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                                                                    EXHIBIT 10.2

                                                                   (NOVELLUS II)

                  SEVENTH AMENDMENT TO PARTICIPATION AGREEMENT

         THIS SEVENTH AMENDMENT TO PARTICIPATION AGREEMENT (this "Amendment"),
dated as of April 13, 2001, 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 financial institutions listed in Schedule I to
         the Participation Agreement referred to in Recital A below
         (collectively, the "Participants"); and

                  (4) ABN AMRO BANK, N.V., as agent for the Participants (in
         such capacity, "Agent").

                                    RECITALS

         A. Lessee, Lessor, Participants and Agent are parties to a
Participation Agreement dated as of October 15, 1997 (as amended by six prior
amendments, the "Participation Agreement"), pursuant to which Lessor and
Participants have provided to Lessee two lease facilities.

         B. Lessee now has requested Lessor, Participants and Agent to amend the
Participation Agreement and certain of the other Operative Documents (as defined
in the Participation Agreement) to make certain changes.

         C. Lessor, Participants and Agent are willing so to amend the
Participation Agreement and the other Operative Documents upon the terms and
subject to the conditions set forth in this Amendment.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Lessee, Lessor, the Participants and Agent hereby agree as
follows:

         1. DEFINITIONS, INTERPRETATION. All capitalized terms defined above and
elsewhere in this Amendment shall be used herein as so defined. Unless otherwise
defined herein, all other capitalized terms used herein shall have the
respective meanings given to those terms in the Participation Agreement, as
amended by this Amendment. The rules of construction set forth in Schedule 1.02
to the Participation Agreement shall, to the extent not inconsistent with the
terms of this Amendment, apply to this Amendment and are hereby incorporated by
reference.

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         2. AMENDMENTS TO PARTICIPATION AGREEMENT. Subject to the satisfaction
of the conditions set forth in Paragraph 5 below, the Participation Agreement is
hereby amended as follows:

                  (a) Subparagraph 2.06(a) is amended by changing clause (iv)(D)
         to read in its entirety as follows:

                           (D) the purchase price paid by any Person (except as
                  otherwise provided in clause (i) above) 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);

                  (b) Subparagraph 4.01(g) is amended to read in its entirety as
         follows:

                           (g) Litigation. Except as set forth in the most
                  recent Form 10-Q and 10-K reports filed by Lessee with the
                  Securities and Exchange Commission, 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.

                  (c) Subparagraph 4.01(k) is amended to read in its entirety as
         follows:

                           (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, mergers, consolidations or reorganizations permitted by
                  Subparagraph 5.02(c), 5.02(d) or 5.02(e).

                  (d) Subparagraph 4.01(l) is amended by changing clause (i) to
         read in its entirety as follows:

                           (i) Based on the most recent valuation date for any
                  Pension Plan, the amount of unfunded benefit liabilities (as
                  defined in Section 4001(a)(18) of ERISA), individually or in
                  the aggregate for all Pension Plans (excluding for purposes of
                  such computation any Pension Plans with respect to which
                  assets exceed benefit liabilities) does not exceed an amount
                  equal to $10,000,000. No Pension Plan has failed to meet the
                  minimum funding standard of Code Section 412 (whether or not
                  waived under Code Section 412(d)) or failed to make by its due
                  date a required installment under Code Section 412(m). 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)
                  that is reasonably likely to have a Material Adverse Effect.

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                  (e) Subparagraph 4.01(n) is amended to read in its entirety as
         follows:

                           (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, except where the failure to have
                  any such rights, either individually or collectively, is not
                  reasonably likely to have a Material Adverse Effect.

                  (f) Subparagraph 4.01(q) is amended to read in its entirety as
         follows:

                           (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 percentages of
                  shares of each such class owned directly or indirectly by
                  Lessee.

                  (g) Paragraph 4.01 is further amended by (i) deleting
         Subparagraph 4.01(v) and (ii) changing the designation of Subparagraph
         4.01(w) to "(v)".

                  (h) Subparagraph 5.01(a) is amended by (i) changing clauses
         (iii), (iv) and (v) to read in their entireties as follows:

                           (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 Funded
                  Indebtedness/EBITDA Ratio for the consecutive four-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 (A) any Reportable
                  Event (excluding any Reportable Event for which the provision
                  of a 30-day notice to the PBGC has been waived by regulation)
                  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
                  $10,000,000 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

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                  details of such event, condition or Default and the action
                  which Lessee proposes to take with respect thereto;

         (ii) deleting clause (vii) and (iii) changing the designations of
         clauses (viii), (ix) and (x) to "(vii)", "(viii)" and "(ix)",
         respectively.

                  (i) Subparagraph 5.01(e) is amended to read in its entirety as
         follows:

                           (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; except where (A) the failure to pay any such
                  taxes, other Governmental Charges or indebtedness, either
                  alone or collectively, is not reasonably likely to have a
                  Material Adverse Effect and (B) any such taxes, other
                  Governmental Charges or 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.

                  (j) Paragraph 5.01 is further amended by (i) deleting
         Subparagraphs 5.01(h) and 5.01(i); (ii) adding a new Subparagraph
         5.01(h) to read in its entirety as follows:

                           (h) Related Credit Agreement. If at any time the
                  financial covenants set forth in Paragraph 5.03 (or any
                  applicable definition used therein) differs from the financial
                  covenants set forth in the Related Credit Agreement (or any
                  applicable definition used therein), Lessee shall execute such
                  amendments to this Agreement as Lessor or Required
                  Participants may reasonably request to conform the financial
                  covenants set forth in Paragraph 5.03 (or any applicable
                  definition used therein) with such financial covenants set
                  forth in the Related Credit Agreement.

         and (iii) changing the designation of Subparagraph 5.01(j) to "(i)".

                  (k) Subparagraph 5.02(a) is amended by changing clause (iv) to
         read in its entirety as follows:

                           (iv) Indebtedness of Lessee and its Subsidiaries
                  listed in Schedule 5.02(a) and existing on April 13, 2001
                  (including committed but undrawn amounts);

                  (l) Subparagraph 5.02(b) is amended by changing clause (x) to
         read in its entirety as follows:

                           (x) Judgement Liens, provided that such Liens do not
                  have a value in excess of $10,000,000 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;

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                  (m) Subparagraph 5.02(c) is amended by changing clause (vi) to
         read in its entirety as follows:

                           (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 the terms of any such sales or other
                  dispositions by or to Lessee (other than sales or other
                  dispositions by Lessee to any of Lessee's wholly owned
                  Subsidiaries or by any of Lessee's wholly owned subsidiaries
                  to Lessee, except for sales or dispositions by Lessee which,
                  either singly or in the aggregate with respect to all such
                  sales or dispositions, would involve all or substantially all
                  of the assets or property of Lessee or which would render
                  Lessee incapable of performing its obligations under the
                  Operative Documents) are on terms which are no less favorable
                  to Lessee than would prevail in the market for similar
                  transactions between unaffiliated parties dealing at arms
                  length;

                  (n) Subparagraph 5.02(e) is amended to read in its entirety as
         follows:

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

                                    (i) Investments permitted by the investment
                           policy of Lessee duly approved by the Board of
                           Directors of Lessee and in effect at the time of such
                           Investment;

                                    (ii) Investments held by Gasonics
                           International Corporation on the date Gasonics
                           International Corporation is acquired by Lessee;

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

                                    (iv) Investments by Lessee in the "Tranche
                           A" portion of synthetic leases in which it is the
                           lessee and which constitute Economically Defeased
                           Synthetic Lease Obligations;

                                    (v) Investments in joint ventures and
                           strategic alliances, provided that the aggregate
                           amount of such Investments does not exceed in any
                           fiscal year two and one-half percent (2 1/2%) of the
                           tangible assets of Lessee and its Subsidiaries,
                           determined on a consolidated basis in accordance with
                           GAAP, on the last day of the immediately preceding
                           fiscal year; and

                                    (vi) 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) (excluding Lessee's
                           acquisition of Gasonics International Corporation)
                           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.

