CONFIDENTIAL

 

Exhibit 10.2

LEASE AGREEMENT

dated as of November 7, 2006

THIS LEASE AGREEMENT (as amended, supplemented or otherwise modified from time
to time, this “Agreement”) is between General Electric Capital Corporation
(together with its successors and assigns, if any, “Lessor”) and Semiconductor
Components Industries, LLC (“Lessee”). Lessor has an office at 4225 Executive
Square, Suite 800, La Jolla, CA 92037. Lessee is a limited liability company
organized and existing under the laws of the state of Delaware. Lessee’s mailing
address and chief executive office is 5005 East McDowell Road, Phoenix, AZ
85008. This Agreement contains the general terms that apply to the leasing of
certain equipment and personal property (the “Equipment”) from Lessor to Lessee.
Additional terms that apply to the Equipment and financial terms in relation to
the lease of the Equipment (term, rent, options, etc.) shall be contained on an
equipment schedule (each a “Schedule”, and collectively the “Schedules”). This
Agreement together with any Schedule shall constitute the “Lease” for any
Equipment. Defined terms used and not defined in this Agreement shall have the
meanings assigned to such terms set forth in the applicable Schedule(s).

1. LEASING:

(a) Subject to the terms and conditions set forth below, Lessor agrees to lease
to Lessee, and Lessee agrees to lease from Lessor, the Equipment described in
any Schedule signed by both parties.

(b) Lessor shall purchase Equipment from the Lessee (“Supplier”) and lease it
back to Lessee on the Lease Commencement Date upon Lessor receiving all
documents as listed in Exhibit B attached hereto. Each of the documents required
above must be in form and substance satisfactory to Lessor. Once the Schedule is
signed, Lessee may not cancel the Schedule.

2. TERM, RENT AND PAYMENT:

(a) The rent (“Rent”) payable for the Equipment and Lessee’s right to use the
Equipment shall begin on the earlier of (i) the date when Lessee signs the
Schedule and accepts the Equipment or (ii) when Lessee has accepted the
Equipment under a Certificate of Acceptance (“Lease Commencement Date”). The
term of the Lease for any Equipment shall commence on the Lease Commencement
Date and shall continue, unless earlier terminated pursuant to the provisions of
the applicable Schedule (the “Term”). If any term is extended or renewed, the
word “Term” shall be deemed to refer to all extended or renewal terms, and all
provisions of this Agreement shall apply during any such extension or renewal
terms, except as may be otherwise specifically provided in writing.

(b) Lessee shall pay Rent to Lessor at its address stated above, unless
otherwise directed by Lessor. Each payment of Rent (each a “Rent Payment”) shall
be in the amount set forth in, payable at such intervals and due in accordance
with the provisions of the applicable Schedule. If any Interim Rent and/or any
Advance Rent is payable in respect of any Equipment, such Interim Rent and/or
Advance Rent shall be set forth in the applicable Schedule and shall be due and
payable in accordance with the terms of the Schedule. Upon Lessor’s receipt of
the Interim Rent and the Advance Rent, (i) the Interim Rent shall be applied to
the Rent Payment due for the Interim Period, if any, set forth in the Schedule,
and (ii) the Advance Rent shall be applied to the first Rent Payment due for the
Basic Term, and (iii) the remaining balance, if any, shall be applied to the
next scheduled Rent Payment under such Schedule. In no event shall any Interim
Rent, Advance Rent or any other Rent Payments be refunded to Lessee. If Lessor
does not receive from Lessee payment in full of any scheduled Rent Payment or
any other sum due under any Lease within ten (10) days after its due date,
Lessee agrees to pay, a late fee equal to five percent (5%) on such unpaid Rent
Payment or other sum, but not exceeding any lawful maximum. Such late fee will
be immediately due and payable, and is in addition to any other costs, fees and
expenses that Lessee may owe as a result of such late payment.

3. RENT ADJUSTMENT:

Intentionally Omitted

4. TAXES AND FEES:

        (a) If permitted by law, Lessee shall report and pay promptly all taxes,
fees and assessments due, imposed, assessed or levied against any Equipment (or
purchase, ownership, delivery, leasing, possession, use or operation thereof),
this Agreement (or any rents or receipts hereunder), any Schedule, Lessor or
Lessee, by any domestic or foreign governmental entity or taxing authority
during or related to the Term of any Lease, including, without limitation, all
license and registration fees, and all sales, use, personal property, excise,
gross receipts, franchise, stamp or other taxes, imposts, duties and charges,
together with any penalties, fines or interest thereon (collectively “Taxes”).
Lessee shall have no liability for Taxes imposed by the United States of America
or any state or political subdivision thereof which are on or measured by the
net income of Lessor except as provided in Section 14(c). Lessee shall promptly
reimburse (on an after tax basis) Lessor for any Taxes charged to or assessed
against Lessor. Lessee shall show Lessor as the owner of the Equipment on all
tax reports or returns, and send Lessor a copy of each report or return and
evidence of Lessee’s payment of Taxes upon request.

 

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(b) Lessee’s obligations, and Lessor’s rights, privileges and indemnities,
contained in this Section 4 shall survive the expiration or other termination of
this Agreement.

5. REPORTS:

(a) If any tax or other lien shall attach to any Equipment, Lessee will notify
Lessor in writing, within thirty (30) days after Lessee becomes aware of the tax
or lien. The notice shall include the full particulars of the tax or lien and
the location of such Equipment on the date of the notice.

(b) Lessee will deliver or make available to Lessor, Lessee’s parent company, ON
Semiconductor Corporation’s (“ON”) complete financial statements prepared in
accordance with generally accepted accounting principles, consistently applied,
certified by a recognized firm of certified public accountants within ninety
(90) days of the close of each fiscal year of ON, together with a certificate of
an authorized officer of Lessee stating that such officer has reviewed the
activities of Lessee and that to the best of such officer’s knowledge, there
exists no Event of Default or event which with notice or lapse of time (or both)
would become an Event of Default. In addition, Lessee will deliver to Lessor
copies of Lessee’s quarterly financial report certified by the chief financial
officer of Lessee, within ninety (90) days of the close of each fiscal quarter
of Lessee. In the event that ON’s Forms 10-K and 10-Q are not publicly
available, Lessee will deliver or make available to Lessor all such Forms 10-K
and 10-Q of ON, if any, filed with the Securities and Exchange Commission within
thirty (30) days after the date on which they are filed.

(c) Lessor may inspect any Equipment during normal business hours after giving
Lessee reasonable prior notice.

(d) Lessee will keep the Equipment under any Lease at the Equipment Location
specified in the applicable Schedule and will give Lessor at least thirty
(30) days’ prior written notice of any relocation of such Equipment. If Lessor
asks, Lessee will promptly notify Lessor in writing of the location of any
Equipment.

(e) If any Equipment is lost or damaged (where the estimated repair costs would
exceed the greater of ten percent (10%) of the original Equipment cost or one
hundred thousand and 00/100 dollars ($100,000), or is otherwise involved in an
accident causing personal injury or property damage, Lessee will promptly and
fully report the event to Lessor in writing within thirty (30) days of the
occurrence of any such incident.

(f) Upon Lessor’s request, Lessee will provide within thirty (30) days of such
request, copies of the insurance policies or other evidence required by the
terms hereof.

(g) Upon reasonable request by Lessor, Lessee will furnish a certificate of an
authorized officer of Lessee stating that he has reviewed the activities of
Lessee and that, to the best of his knowledge, no Event of Default has occurred.

(h) Lessee will promptly notify Lessor of any change in Lessee’s state of
incorporation or organization, in any case within thirty (30) days of such
change.

