Document:

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                                                                    EXHIBIT 10.5

                                     SECURITY AGREEMENT dated as of May 6, 2002,

                        among SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC, a
                        Delaware limited liability company ("SCI LLC"), ON
                        SEMICONDUCTOR CORPORATION, a Delaware corporation (the
                        "Company" and, together with SCI LLC, the "Issuers"),
                        each subsidiary of the Company listed on Schedule I
                        hereto (each such subsidiary individually a "Subsidiary"
                        or a "Guarantor" and, collectively, the "Subsidiaries"
                        or the "Guarantors"; the Guarantors and the Issuers are
                        referred to collectively herein as the "Grantors") and
                        WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a
                        national banking association ("Wells Fargo Bank"), as
                        trustee under the Indenture referred to below and as
                        collateral agent (in such capacity, the "Collateral
                        Agent") for the Secured Parties (as defined herein).

                              W I T N E S S E T H:

            WHEREAS, pursuant to the terms, conditions and provisions of (a) the
Indenture dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time, the "Indenture"), among the Issuers, the
Guarantors and Wells Fargo Bank, as trustee (the "Trustee"), and (b) the
Purchase Agreement dated as of May 1, 2002, among the Issuers, the Guarantors
and Credit Suisse First Boston Corporation, Morgan Stanley & Co. Incorporated,
Salomon Smith Barney Inc. and J.P. Morgan Securities Inc. (the "Initial
Purchasers"), the Issuers are issuing $300,000,000 aggregate principal amount of
12% Senior Secured Notes due 2008 and may issue, from time to time, additional
notes in accordance with the provisions of the Indenture (collectively, the
"Notes") which will be guaranteed on a senior secured basis by each of the
Guarantors;

            WHEREAS, pursuant to the Security Agreement dated as of August 4,
1999 (as amended, supplemented or otherwise modified from time to time), among
the Issuers, each of the subsidiaries of the Company party thereto or which
becomes a party thereto pursuant to the Credit Agreement referred to below
(together with the Issuers, each a "Credit Agreement Grantor" and, collectively,
the "Credit Agreement Grantors") and JPMorgan Chase Bank (as successor to The
Chase Manhattan Bank), a New York banking corporation ("JPMorgan"), as
collateral agent, the Credit Agreement Grantors have granted to the Senior Agent
(as defined below) a first-priority lien and security interest in the Collateral
(as defined below) in connection with the Credit Agreement dated as of August 4,
1999, as amended and restated as of April 3, 2000 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among SCI LLC,
as borrower, the Company, the lenders from time to time party thereto (the
"Lenders"), JPMorgan, as administrative agent, collateral agent and syndication
agent (in such capacity, the "Senior Agent") for the Lenders, and Credit
Lyonnais New York Branch, Credit Suisse First Boston and Lehman Commercial Paper
Inc., as co-documentation agents;

            WHEREAS, the Issuers, the Collateral Agent and the Senior Agent have
entered into an Intercreditor Agreement, dated as of the date hereof (the
"Intercreditor Agreement"), pursuant to which the lien and security interest in
the Collateral granted by this Agreement are and shall be subordinated in all
respects to the lien and security interest in the Collateral granted pursuant
to, and all terms and conditions of, the Senior Lender Documents;
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                                                                               2

            WHEREAS, each Grantor is executing and delivering this Agreement
pursuant to the terms of the Indenture to induce the Trustee to enter into the
Indenture and the Initial Purchasers to purchase the Notes; and

            WHEREAS, each Grantor has duly authorized the execution, delivery
and performance of this Agreement.

            NOW, THEREFORE, for and in consideration of the premises, and of the
mutual covenants herein contained, and in order to induce the Trustee to enter
into the Indenture and the Initial Purchasers to purchase the Notes, each
Grantor and the Collateral Agent, on behalf of itself and each Secured Party
(and each of their respective successors or assigns), hereby agree as follows:

                                    ARTICLE I

                                   Definitions

      SECTION 1.01. Definition of Terms Used Herein. Unless the context
otherwise requires, all capitalized terms used but not defined herein shall have
the meanings set forth in the Indenture.

      SECTION 1.02. Definition of Certain Terms Used Herein. As used herein, the
following terms shall have the following meanings:

      "Account Debtor" shall mean any Person who is or who may become obligated
to any Grantor under, with respect to or on account of an Account.

      "Accounts" shall mean all "accounts" (as defined in the Uniform Commercial
Code as in effect in the State of New York ("UCC")) of any Grantor and shall
include any and all right, title and interest of any Grantor to payment for
goods and services sold or leased, including any such right evidenced by chattel
paper, whether due or to become due, whether or not it has been earned by
performance, and whether now or hereafter acquired or arising in the future,
including accounts receivable from Affiliates of the Grantors.

      "Accounts Receivable" shall mean all Accounts and all right, title and
interest in any returned goods, together with all rights, titles, securities and
guarantees with respect thereto, including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary, in each case whether now existing or
owned or hereafter arising or acquired.

      "Collateral" shall mean all (a) Accounts Receivable, (b) Documents, (c)
Equipment, (d) General Intangibles, (e) Inventory, (f) cash and cash accounts,
(g) Investment Property and (h) Proceeds.

      "Commodity Account" shall mean an account maintained by a Commodity
Intermediary in which a Commodity Contract is carried out for a Commodity
Customer.

      "Commodity Contract" shall mean a commodity futures contract, an option on
a commodity futures contract, a commodity option or any other contract that, in
each case, is (a) traded on or subject to the rules of a board of trade that has
been designated as a contract market for such a contract pursuant to the federal
commodities laws or (b) traded on a foreign commodity board of trade, exchange
or market, and is carried on the books of a Commodity Intermediary for a
Commodity Customer.

      "Commodity Customer" shall mean a Person for whom a Commodity Intermediary
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carries a Commodity Contract on its books.

      "Commodity Intermediary" shall mean (a) a Person who is registered as a
futures commission merchant under the federal commodities laws or (b) a Person
who in the ordinary course of its business provides clearance or settlement
services for a board of trade that has been designated as a contract market
pursuant to federal commodities laws.

      "Copyright License" shall mean any written agreement, now or hereafter in
effect, granting any right to any third party under any Copyright now or
hereafter owned by any Grantor or which such Grantor otherwise has the right to
license, or granting any right to such Grantor under any Copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.

      "Copyrights" shall mean all of the following: (a) all copyright rights in
any work subject to the copyright laws of the United States or any other
country, whether as author, assignee, transferee or otherwise, and (b) all
registrations and applications for registration of any such copyright in the
United States or any other country, including registrations, recordings,
supplemental registrations and pending applications for registration in the
United States Copyright Office, including those listed on Schedule II.

      "Credit Agreement" shall have the meaning assigned to such term in the
recitals of this Agreement.

      "Discharge of Senior Lender Claims" shall have the meaning assigned to
such term in the Intercreditor Agreement.

      "Documents" shall mean all instruments, files, records, ledger sheets and
documents covering or relating to any of the Collateral.

      "Entitlement Holder" shall mean a Person identified in the records of a
Securities Intermediary as the Person having a Security Entitlement against the
Securities Intermediary. If a Person acquires a Security Entitlement by virtue
of Section 8-501(b)(2) or (3) of the Uniform Commercial Code, such Person is the
Entitlement Holder.

      "Equipment" shall mean "equipment" (as defined in the UCC) of any Grantor
and shall include all equipment, furniture and furnishings, and all tangible
personal property similar to any of the foregoing, including tools, parts and
supplies of every kind and description, and all improvements, accessions or
appurtenances thereto, that are now or hereafter owned by any Grantor. The term
Equipment shall include Fixtures.

      "Financial Asset" shall mean (a) a Security, (b) an obligation of a Person
or a share, participation or other interest in a Person or in property or an
enterprise of a Person, which is, or is of a type, dealt with in or traded on
financial markets, or which is recognized in any area in which it is issued or
dealt in as a medium for investment or (c) any property that is held by a
Securities Intermediary for another Person in a Securities Account if the
Securities Intermediary has expressly agreed with the other Person that the
property is to be treated as a Financial Asset under Article 8 of the Uniform
Commercial Code. As the context requires, the term Financial Asset shall mean
either the interest itself or the means by which a Person's claim to it is
evidenced, including a certificated or uncertificated Security, a certificate
representing a Security or a Security Entitlement.

      "First-Lien Termination Date" shall mean, subject to Section 5.6 of the
Intercreditor Agreement, the date on which the Discharge of Senior Lender Claims
occurs.

      "Fixtures" shall mean all items of Equipment, whether now owned or
hereafter acquired, of any Grantor that become so related to particular real
estate that an interest in them arises under
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                                                                               4

any real estate law applicable thereto.

      "General Intangibles" shall mean all "general intangibles" (as defined in
the UCC) of any Grantor and shall include choses in action and causes of action
and all other assignable intangible personal property of any Grantor of every
kind and nature (other than Accounts Receivable) now owned or hereafter acquired
by any Grantor, including corporate or other business records, indemnification
claims, contract rights (including rights under leases, whether entered into as
lessor or lessee, Hedging Agreements and other agreements), Intellectual
Property, goodwill, registrations, franchises, tax refund claims and any letter
of credit, guarantee, claim, security interest or other security held by or
granted to any Grantor to secure payment by an Account Debtor of any of the
Accounts Receivable.

      "Hedging Agreement" shall mean any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.

      "Indenture Documents" shall mean the Indenture, the Notes, this Agreement,
the other Security Documents and the Intercreditor Agreement, as such agreements
may be amended, supplemented or otherwise modified from time to time.

      "Intellectual Property" shall mean all intellectual and similar property
of any Grantor of every kind and nature now owned or hereafter acquired by any
Grantor, including inventions, designs, Patents, Copyrights, Licenses,
Trademarks, trade secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information, software and
databases and all embodiments or fixations thereof and related documentation,
registrations and franchises, and all additions, improvements and accessions to,
and books and records describing or used in connection with, any of the
foregoing.

      "Intercreditor Agreement" shall have the meaning assigned to such term in
the recitals of this Agreement.

      "Inventory" shall mean "inventory" (as defined in the UCC) of any Grantor
and shall include all goods of any Grantor, whether now owned or hereafter
acquired, held for sale or lease, or furnished or to be furnished by any Grantor
under contracts of service, or consumed in any Grantor's business, including raw
materials, intermediates, work in process, packaging materials, finished goods,
semi-finished inventory, scrap inventory, manufacturing supplies and spare
parts, and all such goods that have been returned to or repossessed by or on
behalf of any Grantor.

      "Investment Property" shall mean all Securities (whether certificated or
uncertificated), Security Entitlements, Securities Accounts, Commodity Contracts
and Commodity Accounts of any Grantor, whether now owned or hereafter acquired
by any Grantor; provided that Securities shall not include more than 65% of the
issued and outstanding voting stock of any Foreign Subsidiaries.