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                  (o) Paragraph 5.02 is further amended by (i) deleting
                  Subparagraph 5.02(i) and (ii) changing the designation of
                  Subparagraph 5.02(j) to "(i)".

                  (p) Paragraph 5.03 is amended to read in its entirety as
         follows:

                           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:

                                    (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:

                                    The last day of any
                                            fiscal quarter         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:

                                    The last day of any
                                            fiscal quarter         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:

                                    The last day of any
                                            fiscal quarter         3.50 to 1.00.

                                    (d) Tangible Net Worth. Commencing on
                           December 31, 2000, 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") to be less than the sum on such
                           determination date of the following:

                                             (i) $664,477,000.00 (the
                                    approximate amount of Lessee's Tangible Net
                                    Worth on December 31, 1999);

                                      plus

                                            (ii) Seventy-five percent (75%) of
                                    the sum of (A) Lessee's consolidated annual
                                    net income for its fiscal year ending
                                    December 31, 2000 (ignoring any annual
                                    loss); plus (B) the sum of Lessee's
                                    consolidated quarterly net income (ignoring
                                    any quarterly losses) for each fiscal
                                    quarter ending after December 31, 2000
                                    through and including the fiscal quarter
                                    ending on the determination date;

                                      plus

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                                            (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 December 31, 1999 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
                                    December 31, 1999 and ending on the
                                    determination date.

                           provided, however, that in no case shall Lessee
                           permit its Tangible Net Worth on December 31, 2000 to
                           be less than $1,260,000,000.00.

                                    (e) Minimum Cash Balances. Lessee shall not
                           permit its Cash Balances on any date to be less than
                           the remainder of:

                                            (i) The aggregate amount on such
                                    date of all Synthetic Lease Obligations of
                                    Lessee and its Subsidiaries that (A) would
                                    be attributable to principal if such
                                    obligations were treated as loan obligations
                                    and (B) become due within one (1) year of
                                    such date;

                                      minus

                                            (ii) The sum of (A) all cash of
                                    Lessee and its Subsidiaries on such date and
                                    (B) the market value of Cash Equivalents and
                                    short-term marketable securities (that are
                                    classified as current assets in accordance
                                    with GAAP) of Lessee and its Subsidiaries on
                                    such date to the extent such cash, Cash
                                    Equivalents and short-term marketable
                                    securities secure payment of the current
                                    Synthetic Lease Obligations referred to in
                                    clause (i) above.

                           (In calculating the market value of Cash Equivalents
                           and short-term marketable securities under this
                           subparagraph, Cash Equivalents and short-term
                           marketable securities shall be marked to market
                           quarterly.)

                           (q) Paragraph 7.01 is amended by changing the notice
                  addresses, etc. for Lessee, Lessor and Agent set forth therein
                  to read in their entireties as follows:

                           Lessee:          Novellus Systems, Inc.
                                            4000 North First Street
                                            San Jose, CA 95134
                                            Attn:  Treasurer
                                            Telephone:  (408) 432-5339
                                            Fax No: (408) 545-3009

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                           Lessor:          Lease Plan U.S.A., Inc.
                                            c/o ABN AMRO Bank N.V.
                                            135 South LaSalle Street, Suite 740
                                            Chicago, IL 60603
                                            Attn: David M. Shipley
                                            Telephone: (312) 904-2183
                                            Fax No: (312) 904-6217

                           Agent:           ABN AMRO Bank N.V.
                                            Agency Services
                                            208 South LaSalle Street, Suite 1500
                                            Chicago, IL  60604
                                            Attn:  Josephine O'Brien
                                            Telephone:  (312) 992-5091
                                            Fax: (312) 992-5157

                                            with copies to:

                                            ABN AMRO Bank N.V.
                                            101 California Street, Suite 4550
                                            San Francisco, CA  94111-5812
                                            Attn:  Joe Endoso
                                            Telephone:  (415) 984-3718
                                            Fax:  (415) 362-3524

                                       and

                                            ABN AMRO Bank N.V.
                                            Credit Administration
                                            208 South LaSalle Street, Suite 1500
                                            Chicago, IL 60604
                                            Attn:  Gregory Miller
                                            Telephone:  (312) 992-5116
                                            Fax:  (312) 992-5111

                  (r) Schedule 1.01 is amended by changing the definitions of
         the following terms appearing therein to read in their entireties as
         follows:

                           "Adjusted Net Income" shall mean, with respect to
                  Lessee for any period, the sum, determined on a consolidated
                  basis in accordance with GAAP, of the following:

                                    (a) The net income or net loss of Lessee and
                           its Subsidiaries for such period before provision for
                           income taxes;

                                      plus

                                    (b) The sum (to the extent deducted in
                           calculating net income or loss in clause (a) above)
                           of (i) all Interest Expenses of Lessee and its

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                           Subsidiaries accruing during such period, (ii) all
                           depreciation and amortization expenses of Lessee and
                           its Subsidiaries accruing during such period, and
                           (iii) all rental expenses of Lessee and its
                           Subsidiaries accruing during such period (including
                           Base Rent under both Lease Agreements but excluding
                           any Base Rent or other rental expenses that are
                           capitalized by the lessor during such period);

                                      minus

                                    (c) Fifty percent (50%) of all Capital
                           Expenditures of Lessee and its Subsidiaries accruing
                           during such period.

                           "Debt Service Coverage Ratio" shall mean, with
                  respect to Lessee for any period, the ratio, determined on a
                  consolidated basis in accordance with GAAP, of:

                                    (a) The Adjusted Net Income of Lessee for
                           such period;

                                       to

                                    (b) The sum of (i) all Interest Expenses of
                           Lessee and its Subsidiaries accruing during such
                           period, (ii) all rental expenses of Lessee and its
                           Subsidiaries accruing during such period (including
                           Base Rent under both Lease Agreements but excluding
                           any Base Rent or other rental expenses that are
                           capitalized by the lessor during such period), and
                           (iii) 25% of all payments of principal (or, in the
                           case of Capital Leases, amounts attributable to
                           principal) of Funded Indebtedness (excluding
                           Synthetic Lease Obligations) paid or scheduled to be
                           paid by Lessee and its Subsidiaries due within one
                           year.

                           "EBITDA" shall mean, with respect to Lessee for any
                  period, the sum, determined on a consolidated basis in
                  accordance with GAAP, of the following:

                                    (a) The net income or net loss of Lessee and
                           its Subsidiaries for such period before provision for
                           income taxes;

                                      plus

                                    (b) The sum (to the extent deducted in
                           calculating net income or loss in clause (a) above)
                           of (i) all Interest Expenses of Lessee and its
                           Subsidiaries accruing during such period and (ii) all
                           depreciation and amortization expenses of Lessee and
                           its Subsidiaries accruing during such period.

                           "Funded Indebtedness" of any Person shall mean,
                  without duplication:

                                    (a) All obligations of such Person evidenced
                           by notes, bonds, debentures or other similar
                           instruments and all other obligations of such Person
                           for borrowed money (including obligations to
                           repurchase receivables and other assets sold with
                           recourse);

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                                    (b) All obligations of such Person for the
                           deferred purchase price of property or services
                           (including obligations under letters of credit and
                           other credit facilities which secure or finance such
                           purchase price but excluding trade payables incurred
                           by such Person in the ordinary course of its business
                           on ordinary terms and not overdue) and all Synthetic
                           Lease Obligations of such Person (excluding the
                           Economically Defeased Portion of Synthetic Lease
                           Obligations);

                                    (c) All obligations of such Person under
                           conditional sale or other title retention agreements
                           with respect to property acquired by such Person (to
                           the extent of the value of such property if the
                           rights and remedies of the seller or lender under
                           such agreement in the event of default are limited
                           solely to repossession or sale of such property); and

                                    (d) All obligations of such Person as lessee
                           under or with respect to Capital Leases.

                           "Material Casualty" shall mean any Casualty to any
                  Property that alone, or in combination with any prior
                  Casualties to such Property for which repairs to restore such
                  Property to its prior condition have not been completed, will
                  require repairs costing (a) during the Construction Period,
                  $500,000 or more to restore such Property to its prior
                  condition, or (b) after the Construction Period, $2,500,000 or
                  more to restore such Property to its prior condition.