6. DELIVERY, USE AND OPERATION:

(a) All Equipment shall be shipped directly from Supplier to Lessee (unless the
Equipment is being leased pursuant to a sale-leaseback transaction in which case
Lessee represents and warrants that it is in possession of the Equipment as of
the Lease Commencement Date).

(b) Lessee agrees that the Equipment will be used by Lessee solely in the
conduct of its business, and in a manner complying with all applicable laws,
regulations and insurance policies, and maintained in compliance with prudent
industry standards. To the extent that a piece of equipment is discontinued,
Lessee agrees that it will comply with OEM specifications with respect to the
discontinuation of use of Lithography tools and prudent industry standards in
the discontinuation of all other Equipment types.

(c) Lessee will not part with possession of any of the Equipment (except in
accordance with Section 18 of this Agreement or for maintenance or repair).

(d) Lessee will keep the Equipment free and clear of all liens, claims and
encumbrances other than those which result from acts of Lessor.

(e) Lessor shall not disturb Lessee’s quiet enjoyment of the Equipment during
the term of the Agreement unless an Event of Default has occurred and is
continuing under this Agreement.

 

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7. MAINTENANCE:

(a) Lessee will, at its sole expense, maintain each unit of Equipment in good
operating order and repair, normal wear and tear excepted. Lessee shall also
maintain the Equipment in accordance with prudent industry standards. Lessee
shall make all alterations or modifications required to comply with any
applicable law, rule or regulation during the Term of this Lease. If Lessor
requests, Lessee shall affix plates, tags or other identifying labels showing
ownership thereof by Lessor. The tags or labels shall be placed in a prominent
position on each unit of Equipment.

(b) Lessee will not attach or install anything on any Equipment that will impair
the originally intended function or use of such Equipment without the prior
written consent of Lessor. All additions, parts, supplies, accessories, and
equipment (“Additions”) furnished or attached to any Equipment that are not
readily removable shall become the property of Lessor. All Additions shall be
made only in compliance with applicable law. Lessee will not attach or install
any Equipment to or in any other personal or real property in any manner that
would cause the Equipment to become real property without the prior written
consent of Lessor.

8. STIPULATED LOSS VALUE: If for any reason any unit of the Equipment becomes
lost, stolen, destroyed, irreparably damaged or unusable (“Casualty
Occurrences”; and any unit of Equipment which suffers a Casualty Occurrence
being herein referred to as an “Casualty Item”), Lessee shall promptly and fully
notify Lessor in writing. Lessee shall: (a) on the Payment Date (as defined
below) pay Lessor the sum of: (1) the Stipulated Loss Value (see Schedule) of
the Casualty Item determined as of the rent payment date prior to the Casualty
Occurrence and (2) all rent and other amounts which are then due under this
Agreement for the Casualty Item or (b) continue to pay rent with respect to the
Casualty Item as if no such Casualty Occurrence had occurred and on the Payment
Date which is at least 30 days after the Casualty Occurrence replace the
Casualty Item with another piece of similar equipment (the “Replacement Item”),
which is reasonably acceptable to Lessor, provided that the Lessee shall have
the option to substitute a Replacement Item for a Casulty Item under this clause
(b) only if the substitution qualifies as a tax free exchange to the Lessor in
accordance with Section 1031 or Section 1033 of the Code (or any successor
provision then in effect). The “Payment Date” for purposes of this Section 8
shall be the next scheduled Rent Payment date after the Casualty Occurrence.
Upon payment of all sums payable due under Sections 8(a)(1) and 8(a)(2) hereof,
the term of the Lease with respect to the Casualty Item shall terminate. In the
event that the Casualty Item is replaced in accordance with Section 8(b) hereof,
Lessee shall transfer all rights, title and interest in the Replacement Item to
the Lessor free and clear of all liens, charges or encumbrances whatsoever.
Lessee shall execute and deliver to Lessor any documents required or desired to
evidence the transfer of such right, title and interest. Any proceeds of the
insurances maintained by Lessee received by Lessor shall be applied in reduction
of Lessee’s obligation to pay the Stipulated Loss Value and other amounts owing
by Lessee hereunder, if not already paid by Lessee (the remainder of the
insurance proceeds after such reduction, if any, shall be paid to Lessee), or if
already paid by Lessee, shall be paid over to Lessee. Further if the Casualty
Item is replaced with a Replacement Item pursuant to this Section 8, upon
completion of the replacement, the execution and delivery of all transfer
documentation and the payment of all amounts then due and owing, any insurance
proceeds, maintained by Lessee and received by Lessor in connection with the
Casualty Item, shall be paid over to Lessee.

9. INSURANCE:

(a) Lessee shall bear the entire risk of any loss, theft, damage to, or
destruction of, any unit of Equipment from any cause whatsoever from the Lease
Commencement Date.

(b) Lessee has provided Lessor a certificate of an insurance broker describing
the insurance currently pertaining to the Equipment. Lessee believes that the
insurance maintained by or on behalf of Lessee pertaining to the Equipment is
adequate in all material respects. Lessee will maintain at its own expense
throughout the Term of any Lease of the Equipment, insurance pertaining to the
Equipment for such amounts and against such hazards as are customarily
maintained by companies of established repute engaged in the same or similar
businesses operating in the same or similar locations. All such insurance shall
be with financially sound and reputable internationally recognized insurance
companies. Lessee, on an annual basis or at any time that Lessee changes
insurers, will furnish to Lessor, a certificate of insurance from an insurance
broker evidencing that the insurance coverages described in Clauses (i) through
(viii) below are in effect. In addition to the above, the Lessee shall keep the
Equipment insured at all times while the Equipment is subject to this Lease and
all insurance shall provide for the following:

(i) Coverage for damage to or loss of the Equipment, liability for personal
injuries, death or property damage, in-transit;

(ii) Lessor shall be named as an additional insured with a loss payable clause
in favor of Lessor, as its interest may appear;

(iii) Liability coverage (including bodily injury and property damage to third
parties) in an amount equal to at least ONE MILLION U.S. DOLLARS ($1,000,000.00)
total liability per occurrence;

 

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(iv) Casualty/Property Damage Coverage (insurance including water damage and
theft) coverage in an amount equal to the higher of the Stipulated Loss Value or
the full replacement cost of the Equipment;

(v) In-Transit Coverage in an amount equal to the higher of the Stipulated Loss
Value or the full replacement cost of the Equipment, for Equipment that is
shipped between Lessee facilities;

(vi) That the insurance coverage shall not be subject to any co-insurance
clause;

(vii) That the insurance may not be altered or canceled by the insurer until
after thirty (30) days written notice to Lessor; and

(viii) The interests of Lessor shall be enforced irrespective of any breach of
warranty or other act or omission of the Insured.

(c) Lessee hereby appoints Lessor as Lessee’s attorney-in-fact to make proof of
loss and claim for insurance, and to make adjustments with insurers and to
receive payments and execute or endorse all documents, checks or drafts in
connection with insurance payments. Lessor shall not act as Lessee’s
attorney-in-fact unless Lessee is in default. Lessee shall pay any reasonable
expenses of Lessor in adjusting or collecting insurance. Lessee will not make
adjustments with insurers except with respect to claims for damage to any unit
of Equipment where the repair costs for such unit of Equipment are the lesser of
(x) ten percent (10%) of the Original Equipment Cost (as stipulated in the
applicable Schedule for such Equipment), or (y) one hundred thousand and 00/100
dollars ($100,000). Lessor may, at its option, apply proceeds of insurance, in
whole or in part, to (i) repair or replace Equipment or any portion thereof, or
(ii) satisfy any obligation of Lessee to Lessor under this Agreement.