      "License" shall mean any Patent License, Trademark License, Copyright
License or other license or sublicense to which any Grantor is a party,
including those listed on Schedule III (other than those license agreements in
existence on the date hereof and listed on Schedule III and those license
agreements entered into after the date hereof, which by their terms prohibit
assignment or a grant of a security interest by such Grantor as licensee
thereunder).

      "Obligations" shall mean all obligations of the Issuers and the Guarantors
under the Indenture, the Notes and the other Indenture Documents, including
obligations to the Trustee and the Collateral Agent, whether for payment of
principal of, interest on or additional interest, if any, on the Notes and all
other monetary obligations of the Issuers and the Guarantors under the
Indenture, the Notes and the other Indenture Documents, whether for fees,
expenses,
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                                                                               5

indemnification or otherwise.

      "Other Second-Lien Obligations" means any Indebtedness, other than the
Notes, that is secured by a Permitted Lien, described in clause (a) of the
definition thereof set forth in the Indenture, which is secured equally and
ratably with the Notes by a second-priority security interest in the Collateral,
and that is designated by the Company upon incurrence as "Other Second-Lien
Obligations".

      "Patent License" shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to make, use or sell any invention
on which a Patent, now or hereafter owned by any Grantor or which any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a Patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.

      "Patents" shall mean all of the following now owned or hereafter acquired
by any Grantor: (a) all letters patent of the United States or any other
country, all registrations and recordings thereof, and all applications for
letters patent of the United States or any other country, including
registrations, recordings and pending applications in the United States Patent
and Trademark Office or any similar offices in any other country, including
those listed on Schedule IV, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.

      "Perfection Certificate" shall mean a certificate substantially in the
form of Annex 2 hereto, completed and supplemented with the schedules and
attachments contemplated thereby, and duly executed by an Officer of the Company
and SCI LLC.

      "Proceeds" shall mean "proceeds" (as defined in the UCC) of any Grantor
and shall include any consideration received from the sale, exchange, license,
lease or other disposition of any asset or property that constitutes Collateral,
any value received as a consequence of the possession of any Collateral and any
payment received from any insurer or other Person or entity as a result of the
destruction, loss, theft, damage or other involuntary conversion of whatever
nature of any asset or property which constitutes Collateral, and shall include,
(a) any claim of any Grantor against any third party for (and the right to sue
and recover for and the rights to damages or profits due or accrued arising out
of or in connection with) (i) past, present or future infringement of any Patent
now or hereafter owned by any Grantor, or licensed under a Patent License, (ii)
past, present or future infringement or dilution of any Trademark now or
hereafter owned by any Grantor or licensed under a Trademark License or injury
to the goodwill associated with or symbolized by any Trademark now or hereafter
owned by any Grantor, (iii) past, present or future breach of any License and
(iv) past, present or future infringement of any Copyright now or hereafter
owned by any Grantor or licensed under a Copyright License and (b) any and all
other amounts from time to time paid or payable under or in connection with any
of the Collateral.

      "Secured Parties" shall mean the Trustee, the Collateral Agent, each
Holder and the successors and assigns of each of the foregoing.

      "Securities" shall mean any obligations of an issuer or any shares,
participations or other interests in an issuer or in property or an enterprise
of an issuer which (a) are represented by a certificate representing a security
in bearer or registered form, or the transfer of which may be registered upon
books maintained for that purpose by or on behalf of the issuer, (b) are one of
a class or series or by its terms is divisible into a class or series of shares,
participations, interests or obligations and (c)(i) are, or are of a type, dealt
with or traded on securities exchanges or securities markets or (ii) are a
medium for investment and by their terms expressly provide that they are a
security governed by Article 8 of the Uniform Commercial Code.
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      "Securities Account" shall mean an account to which a Financial Asset is
or may be credited in accordance with an agreement under which the Person
maintaining the account undertakes to treat the Person for whom the account is
maintained as entitled to exercise rights that comprise the Financial Asset.

      "Security Entitlements" shall mean the rights and property interests of an
Entitlement Holder with respect to a Financial Asset.

      "Security Interest" shall have the meaning assigned to such term in
Section 2.01.

      "Security Intermediary" shall mean (a) a clearing corporation or (b) a
Person, including a bank or broker, that in the ordinary course of its business
maintains securities accounts for others and is acting in that capacity.

      "Senior Lender Claims" shall have the meaning assigned to such term in the
Intercreditor Agreement.

      "Senior Lender Documents" shall have the meaning assigned to such term in
the Intercreditor Agreement.

      "Trademark License" shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to use any Trademark now or
hereafter owned by any Grantor or which any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any Trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.

      "Trademarks" shall mean all of the following: (a) all trademarks, service
marks, trade names, corporate names, company names, business names, fictitious
business names, trade styles, trade dress, logos, other source or business
identifiers, designs and general intangibles of like nature, now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the United States Patent and
Trademark Office, any State of the United States or any similar offices in any
other country or any political subdivision thereof, and all extensions or
renewals thereof, including those listed on Schedule V, (b) all goodwill
associated therewith or symbolized thereby and (c) all other assets, rights and
interests that uniquely reflect or embody such goodwill.

      SECTION 1.03. Rules of Interpretation. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
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                                   ARTICLE II

                                Security Interest

      SECTION 2.01. Security Interest. As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor hereby
bargains, sells, conveys, assigns, sets over, mortgages, pledges, hypothecates
and transfers to the Collateral Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, and hereby grants to the Collateral
Agent, its successors and assigns, for the ratable benefit of the Secured
Parties, a security interest in, all of such Grantor's right, title and interest
in, to and under the Collateral (the "Security Interest"). Without limiting the
foregoing, in accordance with, and to the extent consistent with, the terms of
the Intercreditor Agreement, the Collateral Agent is hereby authorized to file
one or more financing statements (including fixture filings), continuation
statements, filings with the United States Patent and Trademark Office or United
States Copyright Office (or any successor office or any similar office in any
other country) or other documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each
Grantor, without the signature of any Grantors, and naming any Grantor or the
Grantors as debtors and the Collateral Agent as secured party.

      SECTION 2.02. No Assumption of Liability. The Security Interest is granted
as security only and shall not subject the Collateral Agent or any other Secured
Party to, or in any way alter or modify, any obligation or liability of any
Grantor with respect to or arising out of the Collateral.

                                   ARTICLE III

                         Representations and Warranties

      The Grantors jointly and severally represent and warrant to the Collateral
Agent and the Secured Parties that:

      SECTION 3.01. Title and Authority. Each Grantor has good and valid rights
in and title to the Collateral with respect to which it has purported to grant a
Security Interest hereunder and has full power and authority to grant to the
Collateral Agent the Security Interest in such Collateral pursuant hereto and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other Person other than
any consent or approval which has been obtained.

      SECTION 3.02. Filings. (a) The Perfection Certificate has been duly
prepared, completed and executed and the information set forth therein is
correct and complete in all material respects. Fully executed Uniform Commercial
Code financing statements (including fixture filings, as applicable) or other
appropriate filings, recordings or registrations containing a description of the
Collateral have been delivered to the Collateral Agent for filing in each
governmental, municipal or other office specified in Schedule 6 to the
Perfection Certificate, which are all the filings, recordings and registrations
(other than filings required to be made in the United States Patent and
Trademark Office and the United States Copyright Office in order to perfect the
Security Interest in Collateral consisting of United States Patents, Trademarks
and Copyrights) that are necessary to publish notice of and protect the validity
of and to establish a legal, valid and perfected second-priority security
interest in favor of the Collateral Agent (for the ratable benefit of the
Secured Parties) in respect of all Collateral in which the Security Interest may
be perfected by filing, recording or registration in the United States (or any
political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements.
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                                                                               8

      (b) Each Grantor shall ensure that fully executed security agreements in
the form hereof (or short-form supplements to this Agreement in form and
substance satisfactory to the Collateral Agent) and containing a description of
all Collateral consisting of Intellectual Property shall have been received and
recorded within three months after the execution of this Agreement with respect
to United States Patents and United States registered Trademarks (and Trademarks
for which United States registration applications are pending) and within one
month after the execution of this Agreement with respect to United States
registered Copyrights have been delivered to the Collateral Agent for recording
by the United States Patent and Trademark Office and the United States Copyright
Office pursuant to 35 U.S.C. Section 261, 15 U.S.C. Section 1060 or 17 U.S.C.
Section 205 and the regulations thereunder, as applicable, and otherwise as may
be required pursuant to the laws of any other necessary jurisdiction in the
United States (or any political subdivision thereof) and its territories and
possessions, to protect the validity of and to establish a legal, valid and
perfected second-priority security interest in favor of the Collateral Agent
(for the ratable benefit of the Secured Parties) in respect of all Collateral
consisting of Patents, Trademarks and Copyrights in which a security interest
may be perfected by filing, recording or registration in the United States (or
any political subdivision thereof) and its territories and possessions, or in
any other necessary jurisdiction, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary in any such
jurisdiction (other than such actions as are necessary to perfect the Security
Interest with respect to any Collateral consisting of Patents, Trademarks and
Copyrights (or registration or application for registration thereof) acquired or
developed after the date hereof).

      SECTION 3.03. Validity of Security Interest. The Security Interest
constitutes (a) a legal and valid second-priority security interest in all the
Collateral securing the payment and performance of the Obligations, (b) subject
to the filings described in Section 3.02 above, a perfected second-priority
security interest in all Collateral in which a security interest may be
perfected by filing, recording or registering a financing statement or analogous
document in the United States (or any political subdivision thereof) and its
territories and possessions pursuant to the UCC or other analogous applicable
law in such jurisdictions and (c) a second-priority security interest that shall
be perfected in all Collateral in which a security interest may be perfected
upon the receipt and recording of this Agreement with the United States Patent
and Trademark Office and the United States Copyright Office, as applicable,
within the three month period (commencing as of the date hereof) pursuant to 35
U.S.C. Section 261 or 15 U.S.C. Section 1060 or the one month period (commencing
as of the date hereof) pursuant to 17 U.S.C. Section 205 and otherwise as may be
required to pursuant to the laws of any other necessary jurisdiction in the
United States (or any political subdivision thereof) and its territories and
possessions. The Security Interest is and shall be a second-priority Security
Interest, prior to any other Lien on any of the Collateral, other than (x) Liens
securing Senior Lender Claims or (y) any other Permitted Liens.

      SECTION 3.04. Absence of Other Liens. The Collateral is owned by the
Grantors free and clear of any Lien, except for (x) Liens securing Senior Lender
Claims and (y) any other Permitted Liens to exist under the Indenture. The
Grantor has not filed or consented to the filing of (a) any financing statement
or analogous document under the UCC or any other applicable laws covering any
Collateral, (b) any assignment in which any Grantor assigns any Collateral or
any security agreement or similar instrument covering any Collateral with the
United States Patent and Trademark Office or the United States Copyright Office
or (c) any assignment in which any Grantor assigns any Collateral or any
security agreement or similar instrument covering any Collateral with any
foreign governmental, municipal or other office, which financing statement or
analogous document, assignment, security agreement or similar instrument is
still in effect, except, in each case, for (x) Liens securing Senior Lender
Claims and (y) any other Permitted Liens.

