligation to create or
           impose any Lien) upon any property, asset or revenue of such
           Participant (except such Liens as may be created in favor of Lessor
           or Agent pursuant to this Agreement or the other Operative
           Documents).

                     (e) Approvals. No consent, approval, order or authorization
           of, or registration, declaration or filing with, any Governmental
           Authority or other Person (including, without limitation, the
           shareholders of any Person) is required in connection with the
           execution and delivery of the Operative Documents executed by such
           Participant and the performance and consummation of the transactions
           contemplated thereby, except such as have been made or obtained and
           are in full force and effect.

                     (f) Litigation. No actions (including, without limitation,
           derivative actions), suits, proceedings or investigations are pending
           or, to the knowledge of such Participant, threatened against such
           Participant at law or in equity in any court or before any other
           Governmental Authority which (i) is reasonably likely (alone or in
           the aggregate) to materially and adversely affect the ability of such
           Participant to perform its obligations under the Operative Documents
           to which it is a party or (ii) seeks to enjoin, either directly or
           indirectly, the execution, delivery or performance by such
           Participant of the Operative Documents or the transactions
           contemplated thereby.

                     (g) Own Account. Such Participant is acquiring its
           participation interest hereunder for its own account for investment
           and not with a view to any distribution (as such term is used in
           Section 2(11) of the Securities Act of 1933) thereof, and, if in the
           future it should decide to dispose of its participation interest, it
           understands that it may do so only in compliance with the Securities
           Act of 1933 and the rules and regulations of the Securities and
           Exchange Commission thereunder and any applicable state securities
           laws.

SECTION 5.  COVENANTS

           5.01. Lessee's Affirmative Covenants. Until the termination of this
Agreement and the satisfaction in full by Lessee of all Lessee Obligations,
Lessee will comply, and will cause compliance, with the following affirmative
covenants, unless Lessor and Required Participants shall otherwise consent in
writing:

                                       29

<PAGE>   35

                     (a) Financial Statements, Reports, etc. Lessee shall
           furnish to Agent, with sufficient copies for Lessor and each
           Participant, the following, each in such form and such detail as
           Agent, Lessor or the Required Participants shall reasonably request:

                               (i) As soon as available and in no event later
                     than fifty (50) days after the last day of each fiscal
                     quarter of Lessee (other than the last quarter in any
                     fiscal year), a copy of the Financial Statements of Lessee
                     and its Subsidiaries (prepared on a consolidated basis) for
                     such quarter and for the fiscal year to date, certified by
                     the president or chief financial officer of Lessee to
                     present fairly the financial condition, results of
                     operations and other information reflected therein and to
                     have been prepared in accordance with GAAP (subject to
                     normal year-end audit adjustments);

                               (ii) As soon as available and in no event later
                     than one hundred (100) days after the close of each fiscal
                     year of Lessee, (A) copies of the audited Financial
                     Statements of Lessee and its Subsidiaries (prepared on a
                     consolidated basis) for such year, prepared by Ernst &
                     Young or by other independent certified public accountants
                     of recognized national standing acceptable to Agent, (B)
                     copies of the unqualified opinions (or qualified opinions
                     reasonably acceptable to Required Participants) and
                     management letters delivered by such accountants in
                     connection with all such Financial Statements and (C)
                     certificates of such accountants to Agent stating that in
                     making the examination necessary for their opinion they
                     have reviewed this Agreement and have obtained no knowledge
                     of any Default which has occurred and is continuing, or if,
                     in the opinion of such accountants, a Default has occurred
                     and is continuing, a statement as to the nature thereof;

                               (iii) Contemporaneously with the quarterly and
                     year-end Financial Statements required by the foregoing
                     clauses (i) and (ii), a compliance certificate of the
                     president or chief financial officer of Lessee which (A)
                     states that no Default has occurred and is continuing, or,
                     if any such Default has occurred and is continuing, a
                     statement as to the nature thereof and what action Lessee
                     proposes to take with respect thereto and (B) sets forth,
                     for the quarter or year covered by such Financial
                     Statements or as of the last day of such quarter or year
                     (as the case may be), the calculation of the financial
                     ratios and tests provided in Paragraph 5.03;

                               (iv) As soon as available and in no event later
                     than fifty (50) days after the last day of each fiscal
                     quarter of Lessee, a certificate of the chief financial
                     officer of Lessee which sets forth the calculation of the
                     annualized Funded Indebtedness/EBITDA Ratio for the
                     consecutive two-quarter period ending on such day;

                               (v) As soon as possible and in no event later
                     than five (5) Business Days after any Senior Officer of
                     Lessee knows of the occurrence or existence of 

                                       30
<PAGE>   36

                      (A) any Reportable Event under any Employee Benefit Plan
                      or Multiemployer Plan; (B) any actual or threatened
                      litigation, suits, claims or disputes against Lessee or
                      any of its Subsidiaries involving potential monetary
                      damages payable by Lessee or its Subsidiaries of
                      $2,500,000 or more (alone or in the aggregate); (C) any
                      other event or condition which is reasonably likely to
                      have a Material Adverse Effect; or (D) any Default; the
                      statement of the president or chief financial officer of
                      Lessee setting forth details of such event, condition or
                      Default and the action which Lessee proposes to take with
                      respect thereto;

                               (vi) As soon as available and in no event later
                     than five (5) Business Days after they are sent, made
                     available or filed, copies of (A) all registration
                     statements and reports filed by Lessee or any of its
                     Subsidiaries with any securities exchange or the Securities
                     and Exchange Commission (including, without limitation, all
                     10-Q, 10-K and 8-Q reports); (B) all reports, proxy
                     statements and financial statements sent or made available
                     by Lessee or any of its Subsidiaries to its security
                     holders; and (C) all press releases and other similar
                     public concerning any material developments in the business
                     of Lessee or any of its Subsidiaries made available by
                     Lessee or any of its Subsidiaries to the public generally;

                               (vii) As soon as available and in no event later
                     than five (5) Business Days after they are filed, copies of
                     all IRS Form 5500 reports for all Employee Benefit Plans
                     required to file such form;

                               (viii) As soon as available and in no event later
                     than ten (10) days before the first day of each fiscal year
                     of Lessee, the consolidated plan and forecast of Lessee and
                     its Subsidiaries for such fiscal year, including quarterly
                     cash flow projections and quarterly projections of Lessee's
                     compliance with each of the covenants set forth in
                     Paragraph 5.03;

                               (ix) As soon as possible and in no event later
                     than (A) ten (10) days prior to the acquisition by Lessee
                     or any of its Subsidiaries of any new Subsidiary or all or
                     substantially all of the assets of any other Person,
                     written notice thereof; and

                               (x) Such other instruments, agreements,
                     certificates, opinions, statements, documents and
                     information relating to the operations or condition
                     (financial or otherwise) of Lessee or its Subsidiaries, and
                     compliance by Lessee with the terms of this Agreement and
                     the other Operative Documents as Lessor or Agent may from
                     time to time reasonably request.

           For the purposes of this Subparagraph 5.01(a), (1) the timely
           delivery by Lessee to Agent pursuant to clause (vi) of a copy of the
           Form 10-Q report filed by Lessee with the Securities and Exchange
           Commission for any quarter shall satisfy the requirements of clause
           (i) for such quarter and (2) the timely delivery by Lessee to Agent
           pursuant to 

                                       31

<PAGE>   37

           clause (vi) of a copy of the Form 10-K report filed by Lessee with
           the Securities and Exchange Commission for any year shall satisfy the
           requirements of clause (ii)(A) for such year, provided that such
           reports are required to contain the same information as required by
           clause (i) and clause (ii)(A), respectively.

                     (b) Books and Records. Lessee and its Subsidiaries shall at
           all times keep proper books of record and account in which full, true
           and correct entries will be made of their transactions in accordance
           with GAAP.