                           "Operative Documents" shall mean and include the
                  Participation Agreement, the Lease Agreements, the Facility 2
                  Construction Agency Agreement, the Purchase Agreements, the
                  Lessee Security Documents, the Lessor Deed of Trust, the
                  Lessor Security Agreement, the Assignment of Lease, the
                  Agent's Fee Letter, the Agent's Syndication Letter and the
                  Lessor's Fee Letter; all other notices, requests,
                  certificates, documents, instruments and agreements delivered
                  to any Lessor Party pursuant to Paragraph 3.01 of the
                  Participation Agreement; all notices, requests, certificates,
                  documents, instruments and agreements required to be delivered
                  to any Lessor Party in connection with any of the foregoing on
                  or after the date of the Participation Agreement; and all Rate
                  Contracts provided to Lessee by any Participant to hedge
                  against fluctuations in the LIBOR Rental Rate under either or
                  both Lease Agreements. (Without limiting the generality of the
                  preceding definition, the term "Operative Documents" shall
                  include all written waivers, amendments and modifications to
                  any of the notices, requests, certificates, documents,
                  instruments and agreements referred to therein.)

                           "Pension Plan" shall mean any Employee Benefit Plan
                  subject to Title IV of ERISA that either Lessee or any ERISA
                  Affiliate maintains or contributes to or has any obligation
                  under.

                           "Quick Ratio" shall mean, with respect to Lessee at
                  any time, the ratio, determined on a consolidated basis in
                  accordance with GAAP, of:

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                                    (a) The remainder of (i) the sum (without
                           duplication) of all cash, Cash Equivalents,
                           short-term investments and net accounts receivable of
                           Lessee and its Subsidiaries at such time, minus (ii)
                           the sum (without duplication) of all such cash, Cash
                           Equivalents, short-term investments and net accounts
                           receivable that are subject to a Lien or are
                           otherwise restricted;

                                       to

                                    (b) The current liabilities of Lessee and
                           its Subsidiaries at such time.

                  (In calculating the Quick Ratio, Cash Equivalents and
                  short-term investments shall be marked to market quarterly.)

                  (s) Schedule 1.01 is further amended by adding thereto, in the
         appropriate alphabetical order, the definitions of the following terms
         to read in their entireties as follows:

                           "Cash Balances" shall mean, with respect to Lessee
                  and its Subsidiaries at any time, the sum, determined on a
                  consolidated basis in accordance with GAAP, of (a) the
                  unrestricted, unencumbered cash of Lessee and its Subsidiaries
                  at such time and (b) the market value of unrestricted,
                  unencumbered Cash Equivalents and short-term marketable
                  securities (that are classified as current assets in
                  accordance with GAAP) of Lessee and its Subsidiaries at such
                  time. (In calculating Cash Balances, Cash Equivalents and
                  short-term marketable securities shall be marked to market
                  quarterly.)

                           "Economically Defeased Portion of Synthetic Lease
                  Obligations" shall mean the remainder of (a) the sum of the
                  "Tranche A" portions, "Tranche B" portions and "Tranche C"
                  portions of leases constituting Economically Defeased
                  Synthetic Lease Obligations, minus (b) the aggregate amount of
                  the "Tranche A" portions of such leases that the lessee has
                  sold, assigned or otherwise transferred to any other Person.

                           "Economically Defeased Synthetic Lease Obligations"
                  shall mean Synthetic Lease Obligations under synthetic leases
                  in which the lessee has secured the "Tranche B" portion of
                  such leases and the "Tranche C" portion of such leases with
                  cash and/or Cash Equivalents and initially has purchased a
                  100% participation interest in the "Tranche A" portion of such
                  leases.

                           "Synthetic Lease Obligations" shall mean the monetary
                  obligations of a Person under (a) a so-called synthetic,
                  off-balance sheet or tax retention lease, or (b) an agreement
                  for the use or possession of property creating obligations
                  that do not appear on the balance sheet of such Person but
                  which, upon the insolvency or bankruptcy of such Person, would
                  be characterized as the indebtedness of such Person (without
                  regard to accounting treatment).

                  (t) Schedules 4.01(g) and 5.02(e) are deleted.

                                       11
<PAGE>   12

                  (u) Schedule 5.02(a) is amended to read in its entirety as set
         forth in the counterpart

         schedule hereto.

                  (v) Exhibits E, F(1) and F(2) are hereby amended by changing
         the notice address appearing therein to the following:

                           Lease Plan U.S.A., Inc.
                           c/o ABN AMRO Bank N.V.,
                                 as Agent
                           Agency Services
                           208 South LaSalle Street, Suite 1500
                           Chicago, IL  60604
                           Attn:  Josephine O'Brien

         3. AMENDMENTS TO OTHER OPERATIVE DOCUMENTS. Subject to the satisfaction
of the conditions set forth in Paragraph 5 below, the Lease Agreements, Purchase
Agreements and Facility 2 Construction Agency Agreement are hereby amended by
changing the notice address appearing in the exhibits thereto in the same manner
as provided in the immediately preceding subparagraph 2(v).

         4. REPRESENTATIONS AND WARRANTIES. Lessee hereby represents and
warrants to Agent and the Participants that the following are true and correct
on the date of this Amendment and that, after giving effect to the amendments
set forth in Paragraphs 2 and 3 above, the following will be true and correct on
the Effective Date (as defined below):

                  (a) The representations and warranties of Lessee set forth in
         Paragraph 4.01 of the Participation Agreement 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; and

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

(Without limiting the scope of the term "Operative Documents," Lessee expressly
acknowledges in making the representations and warranties set forth in this
Paragraph 4 that, on and after the date hereof, such term includes this
Amendment.)

         5. EFFECTIVE DATE. Lessee shall deliver to Agent a written notice
specifying the effective date for this Amendment ("Effective Date"), which date
shall be a Business Day on or prior to April 27, 2001. Lessee shall deliver such
notice to Agent at least five (5) Business Days prior to the Effective Date. The
amendments effected by Paragraphs 2 and 3 above shall then become effective on
the Effective Date, subject to receipt by Lessor, Agent and Required
Participants, on or prior to such date, of the following, each in form and
substance satisfactory to Agent, Required Participants and their respective
counsel:

                  (a) This Amendment duly executed by Lessor, Lessee, Required
         Participants and Agent;

                                       12
<PAGE>   13

                  (b) A certificate of the Chief Financial Officer or Treasurer
         of Lessee, addressed to Lessor and Agent and dated the Closing Date,
         certifying that:

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

                           (2) No Default has occurred and is continuing as of
                  such date;

                           (3) All of the Operative Documents are in full force
                  and effect on such date;

                  (c) A favorable written opinion of Morrison & Foerster, LLP,
         counsel to Lessee, dated the Effective Date, addressed to Agent for the
         benefit of Lessor, Agent and the Participants, covering such legal
         matters as Agent may reasonably request and otherwise in form and
         substance satisfactory to Agent;

                  (d) All fees and expenses payable to the Lessor Parties on or
         prior to the Effective Date (including all Agent's Fees);

                  (e) All fees and expenses of Lessor's and Agent's counsels
         through the Effective Date, to the extent set forth in statements of
         such counsels delivered to Lessee one or more days prior to the
         Effective Date; and

                  (f) Such other evidence as Lessor, Agent or any Participant
         may reasonably request to establish the accuracy and completeness of
         the representations and warranties and the compliance with the terms
         and conditions contained in this Amendment and the other Operative
         Documents.

         6. EFFECT OF THIS AMENDMENT. On and after the Effective Date, each
reference in the Participation Agreement and the other Operative Documents to
the Participation Agreement shall mean the Participation Agreement as amended
hereby. Except as specifically amended above, (a) the Participation Agreement
and the other Operative Documents shall remain in full force and effect and are
hereby ratified and affirmed and (b) the execution, delivery and effectiveness
of this Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power, or remedy of the Lessor, Participants or Agent, nor
constitute a waiver of any provision of the Participation Agreement or any other
Operative Document.