10. RETURN OF EQUIPMENT:

Lessee shall provide at least 120 days irrevocable prior written notice to the
Lessor that it is returning the Equipment at the end of the Term.

(a) Upon the expiration or termination of this Agreement or any Lease (including
any termination pursuant to Section 17 hereof or any termination occurring after
or in connection with an Event of Default hereunder), Lessee shall perform any
testing and repairs required to place the units of Equipment in the same
condition and appearance as when received by Lessee (reasonable wear and tear
excepted) and in good working order for the original intended purpose of the
Equipment.

Lessee shall, not more than (60) days prior to expiration or earlier termination
of the Lease, provide to the Lessor a report detailing the results of such
test(s) and inspection(s) carried out and certifying that the Equipment has been
tested and is operating in accordance with Lessee’s standard performance
specifications as accepted by Lessor.

Except for the expenses incurred in connection with paying a third party in
clause (i) below or expenses incurred in clause (iii) below, Lessee shall
provide for and assume the full expense of the decommissioning, deinstallation,
and transportation of the Equipment to include, but not limited to, the
following: (i) as applicable, all Equipment shall be de-contaminated to prudent
industry standards (all contaminants, internal fluids and/or gases shall be
purged and properly disposed of, any applicable reservoirs, gas lines, liquid
hoses, etc. shall be capped and secured) and certified for removal and
transport, by Lessee (at Lessor’s discretion and cost, Lessor may require a
third party to provide additional certification), in accordance with prudent
industry standards, all applicable laws, rules and regulations; Lessee shall
ensure all Equipment and Equipment decommissioning procedures conform to all
applicable laws, including but not limited to, environmental, health and safety
laws and guidelines, which may be in effect at the time of return. (ii) the
manufacturer’s representative, or such other party acceptable to Lessor, for
lithography equipment or Lessee for all other equipment types shall de-install
all Equipment in accordance with the Lessor’s reasonable instructions and
prudent industry standards; (iii) at Lessor’s cost and instruction all Equipment
shall be professionally packed and crated, (iv) Lessee shall use best efforts to
package and ship: (a) a complete and current set of all service and operating
manuals including replacements and/or additions thereto, such that all
documentation is completely up-to-date; (b) a complete and current set of
documents, detailing equipment configuration and operating procedures, including
those relating to upgrades, and major replacement parts and/or additions
thereto; and (c) all major maintenance records (quarterly and/or semi-annual and
annual preventative maintenance); (v) Lessee shall provide certification that
the Equipment has been deinstalled, and appropriately labeled (i.e. Dangerous
Goods, etc.) in accordance with manufacturer’s specifications for lithography
equipment and prudent industry standards for all other equipment types, all
applicable laws, rules and regulations; (vi) Lessee will arrange for
transportation of the Equipment from its initial location to the nearest U.S.
based Lessor’s Semiconductor Equipment facility, all pursuant to Lessor’s
reasonable instructions and manufacturer’s specifications for lithography
equipment and prudent industry standards for all other equipment types.
(vii) Lessee shall obtain and pay for a policy of transit insurance for the
redelivery period in an amount equal to the replacement value of the Equipment.
The transit insurance must name Lessor as loss payee. All Equipment shall be
cleaned and treated with respect to rust, corrosion and appearance, less normal
wear and tear, in accordance with prudent industry standards. At Lessor’s
option, Lessee shall remove all non-original manufacturer’s markings (i.e
Lessee’s installed markings such as asset tags, etc.).

 

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(b) Until Lessee has fully complied with the requirements of Section 10(a)
above, Lessee’s rent payment obligation and all other obligations under this
Agreement shall continue from month to month notwithstanding any expiration or
termination of the lease term. Lessor may terminate Lessee’s right to use the
Equipment upon ten (10) days notice to Lessee.

(c) To the best of Lessee’s ability, Lessee shall provide to Lessor a detailed
inventory of all components of the Equipment including model and serial numbers.
If Lessee has modified or reconfigured the Equipment in any way that impairs the
originally intended use or fair market value of the Equipment without prior
Lessor consent, at Lessor’s option, Lessee shall restore the Equipment to its
original configuration, as specified by the original equipment configuration at
lease inception.

(d) Lessee shall make the Equipment available for reasonable on-site operational
inspections by potential purchasers and Lessor’s authorized inspectors (with the
exception of the competitors of Lessee) at least ninety (90) days prior to and
continuing up to lease termination. Lessor shall provide Lessee with reasonable
written notice at least 10 days and not more than 20 days prior to any
inspection, including a list of the items of Equipment to be inspected. Lessee
shall provide personnel, power and other requirements necessary to demonstrate
electrical, hydraulic and mechanical systems for each item of Equipment being
inspected.

11. DEFAULT AND REMEDIES:

(a) Lessee shall be in default under this Agreement and under any Lease upon the
occurrence of any of the following (each an “Event of Default”, and
collectively, the “Events of Default”):

(i) Lessee fails to pay within ten (10) days after its due date, any Rent or any
other amount due under this Agreement or any Lease;

(ii) Lessee breaches any of its insurance obligations under this Agreement or
any other Document (as defined in Section 16 hereof);

(iii) Lessee breaches any of its other obligations under any Lease (other than
those described in Section 11(a)(i) and (ii) above), and fails to cure that
breach within thirty (30) days after written notice from Lessor;

(iv) any representation, warranty or covenant made by Lessee in connection with
this Agreement or under any Lease shall be false or misleading in any material
respect;

(v) any Equipment is illegally used;

(vi) Lessee becomes insolvent or ceases to do business as a going concern;

(vii) if Lessee is a natural person, any death or incompetency of Lessee;

(viii) a receiver is appointed for all or of any part of the property of Lessee,
or Lessee makes any assignment for the benefit of its creditors;

(ix) Lessee files a petition under any bankruptcy, insolvency or similar law, or
in the event an involuntary petition is filed against Lessee under any
bankruptcy or insolvency laws and in the event of an involuntary petition, such
petition is not dismissed within sixty (60) days of the filing date;

(x) Lessee breaches or is in default under any agreement, in an original
principal amount greater than $5,000,000, by and between Lessor on the one hand,
and Lessee (or its parent or affiliates) on the other hand; provided however
that any such default under this Section 11(a)(x) is not solely related to a
material adverse change in Lessee’s financial condition;

(xi) There is any dissolution or termination of existence of Lessee

        (xii) there is any merger, consolidation, or change in controlling
ownership (such event and the transactions undertaken in connection with the
event, e.g., a financing to accomplish a merger or consolidation, referred to as
an “Event”) of Lessee wherein the long-term bank loan debt rating (or, if such
rating is not then available, it’s nearest equivalent, in either event, the
“Credit Rating”) of Lessee or the surviving corporation, company, or other such
business entity (Lessee or such surviving entity referred to as the “Surviving
Company”) issued by Moody’s Investors Service (such entity and its successors,
or, in the event such entity is no longer rating the Surviving Company’s debt,
any other nationally recognized rating agency which is then rating the Surviving
Company’s debt, collectively referred to herein as “Moody’s”) immediately after
and as a direct result of the Event (and not for other developments or unrelated
actions following the Event) falls below the lowest “B” rating (or its nearest
equivalent if the rating system is hereafter modified, revised, or replaced,
referred to herein as the “Minimum Rating”) by Moody’s (currently defined as
“B3”); provided ,however, that, in the event the Credit Rating of the Surviving
Company falls below the Minimum Rating as a direct result of the Event (for
purposes of this subsection (xii) the occurrence of the Event (the “Event Date”)
shall be deemed to be the later of (a) the date upon which the Event occurs, or
(b) the issuance by Moody’s of the Credit Rating), an Event of Default shall not
have occurred if (a) Lessee provides Lessor, on or within 10 days after the
Event Date, written notice to the effect that, if an Event occurs, it will
satisfy the letter of credit provisions of clause (b) of this proviso, and
(b) as soon as reasonably practicable, but in any event within 30 days of the
Event Date, Lessee shall cause to be delivered to Lessor an irrevocable standby
letter of credit (the “Letter of Credit”) in the amount of $7,000,000, which
Letter of Credit shall be in form and substance reasonably acceptable to Lessor
and issued by a bank rated at least “A2” by Moody’s; provided, further, that,
if, after the Letter of Credit has been issued, the Credit Rating of the
Surviving Company shall be increased to the Minimum Rating or higher, Lessor
shall promptly (in any event, with 15 days) return the Letter of Credit to
Lessee for cancellation.