                     (c) Inspections. Lessee and its Subsidiaries shall permit
           any Person designated by any Participant, upon reasonable notice and
           during normal business hours, to visit and inspect any of the
           properties and offices of Lessee and its Subsidiaries, to examine the
           books and records of Lessee and its Subsidiaries and make copies
           thereof and to discuss the affairs, finances and business of Lessee
           and its Subsidiaries with, and to be advised as to the same by, their
           officers, auditors and accountants, all at such times and intervals
           as any Participant may reasonably request.

                     (d) Insurance. In addition to the insurance requirements
           set forth in the Lease Agreement with respect to the property, Lessee
           and its Subsidiaries shall:

                               (i) Carry and maintain insurance of the types and
                     in the amounts customarily carried from time to time during
                     the term of this Agreement by others engaged in
                     substantially the same business as such Person and
                     operating in the same geographic area as such Person,
                     including, but not limited to, fire, public liability,
                     property damage and worker's compensation; and

                               (ii) Carry and maintain each policy for such
                     insurance with financially sound insurers.

                     (e) Governmental Charges and Other Indebtedness. Lessee and
           its Subsidiaries shall promptly pay and discharge when due (i) all
           taxes and other Governmental Charges prior to the date upon which
           penalties accrue thereon, (ii) all indebtedness which, if unpaid,
           could become a Lien upon the property of Lessee or its Subsidiaries
           and (iii) subject to any subordination provisions applicable thereto,
           all other Indebtedness which, if unpaid, is reasonably likely to have
           a Material Adverse Effect, except such Indebtedness as may in good
           faith be contested or disputed, or for which arrangements for
           deferred payment have been made, provided that in each such case
           appropriate reserves as required by GAAP are maintained.

                     (f) Use of Proceeds. Lessee shall not use any part of the
           proceeds of any Advance, directly or indirectly, for the purpose of
           purchasing or carrying any Margin Stock or for the purpose of
           purchasing or carrying or trading in any securities under such
           circumstances as to involve Lessee or any Lessor Party in a violation
           of Regulations G, T, U or X issued by the Federal Reserve Board.


                                       32
<PAGE>   38

                     (g) General Business Operations. Each of Lessee and its
           Subsidiaries shall (i) preserve and maintain its corporate existence
           and all of its rights, privileges and franchises reasonably necessary
           to the conduct of its business, (ii) conduct its business activities
           in compliance with all Requirements of Law and Contractual
           Obligations applicable to such Person, the violation of which is
           reasonably likely to have a Material Adverse Effect and (iii) keep
           all property useful and necessary in its business in good working
           order and condition, ordinary wear and tear excepted; provided,
           however, that Lessee and its Subsidiaries may dissolve or liquidate
           any Subsidiary if such Subsidiary is not a Material Subsidiary and
           such dissolution or liquidation is not reasonably likely to have a
           Material Adverse Effect. Lessee shall maintain its chief executive
           office and principal place of business in the United States and shall
           not relocate its chief executive office or principal place of
           business outside of California except upon not less than thirty (30)
           days prior written notice to Agent.

           5.02. Lessee's Negative Covenants. Until the termination of this
Agreement and the satisfaction in full by Lessee of all Lessee Obligations,
Lessee will comply, and will cause compliance, with the following negative
covenants, unless Lessor and Required Participants shall otherwise consent in
writing:

                     (a) Indebtedness. Neither Lessee nor any of its
           Subsidiaries shall create, incur, assume or permit to exist any
           Indebtedness except for the following ("Permitted Indebtedness"):

                              (i) The Lessee Obligations under the Operative
                    Documents;

                              (ii) The Related Credit Obligations and Related
                    Lease Obligations;

                              (iii) Indebtedness of Lessee and its Subsidiaries
                    listed in Schedule 5.02(a) and existing on the date of this
                    Agreement;

                              (iv) Indebtedness of Lessee and its Subsidiaries
                    arising from the endorsement of instruments for collection
                    in the ordinary course of Lessee's or a Subsidiary's
                    business;

                               (v) Indebtedness of Lessee and its Subsidiaries
                     for trade accounts payable, provided that (A) such accounts
                     arise in the ordinary course of business and (B) no
                     material part of any such account is more than ninety (90)
                     days past due (unless subject to a bona fide dispute and
                     for which adequate reserves as required by GAAP have been
                     established);

                               (vi) Indebtedness of Lessee and its Subsidiaries
                     under Rate Contracts, provided that all such Rate Contracts
                     are entered into in connection with bona fide hedging
                     operations and not for speculation;

                                       33
<PAGE>   39

                               (vii) Indebtedness of Lessee and its Subsidiaries
                     under purchase money loans and Capital Leases incurred by
                     Lessee or any of its Subsidiaries to finance the
                     acquisition by such Person of real property, fixtures or
                     equipment provided that in each case, (A) such Indebtedness
                     is incurred by such Person at the time of, or not later
                     than thirty (30) days after, the acquisition by such Person
                     of the property so financed, (B) such Indebtedness does not
                     exceed the purchase price of the property so financed, and
                     (C) no Default has occurred and is continuing at the time
                     such Indebtedness is incurred or will occur after giving
                     effect to such Indebtedness;

                               (viii) Indebtedness of Lessee and its
                     Subsidiaries under initial or successive refinancings of
                     any Indebtedness permitted by clause (iii) above, provided
                     that (A) the principal amount of any such refinancing does
                     not exceed the principal amount of the Indebtedness being
                     refinanced (except to the extent otherwise permitted by
                     clause (x) below) and (B) the material terms and provisions
                     of any such refinancing (including maturity, redemption,
                     prepayment, default and subordination provisions) are no
                     less favorable to the Participants than the Indebtedness
                     being refinanced;

                               (ix) Indebtedness of Lessee and its Subsidiaries
                     with respect to surety, appeal, indemnity, performance or
                     other similar bonds in the ordinary course of business; and

                               (x) Other Indebtedness of Lessee and its
                     Subsidiaries, provided that the aggregate principal amount
                     of all such other Indebtedness does not exceed $25,000,000
                     at any time.

                     (b) Liens. Neither Lessee nor any of its Subsidiaries shall
           create, incur, assume or permit to exist any Lien on or with respect
           to any of its assets or property of any character, whether now owned
           or hereafter acquired, except for the following ("Permitted Liens"):

                              (i) Liens in favor of Lessor, Agent or any
                    Participant securing the Lessee Obligations;

                               (ii) Liens in favor of Agent or any Participant
                     securing the Related Credit Obligations or Related Lease
                     Obligations;

                              (iii) Liens listed in Schedule 5.02(b) and
                    existing on the date of this Agreement;

                               (iv) Liens for taxes or other Governmental
                     Charges not at the time delinquent or thereafter payable
                     without penalty or being contested in good faith, provided
                     that adequate reserves for the payment thereof as required
                     by GAAP have been established;

                                       34
<PAGE>   40

                               (v) Liens of carriers, warehousemen, mechanics,
                     materialmen, vendors, and landlords and other similar Liens
                     imposed by law incurred in the ordinary course of business
                     for sums not overdue or being contested in good faith,
                     provided that adequate reserves for the payment thereof as
                     required by GAAP have been established;

                               (vi) Deposits under workers' compensation,
                     unemployment insurance and social security laws or to
                     secure the performance of bids, tenders, contracts (other
                     than for the repayment of borrowed money) or leases, or to
                     secure statutory obligations of surety or appeal bonds or
                     to secure indemnity, performance or other similar bonds in
                     the ordinary course of business;

                               (vii) Zoning restrictions, easements,
                     rights-of-way, title irregularities and other similar
                     encumbrances, which alone or in the aggregate are not
                     substantial in amount and do not materially detract from
                     the value of the property subject thereto or interfere with
                     the ordinary conduct of the business of Lessee or any of
                     its Subsidiaries;

                              (viii) Banker's Liens and similar Liens (including
                    set-off rights) in respect of bank deposits;

                               (ix) Liens on property or assets of any
                     corporation which becomes a Subsidiary of Lessee or on any
                     property or assets acquired by Lessee or any of its
                     Subsidiaries after the date of this Agreement, provided
                     that (A) such Liens exist at the time the stock of such
                     corporation or such assets or property is or are acquired
                     by Lessee and (B) such Liens were not created in
                     contemplation of such acquisition by Lessee;