         7. MISCELLANEOUS.

                  (a) Counterparts. This Amendment 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.

                  (b) Headings. Headings in this Amendment are for convenience
         of reference only and are not part of the substance hereof.

                                       13
<PAGE>   14

                  (c) Governing Law. This Amendment shall be governed by and
         construed in accordance with the laws of the State of California
         without reference to conflicts of law rules.

                            [Signature pages follow]

                                       14
<PAGE>   15

         IN WITNESS WHEREOF, Lessee, Lessor, Agent and the Participants have
caused this Amendment 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:_____________________

                                            LEASE PLAN U.S.A., INC.

                                             By:__________________________
                                                Name:_____________________
                                                Title:____________________

                                      S-1
<PAGE>   16

                                            KEYBANK NATIONAL ASSOCIATION

                                            By:________________________________
                                               Name:___________________________
                                               Title:__________________________

                                            UNION BANK OF CALIFORNIA, N.A.

                                            By:________________________________
                                               Name:___________________________
                                               Title:__________________________

                                            COMERICA BANK-CALIFORNIA

                                            By:________________________________
                                               Name:___________________________
                                               Title:__________________________

                                            DAI-ICHI KANGYO BANK, LIMITED

                                            By:________________________________
                                               Name:___________________________
                                               Title:__________________________

                                            BANK HAPOALIM B.M., SAN FRANCISCO
                                            BRANCH

                                            By:________________________________
                                               Name:___________________________
                                               Title:__________________________

                                      S-2
<PAGE>   17

                                            THE INDUSTRIAL BANK OF JAPAN,
                                            LIMITED, SAN FRANCISCO AGENCY

                                            By:________________________________
                                               Name:___________________________
                                               Title:__________________________

                                            THE BANK OF NOVA SCOTIA

                                            By:________________________________
                                               Name:___________________________
                                               Title:__________________________

                                            FLEET NATIONAL BANK

                                            By:________________________________
                                               Name:___________________________
                                               Title:__________________________

                                            SANWA BANK CALIFORNIA

                                            By:________________________________
                                               Name:___________________________
                                               Title:__________________________

                                      S-3
<PAGE>   18

                                SCHEDULE 5.02(a)

                              EXISTING INDEBTEDNESS

<TABLE>
<CAPTION>
FINANCIAL INSTITUTION                      CURRENCY                    AMOUNT                 FACILITY TYPE
---------------------                      --------                    ------                 -------------
<S>                                        <C>                       <C>                <C>
Bank of Tokyo Mitsubishi                     JPY                     1,300,000,000           Line of Credit
Bank of Tokyo Mitsubishi                     JPY                       520,000,000           Line of Credit
Sanwa Bank                                   JPY                     2,400,000,000           Line of Credit
Sumitomo Bank                                JPY                       500,000,000           Line of Credit
ABN AMRO Bank                                USD                            97,000             Standby L/C
Malayan Banking Berhad                        RM                            30,000       Bank Guarantee Facility
</TABLE>

                                    5.02(a)-1<PAGE>   1
                                                                    EXHIBIT 10.3
                                                                  (NOVELLUS III)

                   SECOND AMENDMENT TO PARTICIPATION AGREEMENT

         THIS SECOND AMENDMENT TO PARTICIPATION AGREEMENT (this "Amendment"),
dated as of April 13, 2001, is entered into by and among:

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

                  (2) ABN AMRO LEASING, INC., an Illinois corporation
         ("Lessor");

                  (3) Each of the financial institutions listed in Schedule I to
         the Participation Agreement referred to in Recital A below
         (collectively, the "Participants"); and

                  (4) ABN AMRO BANK N.V., as agent for the Participants (in such
         capacity, "Agent").

                                    RECITALS

         A. Lessee, Lessor, Participants and Agent are parties to a
Participation Agreement dated as of August 7, 1998 (as amended by a First
Amendment thereto dated as of August 16, 1999, the "Participation Agreement"),
pursuant to which Lessor and Participants have provided to Lessee a lease
facility.

         B. Lessee now has requested Lessor, Participants and Agent to amend the
Participation Agreement and certain of the other Operative Documents (as defined
in the Participation Agreement) to make certain changes.

         C. Lessor, Participants and Agent are willing so to amend the
Participation Agreement and the other Operative Documents upon the terms and
subject to the conditions set forth in this Amendment.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Lessee, Lessor, the Participants and Agent hereby agree as
follows:

         1. DEFINITIONS, INTERPRETATION. All capitalized terms defined above and
elsewhere in this Amendment shall be used herein as so defined. Unless otherwise
defined herein, all other capitalized terms used herein shall have the
respective meanings given to those terms in the Participation Agreement, as
amended by this Amendment. The rules of construction set forth in Schedule 1.02
to the Participation Agreement shall, to the extent not inconsistent with the
terms of this Amendment, apply to this Amendment and are hereby incorporated by
reference.

                                       1
<PAGE>   2

         2. AMENDMENTS TO PARTICIPATION AGREEMENT. Subject to the satisfaction
of the conditions set forth in Paragraph 5 below, the Participation Agreement is
hereby amended as follows:

                  (a) Subparagraph 2.06(a) is amended by changing clause
         (iii)(D) to read in its entirety as follows:

                           (D) the purchase price paid by any Person (except as
                  otherwise provided in clause (i) above) to purchase the
                  Property (whether after the retention of such Property by
                  Lessor following the Expiration Date of the Lease Agreement,
                  upon foreclosure or otherwise);

                  (b) Subparagraph 4.01(g) is amended to read in its entirety as
         follows:

                           (g) Litigation. Except as set forth in the most
                  recent Form 10-Q and 10-K reports filed by Lessee with the
                  Securities and Exchange Commission, 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.

                  (c) Subparagraph 4.01(k) is amended to read in its entirety as
         follows:

                           (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, mergers, consolidations or reorganizations permitted by
                  Subparagraph 5.02(c), 5.02(d) or 5.02(e).

                  (d) Subparagraph 4.01(l) is amended by changing clause (i) to
         read in its entirety as follows:

                           (i) Based on the most recent valuation date for any
                  Pension Plan, the amount of unfunded benefit liabilities (as
                  defined in Section 4001(a)(18) of ERISA), individually or in
                  the aggregate for all Pension Plans (excluding for purposes of
                  such computation any Pension Plans with respect to which
                  assets exceed benefit liabilities) does not exceed an amount
                  equal to $10,000,000. No Pension Plan has failed to meet the
                  minimum funding standard of Code Section 412 (whether or not
                  waived under Code Section 412(d)) or failed to make by its due
                  date a required installment under Code Section 412(m). 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)
                  that is reasonably likely to have a Material Adverse Effect.

                                       2
<PAGE>   3

                  (e) Subparagraph 4.01(n) is amended to read in its entirety as
         follows:

                           (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, except where the failure to have
                  any such rights, either individually or collectively, is not
                  reasonably likely to have a Material Adverse Effect.

                  (f) Subparagraph 4.01(q) is amended to read in its entirety as
         follows:

                           (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 percentages of
                  shares of each such class owned directly or indirectly by
                  Lessee.

                  (g) Paragraph 4.01 is further amended by (i) deleting
         Subparagraph 4.01(v) and (ii) changing the designation of Subparagraph
         4.01(w) to "(v)".

                  (h) Subparagraph 5.01(a) is amended by (i) changing clauses
         (iii) and (v) to read in their entireties as follows:

                           (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;

                           (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 (A) any Reportable
                  Event (excluding any Reportable Event for which the provision
                  of a 30-day notice to the PBGC has been waived by regulation)
                  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
                  $10,000,000 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;

         (ii) deleting clause (vii) and (iii) changing the designations of
         clauses (viii), (ix), (x) and (xi) to "(vii)", "(viii)", "(ix)" and
         "(x)", respectively.

                                       3
<PAGE>   4

                  (i) Subparagraph 5.01(e) is amended to read in its entirety as
         follows:

                           (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; except where (A) the failure to pay any such
                  taxes, other Governmental Charges or indebtedness, either
                  alone or collectively, is not reasonably likely to have a
                  Material Adverse Effect and (B) any such taxes, other
                  Governmental Charges or 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.