(xii) Lessee sells or leases all, or substantially all, of its assets;

 

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(xiii) there is a material adverse change in Lessee’s financial condition; or

(xiv) Lessee defaults under any contract or obligation requiring the payment of
money in an original principal amount greater than $5,000,000.

The default declaration shall apply to all Schedules unless specifically
excepted by Lessor.

(b) Upon the occurrence of any Event of Default and so long as the same shall be
continuing, Lessor may, at its option, at any time thereafter, exercise one or
more of the following remedies set forth in this Section 11, as Lessor in its
sole discretion shall lawfully elect. (i) Upon the request of Lessor, Lessee
shall immediately comply with the provisions of Section 10(a), (ii) Lessee shall
authorize Lessor to peacefully enter any premises where any Equipment may be and
take possession of the Equipment, (iii) Lessee shall immediately pay to Lessor
without further demand as liquidated damages, for loss of a bargain and not as a
penalty, an amount equal to (x) the Stipulated Loss Value of the Equipment
(calculated as of the Rent Payment date prior to the declaration of default),
plus (y) all Rents and other sums then due under this Agreement, any Lease and
all Schedules, (iv) Lessor may terminate the Lease as to any or all of the
Equipment, and any termination of Leases shall occur only upon written notice by
Lessor to Lessee and only as to the units of Equipment specified in any such
notice, (v) Lessor may, but shall not be required to, sell Equipment at private
or public sale, in bulk or in parcels, with or without notice, and without
having the Equipment present at the place of sale, (vi) Lessor may also, but
shall not be required to, lease, otherwise dispose of or keep idle all or part
of the Equipment, (vii) Lessor may use Lessee’s premises for a reasonable period
of time for any or all of the purposes stated above without liability for rent,
costs, damages or otherwise, (viii) Lessor shall have the right to apply the
proceeds of any sale, lease or other disposition, if any, in the following order
of priorities: (1) to pay all of Lessor’s costs, charges and expenses incurred
in taking, removing, holding, repairing and selling, leasing or otherwise
disposing of Equipment; then, (2) to the extent not previously paid by Lessee,
to pay Lessor all sums due from Lessee under this Agreement; then (3) to
reimburse to Lessee any sums previously paid by Lessee as liquidated damages;
and (4) any surplus shall be retained by Lessor. Lessee shall immediately pay
any deficiency in (1) and (2) above, to the extent any exists, (ix) Lessor shall
be entitled to collect from Lessee all costs, charges, and expenses, including
actual legal fees and disbursements, incurred by Lessor by reason of any Event
of Default under the terms of this Agreement to be a default under any other
agreement between Lessor (or any of its affiliates or parent entities), on the
one hand, and Lessee or any of their respective affiliates or parent entities),
on the other hand, (x) Lessor may proceed by appropriate court action, either by
law or in equity, to enforce the performance by Lessee of the applicable
covenants of this Agreement and any Lease or to recover damages for breach
hereof, and (xi) Lessor may exercise any rights it may have against any security
deposit or other collateral pledged to it by Lessee, or any of its affiliates or
parent entities.

(c) In addition to Lessor’s remedies set forth above, any rent or other amount
not paid when due shall bear interest, from the due date until paid, at a per
annum rate equal to the lesser of twelve percent (12%) or the maximum rate not
prohibited by applicable law (the “Per Diem Interest Rate”). The application of
such Per Diem Interest Rate shall not be interpreted or deemed to extend any
cure period set forth herein, cure any default or otherwise limit Lessor’s
rights or remedies hereunder. Notwithstanding anything to the contrary contained
in this Agreement or any Schedule, in no event shall this Agreement or any
Schedule require the payment or permit the collection of amounts in excess of
the maximum permitted by applicable law.

(d) The foregoing remedies are cumulative, and any or all thereof may be
exercised instead of or in addition to each other or any remedies at law, in
equity, or under any applicable statute, or international treaty, convention or
protocol. Lessee waives notice of sale or other disposition (and the time and
place thereof), and the manner and place of any advertising. Lessee shall pay
Lessor’s actual attorney’s fees incurred in connection with the enforcement,
assertion, defense or preservation of Lessor’s rights and remedies under this
Agreement, or if prohibited by law, such lesser sum as may be permitted. Waiver
of any default shall not be deemed to be a waiver of any other or subsequent
default.

(e) Any Event of Default under the terms of this Agreement or any related
Schedule may be declared by Lessor a default under this Agreement or, any
related Schedule.

12. ASSIGNMENT: LESSEE SHALL NOT SELL, TRANSFER, ASSIGN, ENCUMBER OR SUBLET ANY
EQUIPMENT OR THE INTEREST OF LESSEE IN THE EQUIPMENT WITHOUT THE PRIOR WRITTEN
CONSENT OF LESSOR, WHICH MAY NOT BE WITHHELD UNREASONABLY (EXCEPT THAT NO
CONSENT SHALL BE REQUIRED IN THE CASAE OF AN ASSIGNMENT OR SUBLEASE DESCRIBED IN
SECTION 18C). Lessor may, without the consent of Lessee, assign this Agreement,
any Schedule or the right to enter into a Schedule; provided, however that
Lessor shall not assign this Agreement, any Schedule or the right to enter into
a Schedule to any company whose primary business is the manufacturing of
semiconductors. Lessee agrees that if Lessee receives written notice of an
assignment from Lessor, Lessee will pay all rent and all other amounts payable
under any assigned Schedule to such assignee or as instructed by Lessor. Lessee
also agrees to confirm in writing receipt of the notice of assignment as may be
reasonably requested by assignee. Lessee hereby waives and agrees not to assert
against any such assignee any defense, set-off, recoupment claim or counterclaim
which Lessee has or may at any time have against Lessor for any reason
whatsoever.

13. NET LEASE: Any Lease entered into pursuant to the terms and provisions of
this Agreement is a net lease. Lessee acknowledges and agrees that its
obligations to pay Rent and any and all amounts due and owing in accordance with
the terms hereof and under any Schedule shall be absolute and unconditional, and
such obligations shall not be released, discharged, waived, reduced, set-off or
affected by any circumstances whatsoever, including, without limitation, any

 

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damage to or destruction of any Equipment, defects in the Equipment or Lessee no
longer can use such Equipment. Lessee further acknowledges that Lessee is not
entitled to reduce or set-off against Rent or any other amounts due to Lessor or
to any assignee under Section 12, whether or not Lessee’s claim arises out of
this Agreement, any Lease, any statement by Lessor, Lessor’s liability or any
Supplier’s liability, strict liability, negligence or otherwise. Lessor shall
have no obligation, liability or responsibility to Lessee or any other person
with respect to the operation, maintenance, repairs, alternations,
modifications, correction of faults or defects (whether or not required by
applicable law) or insurance with respect to any Equipment, all such matters
shall be, as between Lessee and Lessor, the sole responsibility of Lessee,
regardless upon whom such responsibilities may fall under applicable law or
otherwise, and the Rent payable hereunder has been set in reliance of Lessee’s
sole responsibility for such aforementioned matters.