                               (x) Judgement Liens, provided that such Liens do
                     not have a value in excess of $2,500,000 or such Liens are
                     released, stayed, vacated or otherwise dismissed within
                     twenty (20) days after issue or levy and, if so stayed,
                     such stay is not thereafter removed;

                               (xi) Rights of vendors or lessors under
                     conditional sale agreements, Capital Leases or other title
                     retention agreements, provided that, in each case, (A) such
                     rights secure or otherwise relate to Permitted
                     Indebtedness, (B) such rights do not extend to any property
                     other than property acquired with the proceeds of such
                     Permitted Indebtedness and (C) such rights do not secure
                     any Indebtedness other than such Permitted Indebtedness;

                                       36
<PAGE>   41

                               (xii) Liens in favor of customs and revenue
                     authorities arising as a matter of law to secure payment of
                     customs duties and in connection with the importation of
                     goods in the ordinary course of Lessee's and its
                     Subsidiaries' businesses;

                               (xiii) Liens securing Indebtedness which
                     constitutes Permitted Indebtedness under clause (vii) of
                     Subparagraph 5.02(a) provided that, in each case, such Lien
                     (A) covers only those assets, the acquisition of which was
                     financed by such Permitted Indebtedness, and (B) secures
                     only such Permitted Indebtedness;

                               (xiv) Liens on the property or assets of any
                     Subsidiary of Lessee in favor of Lessee or any other
                     Subsidiary of Lessee;

                               (xv) Liens incurred in connection with the
                     extension, renewal or refinancing of the Indebtedness
                     secured by the Liens described in clause (iii) above,
                     provided that any extension, renewal or replacement Lien
                     (A) is limited to the property covered by the existing Lien
                     and (B) secures Indebtedness which is no greater in amount
                     and has material terms no less favorable to the
                     Participants than the Indebtedness secured by the existing
                     Lien;

                               (xvi) Liens on insurance proceeds in favor of
                     insurance companies with respect to the financing of
                     insurance premiums;

                              (xvii) Permitted Property Liens in the Property;
                    and

                               (xviii) Other Liens on the property of Lessee and
                     its Subsidiaries, provided that the aggregate principal
                     amount of all Indebtedness secured by such other Liens does
                     not exceed at any time ten percent (10%) of the
                     consolidated total assets of Lessee and its Subsidiaries at
                     such time.

                     (c) Asset Dispositions. Neither Lessee nor any of its
           Subsidiaries shall sell, lease, transfer or otherwise dispose of any
           of its assets or property, whether now owned or hereafter acquired,
           except for the following:

                              (i) Sales of inventory by Lessee and its
                    Subsidiaries in the ordinary course of their businesses;

                              (ii) Sales of surplus, damaged, worn or obsolete
                    equipment or inventory for not less than fair market value;

                              (iii) Sales or other dispositions of Investments
                    permitted by clauses (i) and (iii) of Subparagraph 5.02(e)
                    for not less than fair market value;

                               (iv) Sales or assignments of defaulted
                     receivables to a collection agency in the ordinary course
                     of business;

                               (v) Licenses by Lessee or its Subsidiaries of its
                     patents, copyrights, trademarks, trade names and service
                     marks in the ordinary course of its business 

                                       36
<PAGE>   42

                    provided that, in each case, the terms of the transaction
                    are terms which then would prevail in the market for similar
                    transactions between unaffiliated parties dealing at arm's
                    length;

                               (vi) Sales or other dispositions of assets and
                     property by Lessee to any of Lessee's Subsidiaries or by
                     any of Lessee's Subsidiaries to Lessee or any of its other
                     Subsidiaries, provided that the terms of any such sales or
                     other dispositions by or to Lessee are terms which are no
                     less favorable to Lessee then would prevail in the market
                     for similar transactions between unaffiliated parties
                     dealing at arm's length;

                               (vii) Sales of accounts receivable of Lessee and
                     its Subsidiaries, provided that (A) each such sale is (1)
                     for not less than fair market value and (2) for cash, and
                     (B) the aggregate book value of all such accounts
                     receivable so sold in any consecutive four-quarter period
                     does not exceed ten percent (10%) of the consolidated total
                     accounts receivable of Lessee and its Subsidiaries on the
                     last day immediately preceding such four-quarter period;
                     and

                               (viii) Other sales, leases, transfers and
                     disposals of assets and property for not less than fair
                     market value, provided that the aggregate book value of all
                     such assets and property so sold, leased, transferred or
                     otherwise disposed of in any consecutive four-quarter
                     period does not exceed five percent (5%) of the
                     consolidated total assets of Lessee and its Subsidiaries on
                     the last day immediately preceding such four-quarter
                     period.

                     (d) Mergers, Acquisitions, Etc. Neither Lessee nor any of
           its Subsidiaries shall consolidate with or merge into any other
           Person or permit any other Person to merge into it, establish any new
           Subsidiary, acquire any Person as a new Subsidiary or acquire all or
           substantially all of the assets of any other Person, except for the
           following:

                              (i) Any Subsidiary of Lessee may merge or
                    consolidate with any other Subsidiary of Lessee;

                              (ii) Any Subsidiary of Lessee may merge or
                    consolidate with Lessee, provided that Lessee is the
                    surviving corporation; and

                              (iii) Lessee may merge or consolidate with any
                    other corporation, establish a new Subsidiary, acquire any
                    Person as a new Subsidiary or acquire all or substantially
                    all of the assets of any other Person, provided that:

                                        (A) In the case of any merger or
                              consolidation, either (1) Lessee is the surviving
                              corporation or (2) the surviving corporation (y)
                              is a Solvent United States corporation with a
                              financial condition equal to or better than the
                              financial condition of Lessee immediately prior to
                              such

                              37
<PAGE>   43

                              merger or consolidation and (z) assumes all of the
                              Lessee Obligations in a manner reasonably
                              acceptable to the Required Participants;

                                          (B) No Default has occurred and is
                               continuing at the time of such merger,
                               consolidation, establishment or acquisition or
                               will occur after giving effect to such merger,
                               consolidation or acquisition; and

                                          (C) The aggregate cost of any such
                               merger, consolidation, establishment or
                               acquisition does not exceed the amounts permitted
                               under Subparagraph 5.02(e)(iv).

                     (e) Investments. Neither Lessee nor any of its Subsidiaries
           shall make any Investment except for Investments in the following:

                               (i)   Investments of Lessee and its Subsidiaries
                     in Cash Equivalents;

                               (ii)  Any transaction permitted by Subparagraph
                     5.02(a);

                               (iii) Money market mutual funds registered with
                     the Securities and Exchange Commission, meeting the
                     requirements of Rule 2a-7 promulgated under the Investment
                     Company Act of 1940;

                              (iv) Investments listed in Schedule 5.02(e)
                     existing on the date of this Agreement; and

                               (v) Other Investments, provided that the
                     aggregate amount of such other Investments plus the
                     aggregate cost of all mergers and consolidations
                     consummated, Subsidiaries established and Subsidiaries and
                     assets acquired by Lessee pursuant to Subparagraph 5.02(d)
                     does not exceed in any fiscal year (A) $100,000,000 for any
                     amounts paid in cash and (B) $500,000,000 for any amounts
                     paid with shares of common stock of Lessee (as determined
                     according to the stock price of such shares on the date of
                     transfer) and accounted for on a pooling basis in
                     accordance with GAAP.