                  (j) Paragraph 5.01 is further amended by (i) deleting
         Subparagraphs 5.01(h) and 5.01(i) and (ii) adding a new Subparagraph
         5.01(h) to read in its entirety as follows:

                           (h) Related Credit Agreement. If at any time the
                  financial covenants set forth in Paragraph 5.03 (or any
                  applicable definition used therein) differs from the financial
                  covenants set forth in the Related Credit Agreement (or any
                  applicable definition used therein), Lessee shall execute such
                  amendments to this Agreement as Lessor or Required
                  Participants may reasonably request to conform the financial
                  covenants set forth in Paragraph 5.03 (or any applicable
                  definition used therein) with such financial covenants set
                  forth in the Related Credit Agreement.

                  (k) Subparagraph 5.02(a) is amended by (i) changing clauses
         (iii) and (iv) to read in their entirety as follows:

                           (iii) Synthetic Lease Obligations, provided that the
                  aggregate principal amount thereof (including the Outstanding
                  Lease Amounts hereunder) outstanding at any time does not
                  exceed $595,000,000;

                           (iv) Indebtedness of Lessee and its Subsidiaries
                  listed in Schedule 5.02(a) and existing on April 13, 2001
                  (including committed but undrawn amounts);

         and (ii) changing the reference to "clause (ii), (iii) or (v)" in
         clause (ix) to "clause (ii) or (iv)".

                  (l) Subparagraph 5.02(b) is amended by changing clauses (ii)
         and (x) to read in their entireties as follows:

                           (ii) Liens securing the Related Credit Obligations or
                  Synthetic Lease Obligations;

                           (x) Judgement Liens, provided that such Liens do not
                  have a value in excess of $10,000,000 or such Liens are
                  released, stayed, vacated or otherwise

                                       4
<PAGE>   5

                  dismissed within twenty (20) days after issue or levy and, if
                  so stayed, such stay is not thereafter removed;

                  (m) Subparagraph 5.02(c) is amended by changing clause (vi) to
         read in its entirety as follows:

                           (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 the terms of any such sales or other
                  dispositions by or to Lessee (other than sales or other
                  dispositions by Lessee to any of Lessee's wholly owned
                  Subsidiaries or by any of Lessee's wholly owned subsidiaries
                  to Lessee, except for sales or dispositions by Lessee which,
                  either singly or in the aggregate with respect to all such
                  sales or dispositions, would involve all or substantially all
                  of the assets or property of Lessee or which would render
                  Lessee incapable of performing its obligations under the
                  Operative Documents) are on terms which are no less favorable
                  to Lessee than would prevail in the market for similar
                  transactions between unaffiliated parties dealing at arms
                  length;

                  (n) Subparagraph 5.02(d) is amended by changing clause
         (iii)(C) thereof to read in its entirety as follows:

                           (C) The aggregate cost of any such merger,
                  consolidation, establishment or acquisition does not exceed
                  the amounts permitted under clause (v) of Subparagraph 5.02(e)
                  (except for Lessee's cost of acquiring Gasonics International
                  Corporation, which shall not be subject to such limitation).

                  (o) Subparagraph 5.02(e) is amended to read in its entirety as
         follows:

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

                                    (i) Investments permitted by the investment
                           policy of Lessee duly approved by the Board of
                           Directors of Lessee and in effect at the time of such
                           Investment;

                                    (ii) Investments held by Gasonics
                           International Corporation on the date Gasonics
                           International Corporation is acquired by Lessee;

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

                                    (iv) Investments by Lessee in the "Tranche
                           A" portion of synthetic leases in which it is the
                           lessee and which constitute Economically Defeased
                           Synthetic Lease Obligations;

                                    (v) Investments in joint ventures and
                           strategic alliances, provided that the aggregate
                           amount of such Investments does not exceed in any
                           fiscal year two and one-half percent (2 1/2%) of the
                           tangible assets of Lessee and its Subsidiaries,
                           determined on a consolidated basis in accordance with
                           GAAP, on the last day of the immediately preceding
                           fiscal year; and

                                       5
<PAGE>   6

                                    (vi) 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) (excluding Lessee's
                           acquisition of Gasonics International Corporation)
                           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.

                  (p) Paragraph 5.02 is further amended by (i) deleting
         Subparagraph 5.02(i) and (ii) changing the designation of Subparagraph
         5.02(j) to "(i)".

                  (q) Paragraph 5.03 is amended to read in its entirety as
         follows:

                           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:

                                    (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:

                                    The last day of any
                                            fiscal quarter               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:

                                    The last day of any
                                            fiscal quarter               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:

                                    The last day of any
                                            fiscal quarter               3.50 to
                                    1.00.

                                    (d) Tangible Net Worth. Commencing on
                           December 31, 2000, 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") to be less than the sum on such
                           determination date of the following:

                                             (i) $664,477,000.00 (the
                                    approximate amount of Lessee's Tangible Net
                                    Worth on December 31, 1999);

                                       6
<PAGE>   7

                                      plus

                                            (ii) Seventy-five percent (75%) of
                                    the sum of (A) Lessee's consolidated annual
                                    net income for its fiscal year ending
                                    December 31, 2000 (ignoring any annual
                                    loss); plus (B) the sum of Lessee's
                                    consolidated quarterly net income (ignoring
                                    any quarterly losses) for each fiscal
                                    quarter ending after December 31, 2000
                                    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 December 31, 1999 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
                                    December 31, 1999 and ending on the
                                    determination date.

                           provided, however, that in no case shall Lessee
                           permit its Tangible Net Worth on December 31, 2000 to
                           be less than $1,260,000,000.00.

                                    (e) Minimum Cash Balances. Lessee shall not
                           permit its Cash Balances on any date to be less than
                           the remainder of:

                                            (i) The aggregate amount on such
                                    date of all Synthetic Lease Obligations of
                                    Lessee and its Subsidiaries that (A) would
                                    be attributable to principal if such
                                    obligations were treated as loan obligations
                                    and (B) become due within one (1) year of
                                    such date;

                                      minus

                                            (ii) The sum of (A) all cash of
                                    Lessee and its Subsidiaries on such date and
                                    (B) the market value of Cash Equivalents and
                                    short-term marketable securities (that are
                                    classified as current assets in accordance
                                    with GAAP) of Lessee and its Subsidiaries on
                                    such date to the extent such cash, Cash
                                    Equivalents and short-term marketable
                                    securities secure payment of the current
                                    Synthetic Lease Obligations referred to in
                                    clause (i) above.

                                       7
<PAGE>   8

                           (In calculating the market value of Cash Equivalents
                           and short-term marketable securities under this
                           subparagraph, Cash Equivalents and short-term
                           marketable securities shall be marked to market
                           quarterly.)

                  (r) Paragraph 7.01 is amended by changing the notice
         addresses, etc. for Lessee, Lessor and Agent set forth therein to read
         in their entireties as follows:

                           Lessee:          Novellus Systems, Inc.
                                            4000 North First Street
                                            San Jose, CA 95134
                                            Attn:  Treasurer
                                            Telephone:  (408) 432-5339
                                            Fax No: (408) 545-3009

                           Lessor:          ABN AMRO Leasing, Inc.
                                            c/o ABN AMRO Bank N.V.
                                            135 South LaSalle Street, Suite 740
                                            Chicago, IL 60603
                                            Attn: David M. Shipley
                                            Telephone: (312) 904-2183
                                            Fax No: (312) 904-6217

                           Agent:           ABN AMRO Bank N.V.
                                            Agency Services
                                            208 South LaSalle Street, Suite 1500
                                            Chicago, IL  60604
                                            Attn:  Josephine O'Brien
                                            Telephone:  (312) 992-5091
                                            Fax: (312) 992-5157

                                            with copies to:

                                            ABN AMRO Bank N.V.
                                            101 California Street, Suite 4550
                                            San Francisco, CA  94111-5812
                                            Attn:  Joe Endoso
                                            Telephone:  (415) 984-3718
                                            Fax:  (415) 362-3524