14. INDEMNIFICATION:

(a) Lessee hereby agrees to indemnify and save, on a net after-tax basis, Lessor
and its affiliates, and all of Lessor’s and such affiliates’ respective
directors, shareholders, officers, employees, agents, employees, predecessors,
attorneys-in-fact, lawyers, successors and assigns (each an “Indemnitee”)
harmless from and against any and all losses, damages, penalties, injuries,
claims, actions and suits, including reasonable attorneys’ fees and legal
expenses, of whatsoever kind and nature and other costs of investigation or
defense, including those incurred upon any appeal arising out of or relating to
the Equipment, this Agreement or any Lease or any other Document (as defined in
Section 16 hereof) (collectively, “Claims”) whether in law or equity, or in
contract, tort or otherwise.

This indemnity shall include, but is not limited to, Lessor’s strict liability
in tort or otherwise, including Claims that may be imposed on, incurred by or
asserted against an Indemnitee in any way arising out of (i) the selection,
manufacture, purchase, acceptance or rejection of Equipment, the ownership of
Equipment during the term of this Agreement, and the delivery, lease, sublease,
chartering, possession, maintenance, use, non-use, financing, mortgaging,
control, insurance, testing, condition, return, sale (including all costs,
incurred in making the Equipment ready for sale after the exercise of remedies
as a result of an Event of Default), operation or design of the Equipment
(including, without limitation, latent and other defects, whether or not
discoverable by Lessor or Lessee and any claim for patent, trademark or
copyright infringement or environmental damage), any interchanging or pooling of
any parts of the Equipment, if applicable; (ii) the condition of Equipment sold
or disposed of after use by Lessee, any sublessee or employees of Lessee;
(iii) any breach of Lessee’s representations or obligations under any Lease or
any other Document, or the failure by Lessee to comply with any term, provision
or covenant contained in any Lease or any other Document with respect to the
Equipment or with any applicable law, rule or regulation with respect to the
Equipment, or the nonconformity of the Equipment or its operation with any
applicable law; (iv) any actions brought against any Indemnitee that arise out
of Lessee’s actions or omissions (or actions or omissions of Lessee’s agents);
or (v) reliance by any Indemnitee on any representation or warranty made or by
Lessee (or any of its officers) under or in connection with any Lease or any
other Document, or any material report or other material information delivered
by Lessee pursuant hereto which shall have been incorrect in any material
respect when made or delivered; provided, that Lessee shall not be obligated to
pay and shall have no indemnity liability for any Claims (x) imposed on or
against an Indemnitee to the extent that such Claims are caused by the gross
negligence or willful misconduct of such Indemnitee, or (y) to the extent
imposed with respect to any Claim solely based on events occurring after the
earlier of (A) the expiration or other termination of the Term of any Lease in
circumstances not requiring the return of the Equipment and payment in full of
all amounts due from Lessee under such Lease and any other Document, and (B) the
satisfaction in full by Lessee of all its obligations under Section 10 “Return
of Equipment” hereof in respect of any Lease, and the payment in full of all
amounts due from Lessee under any Lease and related Documents, except in each
case to the extent such Claims result from an exercise of remedies under this
Agreement and any Lease following the occurrence of an Event of Default. Lessee
shall pay on demand to each Indemnitee any and all amounts necessary to
indemnify such Indemnitee from and against any Claims. Lessee shall, upon
request, defend any actions based on, or arising out of, any of the foregoing.

(b) Lessee hereby represents, warrants and covenants that (i) on the Lease
Commencement Date for any unit of Equipment, such unit will qualify for all of
the items of income, deduction and credit specified in Section C of the
applicable Schedule (“Tax Benefits”) in the hands of Lessor, and (ii) at no time
during the term of this Agreement will Lessee take or omit to take, nor will it
permit any sublessee or assignee to take or omit to take, any action (whether or
not such act or omission is otherwise permitted by Lessor or by this Agreement),
which will result in the disqualification of any Equipment for, or recapture of,
all or any portion of such Tax Benefits.

        (c) If as a result of a breach of any representation, warranty or
covenant of Lessee contained in this Agreement or any Schedule (i) tax counsel
of Lessor shall reasonably determine that Lessor is not entitled to claim on its
Federal income tax return all or any portion of the Tax Benefits with respect to
any Equipment, or (ii) any Tax Benefit claimed on the Federal income tax return
of Lessor is disallowed or adjusted by the Internal Revenue Service, or
(iii) any Tax Benefit is recalculated or recaptured (any determination,
disallowance, adjustment, recalculation or recapture being a “Loss”), then
Lessee shall pay to Lessor, as an indemnity and as additional rent, an amount
that shall, in the reasonable opinion of Lessor, cause Lessor’s after-tax
economic yields and cash flows to equal the Net Economic Return that would have
been realized by Lessor if such Loss had not occurred. Such amount shall be paid
promptly upon demand accompanied by a statement describing in reasonable detail
such Loss and the computation of such amount. The economic yields and cash flows
shall be computed on the same assumptions, including use of the highest combined
federal, state and local tax rate in effect for corporations at the time of the
notice of the Loss (“Net Economic Return”).

 

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(d) All references to Lessor in this Section 14 include Lessor and the
consolidated taxpayer group of which Lessor is a member. All of Lessor’s rights,
privileges and indemnities contained in this Section 14 shall survive the
expiration or other termination of this Agreement. The rights, privileges and
indemnities contained in this Agreement are expressly made for the benefit of,
and shall be enforceable by Lessor, its successors and assigns.

15. DISCLAIMER: LESSEE ACKNOWLEDGES THAT IT HAS SELECTED THE EQUIPMENT WITHOUT
ANY ASSISTANCE FROM LESSOR, ITS AGENTS OR EMPLOYEES. LESSOR DOES NOT MAKE, HAS
NOT MADE, NOR SHALL BE DEEMED TO MAKE OR HAVE MADE, ANY WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO THE
EQUIPMENT LEASED UNDER THIS AGREEMENT OR ANY COMPONENT THEREOF, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTY AS TO DESIGN, COMPLIANCE WITH SPECIFICATIONS,
QUALITY OF MATERIALS OR WORKMANSHIP, MERCHANTABILITY, FITNESS FOR ANY PURPOSE,
USE OR OPERATION, SAFETY, PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT, OR TITLE.
All such risks, as between Lessor and Lessee, are to be borne by Lessee. Without
limiting the foregoing, Lessor shall have no responsibility or liability to
Lessee or any other person with respect to any of the following; (i) any
liability, loss or damage caused or alleged to be caused directly or indirectly
by any Equipment, any inadequacy thereof, any deficiency or defect (latent or
otherwise) of the Equipment, or any other circumstance in connection with the
Equipment; (ii) the use, operation or performance of any Equipment or any risks
relating to it; (iii) any interruption of service, loss of business or
anticipated profits or consequential damages; or (iv) the delivery, operation,
servicing, maintenance, repair, improvement or replacement of any Equipment. If,
and so long as, no default exists under this Agreement, Lessee shall be, and
hereby is, authorized during the Term of any Lease to assert and enforce
whatever claims and rights Lessor may have against any Supplier of the Equipment
leased hereunder at Lessee’s sole cost and expense, in the name of and for the
account of Lessor and/or Lessee, as their interests may appear.

16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE:

(a) Lessee makes each of the following representations and warranties to Lessor
on the date hereof and on the Lease Commencement Date.

(i) Lessee has adequate power and capacity to enter into, and perform under,
this Agreement and all related documents (together, the “Documents”). Lessee is
duly qualified to do business wherever necessary to carry on its present
business and operations, including the jurisdiction(s) where the Equipment is
located.