                                   ARTICLE IV

                                    Covenants
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                                                                               9

      SECTION 4.01. Records. Each Grantor agrees to maintain, at its own cost
and expense, such complete and accurate records with respect to the Collateral
owned by it as is consistent with its current practices, but in any event to
include complete accounting records indicating all payments and proceeds
received with respect to any part of the Collateral, and, at such time or times
as the Collateral Agent may reasonably request, promptly to prepare and deliver
to the Collateral Agent an updated Perfection Certificate, noting all material
changes, if any, since the date of the most recent Perfection Certificate.

      SECTION 4.02. Protection of Security. Each Grantor shall, at its own cost
and expense, take any and all actions necessary to defend title to the
Collateral against all Persons and to defend the Security Interest of the
Collateral Agent in the Collateral and the priority thereof against any Lien
other than Permitted Liens.

      SECTION 4.03. Further Assurances. Each Grantor agrees, at its own expense,
to execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such actions as the Collateral Agent, in
accordance with, and to the extent consistent with, the terms of the
Intercreditor Agreement, may from time to time request to better assure,
preserve, protect and perfect the Security Interest and the rights and remedies
created hereby, including the payment of any fees and taxes required in
connection with the execution and delivery of this Agreement, the granting of
the Security Interest and the filing of any financing statements (including
fixture filings) or other documents in connection herewith or therewith. If any
amount payable under or in connection with any of the Collateral shall be or
become evidenced by any promissory note or other instrument, such note or
instrument shall be immediately pledged and delivered to the Senior Agent (or,
if the First-Lien Termination Date has occurred, the Collateral Agent) to be
held as Collateral pursuant to this Agreement and the Intercreditor Agreement,
duly endorsed in a manner satisfactory to the Senior Agent (or, if the
First-Lien Termination Date has occurred, the Collateral Agent).

      SECTION 4.04. Inspection and Verification. The Collateral Agent and such
Persons as the Collateral Agent may reasonably designate shall have the right to
inspect the Collateral, all records related thereto (and to make extracts and
copies from such records) and the premises upon which any of the Collateral is
located, at reasonable times and intervals during normal business hours upon
reasonable advance notice to the respective Grantor and to verify under
reasonable procedures the validity, amount, quality, quantity, value, condition
and status of the Collateral.

      SECTION 4.05. Taxes; Encumbrances. In accordance with, and to the extent
consistent with, the terms of the Intercreditor Agreement, at its option, the
Collateral Agent may discharge past due taxes, assessments, charges, fees,
Liens, security interests or other encumbrances at any time levied or placed on
the Collateral and not permitted under the Indenture, and may pay for the
maintenance and preservation of the Collateral, in each case to the extent any
Grantor fails to do so as required by the Indenture or this Agreement, and each
Grantor jointly and severally agrees to reimburse the Collateral Agent on demand
for any payment made or any expense incurred by the Collateral Agent pursuant to
the foregoing authorization; provided, however, that nothing in this Section
4.05 shall be interpreted as excusing any Grantor from the performance of, or
imposing any obligation on the Collateral Agent or any Secured Party to cure or
perform, any covenants or other promises of any Grantor with respect to taxes,
assessments, charges, fees, liens, security interests or other encumbrances and
maintenance as set forth herein or in the other Indenture Documents.

      SECTION 4.06. Assignment of Security Interest. If at any time any Grantor
shall take a security interest in any property of an Account Debtor or any other
Person to secure payment and performance of an Account, such Grantor shall
promptly assign such security interest to the Collateral Agent to the extent
permitted by any contracts or arrangements to which such property is subject.
Such assignment need not be filed of public record unless necessary to continue
the perfected status of the security interest against creditors of and
transferees from the Account
<PAGE>
                                                                              10

Debtor or other Person granting the security interest.

      SECTION 4.07. Continuing Obligations of the Grantors. Each Grantor shall
remain liable to observe and perform all the conditions and obligations to be
observed and performed by it under each contract, agreement or instrument
relating to the Collateral, all in accordance with the terms and conditions
thereof, and each Grantor jointly and severally agrees to indemnify and hold
harmless the Collateral Agent and the Secured Parties from and against any and
all liability for such performance.

      SECTION 4.08. Use and Disposition of Collateral. None of the Grantors
shall make or permit to be made an assignment, pledge or hypothecation of the
Collateral or shall grant any other Lien in respect of the Collateral, except as
expressly permitted by the Indenture. None of the Grantors shall make or permit
to be made any transfer of the Collateral and each Grantor shall remain at all
times in possession of the Collateral owned by it, except that (a) Inventory may
be sold in the ordinary course of business and (b) unless and until the
Collateral Agent shall notify the Grantors that an Event of Default shall have
occurred and be continuing and that during the continuance thereof the Grantors
shall not sell, convey, lease, assign, transfer or otherwise dispose of any
Collateral (which notice may be given by telephone if promptly confirmed in
writing), the Grantors may use and dispose of the Collateral in any lawful
manner not inconsistent with the provisions of this Agreement, the Indenture or
any other Indenture Document. Without limiting the generality of the foregoing,
each Grantor agrees that it shall not permit any material Inventory to be in the
possession or control of any warehouseman, bailee, agent or processor at any
time unless such warehouseman, bailee, agent or processor shall have been
notified of the Security Interest and shall have agreed in writing to hold the
Inventory subject to the Security Interest and the instructions of the Senior
Agent (or, if the First-Lien Termination Date has occurred, the Collateral
Agent) and to waive and release any Lien held by it with respect to such
Inventory, whether arising by operation of law or otherwise.

      SECTION 4.09. Limitation on Modification of Accounts. None of the Grantors
will, without the prior written consent of the Senior Agent (or, if the
First-Lien Termination Date has occurred, the Collateral Agent) grant any
extension of the time of payment of any of the Accounts Receivable, compromise,
compound or settle the same for less than the full amount thereof, release,
wholly or partly, any Person liable for the payment thereof or allow any credit
or discount whatsoever thereon, other than extensions, credits, discounts,
compromises or settlements granted or made in the ordinary course of business
and consistent with its current practices.

      SECTION 4.10. Insurance. The Grantors, at their own expense, shall
maintain or cause to be maintained insurance covering physical loss or damage to
the Inventory and Equipment with financially sound and reputable insurance
companies in such amounts (with no greater risk retention) and against such
risks as are customarily maintained by companies of established repute engaged
in the same or similar businesses operating in the same or similar locations.
Subject to the Intercreditor Agreement, each Grantor irrevocably makes,
constitutes and appoints the Collateral Agent (and all officers, employees or
agents designated by the Collateral Agent) as such Grantor's true and lawful
agent (and attorney-in-fact) for the purpose, during the continuance of an Event
of Default, of making, settling and adjusting claims in respect of Collateral
under policies of insurance, endorsing the name of such Grantor on any check,
draft, instrument or other item of payment for the proceeds of such policies of
insurance and for making all determinations and decisions with respect thereto.
Subject to the Intercreditor Agreement, in the event that any Grantor at any
time or times shall fail to obtain or maintain any of the policies of insurance
required hereby or to pay any premium in whole or part relating thereto, the
Collateral Agent may, without waiving or releasing any obligation or liability
of the Grantors hereunder or any Event of Default, in its sole discretion,
obtain and maintain such policies of insurance and pay such premium and take any
other actions with respect thereto as the Collateral Agent deems advisable.
Subject to the Intercreditor Agreement, all sums disbursed by the Collateral
Agent in connection with this Section 4.10, including reasonable attorneys'
fees,
<PAGE>
                                                                              11

court costs, expenses and other charges relating thereto, shall be payable, upon
demand, by the Grantors to the Collateral Agent and shall be additional
Obligations secured hereby.

      SECTION 4.11. Legend. If any Accounts Receivable of any Grantor are
evidenced by chattel paper, such Grantor shall legend, in form and manner
satisfactory to the Senior Agent (or, if the First-Lien Termination Date has
occurred, the Collateral Agent), such Accounts Receivable and its books, records
and documents evidencing or pertaining thereto with an appropriate reference to
the fact that such Accounts Receivable have been assigned to the Senior Agent
(or, if the First-Lien Termination Date has occurred, the Collateral Agent) for
the benefit of the Secured Parties and that the Senior Agent has a security
interest therein.

      SECTION 4.12. Covenants Regarding Patent, Trademark and Copyright
Collateral. (a) Each Grantor agrees that it will not, nor will it permit any of
its licensees to, do any act, or omit to do any act, whereby any Patent which is
material to the conduct of such Grantor's business may become invalidated or
dedicated to the public, and agrees that it shall continue to mark any products
covered by a Patent with the relevant patent number as necessary and sufficient
to establish and preserve its maximum rights under applicable patent laws
pursuant to which each such Patent is issued.

      (b) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such Grantor's
business, (i) maintain such Trademark in full force free from any claim of
abandonment or invalidity for non-use, (ii) maintain the quality of products and
services offered under such Trademark sufficient to preclude any findings of
abandonment, (iii) display such Trademark with notice of Federal or foreign
registration to the extent necessary and sufficient to establish and preserve
its maximum rights under applicable law pursuant to which each such Trademark is
issued and (iv) not knowingly use or knowingly permit the use of such Trademark
in violation of any third party rights.

      (c) Each Grantor (either itself or through licensees) will, for each work
covered by a material Copyright, continue to publish, reproduce, display, adopt
and distribute the work with appropriate copyright notice as necessary and
sufficient to establish and preserve its maximum rights under applicable
copyright laws pursuant to which each such Copyright is issued.

      (d) Each Grantor shall notify the Collateral Agent immediately if it knows
or has reason to know that any Patent, Trademark or Copyright material to the
conduct of its business may become abandoned, lost or dedicated to the public,
or of any adverse determination or development (including the institution of, or
any such determination or development in, any proceeding in the United States
Patent and Trademark Office, United States Copyright Office or any court or
similar office of any country) regarding such Grantor's ownership of any Patent,
Trademark or Copyright, its right to register the same, or to keep and maintain
the same.

      (e) In no event shall any Grantor, either itself or through any agent,
employee, licensee or designee, file an application for any Patent, Trademark or
Copyright (or for the registration of any Trademark or Copyright) with the
United States Patent and Trademark Office, United States Copyright Office or any
office or agency in any political subdivision of the United States or in any
other country or any political subdivision thereof, unless it promptly informs
the Collateral Agent, and, in accordance with, and to the extent consistent
with, the terms of the Intercreditor Agreement, upon request of the Collateral
Agent, executes and delivers any and all agreements, instruments, documents and
papers as the Collateral Agent may request to evidence and perfect the
Collateral Agent's security interest in such Patent, Trademark or Copyright, and
each Grantor hereby appoints the Collateral Agent as its attorney-in-fact to
execute and file such writings for the foregoing purposes, all acts of such
attorney being hereby ratified and confirmed; such power, being coupled with an
interest, is irrevocable.