                                       and

                                            ABN AMRO Bank N.V.
                                            Credit Administration
                                            208 South LaSalle Street, Suite 1500
                                            Chicago, IL 60604
                                            Attn:  Gregory Miller
                                            Telephone:  (312) 992-5116
                                            Fax:  (312) 992-5111

                                       8
<PAGE>   9

                  (s) Schedule 1.01 is amended by changing the definitions of
         the following terms appearing therein to read in their entireties as
         follows:

                           "Adjusted Net Income" shall mean, with respect to
                  Lessee for any period, the sum, determined on a consolidated
                  basis in accordance with GAAP, of the following:

                                    (a) The net income or net loss of Lessee and
                           its Subsidiaries for such period before provision for
                           income taxes;

                                      plus

                                    (b) The sum (to the extent deducted in
                           calculating net income or loss in clause (a) above)
                           of (i) all Interest Expenses of Lessee and its
                           Subsidiaries accruing during such period, (ii) all
                           depreciation and amortization expenses of Lessee and
                           its Subsidiaries accruing during such period, and
                           (iii) all rental expenses of Lessee and its
                           Subsidiaries accruing during such period (including
                           Base Rent under the Lease Agreement but excluding any
                           Base Rent or other rental expenses that are
                           capitalized by the lessor during such period);

                                      minus

                                    (c) Fifty percent (50%) of all Capital
                           Expenditures of Lessee and its Subsidiaries accruing
                           during such period.

                           "Agent's Fee Letter" shall mean collectively the
                  letter agreement dated as of July 20, 1998 between Lessee and
                  Agent regarding certain fees payable by Lessee to Agent and
                  the letter agreements dated as of October 11, 2000 and
                  December 5, 2000 between Lessee and Agent regarding certain
                  other fees payable by Lessee to Agent.

                           "Debt Service Coverage Ratio" shall mean, with
                  respect to Lessee for any period, the ratio, determined on a
                  consolidated basis in accordance with GAAP, of:

                                    (a) The Adjusted Net Income of Lessee for
                           such period;

                                       to

                                    (b) The sum of (i) all Interest Expenses of
                           Lessee and its Subsidiaries accruing during such
                           period, (ii) all rental expenses of Lessee and its
                           Subsidiaries accruing during such period (including
                           Base Rent under the Lease Agreement but excluding any
                           Base Rent or other rental expenses that are
                           capitalized by the lessor during such period), and
                           (iii) 25% of all payments of principal (or, in the
                           case of Capital Leases, amounts attributable to
                           principal) of Funded Indebtedness (excluding
                           Synthetic Lease Obligations) paid or scheduled to be
                           paid by Lessee and its Subsidiaries due within one
                           year.

                                       9
<PAGE>   10

                           "EBITDA" shall mean, with respect to Lessee for any
                  period, the sum, determined on a consolidated basis in
                  accordance with GAAP, of the following:

                                    (a) The net income or net loss of Lessee and
                           its Subsidiaries for such period before provision for
                           income taxes;

                                      plus

                                    (b) The sum (to the extent deducted in
                           calculating net income or loss in clause (a) above)
                           of (i) all Interest Expenses of Lessee and its
                           Subsidiaries accruing during such period and (ii) all
                           depreciation and amortization expenses of Lessee and
                           its Subsidiaries accruing during such period.

                           "Funded Indebtedness" of any Person shall mean,
                  without duplication:

                                    (a) All obligations of such Person evidenced
                           by notes, bonds, debentures or other similar
                           instruments and all other obligations of such Person
                           for borrowed money (including obligations to
                           repurchase receivables and other assets sold with
                           recourse);

                                    (b) All obligations of such Person for the
                           deferred purchase price of property or services
                           (including obligations under letters of credit and
                           other credit facilities which secure or finance such
                           purchase price but excluding trade payables incurred
                           by such Person in the ordinary course of its business
                           on ordinary terms and not overdue) and all Synthetic
                           Lease Obligations of such Person (excluding the
                           Economically Defeased Portion of Synthetic Lease
                           Obligations);

                                    (c) All obligations of such Person under
                           conditional sale or other title retention agreements
                           with respect to property acquired by such Person (to
                           the extent of the value of such property if the
                           rights and remedies of the seller or lender under
                           such agreement in the event of default are limited
                           solely to repossession or sale of such property); and

                                    (d) All obligations of such Person as lessee
                           under or with respect to Capital Leases.

                           "Lease Reduction Payments" shall mean each of the
                  following to the extent applied to reduce the Outstanding
                  Lease Amount pursuant to the Operative Documents:

                                    (a) Casualty and Condemnation Proceeds;

                                    (b) The purchase price paid for the Property
                           (or any portion thereof) by Lessee, an Assignee
                           Purchaser or a Designated Purchaser pursuant to the
                           Purchase Agreement;

                                    (c) The Residual Value Guaranty and
                           Indemnity Amount paid by Lessee pursuant to the
                           Purchase Agreement;

                                       10
<PAGE>   11

                                    (d) Any proceeds received by Lessee from any
                           sale of the Property after the Expiration Date if
                           such Property is retained by Lessor after such
                           Expiration Date pursuant to the Purchase Agreement;

                                    (e) Any proceeds received by any Lessor
                           Party from the exercise of any of its remedies under
                           the Operative Documents after the occurrence of an
                           Event of Default under the Lease Agreement; and

                                    (f) Any other amount received by Lessor that
                           Lessee, Lessor and Agent agree shall be applied to
                           reduce the Outstanding Lease Amount.

                           "Material Casualty" shall mean any Casualty to the
                  Property that alone, or in combination with any prior
                  Casualties to the Property for which repairs to restore the
                  Property to its prior condition have not been completed, will
                  require repairs costing $1,725,000 or more to restore the
                  Property to its prior condition.

                           "Operative Documents" shall mean and include the
                  Participation Agreement, the Ground Lease, the Lease
                  Agreement, the Construction Agency Agreement, the Purchase
                  Agreement, the Lessee Security Documents, the Lessor Deed of
                  Trust, the Lessor Security Agreement, the Assignment of Lease,
                  the Agent's Fee Letter and the Agent's Syndication Letter; all
                  other notices, requests, certificates, documents, instruments
                  and agreements delivered to any Lessor Party pursuant to
                  Paragraph 3.01 of the Participation Agreement; all notices,
                  requests, certificates, documents, instruments and agreements
                  required to be delivered to any Lessor Party in connection
                  with any of the foregoing on or after the date of the
                  Participation Agreement; and all Rate Contracts provided to
                  Lessee by any Participant to hedge against fluctuations in the
                  LIBOR Rental Rate under the Lease Agreement. (Without limiting
                  the generality of the preceding definition, the term
                  "Operative Documents" shall include all written waivers,
                  amendments and modifications to any of the notices, requests,
                  certificates, documents, instruments and agreements referred
                  to therein.)

                           "Pension Plan" shall mean any Employee Benefit Plan
                  subject to Title IV of ERISA that either Lessee or any ERISA
                  Affiliate maintains or contributes to or has any obligation
                  under.

                           "Quick Ratio" shall mean, with respect to Lessee at
                  any time, the ratio, determined on a consolidated basis in
                  accordance with GAAP, of:

                                    (a) The remainder of (i) the sum (without
                           duplication) of all cash, Cash Equivalents,
                           short-term investments and net accounts receivable of
                           Lessee and its Subsidiaries at such time, minus (ii)
                           the sum (without duplication) of all such cash, Cash
                           Equivalents, short-term investments and net accounts
                           receivable that are subject to a Lien or are
                           otherwise restricted;

                                       to

                                    (b) The current liabilities of Lessee and
                           its Subsidiaries at such time.

                                       11
<PAGE>   12

                  (In calculating the Quick Ratio, Cash Equivalents and
                  short-term investments shall be marked to market quarterly.)

                           "Tranche A Proportionate Share" shall mean (a) at any
                  time prior to the Completion Date, eighty-nine and nine-tenths
                  percent (89.9%) and (b) at any time on or after the Completion
                  Date, ninety-seven percent (97.0%).