                     (f) Dividends, Redemptions, Etc. Neither Lessee nor any of
           its Subsidiaries shall pay any dividends or make any distributions on
           its Equity Securities; purchase, redeem, retire, defease or otherwise
           acquire for value any of its Equity Securities; return any capital to
           any holder of its Equity Securities as such; make any distribution of
           assets, Equity Securities, obligations or securities to any holder of
           its Equity Securities as such; or set apart any sum for any such
           purpose; except as follows:

                              (i) Either Lessee or any of its Subsidiaries may
                    pay dividends on its capital stock payable solely in such
                    Person's own capital stock;

                              (ii) Any Subsidiary of Lessee may pay dividends to
                    Lessee;

                                       38
<PAGE>   44

                               (iii) Lessee may purchase shares of its capital
                     stock for its employee stock option plans, provided that
                     (A) the aggregate amount of such purchases does not exceed
                     $50,000,000 in any fiscal year and (B) no Default has
                     occurred and is continuing at the time of such purchase or
                     will occur after giving effect to such purchase; and

                               (iv) Lessee may purchase shares of its capital
                     stock with the proceeds received by it from a substantially
                     concurrent issue of new shares of its capital stock

                     (g) Change in Business. Neither Lessee nor any of its
           Subsidiaries shall engage, either directly or indirectly through
           Affiliates, in any material line of business other than the
           semiconductor capital equipment business and other businesses
           incidental or reasonably related thereto.

                     (h) ERISA. Neither Lessee nor any ERISA Affiliate shall (i)
           adopt or institute any Employee Benefit Plan that is an employee
           pension benefit plan within the meaning of Section 3(2) of ERISA,
           (ii) take any action which will result in the partial or complete
           withdrawal, within the meanings of sections 4203 and 4205 of ERISA,
           from a Multiemployer Plan, (iii) engage or permit any Person to
           engage in any transaction prohibited by section 406 of ERISA or
           section 4975 of the IRC involving any Employee Benefit Plan or
           Multiemployer Plan which would subject either Lessee or any ERISA
           Affiliate to any tax, penalty or other liability including a
           liability to indemnify, (iv) incur or allow to exist any accumulated
           funding deficiency (within the meaning of section 412 of the IRC or
           section 302 of ERISA), (v) fail to make full payment when due of all
           amounts due as contributions to any Employee Benefit Plan or
           Multiemployer Plan, (vi) fail to comply with the requirements of
           section 4980B of the IRC or Part 6 of Title I(B) of ERISA, or (vii)
           adopt any amendment to any Employee Benefit Plan which would require
           the posting of security pursuant to section 401(a)(29) of the IRC,
           where singly or cumulatively, the above would have a Material Adverse
           Effect.

                     (i) Transactions With Affiliates. Neither Lessee nor any of
           its Subsidiaries shall enter into any Contractual Obligation with any
           Affiliate or engage in any other transaction with any Affiliate
           except upon terms at least as favorable to Lessee or such Subsidiary
           as an arms-length transaction with unaffiliated Persons.

                     (j) Accounting Changes. Neither Lessee nor any of its
           Subsidiaries shall change (i) its fiscal year (currently January 1
           through December 31) or (ii) its accounting practices except as
           permitted by GAAP.

           5.03. Lessee's Financial Covenants. Until the termination of this
Agreement and the satisfaction in full by Lessee of all Lessee Obligations,
Lessee will comply, and will cause compliance, with the following financial
covenants, unless Lessor and Required Participants shall otherwise consent in
writing:

                                       39
<PAGE>   45

                   (a) Funded Indebtedness/Capital Ratio. Lessee shall not
           permit its Funded Indebtedness/Capital Ratio on any day set forth
           below to be greater than the ratio set forth opposite such day below:

<TABLE>
<S>             <C>                                                                          <C>  
                June 30, 1997;
                           September 30, 1997................................................0.55 to 1.00;

                December 31, 1997;
                           March 31, 1998;
                           June 30, 1998.....................................................0.50 to 1.00;

                September 30, 1998;
                           December 31, 1998
                           March 31, 1999
                           June 30, 1999.....................................................0.45 to 1.00;

                The last day of each
                           fiscal quarter thereafter.........................................0.40 to 1.00.

                     (b) Quick Ratio. Lessee shall not permit its Quick Ratio on
           any day set forth below to be less than the ratio set forth opposite
           such day below:

                         June 30, 1997;
                                    September 30, 1997;
                                    December 31, 1997...................................1.00 to 1.00;

                         March 31, 1998;
                                    June 30, 1998;
                                    September 30, 1998..................................1.25 to 1.00;

                         The last day of each
                                    fiscal quarter thereafter...........................1.50 to 1.00.

                     (c) Debt Service Coverage Ratio. Lessee shall not permit
           its Debt Service Coverage Ratio for any fiscal quarter ending on any
           day set forth below to be less than the ratio set forth opposite such
           day below:

                         June 30, 1997; 
                                September 30, 1997; 
                                December 31, 1997; 
                                March 31, 1998; 
                                June 30, 1998;
                                September 30, 1998......................................2.50 to 1.00;

                         December 31, 1998;

</TABLE>


                                       40
<PAGE>   46
<TABLE>

<S>                       <C>                                                          <C>  
                                March 31, 1999..........................................3.50 to 1.00;

                         The last day of each
                                    fiscal quarter thereafter...........................4.50 to 1.00.
</TABLE>

                     (d) Tangible Net Worth. Lessee shall not permit its
           Tangible Net Worth on the last day of any fiscal quarter (such date
           to be referred to herein as a "determination date") which occurs
           after June 30, 1997 (such date to be referred to herein as the "base
           date") to be less than the sum on such determination date of the
           following:

                              (i) Ninety percent (90%) of the Tangible Net Worth
                    of Lessee and its Subsidiaries on the base date;

                                      plus

                               (ii) Seventy-five percent (75%) of the sum of
                     Lessee's consolidated quarterly net income (ignoring any
                     quarterly losses) for each fiscal quarter after the base
                     date through and including the fiscal quarter ending on the
                     determination date;

                                      plus

                               (iii) One hundred percent (100%) of the Net
                     Proceeds of all Equity Securities issued by Lessee and its
                     Subsidiaries (to Persons other than Lessee or its
                     Subsidiaries) during the period commencing on the base date
                     and ending on the determination date;

                                      plus

                               (iv) One hundred percent (100%) of the principal
                     amount of all debt securities of Lessee and its
                     Subsidiaries converted into Equity Securities of Lessee and
                     its Subsidiaries during the period commencing on the base
                     date and ending on the determination date;

                                      minus

                               (v) The lesser of (A) the sum of all
                     non-recurring, non-cash charges taken by Lessee and its
                     Subsidiaries during the period commencing on the date of
                     this Agreement and ending on the earlier of the
                     determination date and December 31, 1997 and (B)
                     $40,000,000.

           5.04. Lessor's Covenants. Until the termination of this Agreement and
the satisfaction in full by Lessee of all Lessor Obligations, Lessor will
comply, and will cause compliance, with the following covenants, unless Lessee
and Required Participants shall otherwise consent in writing:


                                       41
<PAGE>   47

                     (a) Use of Proceeds. Lessor shall use the proceeds of all
           amounts delivered to Lessor by Participants pursuant to Subparagraph
           2.05(a) solely to fund Advances.

                     (b) Lessor Liens. Lessor shall not create, incur, assume or
           permit to exist any Lessor Lien and shall promptly discharge, at its
           sole cost and expense, any Lessor Lien on the Property; provided,
           however, that Lessor shall not be required so to discharge any such
           Lessor Lien if (i) the same is being contested in good faith by
           appropriate proceedings diligently prosecuted and (ii) any such
           contest is completed and all Lessor Liens are discharged on or prior
           to the Expiration Date.

                     (c) Property Disposition. Lessor shall not sell, lease,
           transfer or otherwise dispose of its right, title and interest in the
           Property and the Operative Documents except as provided in
           Subparagraph 2.11(b) or Subparagraph 7.05(d) or after retaining the
           Property following the Expiration Date.

                     (d) Chief Place of Business. Lessor shall not change its
           chief place of business without giving Agent prompt written notice.

           5.05. Participants' Covenants. Each Participant covenants that it
will not fund its portion of any Advance with the assets of any "employee
benefit plan" (as defined in Section 3(3) of ERISA) which is subject to Title I
of ERISA or any "plan" (as defined in Section 4975(e)(1) of the IRC.