      (f) Each Grantor will take all necessary steps that are consistent with
the practice in any proceeding before the United States Patent and Trademark
Office, United States Copyright
<PAGE>
                                                                              12

Office or any office or agency in any political subdivision of the United States
or in any other country or any political subdivision thereof, to maintain and
pursue each material application relating to the Patents, Trademarks and/or
Copyrights (and to obtain the relevant grant or registration) and to maintain
each issued Patent and each registration of the Trademarks and Copyrights that
is material to the conduct of any Grantor's business, including timely filings
of applications for renewal, affidavits of use, affidavits of incontestability
and payment of maintenance fees, and, if consistent with good business judgment,
to initiate opposition, interference and cancelation proceedings against third
parties.

      (g) In the event that any Grantor has reason to believe that any
Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of any Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall notify
the Collateral Agent and shall, if consistent with good business judgment,
promptly sue for infringement, misappropriation or dilution and to recover any
and all damages for such infringement, misappropriation or dilution, and take
such other actions as are appropriate under the circumstances to protect such
Collateral.

      (h) Upon and during the continuance of an Event of Default, each Grantor
shall use its best efforts to obtain all requisite consents or approvals from
the licensor of each Copyright License, Patent License or Trademark License to
effect the assignment of all of such Grantor's right, title and interest
thereunder to the Senior Agent (or, if the First-Lien Termination Date has
occurred, the Collateral Agent) or its designee for the benefit of the Secured
Parties in accordance with the Intercreditor Agreement.

                                    ARTICLE V

                                Power of Attorney

      Each Grantor irrevocably makes, constitutes and appoints the Collateral
Agent (and all officers, employees or agents designated by the Collateral Agent)
as such Grantor's true and lawful agent and attorney-in-fact, and in such
capacity the Collateral Agent shall have the right, with power of substitution
for each Grantor and in each Grantor's name or otherwise, for the use and
benefit of the Collateral Agent and the Secured Parties, upon the occurrence and
during the continuance of an Event of Default (a) to receive, endorse, assign
and/or deliver any and all notes, acceptances, checks, drafts, money orders or
other evidences of payment relating to the Collateral or any part thereof; (b)
to demand, collect, receive payment of, give receipt for and give discharges and
releases of all or any of the Collateral; (c) to sign the name of any Grantor on
any invoice or bill of lading relating to any of the Collateral; (d) to send
verifications of Accounts Receivable to any Account Debtor; (e) to commence and
prosecute any and all suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect or otherwise realize on all or any of
the Collateral or to enforce any rights in respect of any Collateral; (f) to
settle, compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (g) to notify, or to require any
Grantor to notify, Account Debtors to make payment directly to the Collateral
Agent; and (h) to use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with all or any of the Collateral, and to do all
other acts and things necessary to carry out the purposes of this Agreement, as
fully and completely as though the Collateral Agent were the absolute owner of
the Collateral for all purposes; provided, however, that nothing herein
contained shall be construed as requiring or obligating the Collateral Agent or
any Secured Party to make any commitment or to make any inquiry as to the nature
or sufficiency of any payment received by the Collateral Agent or any Secured
Party, or to present or file any claim or notice, or to take any action with
respect to the Collateral or any part thereof or the moneys due or to become due
in respect thereof or any property covered thereby, and no action taken or
omitted to be taken by the Collateral Agent or any Secured Party with respect to
the Collateral or any part thereof shall give rise to any defense, counterclaim
or offset in favor of any Grantor or to any claim or action
<PAGE>
                                                                              13

against the Collateral Agent or any Secured Party. It is understood and agreed
that the appointment of the Collateral Agent as the agent and attorney-in-fact
of the Grantors for the purposes set forth above is coupled with an interest and
is irrevocable. The provisions of this Section shall in no event relieve any
Grantor of any of its obligations hereunder or under any other Indenture
Document with respect to the Collateral or any part thereof or impose any
obligation on the Collateral Agent or any Secured Party to proceed in any
particular manner with respect to the Collateral or any part thereof, or in any
way limit the exercise by the Collateral Agent or any Secured Party of any other
or further right which it may have on the date of this Agreement or hereafter,
whether hereunder, under any other Indenture Document, by law or otherwise.

      Notwithstanding anything in this Article V to the contrary, the Collateral
Agent agrees that it will not exercise any rights under the power of attorney
provided for in this Article V unless it does so in accordance with, and to the
extent consistent with, the terms of the Intercreditor Agreement.

                                   ARTICLE VI

                                    Remedies

      SECTION 6.01. Remedies upon Default. In accordance with, and to the extent
consistent with, the terms of the Intercreditor Agreement, upon the occurrence
and during the continuance of an Event of Default, each Grantor agrees to
deliver each item of Collateral to the Collateral Agent on demand, and it is
agreed that the Collateral Agent shall have the right to take any of or all the
following actions at the same or different times: (a) with respect to any
Collateral consisting of Intellectual Property, on demand, to cause the Security
Interest to become an assignment, transfer and conveyance of any of or all such
Collateral by the applicable Grantors to the Collateral Agent (except to the
extent assignment, transfer or conveyance thereof would result in a loss of said
Intellectual Property), or to license or sublicense, whether general, special or
otherwise, and whether on an exclusive or non-exclusive basis, any such
Collateral throughout the world on such terms and conditions and in such manner
as the Collateral Agent shall determine (other than in violation of any
then-existing licensing arrangements to the extent that waivers cannot be
obtained), and (b) with or without legal process and with or without prior
notice or demand for performance, to take possession of the Collateral and
without liability for trespass to enter any premises where the Collateral may be
located for the purpose of taking possession of or removing the Collateral and,
generally, to exercise any and all rights afforded to a secured party under the
UCC or other applicable law. Without limiting the generality of the foregoing,
in accordance with, and to the extent consistent with, the terms of the
Intercreditor Agreement, each Grantor agrees that the Collateral Agent shall
have the right, subject to the mandatory requirements of applicable law, to sell
or otherwise dispose of all or any part of the Collateral, at public or private
sale or at any broker's board or on any securities exchange, for cash, upon
credit or for future delivery as the Collateral Agent shall deem appropriate.
The Collateral Agent shall be authorized at any such sale (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers to Persons
who will represent and agree that they are purchasing the Collateral for their
own account for investment and not with a view to the distribution or sale
thereof, and upon consummation of any such sale the Collateral Agent shall have
the right to assign, transfer and deliver to the purchaser or purchasers thereof
the Collateral so sold. Each such purchaser at any such sale shall hold the
property sold absolutely, free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by law) all
rights of redemption, stay and appraisal which such Grantor now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted.

      The Collateral Agent shall give the Grantors 10 days' written notice
(which each Grantor agrees is reasonable notice within the meaning of Section
9-611 of the Uniform Commercial
<PAGE>
                                                                              14

Code as in effect in the State of New York or its equivalent in other
jurisdictions) of the Collateral Agent's intention to make any sale of
Collateral. Such notice, in the case of a public sale, shall state the time and
place for such sale and, in the case of a sale at a broker's board or on a
securities exchange, shall state the board or exchange at which such sale is to
be made and the day on which the Collateral, or portion thereof, will first be
offered for sale at such board or exchange. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Collateral Agent may fix and state in the notice (if any) of such sale.
At any such sale, the Collateral, or portion thereof, to be sold may be sold in
one lot as an entirety or in separate parcels, as the Collateral Agent may (in
its sole and absolute discretion) determine. The Collateral Agent shall not be
obligated to make any sale of any Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of such Collateral shall have been
given. The Collateral Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. At any public (or, to the extent permitted by law, private) sale made
pursuant to this Section, any Secured Party may bid for or purchase, free (to
the extent permitted by law) from any right of redemption, stay, valuation or
appraisal on the part of any Grantor (all said rights being also hereby waived
and released to the extent permitted by law), the Collateral or any part thereof
offered for sale and may make payment on account thereof by using any Obligation
then due and payable to such Secured Party from any Grantor as a credit against
the purchase price, and such Secured Party may, upon compliance with the terms
of sale, hold, retain and dispose of such property without further
accountability to any Grantor therefor. For purposes hereof a written agreement
to purchase the Collateral or any portion thereof shall be treated as a sale
thereof; the Collateral Agent shall be free to carry out such sale pursuant to
such agreement and no Grantor shall be entitled to the return of the Collateral
or any portion thereof subject thereto, notwithstanding the fact that after the
Collateral Agent shall have entered into such an agreement all Events of Default
shall have been remedied and the Obligations paid in full. As an alternative to
exercising the power of sale herein conferred upon it, the Collateral Agent may
proceed by a suit or suits at law or in equity to foreclose this Agreement and
to sell the Collateral or any portion thereof pursuant to a judgment or decree
of a court or courts having competent jurisdiction or pursuant to a proceeding
by a court-appointed receiver.

      SECTION 6.02. Application of Proceeds. In accordance with, and to the
extent consistent with, the terms of the Intercreditor Agreement, the Collateral
Agent shall apply the proceeds of any collection or sale of the Collateral, as
well as any Collateral consisting of cash, as follows:

            FIRST, to the payment of all costs and expenses incurred by Trustee
      or the Collateral Agent (in its capacity as such hereunder or under any
      other Indenture Document) in connection with such collection or sale or
      otherwise in connection with this Agreement or any of the Obligations,
      including all court costs and the reasonable fees and expenses of its
      agents and legal counsel, the repayment of all advances made by the
      Trustee or the Collateral Agent hereunder or under any other Indenture
      Document on behalf of any Grantor and any other costs or expenses incurred
      in connection with the exercise of any right or remedy hereunder or under
      any other Indenture Document and any other amounts due to the Trustee or
      the Collateral Agent under Section 7.07 of the Indenture;

            SECOND, to the payment in full of the Obligations owed to the
      Holders and any Other Second-Lien Obligations owed to holders of such
      Indebtedness (the amounts so
<PAGE>
                                                                              15

      applied to be distributed among the Holders and any holders of Other
      Second-Lien Obligations pro rata in accordance with the amounts of the
      Obligations owed to Holders and Other Second-Lien Obligations owed to
      holders of such Indebtedness on the date of any such distribution); and

            THIRD, to the Grantors, their successors or assigns, or as a court
      of competent jurisdiction may otherwise direct.

      The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. The Collateral Agent may fix a record date and payment date for any
payment to Holders pursuant to this Section 6.02. At least 15 days before such
record date, the Collateral Agent shall mail to each Holder and the Issuers a
notice that states the record date, the payment and amount to be paid. Upon any
sale of the Collateral by the Collateral Agent (including pursuant to a power of
sale granted by statute or under a judicial proceeding), the receipt of the
Collateral Agent or of the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Collateral so sold and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Collateral Agent or such officer or
be answerable in any way for the misapplication thereof.