                           "Tranche B Proportionate Share" shall mean (a) at any
                  time prior to the Completion Date, seven and one tenth percent
                  (7.1%) and (b) at any time on or after the Completion Date,
                  zero percent (0%).

                  (t) Schedule 1.01 is further amended by adding thereto, in the
         appropriate alphabetical order, the definitions of the following terms
         to read in their entireties as follows:

                           "Cash Balances" shall mean, with respect to Lessee
                  and its Subsidiaries at any time, the sum, determined on a
                  consolidated basis in accordance with GAAP, of (a) the
                  unrestricted, unencumbered cash of Lessee and its Subsidiaries
                  at such time and (b) the market value of unrestricted,
                  unencumbered Cash Equivalents and short-term marketable
                  securities (that are classified as current assets in
                  accordance with GAAP) of Lessee and its Subsidiaries at such
                  time. (In calculating Cash Balances, Cash Equivalents and
                  short-term marketable securities shall be marked to market
                  quarterly.)

                           "Economically Defeased Portion of Synthetic Lease
                  Obligations" shall mean the remainder of (a) the sum of the
                  "Tranche A" portions, "Tranche B" portions and "Tranche C"
                  portions of leases constituting Economically Defeased
                  Synthetic Lease Obligations, minus (b) the aggregate amount of
                  the "Tranche A" portions of such leases that the lessee has
                  sold, assigned or otherwise transferred to any other Person.

                           "Economically Defeased Synthetic Lease Obligations"
                  shall mean Synthetic Lease Obligations under synthetic leases
                  in which the lessee has secured the "Tranche B" portion of
                  such leases and the "Tranche C" portion of such leases with
                  cash and/or Cash Equivalents and initially has purchased a
                  100% participation interest in the "Tranche A" portion of such
                  leases.

                           "Synthetic Lease Obligations" shall mean the monetary
                  obligations of a Person under (a) a so-called synthetic,
                  off-balance sheet or tax retention lease, or (b) an agreement
                  for the use or possession of property creating obligations
                  that do not appear on the balance sheet of such Person but
                  which, upon the insolvency or bankruptcy of such Person, would
                  be characterized as the indebtedness of such Person (without
                  regard to accounting treatment).

                  (u) Schedules 4.01(g) and 5.02(e) are deleted.

                  (v) Schedule 5.02(a) is amended to read in its entirety as set
         forth in the counterpart schedule hereto.

                                       12
<PAGE>   13

                  (w) Exhibits E, F(1) and F(2) are hereby amended by changing
         the notice address appearing therein to the following:

                           ABN AMRO Leasing, Inc.
                           c/o ABN AMRO Bank N.V.,
                                 as Agent
                           Agency Services
                           208 South LaSalle Street, Suite 1500
                           Chicago, IL  60604
                           Attn:  Josephine O'Brien

         3. AMENDMENTS TO OTHER OPERATIVE DOCUMENTS. Subject to the satisfaction
of the conditions set forth in Paragraph 5 below, the Lease Agreement, Purchase
Agreement and Construction Agency Agreement are hereby amended by changing the
notice address appearing in the exhibits thereto in the same manner as provided
in the immediately preceding subparagraph 2(w).

         4. REPRESENTATIONS AND WARRANTIES. Lessee hereby represents and
warrants to Agent and the Participants that the following are true and correct
on the date of this Amendment and that, after giving effect to the amendments
set forth in Paragraphs 2 and 3 above, the following will be true and correct on
the Effective Date (as defined below):

                  (a) The representations and warranties of Lessee set forth in
         Paragraph 4.01 of the Participation Agreement 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; and

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

(Without limiting the scope of the term "Operative Documents," Lessee expressly
acknowledges in making the representations and warranties set forth in this
Paragraph 4 that, on and after the date hereof, such term includes this
Amendment.)

         5. EFFECTIVE DATE. Lessee shall deliver to Agent a written notice
specifying the effective date for this Amendment ("Effective Date"), which date
shall be a Business Day on or prior to April 27, 2001. Lessee shall deliver such
notice to Agent at least five (5) Business Days prior to the Effective Date. The
amendments effected by Paragraphs 2 and 3 above shall then become effective on
the Effective Date, subject to receipt by Lessor, Agent and Required
Participants, on or prior to such date, of the following, each in form and
substance satisfactory to Agent, Required Participants and their respective
counsel:

                  (a) This Amendment duly executed by Lessor, Lessee, Required
         Participants and Agent;

                  (b) A First Amendment to Lease Agreement in the form of
         Exhibit A hereto, duly executed by Lessee and Lessor and appropriately
         notarized for recording;

                                       13
<PAGE>   14

                  (c) Evidence that the First Amendment to Lease Agreement
         delivered pursuant to clause 5(b) above will be promptly recorded in
         the Official Records of the County of Santa Clara, California;

                  (d) A certificate of the Chief Financial Officer or Treasurer
         of Lessee, addressed to Lessor and Agent and dated the Closing Date,
         certifying that:

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

                           (2) No Default has occurred and is continuing as of
                  such date;

                           (3) All of the Operative Documents are in full force
                  and effect on such date;

                  (e) A favorable written opinion of Morrison & Foerster, LLP,
         counsel to Lessee, dated the Effective Date, addressed to Agent for the
         benefit of Lessor, Agent and the Participants, covering such legal
         matters as Agent may reasonably request and otherwise in form and
         substance satisfactory to Agent;

                  (f) An amendment fee for each Participant that executes this
         Amendment on or prior to April 13, 2001 equal to 0.125% of such
         Participant's aggregate Outstanding Participation Amount on the
         Effective Date;

                  (g) All fees and expenses payable to the Lessor Parties on or
         prior to the Effective Date (including all Agent's Fees);

                  (h) All fees and expenses of Lessor's and Agent's counsels
         through the Effective Date, to the extent set forth in statements of
         such counsels delivered to Lessee one or more days prior to the
         Effective Date; and

                  (i) Such other evidence as Lessor, Agent or any Participant
         may reasonably request to establish the accuracy and completeness of
         the representations and warranties and the compliance with the terms
         and conditions contained in this Amendment and the other Operative
         Documents.

         6. EFFECT OF THIS AMENDMENT. On and after the Effective Date, each
reference in the Participation Agreement and the other Operative Documents to
the Participation Agreement shall mean the Participation Agreement as amended
hereby. Except as specifically amended above, (a) the Participation Agreement
and the other Operative Documents shall remain in full force and effect and are
hereby ratified and affirmed and (b) the execution, delivery and effectiveness
of this Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power, or remedy of the Lessor, Participants or Agent, nor
constitute a waiver of any provision of the Participation Agreement or any other
Operative Document.

         7. MISCELLANEOUS.

                                       14
<PAGE>   15

                  (a) Counterparts. This Amendment 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.

                  (b) Headings. Headings in this Amendment are for convenience
         of reference only and are not part of the substance hereof.

                  (c) Governing Law. This Amendment shall be governed by and
         construed in accordance with the laws of the State of California
         without reference to conflicts of law rules.

                            [Signature pages follow]

                                       15
<PAGE>   16

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

LESSEE:                                     NOVELLUS SYSTEMS, INC.

                                            By:_______________________________
                                               Name:__________________________
                                               Title:_________________________

LESSOR:                                     ABN AMRO LEASING, 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:_________________________

                                            ABN AMRO LEASING, INC.