SECTION 6. LESSOR, AGENT AND THEIR RELATIONS WITH PARTICIPANTS

           6.01. Appointment of Agent. Each Participant hereby appoints and
authorizes Agent to act as its agent hereunder and under the other Operative
Documents with such powers as are expressly delegated to Agent by the terms of
this Agreement and the other Operative Documents, together with such other
powers as are reasonably incidental thereto. Lessor is not an agent for the
Participants or Agent, and neither this Agreement nor any other Operative
Document shall be construed to constitute or evidence a partnership among the
Lessor Parties or otherwise to impose upon Lessor or Agent any fiduciary duty.

           6.02. Powers and Immunities. Neither Lessor nor Agent shall have any
duties or responsibilities except those expressly set forth in this Agreement or
in any other Operative Document, be a trustee for any Participant or have any
fiduciary duty to any Participant. Notwithstanding anything to the contrary
contained herein, neither Lessor nor Agent shall be required to take any action
which is contrary to this Agreement or any other Operative Document or any
applicable Governmental Rule. Neither Lessor nor Agent nor any Participant shall
be responsible to any Participant for any recitals, statements, representations
or warranties made by Lessee or any of its Subsidiaries contained in this
Agreement or in any other Operative Document, for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Operative Document or for any failure by Lessee or any of its
Subsidiaries to perform their respective obligations hereunder or thereunder.
Lessor and Agent may employ agents and attorneys-in-fact and shall not be
responsible to any Participant for the 

                                       42
<PAGE>   48

negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care. Neither Lessor nor Agent nor any of their respective
directors, officers, employees, agents or advisors shall be responsible to any
Participant for any action taken or omitted to be taken by it or them hereunder
or under any other Operative Document or in connection herewith or therewith,
except for its or their own gross negligence or willful misconduct. Except as
otherwise provided under this Agreement, Lessor and Agent shall take such action
with respect to the Operative Documents as shall be directed by the Required
Participants.

           6.03. Reliance. Lessor or Agent shall be entitled to rely upon any
certificate, notice or other document (including any cable, telegram, facsimile
or telex) believed by it in good faith to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by Lessor or Agent with reasonable care. As to any other
matters not expressly provided for by this Agreement, neither Lessor nor Agent
shall be required to take any action or exercise any discretion, but shall be
required to act or to refrain from acting upon instructions of the Required
Participants and shall in all cases be fully protected by the Participants in
acting, or in refraining from acting, hereunder or under any other Operative
Document in accordance with the instructions of the Required Participants, and
such instructions of the Required Participants and any action taken or failure
to act pursuant thereto shall be binding on all of the Participants.

           6.04. Defaults. Neither Lessor nor Agent shall be deemed to have
knowledge or notice of the occurrence of any Default unless Lessor and Agent
have received a written notice from a Participant or Lessee, referring to this
Agreement, describing such Default and stating that such notice is a "Notice of
Default". If Lessor and Agent receive such a notice of the occurrence of a
Default, Agent shall give prompt notice thereof to the Participants. Lessor and
Agent shall take such action with respect to such Default as shall be reasonably
directed by the Required Participants; provided, however, that until Lessor and
Agent shall have received such directions, Lessor or Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interest of the
Participants.

           6.05. Indemnification. Without limiting the Obligations of Lessee
hereunder, each Participant agrees to indemnify Lessor and Agent, ratably in
accordance with such Participant's Proportionate Share, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may at
any time be imposed on, incurred by or asserted against Lessor or Agent in any
way relating to or arising out of this Agreement or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby or the enforcement of any of the terms hereof or thereof; provided,
however, that no Participant shall be liable for any of the foregoing to the
extent they arise from Lessor's or Agent's gross negligence or willful
misconduct. Lessor or Agent shall be fully justified in refusing to take or in
continuing to take any action hereunder unless it shall first be indemnified to
its satisfaction by the Participants against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. The obligations of each Participant under this Paragraph 6.05 shall
survive the payment and performance of the Lessee Obligations, the termination
of this Agreement and any 

                                       43
<PAGE>   49

Participant ceasing to be a party to this Agreement (with respect to events
which occurred prior to the time such Participant ceased to be a Participant
hereunder).

           6.06. Non-Reliance. Each Participant represents that it has,
independently and without reliance on Lessor, Agent, or any other Participant,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of the business, prospects, management, financial condition
and affairs of Lessee and the Subsidiaries and its own decision to enter into
this Agreement and agrees that it will, independently and without reliance upon
Lessor, Agent or any other Participant, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
appraisals and decisions in taking or not taking action under this Agreement or
any other Operative Document. Neither Lessor nor Agent nor any of their
respective affiliates nor any of their respective directors, officers,
employees, agents or advisors shall (a) be required to keep any Participant
informed as to the performance or observance by Lessee or any of its
Subsidiaries of the obligations under this Agreement or any other document
referred to or provided for herein or to make inquiry of, or to inspect the
properties or books of Lessee or any of its Subsidiaries; (b) have any duty or
responsibility to provide any Participant with any credit or other information
concerning Lessee or any of its Subsidiaries which may come into the possession
of Lessor or Agent, except for notices, reports and other documents and
information expressly required to be furnished to the Participants by Lessor or
Agent hereunder; or (c) be responsible to any Participant for (i) any recital,
statement, representation or warranty made by Lessee or any officer, employee or
agent of Lessee in this Agreement or in any of the other Operative Documents,
(ii) the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any Operative Document, (iii) the value or
sufficiency of the Property or the validity or perfection of any of the liens or
security interests intended to be created by the Operative Documents, or (iv)
any failure by Lessee to perform its obligations under this Agreement or any
other Operative Document.

           6.07. Resignation or Removal of Agent. Agent may resign at any time
by giving thirty (30) days prior written notice thereof to Lessee and the
Participants, and Agent may be removed at any time with or without cause by the
Required Participants; provided, however, that Agent shall not resign and may
not be removed without cause prior to the Commitment Termination Date without
the consent of Lessee unless a Change of Law makes it unlawful or unreasonably
burdensome for Agent to continue to act in such capacity. Upon any such
resignation or removal, the Required Participants shall have the right to
appoint a successor Agent, which Agent, if not a Participant, shall be
reasonably acceptable to Lessee; provided, however, that Lessee shall have no
right to approve a successor Agent if a Default has occurred and is continuing.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from the duties and obligations thereafter arising
hereunder. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Section VI and any other provision of this Agreement or
any other Operative Document which by its terms survives the termination of this
Agreement shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Agent.

                                       44
<PAGE>   50

           6.08. Authorization. Agent is hereby authorized by the Participants
to execute, deliver and perform, each of the Operative Documents to which Agent
is or is intended to be a party and each Participant agrees to be bound by all
of the agreements of Agent contained in the Operative Documents.

           6.09. Lessor and Agent in their Individual Capacities. Lessor, Agent
and their respective affiliates may make loans to, accept deposits from and
generally engage in any kind of banking or other business with Lessee and its
Subsidiaries and affiliates as though Lessor were not Lessor hereunder and Agent
were not Agent hereunder. With respect to Advances, if any, made by Agent in its
capacity as a Participant, Agent in its capacity as a Participant shall have the
same rights and powers under this Agreement and the other Operative Documents as
any other Participant and may exercise the same as though it were not Agent, and
the terms "Participant" or "Participants" shall include Agent in its capacity as
a Participant.

SECTION 7.  MISCELLANEOUS

           7.01. Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Lessor, Lessee, any Participant or Agent under this Agreement or the other
Operative Documents shall be in writing and faxed, mailed or delivered, if to
Lessor, Lessee or Agent, at its respective facsimile number or address set forth
below or, if to any Participant, at the address or facsimile number specified
beneath the heading "Address for Notices" under the name of such Participant in
Part B of Schedule I (or to such other facsimile number or address for any party
as indicated in any notice given by that party to the other parties). All such
notices and communications shall be effective (a) when sent by Federal Express
or other overnight service of recognized standing, on the Business Day following
the deposit with such service; (b) when mailed, first class postage prepaid and
addressed as aforesaid through the United States Postal Service, upon receipt;
(c) when delivered by hand, upon delivery; and (d) when faxed, upon confirmation
of receipt; provided, however, that any Advance Request, Notice of Rental Period
Selection, Extension Request, Notice of Term Purchase Option Exercise, Notice of
Marketing Option Exercise or Notice of Expiration Date Purchase Option Exercise
delivered to Lessor or Agent shall not be effective until received by Lessor or
Agent.