      SECTION 6.03. Grant of License to Use Intellectual Property. In accordance
with, and to the extent consistent with, the Intercreditor Agreement, for the
purpose of enabling the Collateral Agent to exercise rights and remedies under
this Article at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants to the Collateral
Agent an irrevocable, non-exclusive license (exercisable without payment of
royalty or other compensation to the Grantors) to use, license or sub-license
any of the Collateral consisting of Intellectual Property now owned or hereafter
acquired by such Grantor, and wherever the same may be located, and including in
such license reasonable access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Collateral Agent
shall be exercised, at the option of the Collateral Agent (if the First-Lien
Termination Date has occurred), upon the occurrence and during the continuation
of an Event of Default; provided that any license, sub-license or other
transaction entered into by the Collateral Agent in accordance herewith shall be
binding upon the Grantors notwithstanding any subsequent cure of an Event of
Default.

                                   ARTICLE VII

                                  Miscellaneous

      SECTION 7.01. Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in Section 12.02 of the Indenture. All communications and notices
hereunder to any Guarantor shall be given to it at its address or telecopy
number set forth on Schedule I, with a copy to the Company.

      SECTION 7.02. Security Interest Absolute. All rights of the Collateral
Agent hereunder, the Security Interest and all obligations of the Grantors
hereunder shall be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of the Indenture, any other Indenture Document, any
agreement with respect to any of the Obligations or any other agreement or
instrument relating to any of the foregoing, (b) any change in the time, manner
or place of payment of, or in any other term of, all or any of the Obligations,
or any other amendment or waiver of or any consent to any departure from the
Indenture, any other Indenture Document or any other agreement or instrument,
(c) any exchange, release or non-perfection of any Lien on other collateral, or
any release or amendment or waiver of or consent under or departure from any
guarantee, securing or guaranteeing all or any of the Obligations, or (d) any
<PAGE>
                                                                              16

other circumstance that might otherwise constitute a defense available to, or a
discharge of, any Grantor in respect of the Obligations or this Agreement.

      SECTION 7.03. Survival of Agreement. All covenants, agreements,
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Secured Parties and shall survive the purchase and resale of the Notes by the
Initial Purchasers, regardless of any investigation made by the Initial
Purchasers or on their behalf, and shall continue in full force and effect until
this Agreement shall terminate.

      SECTION 7.04. Binding Effect; Several Agreement. This Agreement shall
become effective as to any Grantor when a counterpart hereof executed on behalf
of such Grantor shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such Grantor and the Collateral Agent and
their respective successors and assigns, and shall inure to the benefit of such
Grantor, the Collateral Agent and the other Secured Parties and their respective
successors and assigns, except that no Grantor shall have the right to assign or
transfer its rights or obligations hereunder or any interest herein or in the
Collateral (and any such assignment or transfer shall be void) except as
expressly contemplated by this Agreement or the other Indenture Documents. This
Agreement shall be construed as a separate agreement with respect to each
Grantor and may be amended, modified, supplemented, waived or released with
respect to any Grantor without the approval of any other Grantor and without
affecting the obligations of any other Grantor hereunder.

      SECTION 7.05. Successors and Assigns. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of any Grantor or the Collateral Agent that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns.

      SECTION 7.06. Collateral Agent's Fees and Expenses; Indemnification. In
accordance with, and to the extent consistent with, the terms of the
Intercreditor Agreement, (a) each Grantor jointly and severally agrees to pay
upon demand to the Collateral Agent the amount of any and all reasonable
expenses, including the reasonable fees, disbursements and other charges of its
counsel and of any experts or agents, which the Collateral Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from or other realization upon any
of the Collateral, (iii) the exercise, enforcement or protection of any of the
rights of the Collateral Agent hereunder or (iv) the failure of any Grantor to
perform or observe any of the provisions hereof applicable to it.

      (b) Without limitation of its indemnification obligations under the other
Indenture Documents, each Grantor jointly and severally agrees to indemnify the
Collateral Agent, the Trustee, the Holders and each Affiliate of the foregoing
Persons (each such Person being called an "Indemnitee") against, and hold each
of them harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable fees, disbursements and other charges of
counsel, incurred by or asserted against any of them arising out of, in any way
connected with, or as a result of, the execution, delivery or performance of
this Agreement or any claim, litigation, investigation or proceeding relating
hereto or to the Collateral, whether or not any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee.

      (c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 7.06 shall remain operative and in full force and effect
regardless of the termination of this Agreement or
<PAGE>
                                                                              17

any other Indenture Document, the consummation of the transactions contemplated
hereby, the repayment of any of the Notes, the invalidity or unenforceability of
any term or provision of this Agreement or any other Indenture Document, or any
investigation made by or on behalf of the Collateral Agent or any Holder. All
amounts due under this Section 7.06 shall be payable on written demand therefor.

      SECTION 7.07. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

      SECTION 7.08. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the Collateral Agent, the Trustee and the Holders under the other
Indenture Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provisions of this
Agreement or any other Indenture Document or consent to any departure by any
Grantor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on any Grantor in any case shall entitle such Grantor or any
other Grantor to any other or further notice or demand in similar or other
circumstances.

      (b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except (i) in accordance with the Indenture pursuant to an agreement
or agreements in writing entered into by the Collateral Agent and the Grantor or
Grantors with respect to which such waiver, amendment or modification is to
apply, or (ii) as otherwise provided in the Intercreditor Agreement.

      SECTION 7.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER INDENTURE
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER INDENTURE DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 7.09.

      SECTION 7.10. Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired thereby
(it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

      SECTION 7.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract (subject to Section 7.04), and
shall become effective as provided in
<PAGE>
                                                                              18

Section 7.04. Delivery of an executed signature page to this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof.

      SECTION 7.12. Headings. Article and Section headings used herein are for
the purpose of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.

      SECTION 7.13. Jurisdiction; Consent to Service of Process. (a) Each
Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Indenture Documents, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State or, to
the extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Collateral Agent, the Trustee or any Holder may otherwise have to
bring any action or proceeding relating to this Agreement or the other Indenture
Documents against any Grantor or its properties in the courts of any
jurisdiction.

      (b) Each Grantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Indenture Documents in
any New York State or Federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

      (c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 7.01. Nothing in this
Agreement will affected the right of any party to this Agreement to serve
process in any other manner permitted by law.

      SECTION 7.14. Termination. (a) This Agreement and the Security Interest
shall terminate at the time provided in Section 10.08 of the Indenture at which
time the Collateral Agent shall execute and deliver to the Grantors, at the
Grantors' expense, all Uniform Commercial Code termination statements and
similar documents, including, without limitation, authorization for the Grantors
to file Uniform Commercial Code termination statements, which the Grantors shall
reasonably request to evidence such termination. Any execution and delivery of
termination statements or documents pursuant to this Section 7.14 shall be
without recourse to or warranty by the Collateral Agent. A Grantor shall
automatically be released from its obligations hereunder and the Security
Interest in the Collateral of such Grantor shall be automatically released in
the event that such Grantor ceases to be a Guarantor pursuant to a transaction
permitted under the Indenture, at which time the Collateral Agent shall execute
and deliver to any Grantor, at such Grantor's expense, all documents that such
Grantor shall reasonably request to evidence such release.

      (b) If any of the Collateral shall become subject to the release
provisions set forth in Section 10.03 of the Indenture or Section 5.1 of the
Intercreditor Agreement, such Collateral shall be automatically released from
the Security Interest to the extent provided in Section 10.03 of the Indenture
or Section 5.1 of the Intercreditor Agreement, as applicable. The Collateral
Agent shall execute and deliver to the Grantors, at the Grantors' expense, all
Uniform Commercial Code termination statements and similar documents which the
Grantor shall reasonable request to evidence the termination of the Security
Interest in such Collateral.

      SECTION 7.15. Additional Grantors. If, pursuant to Sections 4.11 and 11.06
of the
<PAGE>
                                                                              19

Indenture, the Company is required to cause any Subsidiary of the Company that
is not a Grantor to enter in to this Agreement as a Grantor, upon execution and
delivery by the Collateral Agent and such Subsidiary of an instrument in the
form of Annex 3 hereto, such Subsidiary shall become a Grantor hereunder with
the same force and effect as if originally named as a Grantor herein. The
execution and delivery of any such instrument shall not require the consent of
any Grantor hereunder. The rights and obligations of each Grantor hereunder
shall remain in full force and effect notwithstanding the addition of any new
Grantor as a party to this Agreement.

      SECTION 7.16. Subject to Intercreditor Agreement. Notwithstanding anything
herein to the contrary, the lien and security interest granted to the Collateral
Agent pursuant to this Agreement and the exercise of any right or remedy by the
Collateral Agent hereunder are subject to the provisions of the Intercreditor
Agreement. In the event of any conflict between the terms of the Intercreditor
Agreement and this Agreement, the terms of the Intercreditor Agreement shall
govern.

      IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.

                                     SEMICONDUCTOR COMPONENTS
                                     INDUSTRIES, LLC,

                                     By /s/ John T. Kurtzweil
                                       ---------------------------------
                                       Name: John T. Kurtzweil
                                       Title: Chief Financial Officer

                                     ON SEMICONDUCTOR CORPORATION,

                                     By /s/ John T. Kurtzweil
                                       ---------------------------------
                                       Name: John T. Kurtzweil
                                       Title: Chief Financial Officer

                                     EACH OF THE OTHER GUARANTORS
                                     LISTED ON SCHEDULE I HERETO,

                                     By /s/ John T. Kurtzweil
                                       ------------------------------
                                       Name: John T. Kurtzweil
                                       Title: Chief Financial Officer

                                     WELLS FARGO BANK MINNESOTA,
                                     NATIONAL ASSOCIATION, as Collateral
                                     Agent,

                                     By /s/ Joseph P. O'Donnell
                                       --------------------------
                                       Name: Joseph P. O'Donnell
                                       Title: Corporate Trust Officer
<PAGE>
                                                               Schedule I to the
                                                              Security Agreement

                                   GUARANTORS

<TABLE>
<CAPTION>
                Guarantors                                 Address
                ----------                                 -------
<S>                                                  <C>

SCG International Development LLC                    5005 East McDowell Road
                                                     Phoenix, AZ 85008

SCG (Malaysia SMP) Holding Corporation               5005 East McDowell Road
                                                     Phoenix, AZ 85008

SCG (Czech) Holding Corporation                      5005 East McDowell Road
                                                     Phoenix, AZ 85008

SCG (China) Holding Corporation                      5005 East McDowell Road
                                                     Phoenix, AZ 85008

Semiconductor Components Industries Puerto Rico,     5005 East McDowell Road
Inc.                                                 Phoenix, AZ 85008

Semiconductor Components Industries of Rhode         2000 South County Trail
Island, Inc.                                         East Greenwich, RI 02818

Semiconductor Components Industries International    2000 South County Trail
of Rhode Island, Inc.                                East Greenwich, RI 02818
</TABLE>
<PAGE>
                                                              Schedule II to the
                                                              Security Agreement

                                   COPYRIGHTS
<PAGE>
                                                             Schedule III to the
                                                              Security Agreement

                                    LICENSES
<PAGE>
                                                              Schedule IV to the
                                                              Security Agreement

                                     PATENTS
<PAGE>
                                                               Schedule V to the
                                                              Security Agreement

                                   TRADEMARKS
<PAGE>
                                                                  Annex 2 to the
                                                              Security Agreement

                                    [Form of]

                             PERFECTION CERTIFICATE

      Reference is made to (a) the Indenture dated as of May 6, 2002 (as
amended, supplemented or otherwise modified from time to time, the "Indenture"),
among ON Semiconductor Corporation, a Delaware corporation (the "Company"), and
Semiconductor Components Industries, LLC, a Delaware limited liability company
("SCI LLC " and, together with the Company, the "Issuers"), the Guarantors and
Wells Fargo Bank Minnesota, National Association, a national banking association
("Wells Fargo Bank"), as trustee, (b) the Security Agreement dated as of May 6,
2002, among the Company, SCI LLC, the Guarantors and Wells Fargo Bank, as
collateral agent (in such capacity, the "Collateral Agent"), and (c) the
Intercreditor Agreement dated as of May 6, 2002 (as amended, supplemented or
otherwise modified from time to time, the "Intercreditor Agreement"), among the
Issuers, the Collateral Agent and the Senior Agent. Capitalized terms used but
not defined herein have the meanings assigned to them in the Indenture or the
Security Agreement, as applicable.