(ii) The Documents have been duly authorized, executed and delivered by Lessee
and constitute valid, legal and binding agreements, enforceable in accordance
with their terms, except to the extent that the enforcement of remedies may be
limited under applicable bankruptcy and insolvency laws.

(iii) No approval, consent or withholding of objections is required from any
governmental authority or entity with respect to the entry into or performance
by Lessee of the Documents except such as have already been obtained.

(iv) The entry into and performance by Lessee of the Documents do not, and will
not: (i) violate any judgment, order, law or regulation applicable to Lessee or
any provision of Lessee’s organizational documents; or (ii) result in any breach
of, constitute a default under or result in the creation of any lien, charge,
security interest or other encumbrance upon any Equipment pursuant to any
indenture, mortgage, deed of trust, bank loan or credit agreement or other
instrument (other than this Agreement) to which Lessee is a party.

(v) There are no suits or proceedings pending or threatened in court or before
any commission, board or other administrative agency against or affecting
Lessee, which if decided against Lessee will have a material adverse effect on
the ability of Lessee to fulfill its obligations under this Agreement.

(vi) Each financial statement of ON delivered to Lessor has been prepared in
accordance with generally accepted accounting principles consistently applied.
Since the date of the most recent financial statement, there has been no
material adverse change.

(vii) Lessee’s exact legal name is as set forth in the first sentence of this
Agreement.

(b) Lessee hereby covenants to Lessor that at all times during the Term of any
Lease:

(i) The Equipment accepted under any Certificate of Acceptance is tangible
personal property and Lessee shall not take any action that may result in a
change the status of the Equipment so that it is no longer tangible personal
property.

(ii) Lessee is validly existing and in good standing under the laws of its state
of incorporation or organization (specified in the first sentence of this
Agreement).

(iii) The Equipment will at all times be used for commercial or business
purposes.

 

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(iv) Lessee shall maintain all books and records (including any computerized
maintenance records) pertaining to the Equipment during the Term of any Lease in
accordance with applicable rules and regulations.

(v) Lessee is and will remain in full compliance with all laws and regulations
applicable to it including, without limitation, (i) ensuring that no person who
owns a controlling interest in or otherwise controls Lessee is or shall be
(Y) listed on the Specially Designated Nationals and Blocked Person List
maintained by the Office of Foreign Assets Control (“OFAC”), Department of the
Treasury, and/or any other similar lists maintained by OFAC pursuant to any
authorizing statute, Executive Order or regulation or (Z) a person designated
under Section 1(b), (c) or (d) of Executive Order No. 13224 (September 23,
2001), any related enabling legislation or any other similar Executive Orders,
and (ii) compliance with all applicable Bank Secrecy Act (“BSA”) laws,
regulations and government guidance on BSA compliance and on the prevention and
detection of money laundering violations.

17. EARLY TERMINATION:

(a) On or after the First Termination Date (specified in the applicable
Schedule), Lessee may, so long as no Event of Default (or event or circumstance
which with the giving of notice or passage of time or both, would result in an
Event of Default) exists and no Casualty Occurrence has occurred, terminate this
Agreement as to all (but not less than all) of the Equipment on such Schedule as
of a Rent Payment Date (“Termination Date”). Lessee must give Lessor at least
ninety (90) days’, but no more than one hundred eighty (180) days’ prior written
notice of the termination.

(b) Lessee shall, and Lessor shall have the right to, solicit cash bids for the
Equipment on an AS IS, WHERE IS BASIS without recourse to or warranty from
Lessor, express or implied (“AS IS BASIS”). Prior to the Termination Date,
Lessee shall (i) certify to Lessor any bids received by Lessee and (ii) pay to
Lessor (1) the Termination Value (calculated as of the Rent due on the
Termination Date) for the Equipment, and (2) all Rent and other sums due and
unpaid as of the Termination Date.

(c) If all amounts due hereunder have been paid on the Termination Date, Lessor
shall (i) sell the Equipment on an AS IS BASIS for cash to the highest bidder
and (ii) refund the proceeds of such sale (net of any related expenses) to
Lessee up to the amount of the Termination Value. If such sale is not
consummated, no termination shall occur and Lessor shall refund the Termination
Value (less any expenses incurred by Lessor) to Lessee.

(d) Lessor shall have the right to elect by written notice, at any time prior to
the Termination Date, not to sell the Equipment. In that event, on the
Termination Date Lessee shall (i) return the Equipment (in accordance with
Section 10) and (ii) pay to Lessor an amount equal to the sum of (x) the
Termination Value (calculated as of the Termination Date) for the Equipment as
required under Section 17(b)(ii)(1) above less the amount of the highest bid
certified by Lessee to Lessor, plus (y) all Rent and other amounts due and
unpaid as of the Termination Date as required under Section 17(b)(ii)(2) above.
FOR THE AVOIDANCE OF DOUBT, Lessee’s rights under Section 20 (Early Substitution
Option), the Early Purchase Option described in the Schedules to this Agreement
and Section 19 (End Of Lease Purchase Option) shall not be affected by this
Section 17(d) to the extent that at the time Lessee is exercising its rights
under such sections, the Lease with respect to such Equipment has not been
previously terminated.

18. RELOCATION OPTION:

(a) So long as no Event of Default has occurred and is continuing, Lessee may
relocate up to ten percent (10%) of the Equipment to various locations around
the world subject to the terms and conditions of this Section 18. All expenses
(including Lessor’s reasonable attorneys’ fees in an amount not to exceed
$25,000), costs and liability for such relocation shall be paid for by Lessee.
Lessee shall notify Lessor in writing of such proposed relocation at least 45
days prior to the relocation (the “Relocation Notice”). The Relocation Notice
shall describe the Equipment proposed to be relocated, the address of the
proposed relocation, indicate the proposed relocation date and state whether the
location to which the Equipment will be relocated is a Permitted Location (as
defined below). The delivery of the Relocation Notice shall constitute an
agreement of the Lessee to pay and indemnify Lessor for any additional tax or
other expenses associated with the transfer of the Equipment, subject to the
terms and conditions set forth herein.

(b) If the Relocation Notice states that the Equipment will be relocated to a
location which is not a Permitted Location, then as soon as practicable, but in
any event no later than 30 days after receipt of the Relocation Notice, Lessor
shall notify Lessee as to whether it is satisfied that following such relocation
its interest in the Equipment is that of owner and such interest is fully
protected against and senior to any potential claims of any third parties. In
the event that Lessor indicates in such notice that it is not satisfied that its
interest in the Equipment is adequately protected, Lessee shall not be permitted
to so relocate the Equipment to such location unless and until the Lessee
complies with subsection (d) below.

(c) In effecting any relocation of Equipment pursuant to this Section 18, Lessee
may, at its option, sublease or assign its rights to the Equipment to one of its
Affiliates or Lessee may maintain the Equipment under this Lease and simply
relocate the Equipment to its facility in the new location, in each case so

 

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long as such sublease, assignment or relocation does not cause the Lessor to
suffer a Loss, as such term is defined in Section 14(c) hereof (unless Lessee
promptly reimburses Lessor for such Loss upon demand). Notwithstanding anything
to the contrary contained herein or the date of any such assignment or sublease,
the effective date of such assignment or sublease as between Lessee and such
Affiliate (for purposes of allocating payments, costs and other items) shall be
the date such Equipment was physically transferred from Lessee to its Affiliate.
In the case of a sublease, Lessee shall remain primarily obligated with respect
to the Equipment under this Lease, and such sublease shall be subject and
subordinate to the terms of this Lease.