                     Lessee:              Novellus Systems, Inc.
                                          3970 North First Street
                                          San Jose, CA 95134
                                          Attn:  Chief Financial Officer
                                          Telephone:  (408) 943-3460
                                          Fax No: (408) 943-3422

                     Lessor:              Lease Plan U.S.A., Inc.
                                          c/o ABN AMRO Bank N.V.
                                          135 South LaSalle Street, Suite 711
                                          Chicago, IL 60603
                                          Attn: David M. Shipley


                                       45
<PAGE>   51

                                          Telephone: (312) 904-2183
                                          Fax No: (312) 904-6217

                     Agent:               ABN AMRO Bank N.V.
                                          ABN AMRO Bank North America, Inc.
                                          Capital Markets-Syndications Group
                                          1325 Avenue of the Americas, 9th Floor
                                          New York, NY  10019
                                          Attn:  Linda Boardman
                                          Telephone:  (212) 314-1724
                                          Fax: (212) 314-1709



                                          With a copy to:

                                          ABN AMRO Bank N.V.
                                          ABN AMRO Bank North America, Inc.
                                          101 California Street, Suite 4550
                                          San Francisco, CA  94111-5812
                                          Attn:  Robin Yim
                                          Telephone:  (415) 984-3712
                                          Fax:  (415) 362-3524

Each Advance Request, Notice of Rental Period Selection, Extension Request,
Notice of Term Purchase Option Exercise, Notice of Marketing Option Exercise and
Notice of Expiration Date Purchase Option Exercise shall be given by Lessee to
Agent's office located at its address referred to above during its normal
business hours; provided, however, that any such notice received by Agent after
10:00 a.m. on any Business Day shall be deemed received by Agent on the next
Business Day. In any case where this Agreement authorizes notices, requests,
demands or other communications by Lessee to any Lessor Party to be made by
telephone or facsimile, any Lessor Party may conclusively presume that anyone
purporting to be a person designated in any incumbency certificate or other
similar document received by such Lessor Party is such a person.

           7.02. Expenses. Lessee shall pay on demand, whether or not any
Advance is made hereunder, (a) all reasonable fees and expenses, including
reasonable attorneys' fees and expenses, incurred by Lessor and Agent in
connection with the preparation, negotiation, execution and delivery of, the
consummation of the transactions contemplated by and the exercise of their
duties under, this Agreement and the other Operative Documents, and the
preparation, negotiation, execution and delivery of amendments and waivers
hereunder and thereunder and (b) all reasonable fees and expenses, including
reasonable attorneys' fees and expenses, incurred by the Lessor Parties in the
enforcement or attempted enforcement of any of the Lessee Obligations or in
preserving any of the Lessor Parties' rights and remedies (including all such
fees and expenses incurred in connection with any "workout" or restructuring
affecting 


                                       47
<PAGE>   52

the Operative Documents or the Lessee Obligations or any bankruptcy or
similar proceeding involving Lessee or any of its Subsidiaries). As used herein,
the term "reasonable attorneys' fees and expenses" shall include, without
limitation, allocable costs and expenses of Agent's and Participants' in-house
legal counsel and staff. The obligations of Lessee under this Paragraph 7.02
shall survive the payment and performance of the Lessee Obligations and the
termination of this Agreement.

           7.03. Indemnification. To the fullest extent permitted by law, Lessee
agrees to protect, indemnify, defend and hold harmless, on an after-tax basis,
the Lessor Parties and the other Indemnitees from and against any and all
liabilities, losses, damages or expenses of any kind or nature (including
Indemnified Taxes) and from any suits, claims or demands (including in respect
of or for reasonable attorney's fees and other expenses) arising on account of
or in connection with any matter or thing or action or failure to act by
Indemnitees, or any of them, arising out of or relating to the Operative
Documents, any transaction contemplated thereby or the Property (including any
use by Lessee of the Property or the Advances), except to the extent such
liability arises from the willful misconduct or gross negligence of such
Indemnitee. Upon receiving knowledge of any suit, claim or demand asserted by a
third party that any Lessor Party believes is covered by this indemnity, such
Lessor Party promptly shall give Lessee notice of the matter and an opportunity
to defend it, at Lessee's sole cost and expense, with legal counsel reasonably
satisfactory to such Lessor Party. Such Lessor Parties may also require Lessee
to defend the matter. Any failure or delay of any Lessor Party to notify Lessee
of any such suit, claim or demand shall not relieve Lessee of its obligations
under this Paragraph 7.03. The obligations of Lessee under this Paragraph 7.03
shall survive the payment and performance of the Lessee Obligations and the
termination of this Agreement.

           7.04. Waivers; Amendments. Any term, covenant, agreement or condition
of this Agreement or any other Operative Document may be amended or waived if
such amendment or waiver is in writing and is signed by Lessor, Lessee and the
Required Participants; provided, however that:

                     (a) Any amendment, waiver or consent which (i) increases
           the Total Commitment, (ii) extends the Scheduled Expiration Date,
           (iii) reduces the Rental Rate or any fees or other amounts payable
           for the account of the Participants hereunder, (iv) postpones any
           date scheduled for any payment of Base Rent or any fees or other
           amounts payable for the account of the Participants hereunder or
           thereunder, (v) amends this Paragraph 7.04, (vi) amends the
           definition of Required Participants or (vii) releases Lessor's
           interest in any substantial part of the Property, must be in writing
           and signed or approved in writing by all Participants;

                     (b) Any amendment, waiver or consent which amends Paragraph
           2.06 and adversely affects the Tranche A Participants, the Tranche B
           Participants or the Tranche C Participants as a group must be in
           writing and signed by each Participant that is a member of such
           group;

                                       47
<PAGE>   53

                     (c) Any amendment, waiver or consent which increases or
           decreases the Proportionate Share of any Participant must be in
           writing and signed by such Participant; and

                     (d) Any amendment, waiver or consent which affects the
           rights or obligations of Agent must be in writing and signed by
           Agent.

No failure or delay by any Lessor Party in exercising any right hereunder shall
operate as a waiver thereof or of any other right nor shall any single or
partial exercise of any such right preclude any other further exercise thereof
or of any other right. Unless otherwise specified in such waiver or consent, a
waiver or consent given hereunder shall be effective only in the specific
instance and for the specific purpose for which given.

           7.05.     Successors and Assigns.

                     (a) Binding Effect. This Agreement and the other Operative
           Documents shall be binding upon and inure to the benefit of Lessee,
           Lessor, the Participants, Agent and their respective permitted
           successors and assigns. All references in this Agreement to any
           Person shall be deemed to include all successors and assigns of such
           Person.

                    (b)    Participant Assignments.