            The undersigned, an Officer of the Issuers, hereby certifies to the
Collateral Agent and each other Secured Party as follows:

1.    Names.

(a) The exact legal name of each Grantor, as such name appears in its respective
certificate of formation, is as follows:

(b) Set forth below is each other legal name each Grantor has had in the past
five years, together with the date of the relevant change:

(c) Except as set forth in Schedule 1 hereto, no Grantor has changed its
identity or corporate structure in any way within the past five years. Changes
in identity or corporate structure would include mergers, consolidations and
acquisitions, as well as any change in the form, nature or jurisdiction of
corporate organization. If any such change has occurred, include in Schedule 1
the information required by Sections 1 and 2 of this certificate as to each
acquiree or constituent party to a merger or consolidation.

(d) The following is a list of all other names (including trade names or similar
appellations) used by each Grantor or any of its divisions or other business
units in connection with the conduct of its business or the ownership of its
properties at any time during the past five years:

(e) Set forth below is the organizational identification number, if any, issued
by the jurisdiction of formation of each Grantor that is a registered
organization:

<TABLE>
<CAPTION>
                                            Organizational Identification
     Grantor                                            Number
     -------                                            ------
<S>                                         <C>

</TABLE>
<PAGE>
                                                                               2

(f) Set forth below is the Federal Taxpayer Identification Number of each
Grantor:

<TABLE>
<CAPTION>
                                           Federal Taxpayer Identification
     Grantor                                            Number
     -------                                            ------
<S>                                        <C>

</TABLE>

2. Current Locations. (a) The chief executive office of each Grantor is located
at the address set forth opposite its name below:

<TABLE>
<CAPTION>
         Grantor              Mailing Address        County        State
         -------              ---------------        ------        -----
<S>                           <C>                    <C>           <C>

</TABLE>

(b) Set forth below opposite the name of each Grantor are all locations where
such Grantor maintains any books or records relating to any Accounts Receivable
or General Intangibles (with each location at which Chattel Paper, if any, is
kept being indicated by an "*"):

<TABLE>
<CAPTION>
         Grantor              Mailing Address        County        State
         -------              ---------------        ------        -----
<S>                           <C>                    <C>           <C>

</TABLE>

(c) The jurisdiction of formation of each Grantor that is a registered
organization is set forth opposite its name below:

<TABLE>
<CAPTION>
         Grantor                                       Jurisdiction
         -------                                       ------------
<S>                                                    <C>

</TABLE>

(d) Set forth below opposite the name of each Grantor are all the locations
where such Grantor maintains any Inventory or Equipment or other Collateral not
identified above:

<TABLE>
<CAPTION>
         Grantor              Mailing Address        County        State
         -------              ---------------        ------        -----
<S>                           <C>                    <C>           <C>

</TABLE>

(e) Set forth below opposite the name of each Grantor are all the places of
business of such Grantor not identified in paragraph (a), (b), (c) or (d) above:

(f) Set forth below opposite the name of each Grantor are the names and
addresses of all Persons other than such Grantor that have possession of any of
the Collateral of such Grantor:

3. Unusual Transactions. All Accounts have been originated by the Grantors and
all Inventory has
<PAGE>
                                                                               3

been acquired by the Grantors in the ordinary course of business.

4. File Search Reports. File search reports have been obtained from each Uniform
Commercial Code filing office identified with respect to such Grantor in Section
2 hereof, and such search reports reflect no liens against any of the Collateral
other than those permitted under the Indenture.

5. UCC Filings. UCC financing statements in substantially the form of Schedule 5
hereto have been prepared for filing in the proper Uniform Commercial Code
filing office in the jurisdiction in which each Grantor is located and, to the
extent any of the Collateral is comprised of fixtures in the proper local
jurisdiction, as set forth with respect to such Grantor in Section 2 hereof.

6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule setting
forth, with respect to the filings described in Section 5 above, each filing and
the filing office in which such filing is to be made.

7. Stock Ownership and other Equity Interests. Attached hereto as Schedule 7 is
a true and correct list of all the issued and outstanding stock, partnership
interests, limited liability company membership interests or other equity
interests owned by the Company and each Subsidiary of the Company (including SCI
LLC). Also set forth on Schedule 7 is each equity investment of the Company or
any Subsidiary of the Company (including SCI LLC) that represents 50% or less of
the equity of the entity in which such investment was made.

8. Debt Instruments. Attached hereto as Schedule 8 is a true and correct list of
all instruments, including any promissory notes, and other evidence of
indebtedness held by the Company and each Subsidiary of the Company (including
SCI LLC), including all intercompany notes between the Company and each
Subsidiary of the Company (including SCI LLC) and each Subsidiary of the Company
(including SCI LLC) and each other such Subsidiary (including SCI LLC).

9. Advances. Attached hereto as Schedule 9 is (a) a true and correct list of all
advances made by the Company to any Subsidiary of the Company (including SCI
LLC) or made by any Subsidiary of the Company (including SCI LLC) to the Company
or to any other Subsidiary of the Company (including SCI LLC) (other than those
identified on Schedule 8), which advances will be on and after the date hereof
evidenced by one or more intercompany notes pledged to the Collateral Agent
under the Pledge Agreement and (b) a true and correct list of all unpaid
intercompany transfers of goods sold and delivered by or to the Company or any
Subsidiary of the Company (including SCI LLC).

10. Mortgage Filings. Attached hereto as Schedule 10 is a schedule setting
forth, with respect to each Mortgaged Property, (a) the exact name of the Person
that owns such property as such name appears in its certificate of incorporation
or other organizational document, (b) if different from the name identified
pursuant to clause (a), the exact name of the current record owner of such
property reflected in the records of the filing office for such property
identified pursuant to the following clause and (c) the filing office in which a
Mortgage with respect to such property must be filed or recorded in order for
the Collateral Agent to obtain a perfected security interest therein.

11. Intellectual Property.
Attached hereto as Schedule 11(A) is a schedule setting forth all of each
Grantor's Patents and registered Trademarks and Patent and Trademark
applications, including the name of the registered owner or applicant, as
applicable, and the registration or application number, as
<PAGE>
                                                                               4

applicable, of each Patent and registered Trademark or Patent or Trademark
application owned by any Grantor, in proper form for filing with the United
States Patent and Trademark Office, and a schedule setting forth all of each
Grantor's material Patent Licenses and material Trademark Licenses. Attached
hereto as Schedule 11(B) is a schedule setting forth all of each Grantor's
registered Copyrights, including the name of the registered owner and the
registration number of each Copyright owned by any Grantor, in proper form for
filing with the United States Copyright Office, and a schedule setting forth all
of each Grantor's material Copyright Licenses that grant rights with respect to
registered Copyrights.
<PAGE>
                                                                               5

            IN WITNESS WHEREOF, the undersigned have duly executed this
certificate on this [ ]th day of May, 2002.

                                      ON SEMICONDUCTOR CORPORATION,

                                       by
                                          --------------------------
                                          Name:
                                          Title:

                                      SEMICONDUCTOR COMPONENTS
                                      INDUSTRIES, LLC,

                                       by
                                          --------------------------
                                          Name:
                                          Title:
<PAGE>
                                                                  Annex 3 to the
                                                              Security Agreement

                                      SUPPLEMENT NO. [ ] dated as of [ ], to the

                        Security Agreement dated as of May 6, 2002, among
                        SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC, a Delaware
                        limited liability company ("SCI LLC"), ON SEMICONDUCTOR
                        CORPORATION, a Delaware corporation (the "Company" and,
                        together with SCI LLC, the "Issuers"), each subsidiary
                        of the Company listed on Schedule I thereto (each such
                        subsidiary individually a "Subsidiary" or a "Guarantor"
                        and, collectively, the "Subsidiaries" or the
                        "Guarantors"; the Guarantors and the Issuers are
                        referred to collectively herein as the "Grantors") and
                        WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a
                        national banking association ("Wells Fargo Bank"), as
                        trustee under the Indenture referred to below and as
                        collateral agent (in such capacity, the "Collateral
                        Agent") for the Secured Parties (as defined therein).

      A. Reference is made to (a) the Indenture dated as of May 6, 2002 (as
amended, supplemented or otherwise modified from time to time, the "Indenture"),
among the Company, SCI LLC, the Guarantors and Wells Fargo Bank, as trustee, and
(b) the Intercreditor Agreement dated as of May 6, 2002 (as amended,
supplemented or otherwise modified from time to time, the "Intercreditor
Agreement"), among the Issuers, the Collateral Agent and the Senior Agent.

      B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Security Agreement and the
Indenture.

      C. The Grantors have entered into the Security Agreement in order to
induce the Trustee to enter into the Indenture and the Initial Purchasers to
purchase the Notes. Pursuant to Section 4.11 of the Indenture, the Company is
required to cause certain of its Subsidiaries that are not Grantors to enter in
to this Agreement as Grantors. Section 7.15 of the Security Agreement provides
that such Subsidiaries may become Grantors under the Security Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the "New Grantor") is executing this Supplement in
accordance with the requirements of the Indenture to become a Grantor under
the Security Agreement as consideration for the purchase of the Notes by the
Initial Purchasers and the Holders.