                                            By:_______________________________
                                               Name:__________________________
                                               Title:_________________________

                                      S-1
<PAGE>   17

                                            COMERICA BANK-CALIFORNIA

                                            By:________________________________
                                               Name:___________________________
                                               Title:__________________________

                                            THE INDUSTRIAL BANK OF JAPAN,
                                            LIMITED, SAN FRANCISCO AGENCY

                                            By:________________________________
                                               Name:___________________________
                                               Title:__________________________

                                            THE BANK OF NOVA SCOTIA

                                            By:________________________________
                                               Name:___________________________
                                               Title:__________________________

                                            THE FUJI BANK, LIMITED

                                            By:________________________________
                                               Name:___________________________
                                               Title:__________________________

                                            SANWA BANK CALIFORNIA

                                            By:________________________________
                                               Name:___________________________
                                               Title:__________________________

                                      S-2
<PAGE>   18

                                SCHEDULE 5.02(a)

                              EXISTING INDEBTEDNESS

<TABLE>
<CAPTION>
FINANCIAL INSTITUTION                      CURRENCY                    AMOUNT                 FACILITY TYPE
---------------------                      --------                    ------                 -------------
<S>                                        <C>                       <C>                 <C>
Bank of Tokyo Mitsubishi                     JPY                     1,300,000,000           Line of Credit
Bank of Tokyo Mitsubishi                     JPY                       520,000,000           Line of Credit
Sanwa Bank                                   JPY                     2,400,000,000           Line of Credit
Sumitomo Bank                                JPY                       500,000,000           Line of Credit
ABN AMRO Bank                                USD                            97,000             Standby L/C
Malayan Banking Berhad                        RM                            30,000       Bank Guarantee Facility
</TABLE>

                                   5.02(a)-1
<PAGE>   19

                                    EXHIBIT A

RECORDING REQUESTED BY
AND WHEN RECORDED, RETURN TO:
Orrick, Herrington & Sutcliffe LLP
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, CA  94111
Attn:  John Rivers, Esq.

                       FIRST AMENDMENT TO LEASE AGREEMENT,
                           CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS,
                      SECURITY AGREEMENT AND FIXTURE FILING

         THIS FIRST AMENDMENT TO LEASE AGREEMENT, CONSTRUCTION DEED OF TRUST
WITH ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this
"Amendment"), dated as of April 13, 2001, is entered into by and between:

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

                  (2) ABN AMRO LEASING, INC., an Illinois corporation, as lessor
         under the Lease Agreement (as defined below) and as trustee under the
         deed of trust contained therein ("Lessor").

                                    RECITALS

         A. Lessee; Lessor; each of the financial institutions that are parties
thereto as "Participants" ("Participants"); and ABN AMRO BANK, N.V., as agent
for the Participants (in such capacity, "Agent"), are parties to that certain
Participation Agreement dated as of August 7, 1998 (as amended by a First
Amendment thereto dated as of August 16, 1999, the "Participation Agreement"),
pursuant to which Lessor and Participants have provided to Lessee a certain
lease facility.

         B. Pursuant to the Participation Agreement, Lessee and Lessor executed
a Lease Agreement, Construction Deed of Trust with Assignment of Rents, Security
Agreement and Fixture Filing dated as of August 7, 1998, affecting certain real
property located in Santa Clara County, California, described in Exhibit A
thereto (the "Lease Agreement"). The Lease Agreement was recorded in the
Official Records of Santa Clara County, California, on December 1, 1998, as
Document No. 14528604.

         C. Lessee now has requested Lessor, Participants and Agent to amend the
Participation Agreement and certain of the other Operative Documents (as defined
in the Participation Agreement) to make certain changes.

         D. Pursuant to a Second Amendment to Participation Agreement dated as
of April 13, 2001 (the "Second Amendment to Participation Agreement") among
Lessee, Lessor, Participants and Agent, Lessor, Participants and Agent have
agreed to amend the Participation Agreement and the other Operative Documents
upon the terms and subject to the conditions set

                                      A-1
<PAGE>   20

forth in the Second Amendment to Participation Agreement, including without
limitation, the execution and delivery by Lessee of this Amendment.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Lessee and Lessor hereby agree as follows:

         1. DEFINITIONS, INTERPRETATION. All capitalized terms defined above and
elsewhere in this Amendment shall be used herein as so defined. Unless otherwise
defined herein, all other capitalized terms used herein shall have the
respective meanings given to those terms in Schedule 1.01 to the Participation
Agreement. The rules of construction set forth in Schedule 1.02 to the
Participation Agreement shall, to the extent not inconsistent with the terms of
this Amendment, apply to this Amendment and are hereby incorporated by
reference.

         2. AMENDMENTS TO THE LEASE AGREEMENT.

                  (a) Subparagraph 3.07(a) is amended to read in its entirety as
         follows:

                           (a) Lessee's Covenants. Subject to Paragraph 3.12
                  relating to permitted contests, Lessee shall not create,
                  incur, assume or permit to exist any Lien or easement on or
                  with respect to any of the Property of any character, whether
                  now owned or hereafter acquired, except for the following
                  ("Permitted Property Liens"):

                                    (i) Liens in favor of a Lessor Party
                           securing the Lessee Obligations and other Lessor
                           Liens;

                                    (ii) Liens and easements in existence on the
                           Commencement Date to the extent reflected in the
                           title insurance policies delivered to Agent pursuant
                           to Paragraph 3.02 of and Schedule 3.02 to the
                           Participation Agreement and approved by Lessor;

                                    (iii) Liens for taxes or other Governmental
                           Charges not at the time delinquent or thereafter
                           payable without penalty;

                                    (iv) Liens of carriers, warehousemen,
                           mechanics, materialmen and vendors and other similar
                           Liens imposed by law incurred in the ordinary course
                           of business for sums not overdue;

                                    (vi) Easements granted or created in
                           connection with and reasonably necessary for the
                           construction of the New Improvements as approved by
                           Lessor; and

                                    (vi) Lessor Liens.

                                      A-2
<PAGE>   21

                  Subject to Paragraph 3.12 relating to permitted contests,
                  Lessee shall promptly (A) pay all Indebtedness of Lessee and
                  other obligations prior to the time the non-payment thereof
                  would give rise to a Lien on the Property and (B) discharge,
                  at its sole cost and expense, any Lien on the Property which
                  is not a Permitted Property Lien.

                  (b) Subparagraphs 5.01(e) and 5.01(h) are hereby amended by
         changing the amount "$2,500,000" wherever it appears therein to
         "$10,000,000".

         3. EFFECTIVE DATE. The amendments effected by Paragraph 2 above shall
become effective on the "Effective Date" as defined in the Second Amendment to
Participation Agreement, subject to satisfaction of the conditions set forth in
Paragraph 5 thereof.

         4. EFFECT OF THIS AMENDMENT. On and after the Effective Date, each
reference in the Lease Agreement and the other Operative Documents to the Lease
Agreement shall mean the Lease Agreement as amended hereby. Except as
specifically amended above, (a) the Lease Agreement and the other Operative
Documents shall remain in full force and effect and are hereby ratified and
affirmed and (b) the execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power, or remedy of Lessor, the Participants or Agent, nor constitute a
waiver of any provision of the Lease Agreement or any other Operative Document.

         5. MISCELLANEOUS.

                  (a) Counterparts. This Amendment may be executed in any number
         of counterparts, each of which shall be deemed an original, but all of
         which taken together shall constitute one and the same instrument. The
         signature page and acknowledgment of any counterpart may be removed
         therefrom and attached to any other counterpart to evidence execution
         thereof by all of the parties hereto without affecting the validity
         thereof.

                  (b) Headings. Headings in this Amendment are for convenience
         of reference only and are not part of the substance hereof.

                  (c) Governing Law. This Amendment shall be governed by and
         construed in accordance with the laws of the State of California
         without reference to conflicts of law rules.

                          [The signature page follows.]

                                      A-3
<PAGE>   22

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

LESSEE:                                NOVELLUS SYSTEMS, INC.

                                       By:_________________________________
                                          Name:____________________________
                                          Title:___________________________

LESSOR:                                ABN AMRO LEASING, INC.

                                       By:_________________________________
                                          Name:____________________________
                                          Title:___________________________

                                      A-4
<PAGE>   23

 STATE OF ___________________________________________)
                                                     )
 COUNTY OF __________________________________________)

                  On ________ 2001, before me, _______________________, a Notary
Public in and for the State of California, personally appeared
_______________________________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.

                  WITNESS my hand and official seal.

                  [SEAL]
                                 ________________________________________

<PAGE>   24

 STATE OF ___________________________________________)
                                                     )
 COUNTY OF __________________________________________)

                  On ___________, 2001, before me, _______________________, a
Notary Public in and for the State of California, personally appeared
_______________________________, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.

                  WITNESS my hand and official seal.

                  [SEAL]
                                 _________________________________________

                                      C-1

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