                              (i) Any Participant may, at any time, sell and
                    assign to any other Participant or any Eligible Assignee
                    (individually, an "Assignee Participant") all or a portion
                    of its rights and obligations under this Agreement and the
                    other Operative Documents (such a sale and assignment to be
                    referred to herein as an "Assignment") pursuant to an
                    assignment agreement in the form of Exhibit M (an
                    "Assignment Agreement"), executed by each Assignee
                    Participant and such assignor Participant (an "Assignor
                    Participant") and delivered to Agent for its acceptance and
                    recording in the Register; provided, however, that:

                                          (A) Without the written consent of
                               Lessor, Agent and, if no Default has occurred and
                               is continuing, Lessee (which consent of Lessor,
                               Agent and Lessee shall not be unreasonably
                               withheld), no Participant may make any Assignment
                               to any Assignee Participant which is not,
                               immediately prior to such Assignment, a
                               Participant hereunder or an Affiliate thereof; or

                                          (B) Without the written consent of
                               Lessor, Agent and, if no Default has occurred and
                               is continuing, Lessee (which consent of Lessor,
                               Agent and Lessee shall not be unreasonably
                               withheld), no Participant may make any Assignment
                               of its Outstanding Tranche A Participation Amount
                               or its Outstanding Tranche B Participation Amount
                               under either Facility which does not assign and
                               delegate an equal pro rata interest in (1) such
                               Participant's Outstanding Tranche A Participation
                               Amount and its 

                                       48
<PAGE>   54

                              Outstanding Tranche B Participation Amount under
                              both Facilities, (2) such Participant's Tranche A
                              Percentage and its Tranche B Percentage under both
                              Facilities, and (3) such Participant's other
                              rights, duties and obligations relating to the
                              Tranche A Portion and the Tranche B Portion of
                              both Facilities under this Agreement and the other
                              Operative Documents; or

                                          (C) Without the written consent of
                               Lessor, Agent and, if no Default has occurred and
                               is continuing, Lessee (which consent of Lessor,
                               Agent and Lessee shall not be unreasonably
                               withheld), no Tranche C Participant may make any
                               Assignment of its Outstanding Tranche C
                               Participation Amount under either Facility which
                               does not assign and delegate an equal pro rata
                               interest in (1) such Participant's Outstanding
                               Tranche C Participation Amount under both
                               Facilities, (2) such Participant's Tranche C
                               Percentage under both Facilities, and (3) such
                               Participant's other rights, duties and
                               obligations relating to the Tranche C Portion of
                               both Facilities under this Agreement and the
                               other Operative Documents; or

                                          (D) Without the written consent of
                               Lessor, Agent and, if no Default has occurred and
                               is continuing, Lessee (which consent of Lessor,
                               Agent and Lessee shall not be unreasonably
                               withheld), no Participant may make any Assignment
                               to any Assignee Participant if, after giving
                               effect to such Assignment, the Commitment of such
                               Participant or such Assignee Participant
                               hereunder would be less than Five Million Dollars
                               ($5,000,000.00); provided, however, that a
                               Participant may, without the written consent of
                               Lessor, Lessee and Agent, make an Assignment
                               hereunder that reduces its Commitment hereunder
                               to zero.

                               Upon such execution, delivery, acceptance and
                     recording of each Assignment Agreement, from and after the
                     Assignment Effective Date determined pursuant to such
                     Assignment Agreement, (y) each Assignee Participant
                     thereunder shall be a Participant hereunder with a Tranche
                     A Percentage, Tranche B Percentage, Tranche C Percentage
                     and Proportionate Share under each Facility as set forth on
                     Attachment 1 to such Assignment Agreement (under the
                     caption "Tranche Percentages and Proportionate Shares After
                     Assignment") and shall have the rights, duties and
                     obligations of such a Participant under this Agreement and
                     the other Operative Documents, and (z) the Assignor
                     Participant thereunder shall be a Participant with a
                     Tranche A Percentage, Tranche B Percentage, Tranche C
                     Percentage and Proportionate Share under each Facility as
                     set forth on Attachment 1 to such Assignment Agreement
                     (under the caption "Tranche Percentages and Proportionate
                     Shares After Assignment") , or, if the Proportionate Share
                     of the Assignor Participant has been reduced to 0%, the
                     Assignor Participant shall cease to be a Participant and to
                     have any obligation to fund any portion of any Advance;
                     provided, however, that any such Assignor Participant which
                     ceases to be a 


                                       49
<PAGE>   55

                    Participant shall continue to be entitled to the benefits of
                    any provision of this Agreement which by its terms survives
                    the termination of this Agreement. Each Assignment Agreement
                    shall be deemed to amend Schedule I to the extent, and only
                    to the extent, necessary to reflect the addition of each
                    Assignee Participant, the deletion of each Assignor
                    Participant which reduces its Proportionate Share to 0% and
                    the resulting adjustment of Tranche A Percentages, Tranche B
                    Percentages, Tranche C Percentages and Proportionate Shares
                    arising from the purchase by each Assignee Participant of
                    all or a portion of the rights and obligations of an
                    Assignor Participant under this Agreement and the other
                    Operative Documents. Each Assignee Participant which was not
                    previously a Participant hereunder and which is not
                    incorporated under the laws of the United States of America
                    or a state thereof shall, within three (3) Business Days of
                    becoming a Participant, deliver to Lessee and Agent two duly
                    completed copies of United States Internal Revenue Service
                    Form 1001 or 4224 (or successor applicable form), as the
                    case may be, certifying in each case that such Participant
                    is entitled to receive payments under this Agreement without
                    deduction or withholding of any United States federal income
                    taxes. (Without limiting the generality of any of the
                    preceding provisions of this clause (i) of Subparagraph
                    7.05(b), no Participant may, if Lessee shall object in
                    writing, make any Assignment to any Assignee Participant
                    that, at the time of such Assignment, (1) has a basis for
                    demanding any payment under Subparagraph 2.12(c) or
                    Subparagraph 2.12(d) in excess of the pro rata amount that
                    then could be demanded thereunder by the Participant
                    proposing to make such Assignment or (2) would require
                    Borrower to make any payment under Subparagraph 2.13(a) on
                    account of payments to such Assignee Participant in excess
                    of the pro rata amount that Lessee was then required to make
                    thereunder on account of payments to the Participant
                    proposing to make such Assignment.)

                              (ii) Agent shall maintain at its address referred
                    to in Paragraph 7.01 a copy of each Assignment Agreement
                    delivered to it and a register (the "Register") for the
                    recordation of the names and addresses of the Participants
                    and the Tranche A Percentage, Tranche B Percentage, Tranche
                    C Percentage and Proportionate Share of each Participant
                    under each Facility from time to time. The entries in the
                    Register shall be conclusive in the absence of manifest
                    error, and Lessee, Agent and the Participants may treat each
                    Person whose name is recorded in the Register as the owner
                    of the interests recorded therein for all purposes of this
                    Agreement. The Register shall be available for inspection by
                    Lessee or any Participant at any reasonable time and from
                    time to time upon reasonable prior notice.

                              (iii) Upon its receipt of an Assignment Agreement
                    executed by an Assignor Participant and an Assignee
                    Participant (and, to the extent required by clause (i) of
                    this Subparagraph 7.05(b), by Lessor, Agent and Lessee),
                    together with payment to Agent by Assignor Participant of a
                    registration and processing fee of $2,500, Agent shall (A)
                    promptly accept such Assignment Agreement and (B) on the
                    Assignment Effective Date determined pursuant thereto record
                    the 

                                       51
<PAGE>   56

                    information contained therein in the Register and give
                    notice of such acceptance and recordation to Lessor, the
                    Participants and Lessee. Agent may, from time to time at its
                    election, prepare and deliver to Lessor, the Participants
                    and Lessee a revised Schedule I reflecting the names,
                    addresses and respective Proportionate Shares of all
                    Participants then parties hereto.

                              (iv) Subject to Subparagraph 7.13(g), the Lessor
                    Parties may disclose the Operative Documents and any
                    financial or other information relating to Lessee or any
                    Subsidiary to each other or to any potential Assignee
                    Participant.

                     (c) Participant Subparticipations. Any Participant may at
           any time sell to one or more Persons ("Subparticipants")
           subparticipation interests in the rights and interests of such
           Participant under this Agreement and the other Operative Documents.
           In the event of any such sale by a Participant of subparticipation
           interests, such Participant's obligations under this Agreement and
           the other Operative Documents shall remain unchanged, such
           Participant shall remain solely responsible for the performance
           thereof and Lessee and the other Lessor Parties shall continue to
           deal solely and directly with such Participant in connection with
           such Participant's rights and obligations under this Agreement. Any
           agreement pursuant to which any such sale is effected may require the
           selling Participant to obtain the consent of the Subparticipant in
           order for such Participant to agree in writing to any amendment,
           waiver or consent of a type specified in clause (i), (ii), (iii) or
           (iv) of Subparagraph 7.04(a) but may not otherwise require the
           selling Participant to obtain the consent of such Subparticipant to
           any other amendment, waiver or consent hereunder. Lessee agrees that
           any Participant which has transferred any subparticipation interest
           shall, notwithstanding any such transfer, be entitled to the full
           benefits accorded such Participant under Paragraph 2.12, Paragraph
           2.13, and Paragraph 2.14, as if such Participant had not made such
           transfer.