(d) If the Lessor notifies Lessee in its response to the Relocation Notice that
it has reasonably determined that its interest in the Equipment will not be
adequately protected following such relocation, Lessee shall not be permitted to
so relocate the Equipment to such location unless and until the Lessee has
provided to Lessor mutually agreeable additional forms of collateral support or
credit enhancement having a value no greater than 100% of the Termination Value
of such Equipment.

(e) For purposes of this Agreement, “Permitted Locations” means the locations
set forth on Exhibit A hereto. If any location contained thereon is no longer a
location where Lessor’s internal policies permit Lessor to locate its Equipment
without adequate security, such location shall be removed from the list not less
than 30 days after written notice thereof to Lessee (it being acknowledged and
agreed that such removal shall have no effect on Equipment which was relocated
prior to such removal). If Lessor’s internal policies permit Lessor to own and
lease equipment, under leases such as this Agreement, located in locations other
than those set forth in Exhibit A, Lessor shall add such new Permitted Locations
to Exhibit A from time to time and provide notice thereof to Lessee.

19. END OF LEASE PURCHASE OPTION:

(a) On the expiration of any Lease, Lessee may, so long as no Event of Default
(or event or circumstance which with the giving of notice or passage of time or
both, would result in an Event of Default) exists thereunder, and such Lease has
not been earlier terminated, purchase all (but not less than all) of the
Equipment set forth in any Schedule on an AS IS BASIS for cash equal to its then
Fair Market Value (plus all applicable sales taxes). Lessee must notify Lessor
of its intent to purchase the Equipment in writing at least one hundred fifty
(150) days prior to the expiration date of such Lease. If Lessee is in default,
or if the Lease or this Agreement has already been terminated, Lessee may not
purchase the Equipment.

(b) “Fair Market Value” shall mean the price that a willing buyer (who is
neither a lessee in possession nor a used equipment dealer) would pay for the
Equipment in an arm’s-length transaction to a willing seller under no compulsion
to sell. In determining the Fair Market Value, (i) the Equipment shall be
assumed to be in the condition in which it is required to be maintained and
returned under the Lease, (ii) the Equipment is valued on an installed basis,
and (iii) the costs of removal of the Equipment from current location shall not
be a deduction from the value of the Equipment. If Lessor and Lessee are unable
to agree on the Fair Market Value at least one hundred twenty (120) days prior
to the expiration of the Lease, Lessor shall appoint an independent appraiser
(reasonably acceptable to Lessee) to determine Fair Market Value, at Lessee’s
sole cost, and such independent appraiser’s determination shall be final,
binding and conclusive.

(c) Lessee shall be deemed to have waived this option unless it provides Lessor
with written notice of its irrevocable election to exercise the same within
fifteen (15) days after Fair Market Value is provided in writing to Lessee.

20. EARLY SUBSTITUTION OPTION:

So long as no Event of Default under the Lease shall have occurred and be
continuing, Lessee may from time to time substitute an item of equipment for one
or more items of Equipment upon notice to the Lessor, so long as (i) the
substitution qualifies as a tax free exchange to the Lessor in accordance with
Section 1031 or 1033 of the Code (or any successor provision then in effect);
(ii) such replacement item is of equal or greater value than the old item and is
reasonably deemed by the Lessee as an item that enhances the value and
usefulness of the equipment taken as a whole; (iii) Lessee guarantees to the
Lessor in form satisfactory to Lessor that the fair market value of the
replacement item at scheduled expiration of the Lease will be at least equal to
what the fair market value of the replaced item of Equipment would have been on
such date (provided that the Lessee has not exercised the early purchase option
with respect to such item); and, (iv) the Lessor shall have received from the
Lessee a duly executed full warranty bill of sale for such replacement item and
title to such item shall have vested in the Lessor, free and clear of all liens.
Notwithstanding anything else contained in the foregoing, the maximum aggregate
Capitalized Lessor’s Cost of Equipment being leased under the Agreement that may
be substituted shall be limited to fifteen percent (15%) of the aggregate
Capitalized Lessor’s Cost of the Equipment leased under the Agreement, except
that this limitation shall not apply in the event of a material casualty event
requiring replacement by the Lessee. Lessor shall deliver to Lessee a duly
executed full warranty bill of sale for the Equipment that has been substituted
for the replacement equipment under this Section 20 and the Equipment being
transferred to Lessee shall be free and clear of all liens. If, in any 12 month
period, the Lessee substitutes replacement items of equipment for Equipment with
a Capitalized Lessor’s Cost of more than $5 million, Lessee shall certify to
Lessor that the Equipment will be used elsewhere in Lessee’s business or the
Equipment is not required for Lessee’s manufacturing purposes.

 

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21. MISCELLANEOUS:

(a) LESSEE AND LESSOR UNCONDITIONALLY WAIVE THEIR RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE
RELATED DOCUMENTS, ANY DEALINGS BETWEEN LESSEE AND LESSOR RELATING TO THE
SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE
RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN LESSEE AND LESSOR. THE SCOPE OF
THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY
BE FILED IN ANY COURT. THIS WAIVER IS IRREVOCABLE. THIS WAIVER MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING. THE WAIVER ALSO SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT,
ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS
TRANSACTION OR ANY RELATED TRANSACTION. THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.

(b) The Equipment shall remain Lessor’s property unless Lessee purchases the
Equipment from Lessor in accordance with the terms hereof, and until such time
Lessee shall only have the right to use the Equipment as a lessee. Any
cancellation or termination by Lessor of this Agreement, any Schedule,
supplement or amendment hereto, or the lease of any Equipment hereunder shall
not release Lessee from any then outstanding obligations to Lessor hereunder.
All Equipment shall at all times remain personal property of Lessor even though
it may be attached to real property. The Equipment shall not become part of any
other property by reason of any installation in, or attachment to, other real or
personal property.

(c) Time is of the essence of this Agreement. A party’s failure at any time to
require strict performance by the other party of any of the provisions hereof
shall not waive or diminish such party’s right at any other time to demand
strict compliance with this Agreement and any Lease. Lessor may correct patent
errors and fill in all blanks in the Documents consistent with the agreement of
the parties. Lessee will promptly, upon Lessor’s request and at Lessee’s sole
cost and expense, execute, or otherwise authenticate, any document, record or
instrument necessary or expedient for filing, recording or perfecting the
interest of Lessor or to carry out the intent of this Agreement and any Lease
(including filings to evidence amendments to this Agreement and any Lease, and
acknowledgments of assignments), and will take such further action as Lessor may
reasonably request in order to carry out more effectively the intent and
purposes of this Agreement and any Lease and to establish Lessor’s rights and
remedies under this Lease, or otherwise with respect to the Equipment. In
addition, Lessee hereby authorizes Lessor to file a financing statement and
amendments thereto describing the Equipment described in any and all Schedules
now and hereafter executed pursuant hereto and adding any other collateral
described therein and containing any other information required by the
applicable Uniform Commercial Code. Lessee irrevocably grants to Lessor the
power to sign Lessee’s name and generally to act on behalf of Lessee to execute
and file financing statements and other documents pertaining to any or all of
the Equipment. Lessee hereby ratifies its prior authorization for Lessor to file
financing statements and amendments thereto describing the Equipment and
containing any other information required by any applicable law (including
without limitation the Uniform Commercial Code) if filed prior to the date
hereof. All notices required to be given hereunder shall be deemed adequately
given if delivered by hand, or sent by registered or certified mail to the
addressee at its address stated herein, or at such other place as such addressee
may have designated in writing. This Agreement and any Schedules and Annexes
thereto constitute the entire agreement of the parties with respect to the
subject matter hereof. NO VARIATION OR MODIFICATION OF THIS AGREEMENT OR ANY
WAIVER OF ANY OF ITS PROVISIONS OR CONDITIONS, SHALL BE VALID UNLESS IN WRITING
AND SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE PARTIES HERETO.