      Accordingly, the Collateral Agent and the New Grantor agree as follows:

      SECTION 1. In accordance with Section 7.15 of the Security Agreement, the
New Grantor by its signature below becomes a Grantor under the Security
Agreement with the same force and effect as if originally named therein as a
Grantor and the New Grantor hereby (a) agrees to all the terms and provisions of
the Security Agreement applicable to it as a Grantor thereunder and (b)
represents and warrants that the representations and warranties made by it as a
Grantor thereunder are true and correct on and as of the date hereof except to
the extent a representation and warranty expressly relates solely to a specific
date in which case such representation and warranty shall be true and correct on
such date. In furtherance of the foregoing, the New Grantor, as security for the
payment and performance in full of the Obligations (as defined in the Security
Agreement), does hereby create and grant to the Collateral Agent, its successors
and assigns, for the benefit of the Secured Parties, their successors and
assigns, a security interest in and lien on all of the New Grantor's right,
title and interest in and to the Collateral of the New Grantor. Each reference
to a "Grantor" in the Security Agreement shall be deemed to include the New
Grantor. The Security Agreement is hereby incorporated herein by reference.
<PAGE>
                                                                               2

      SECTION 2. The New Grantor represents and warrants to the Collateral Agent
and the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.

      SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Grantor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.

      SECTION 4. The New Grantor hereby represents and warrants that (a) set
forth on Schedule I attached hereto is a true and correct schedule of the
location of any and all Collateral of the New Grantor and (b) set forth under
its signature hereto, is the true and correct location of the chief executive
office of the New Grantor.

      SECTION 5. Except as expressly supplemented hereby, the Security Agreement
shall remain in full force and effect.

      SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

      SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

      SECTION 8. All communications and notices hereunder shall be in writing
and given as provided in Section 7.01 of the Security Agreement. All
communications and notices hereunder to the New Grantor shall be given to it at
the address set forth under its signature below, with a copy to the Company.

      SECTION 9. The New Grantor agrees to reimburse the Collateral Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent.
<PAGE>
                                                                               3

      IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly
executed this Supplement to the Security Agreement as of the day and year first
above written.

                                    [NAME OF NEW GRANTOR],

                                    By
                                       ------------------------------------
                                       Name:
                                       Title:
                                       Address:

                                       WELLS FARGO BANK MINNESOTA,
                                       NATIONAL ASSOCIATION, as Collateral
                                       Agent,

                                    By
                                       ------------------------------------
                                       Name:
                                       Title:
<PAGE>
                                                                      Schedule I
                                                           to Supplement No. [ ]
                                                       to the Security Agreement

                             LOCATION OF COLLATERAL

<TABLE>
<CAPTION>
Description                                          Location
-----------                                          --------
<S>                                                  <C>

</TABLE><PAGE>
                                                                    Exhibit 10.6

                                    PLEDGE AGREEMENT dated as of May 6, 2002,
                           among SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC, a
                           Delaware limited liability company (the "SCI LLC"),
                           ON SEMICONDUCTOR CORPORATION, a Delaware corporation
                           (the "Company" and, together with SCI LLC, the
                           "Issuers"), each subsidiary of the Company listed on
                           Schedule I hereto (each such subsidiary individually
                           a "Subsidiary Pledgor" and collectively, the
                           "Subsidiary Pledgors"; SCI LLC, the Company and the
                           Subsidiary Pledgors are referred to herein
                           individually as a "Pledgor" and collectively as the
                           "Pledgors") and WELLS FARGO BANK MINNESOTA, NATIONAL
                           ASSOCIATION, a national banking association ("Wells
                           Fargo Bank"), as trustee under the Indenture referred
                           to below and as collateral agent (in such capacity,
                           the "Collateral Agent") for the Secured Parties (as
                           defined in the Security Agreement). Capitalized terms
                           used but not defined herein shall have the meanings
                           assigned to such terms in the Indenture (as defined
                           below).

                                   WITNESSETH:

                  WHEREAS, pursuant to the terms, conditions and provisions of
the (a) Indenture dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the "Indenture"), among
the Issuers, the Subsidiary Pledgors and Wells Fargo Bank, as trustee (the
"Trustee"), and (b) the Purchase Agreement dated as of May 1, 2002, among the
Issuers, the Subsidiary Pledgors and Credit Suisse First Boston Corporation,
Morgan Stanley Co. Incorporated, Salomon Smith Barney Inc. and J.P. Morgan
Securities Inc. (the "Initial Purchasers"), the Issuers are issuing $300,000,000
aggregate principal amount of 12% Senior Secured Notes due 2008 and may issue,
from time to time, additional notes in accordance with the provisions of the
Indenture (collectively, the "Notes") which will be guaranteed on a senior
secured basis by each of the Pledgors;

                  WHEREAS, pursuant to the Pledge Agreement dated as of August
4, 1999 (as amended, supplemented or otherwise modified from time to time),
among the Issuers, each of the subsidiaries of the Company party thereto or
which becomes a party thereto pursuant to the Credit Agreement referred to below
(together with the Issuers, each a "Credit Agreement Pledgor" and, collectively,
the "Credit Agreement Pledgors") and JPMorgan Chase Bank (as successor to The
Chase Manhattan Bank), a New York banking corporation ("JPMorgan"), as
collateral agent, the Credit Agreement Pledgors have granted to the Senior Agent
(as defined below) a first-priority lien and security interest in the Collateral
(as defined below) in connection with the Credit Agreement dated as of August 4,
1999, as amended and restated as of April 3, 2000 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among SCI LLC, as
borrower, the Company, the lenders from time to time party thereto (the
"Lenders"), JPMorgan, as administrative agent, collateral agent and syndication
agent (in such capacity, the "Senior Agent") for the Lenders, and Credit
Lyonnais New York
<PAGE>
                                                                               2

Branch, Credit Suisse First Boston and Lehman Commercial Paper Inc., as
co-documentation agents;

                  WHEREAS, the Issuers, the Collateral Agent and the Senior
Agent have entered into an Intercreditor Agreement, dated as of the date hereof
(the "Intercreditor Agreement"), pursuant to which the lien and security
interest in the Collateral granted by this Agreement are and shall be
subordinated in all respects to the lien and security interest in the Collateral
granted pursuant to, and all terms and conditions of, the Senior Lender
Documents (as defined in the Intercreditor Agreement);

                  WHEREAS, each Pledgor is executing and delivering this
Agreement pursuant to the terms of the Indenture to induce the Trustee to enter
into the Indenture and the Initial Purchasers to purchase the Notes; and

                  WHEREAS, each Pledgor has duly authorized the execution,
delivery and performance of this Agreement.

                  NOW, THEREFORE, for and in consideration of the premises, and
of the mutual covenants herein contained, and in order to induce the Trustee to
enter into the Indenture and the Initial Purchasers to purchase the Notes, each
Pledgor and the Collateral Agent, on behalf of itself and each Secured Party (as
defined in the Security Agreement) (and each of their respective successors or
assigns), hereby agree as follows:

         SECTION 1. Pledge. As security for the payment and performance, as the
case may be, in full of all obligations of the Issuers and the Subsidiary
Pledgors under the Indenture, the Notes and the other Indenture Documents,
including obligations to the Trustee and the Collateral Agent, whether for
payment of principal of, interest on or additional interest, if any, on the
Notes and all other monetary obligations of the Issuers and the Subsidiary
Pledgors under the Indenture, the Notes and the other Indenture Documents,
whether for fees, expenses, indemnification or otherwise (referred to
collectively as the "Obligations"), each Pledgor hereby pledges and grants to
the Collateral Agent, its successors and assigns, and hereby grants to the
Collateral Agent, its successors and assigns, for the ratable benefit of the
Secured Parties, a second-priority security interest in all of such Pledgor's
right, title and interest in, to and under (a) the shares of capital stock,
partnership interests, membership interests in a limited liability company,
beneficial interests in a trust or other equity ownership interests in a Person
(collectively, the "Equity Interests") owned by it which are listed on Schedule
II hereto and any Equity Interests obtained in the future by such Pledgor and
the certificates representing all such Equity Interests (the "Pledged
Interests"); provided that (i) the Pledged Interests shall not include more than
65% of the issued and outstanding voting stock of any Foreign Subsidiary, (ii)
the Pledged Interests shall not include any Equity Interests in any Foreign
Joint Venture Company (as defined in the Credit Agreement) to the extent that
such a Pledge is prohibited by the constitutive documents of such Foreign Joint
Venture Company or (iii) to the extent that applicable law requires that a
Subsidiary of such Pledgor issue directors' qualifying shares, such qualifying
shares; (b)(i) the debt securities owned by it which are listed opposite the
name of such Pledgor on Schedule II hereto, (ii) any debt securities in the
future issued to such Pledgor and (iii) the promissory notes and any other
instruments evidencing such debt securities (the "Pledged Debt Securities"); (c)
all other property that has been or may be delivered to and held by the Senior
Agent (or, if the First-Lien Termination Date (as defined in the Security
Agreement) has occurred, the Collateral Agent) pursuant to the terms hereof; (d)
subject
<PAGE>
                                                                               3

to Section 5, all payments of principal or interest, dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed, in respect of, in exchange for or upon the conversion of
the securities referred to in clauses (a) and (b) above; (e) subject to Section
5, all rights and privileges of such Pledgor with respect to the securities and
other property referred to in clauses (a), (b), (c) and (d) above; and (f) all
proceeds of any of the foregoing (the items referred to in clauses (a) through
(f) above being collectively referred to as the "Collateral"). Upon delivery to
the Senior Agent (or, if the First-Lien Termination Date has occurred, the
Collateral Agent), (a) any Pledged Interests, any Pledged Debt Securities or any
stock certificates, notes or other securities now or hereafter included in the
Collateral (the "Pledged Securities") have been or shall be accompanied by stock
powers duly executed in blank or other instruments of transfer satisfactory to
the Senior Agent (or, if the First-Lien Termination Date has occurred, the
Collateral Agent) and by such other instruments and documents as the Senior
Agent (or, if the First-Lien Termination Date has occurred, the Collateral
Agent) may reasonably request and (b) all other property comprising part of the
Collateral shall be accompanied by proper instruments of assignment duly
executed by the applicable Pledgor and such other instruments or documents as
the Senior Agent (or, if the First-Lien Termination Date has occurred, the
Collateral Agent) may reasonably request. Each delivery of Pledged Securities
shall be accompanied by a schedule describing the securities theretofore and
then being pledged hereunder, which schedule shall be attached hereto as
Schedule II and made a part hereof. Each schedule so delivered shall supersede
any prior schedules so delivered.

         TO HAVE AND TO HOLD the Collateral, in accordance with, and to the
extent consistent with, the terms of the Intercreditor Agreement, together with
all right, title, interest, powers, privileges and preferences pertaining or
incidental thereto, unto the Collateral Agent, its successors and assigns, for
the ratable benefit of the Secured Parties, forever; subject, however, to the
terms, covenants and conditions hereinafter set forth.

         SECTION 2. Delivery of the Collateral. (a) Each Pledgor agrees promptly
to deliver or cause to be delivered to the Senior Agent (or, if the First-Lien
Termination Date has occurred, the Collateral Agent) any and all Pledged
Securities, and any and all certificates or other instruments or documents
representing the Collateral unless such Pledged Securities, certificates or
other instruments or documents have previously been delivered to the Senior
Agent.