                     (d) Lessor Assignments. Lessor may, upon one (1) month's
           prior written notice to Lessee and Agent, sell and assign all of its
           right, title and interest in the Property and its rights, powers,
           privileges, duties and obligations under this Agreement and the other
           Operative Documents, provided that:

                              (i) If such sale and assignment is effected after
                    either (A) the occurrence of a Change of Law which makes it
                    unlawful or unreasonably burdensome for Lessor to hold legal
                    or beneficial title to the Property or to perform its
                    obligations and duties under this Agreement and the other
                    Operative Documents or (B) the resignation or removal of the
                    Agent which was the Agent at the time Lessor became the
                    Lessor, the purchaser/assignee (the "successor Lessor")
                    shall be either (1) a Participant or an Eligible Assignee
                    that is a multi-asset Person having substantial assets
                    beyond its interest in the Property and the Operative
                    Documents or (2) a Person approved as provided in clause
                    (ii) below; or

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<PAGE>   57

                              (ii) If such sale and assignment is effected in
                    any other circumstance, the successor Lessor shall be
                    approved in writing by Agent, Required Participants and, if
                    no Default has occurred and is continuing, Lessee (which
                    consents of Agent, Required Participants and Lessee shall
                    not be unreasonably withheld), provided that Lessee shall
                    have no obligation to consent to any such sale and
                    assignment prior to the Commitment Termination Date; and

                              (iii) The successor Lessor executes such
                    documents, instruments and agreements as may reasonably be
                    necessary to evidence its agreement to assume all of the
                    obligations and duties of the Lessor under this Agreement
                    and the other Operative Documents.

           Upon the consummation of any such sale and assignment, (A) the
           successor Lessor shall become the "Lessor" and shall succeed to and
           become vested with all the rights, powers, privileges, duties and
           obligations of the Lessor under this Agreement and the other
           Operative Documents and (B) the retiring Lessor shall be discharged
           from the duties and obligations of the Lessor thereafter arising
           under this Agreement and the other Operative Documents. After any
           retiring Lessor's discharge as the Lessor, the provisions of Section
           VI and any other provision of this Agreement or any other Operative
           Document which by its terms survives the termination of this
           Agreement shall continue in effect for its benefit in respect of any
           actions taken or omitted to be taken by it while it was acting as the
           Lessor. Unless a sale and assignment by Lessor of its right, title
           and interest in the Property under this subparagraph is made by
           Lessor pursuant to clause (i) above, Lessor shall pay any real
           property transfer taxes payable as a result of such sale and
           assignment.

           7.06. Setoff. In addition to any rights and remedies of the
Participants provided by law, each Participant shall have the right, with the
prior written consent of Agent, but without prior notice to or consent of
Lessee, any such notice and consent being expressly waived by Lessee to the
extent permitted by applicable law, upon the occurrence and during the
continuance of an Event of Default, to set-off and apply against the Lessee
Obligations, whether matured or unmatured, any amount owing from such
Participant to Lessee, at or at any time after, the occurrence of such Event of
Default. The aforesaid right of set-off may be exercised by such Participant
against Lessee or against any trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, receiver or execution, judgment or
attachment creditor of Lessee or against anyone else claiming through or against
Lessee or such trustee in bankruptcy, debtor in possession, assignee for the
benefit of creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Participant prior to the occurrence of an Event of Default.
Each Participant agrees promptly to notify Lessee after any such set-off and
application made by such Participant, provided that the failure to give such
notice shall not affect the validity of such set-off and application.

           7.07. No Third Party Rights. Nothing expressed in or to be implied
from this Agreement is intended to give, or shall be construed to give, any
Person, other than the parties hereto and their permitted successors and assigns
hereunder, any benefit or legal or equitable 


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<PAGE>   58

right, remedy or claim under or by virtue of this Agreement or under or by
virtue of any provision herein.

           7.08. Partial Invalidity. If at any time any provision of this
Agreement or any other Operative Document is or becomes illegal, invalid or
unenforceable in any respect under the law or any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions of this
Agreement or the other Operative Documents nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.

           7.09. JURY TRIAL. EACH OF LESSEE AND THE LESSOR PARTIES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY AS TO ANY ISSUE RELATING TO THE OPERATIVE DOCUMENTS IN ANY
ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY OPERATIVE
DOCUMENT.

           7.10. Counterparts. This Agreement may be executed in any number of
identical counterparts, any set of which signed by all the parties hereto shall
be deemed to constitute a complete, executed original for all purposes.

           7.11. No Joint Venture, Etc. Neither this Agreement nor any other
Operative Document nor any transaction contemplated hereby or thereby shall be
construed to (a) constitute a partnership or joint venture between Lessee and
any Lessor Party or (b) impose upon any Lessor Party any agency relationship
with or fiduciary duty to Lessee.

           7.12. Usury Savings Clause. Nothing contained in this Agreement or
any other Operative Documents shall be deemed to require the payment of interest
or other charges by Lessee in excess of the amount the applicable Lessor Parties
may lawfully charge under applicable usury laws. In the event any Lessor Party
shall collect monies which are deemed to constitute interest which would
increase the effective interest rate to a rate in excess of that permitted to be
charged by applicable law, all such sums deemed to constitute excess interest
shall, upon such determination, at the option of Lessor, be returned to Lessee
or credited against other Lessee Obligations.

           7.13. Confidentiality. No Lessor Party shall disclose to any Person
any information with respect to Lessee or any of its Subsidiaries which is
furnished pursuant to this Agreement or under the other Operative Documents,
except that any Lessor Party may disclose any such information (a) to its own
directors, officers, employees, auditors, counsel and other advisors and to its
Affiliates; (b) to any other Lessor Party; (c) which is otherwise available to
the public; (d) if required or appropriate in any report, statement or testimony
submitted to any Governmental Authority having or claiming to have jurisdiction
over such Lessor Party; (e) if required or appropriate in response to any
summons or subpoena or in connection with any litigation; (f) to comply with any
Requirement of Law applicable to such Lessor Party; (g) to any Assignee
Participant or Subparticipant or any prospective Assignee Participant or
Subparticipant, provided that such Assignee Participant or Subparticipant or
prospective Assignee Participant or Subparticipant agrees to be bound by this
Paragraph 7.13; or (h) otherwise with the prior consent 


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<PAGE>   59

of Lessee; provided, however, that any disclosure made in violation of this
Agreement shall not affect the obligations of Lessee and its Subsidiaries under
this Agreement and the other Operative Documents.

                       [The first signature page follows.]



                                       54
<PAGE>   60



           IN WITNESS WHEREOF, Lessee, Lessor, the Participants and Agent have
caused this Agreement to be executed as of the day and year first above written.


LESSEE:                                   NOVELLUS SYSTEMS, INC.


                                          By:_____________________________
                                             Name:________________________
                                             Title:_______________________


LESSOR:                                   LEASE PLAN U.S.A., INC.


                                           By:_____________________________
                                              Name:________________________
                                              Title:_______________________


AGENT:                                   ABN AMRO BANK N.V.


                                         By:______________________________
                                            Name:_________________________
                                            Title:________________________

                                            By:___________________________
                                            Name:_________________________
                                            Title:________________________




PARTICIPANTS:                            ABN AMRO BANK N.V.


                                         By:______________________________
                                            Name:_________________________
                                            Title:________________________

                                         By:______________________________
                                            Name:_________________________
                                            Title:________________________


                                       55





















                                       55
<PAGE>   61



PARTICIPANTS:                            LEASE PLAN NORTH AMERICA, INC.



                                         By:_____________________________
                                            Name:________________________
                                            Title:_______________________



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