(d) If Lessee does not comply with any provision of this Agreement, Lessor shall
have the right, but shall not be obligated, to effect such compliance, in whole
or in part. All reasonable amounts spent and obligations incurred or assumed by
Lessor in effecting such compliance shall constitute additional rent due to
Lessor. Lessee shall pay the additional rent within five (5) days after the date
Lessor sends notice to Lessee requesting payment. Lessor’s effecting such
compliance shall not be a waiver of Lessee’s default.

(e) Any provisions in this Agreement and any Schedule that are in conflict with
any statute, law or applicable rule shall be deemed omitted, modified or altered
to conform thereto.

(f) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF CONNECTICUT (WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, REGARDLESS OF THE LOCATION OF THE EQUIPMENT. LESSEE IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN
THE STATE OF CONNECTICUT TO HEAR AND DETERMINE ANY SUIT, ACTION OR PROCEEDING
AND TO SETTLE ANY DISPUTES, WHICH MAY ARISE OUT OF OR IN CONNECTION HEREWITH
(COLLECTIVELY, THE “PROCEEDINGS”), AND LESSEE FURTHER IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE TO REMOVE ANY SUCH PROCEEDINGS FROM ANY SUCH COURT (EVEN IF
REMOVAL IS SOUGHT TO ANOTHER OF THE ABOVE-NAMED COURTS). LESSEE IRREVOCABLY
WAIVES ANY OBJECTION WHICH IT MIGHT NOW OR HEREAFTER HAVE TO THE ABOVE-NAMED
COURTS BEING NOMINATED AS THE

 

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EXCLUSIVE FORUM TO HEAR AND DETERMINE ANY SUCH PROCEEDINGS AND AGREES NOT TO
CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE ABOVE-NAMED
COURTS FOR ANY REASON WHATSOEVER, THAT IT OR ITS PROPERTY IS IMMUNE FROM LEGAL
PROCESS FOR ANY REASON WHATSOEVER, THAT ANY SUCH COURT IS NOT A CONVENIENT OR
APPROPRIATE FORUM IN EACH CASE WHETHER ON THE GROUNDS OF VENUE OR FORUM
NON-CONVENIENS OR OTHERWISE. Notwithstanding the foregoing, each of Lessee and
Lessor shall have the right to apply to a court of competent jurisdiction in the
United States or abroad for equitable relief as is necessary to preserve,
protect and enforce their rights under this Agreement and any Lease, including
but not limited to orders of attachment or injunction necessary to maintain the
status quo pending litigation or to enforce judgments against Lessee or the
Equipment or to gain possession of the Equipment.

(g) Any cancellation or termination by Lessor, pursuant to the provisions of
this Agreement, any Schedule, supplement or amendment hereto, of the lease of
any Equipment hereunder, shall not release Lessee from any then outstanding
obligations to Lessor hereunder.

(h) To the extent that any Schedule would constitute chattel paper, as such term
is defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction, no security interest therein may be created through the transfer
or possession of this Agreement in and of itself without the transfer or
possession of the original of a Schedule executed pursuant to this Agreement and
incorporating this Agreement by reference; and no security interest in this
Agreement and a Schedule may be created by the transfer or possession of any
counterpart of the Schedule other than the original thereof, which shall be
identified as the document marked “Original” and all other counterparts shall be
marked “Duplicate”.

(i) This Agreement and any amendments, waivers, consents or supplements hereto
or in connection herewith may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. Delivery of an executed signature page of this Agreement or any
delivery contemplated hereby by facsimile transmission shall be as effective as
delivery of a manually executed counterpart thereof.

(j) Each party hereto agrees to keep confidential, the terms and provisions of
the Documents and the transactions contemplated hereby and thereby
(collectively, the “Transactions”); provided that either party may disclose the
terms and provisions of the Documents and transactions contemplated hereby and
thereby (collectively, “Confidential Information”) (i) to its or its controlling
entities’ employees, officers, directors, agents, consultants, auditors,
attorneys and accountants, (ii) if it is reasonably believed by it to be
compelled by any court decree, subpoena or other legal or administrative order
or process, (iii) on the advice of its counsel, otherwise required by law
(including without limitation ON’s disclosure obligations under applicable law,
regulation or SEC Rule) or necessary or appropriate in connection with any
litigation or other proceeding to which it or its affiliates is a party, or
(iv) which becomes available to such party from a third party on a
non-confidential basis. Notwithstanding the foregoing, the obligations of
confidentiality contained herein, as they relate to the Transactions, shall not
apply to the federal tax structure or federal tax treatment of the Transactions,
and each party hereto (and any employee, representative, or agent of any party
hereto) may disclose to any and all persons, without limitation of any kind, the
federal tax structure and federal tax treatment of the Transactions. The
preceding sentence is intended to cause each Transaction to be treated as not
having been offered under conditions of confidentiality for purposes of
Section 1.6011-4(b)(3) (or any successor provision) of the Treasury Regulations
promulgated under Section 6011 of the Internal Revenue Code of 1986, as amended,
and shall be construed in a manner consistent with such purpose. In addition,
each party hereto acknowledges that it has no proprietary or exclusive rights to
the federal tax structure of the Transactions or any federal tax matter or
federal tax idea related to the Transactions.

(k) Lessee hereby acknowledges and agrees that Lessor reserves the right to
impose fees or charges for returned checks and certain mutually agreed on
optional services that Lessor may offer or Lessee may request during the term of
this Agreement. Lessor will notify Lessee the amount of the applicable fee or
charge if Lessee requests such optional services. In addition, Lessor may make
available to Lessee a schedule of fees or charges for such optional services
from time to time or upon demand, provided, however, that such fees and charges
are subject to change in Lessor’s sole discretion without notice to Lessee.

 

Page 12 of 15

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CONFIDENTIAL

 

IN WITNESS WHEREOF, Lessee and Lessor have caused this Agreement to be executed
by their duly authorized representatives as of the date first above written.

 

LESSOR:

   

LESSEE:

General Electric Capital Corporation     Semiconductor Components Industries,
LLC

By:

 

/s/ JAMES C. SHELLEY

   

By:

 

/s/ DONALD COLVIN

Name:

 

James C. Shelley

   

Name:

 

Donald Colvin

Title:

 

Chief Risk Officer

   

Title:

 

Chief Financial Officer

 

Page 13 of 15

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CONFIDENTIAL

 

EXHIBIT A

LIST OF PERMITTED LOCATIONS

Austria

Canada

Denmark

Finland

France

Germany

Hong Kong

India

Ireland

Italy

Japan

Korea

Mexico

The Netherlands

Norway

Singapore

Spain

Sweden

Taiwan

United Kingdom

USA

 

Page 14 of 15

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CONFIDENTIAL

 

EXHIBIT B

CLOSING DOCUMENT REQUIREMENTS

 

  •   Corporate Verification of Good Standing

 

  •   Bill of Sale

 

  •   Fully Executed Lease Agreement

 

  •   Board of Directors Resolution / Secretary’s Certificate of Authority

 

  •   Fully Executed Equipment Schedule

 

  •   Annex A (Description of Equipment)

 

  •   Pay Proceeds Letter

 

  •   Billing Form

 

  •   Lessee Invoice for Purchase Price reimbursement

 

  •   Insurance Certificate (Property, Liability and Cargo)

 

  •   UCC Search Results (Confirmation Equipment is Free of Liens)

 

  •   Lien Waiver from J.P. Morgan Chase

 

Page 15 of 15