         (b) Each Pledgor will cause any Indebtedness for borrowed money owed to
the Pledgor by any Person to be evidenced by a duly executed promissory note
that is pledged to the Collateral Agent and delivered to the Senior Agent (or,
if the First-Lien Termination Date has occurred, the Collateral Agent) for the
benefit of the Secured Parties pursuant to the terms thereof.

         SECTION 3. Representations, Warranties and Covenants. Each Pledgor
hereby represents, warrants and covenants, as to itself and the Collateral
pledged by it hereunder, to and with the Collateral Agent that:

                  (a) the Pledged Interests represent that percentage as set
         forth on Schedule II of the issued and outstanding shares of each class
         of the Equity Interests of the issuer with respect thereto;
<PAGE>
                                                                               4

                  (b) except for the security interest granted hereunder and the
         security interest granted under the Senior Lender Documents (as defined
         in the Intercreditor Agreement), such Pledgor (i) is and will at all
         times continue to be the direct owner, beneficially and of record, of
         the Pledged Securities indicated on Schedule II, (ii) holds the same
         free and clear of all Liens other than Permitted Liens, (iii) will make
         no assignment, pledge, hypothecation or transfer of, or create or
         permit to exist any security interest in or other Lien on, the
         Collateral, other than pursuant hereto or the Senior Lender Documents
         in accordance with the Intercreditor Agreement, and (iv) subject to
         Section 5 and the Intercreditor Agreement, will cause any and all
         Collateral, whether for value paid by such Pledgor or otherwise, to be
         forthwith deposited (unless such Collateral previously was deposited
         with the Senior Agent) with the Senior Agent (or, if the First-Lien
         Termination Date has occurred, the Collateral Agent) and pledged or
         assigned hereunder;

                  (c) such Pledgor (i) has the power and authority to pledge the
         Collateral in the manner hereby done or contemplated and (ii) will
         defend its title or interest thereto or therein against any and all
         Liens other than Permitted Liens, however arising, of all Persons
         whomsoever;

                  (d) no consent of any other Person (including stockholders or
         creditors of any Pledgor) and no consent or approval of any
         Governmental Authority or any securities exchange was or is necessary
         to the validity of the pledge effected hereby;

                  (e) by virtue of the execution and delivery by the Pledgors of
         this Agreement, upon delivery to the Senior Agent of the Pledged
         Securities, certificates or other documents representing or evidencing
         the Collateral in accordance with this Agreement, and, in the case of
         Pledged Securities not constituting certificated securities or
         instruments, the filing of UCC financing statements in the appropriate
         filing office, the Collateral Agent will have a valid and perfected
         second-priority lien upon and security interest in such Pledged
         Securities as security for the payment and performance of the
         Obligations;

                  (f) the pledge effected hereby is effective to vest in the
         Collateral Agent, on behalf of the Secured Parties, the rights of the
         Collateral Agent in the Collateral as set forth herein;

                  (g) all of the Pledged Interests have been duly authorized and
         validly issued and are fully paid and nonassessable;

                  (h) all information set forth herein relating to the Pledged
         Interests is accurate and complete in all material respects as of the
         date hereof;

                  (i) the pledge of the Pledged Interests pursuant to this
         Agreement does not violate Regulation T, U or X of the Federal Reserve
         Board or any successor thereto as of the date hereof; and

                  (j) all Collateral consisting of Pledged Securities,
         certificates or other documents representing or evidencing the
         Collateral has been delivered to the
<PAGE>
                                                                               5

         Senior Agent (or, if the First-Lien Termination Date has occurred, the
         Collateral Agent) in accordance with Section 2.

         SECTION 4. Registration in Nominee Name; Denominations. The Senior
Agent (or, if the First-Lien Termination Date has occurred, the Collateral
Agent), on behalf of the Secured Parties, shall have the right (in its sole and
absolute discretion) to hold the Pledged Securities in its own name as pledgee,
the name of its nominee (as pledgee or as sub-agent) or the name of the
Pledgors, endorsed or assigned in blank or in favor of the Senior Agent (or, if
the First-Lien Termination Date has occurred, the Collateral Agent). Each
Pledgor will promptly give to the Collateral Agent copies of any notices or
other communications received by it with respect to Pledged Securities
registered in the name of such Pledgor. The Senior Agent (or, if the First-Lien
Termination Date has occurred, the Collateral Agent) shall at all times have the
right to exchange the certificates representing Pledged Securities for
certificates of smaller or larger denominations for any purpose consistent with
this Agreement and the Intercreditor Agreement.

         SECTION 5. Voting Rights; Dividends and Interest, etc. (a) Unless and
until an Event of Default shall have occurred and be continuing:

                  (i) Each Pledgor shall be entitled to exercise any and all
         voting and/or other consensual rights and powers inuring to an owner of
         Pledged Securities or any part thereof for any purpose consistent with
         the terms of this Agreement, the Indenture and the other Indenture
         Documents; provided, however, that such Pledgor will not be entitled to
         exercise any such right if the result thereof could materially and
         adversely affect the rights inuring to a holder of the Pledged
         Securities or the rights and remedies of any of the Secured Parties
         under this Agreement or the Indenture or any other Indenture Document
         or the ability of the Secured Parties to exercise the same.

                (ii) The Collateral Agent shall execute and deliver to each
         Pledgor, or cause to be executed and delivered to each Pledgor, all
         such proxies, powers of attorney and other instruments as such Pledgor
         may reasonably request for the purpose of enabling such Pledgor to
         exercise the voting and/or consensual rights and powers it is entitled
         to exercise pursuant to subparagraph (i) above and to receive the cash
         dividends it is entitled to receive pursuant to subparagraph (iii)
         below.

               (iii) Each Pledgor shall be entitled to receive and retain any
         and all cash dividends, interest and principal paid on the Pledged
         Securities to the extent and only to the extent that such cash
         dividends, interest and principal are permitted by, and otherwise paid
         in accordance with, the terms and conditions of the Indenture, the
         other Indenture Documents and applicable laws. All noncash dividends,
         interest and principal, and all dividends, interest and principal paid
         or payable in cash or otherwise in connection with a partial or total
         liquidation or dissolution, return of capital, capital surplus or
         paid-in surplus, and all other distributions (other than distributions
         referred to in the preceding sentence) made on or in respect of the
         Pledged Securities, whether paid or payable in cash or otherwise,
         whether resulting from a subdivision, combination or reclassification
         of the outstanding capital stock of the issuer of any Pledged
         Securities or received in exchange for Pledged Securities or any part
         thereof, or in redemption thereof, or as a result of any merger,
         consolidation, acquisition or other exchange of assets to which such
         issuer may be a party or otherwise, shall be and become part of the
<PAGE>
                                       6

         Collateral, and, if received by any Pledgor, shall not be commingled by
         such Pledgor with any of its other funds or property but shall be held
         separate and apart therefrom, shall be held in trust for the benefit of
         the Collateral Agent and shall be forthwith delivered to the Senior
         Agent (or, if the First-Lien Termination Date has occurred, the
         Collateral Agent) for the benefit of the Secured Parties in the same
         form as so received (with any necessary endorsement).

         (b) In accordance with, and to the extent consistent with, the terms of
the Intercreditor Agreement, upon the occurrence and during the continuance of
an Event of Default, all rights of any Pledgor to dividends, interest or
principal that such Pledgor is authorized to receive pursuant to paragraph
(a)(iii) above shall cease, and all such rights shall thereupon become vested in
the Collateral Agent, which shall subject to the provisions of this paragraph
(b) have the sole and exclusive right and authority to receive and retain such
dividends, interest or principal. All dividends, interest or principal received
by the Pledgor contrary to the provisions of this Section 5 shall be held in
trust for the benefit of the Collateral Agent, shall be segregated from other
property or funds of such Pledgor and shall be forthwith delivered to the
Collateral Agent upon demand in the same form as so received (with any necessary
endorsement). Any and all money and other property paid over to or received by
the Collateral Agent pursuant to the provisions of this paragraph (b) shall be
retained by the Collateral Agent in an account to be established by the
Collateral Agent upon receipt of such money or other property and shall be
applied in accordance with the provisions of Section 7. After all Events of
Default have been cured or waived, the Collateral Agent shall promptly repay to
each Pledgor all cash dividends, interest or principal (without interest), that
such Pledgor would otherwise be permitted to retain pursuant to the terms of
paragraph (a)(iii) above and which remain in such account.

         (c) In accordance with, and to the extent consistent with, the terms of
the Intercreditor Agreement, upon the occurrence and during the continuance of
an Event of Default, all rights of any Pledgor to exercise the voting and
consensual rights and powers it is entitled to exercise pursuant to paragraph
(a)(i) of this Section 5, and the obligations of the Collateral Agent under
paragraph (a)(ii) of this Section 5, shall cease, and all such rights shall
thereupon become vested in the Collateral Agent, which shall have the sole and
exclusive right and authority to exercise such voting and consensual rights and
powers, provided that, unless the Collateral Agent shall have received written
objections from Holders of at least 25% in principal amount of the Notes, the
Collateral Agent shall have the right from time to time following and during the
continuance of an Event of Default to permit the Pledgors to exercise such
rights. After all Events of Default have been cured or waived, each Pledgor will
have the right to exercise the voting and consensual rights and powers that it
would otherwise be entitled to exercise pursuant to the terms of paragraph
(a)(i) above.

         SECTION 6. Remedies upon Default. In accordance with, and to the extent
consistent with, the terms of the Intercreditor Agreement, upon the occurrence
and during the continuance of an Event of Default, subject to applicable
regulatory and legal requirements, the Collateral Agent may sell the Collateral,
or any part thereof, at public or private sale or at any broker's board or on
any securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to Persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the
<PAGE>
                                                                               7

distribution or sale thereof, and upon consummation of any such sale the
Collateral Agent shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold. Each such purchaser at
any such sale shall hold the property sold absolutely free from any claim or
right on the part of any Pledgor, and, to the extent permitted by applicable
law, the Pledgors hereby waive all rights of redemption, stay, valuation and
appraisal any Pledgor now has or may at any time in the future have under any
rule of law or statute now existing or hereafter enacted.

         The Collateral Agent shall give a Pledgor 10 days' prior written notice
(which each Pledgor agrees is reasonable notice within the meaning of Section
9-611 of the Uniform Commercial Code as in effect in the State of New York or
its equivalent in other jurisdictions) of the Collateral Agent's intention to
make any sale of such Pledgor's Collateral. Such notice, in the case of a public
sale, shall state the time and place for such sale and, in the case of a sale at
a broker's board or on a securities exchange, shall state the board or exchange
at which such sale is to be made and the day on which the Collateral, or portion
thereof, will first be offered for sale at such board or exchange. Any such
public sale shall be held at such time or times within ordinary business hours
and at such place or places as the Collateral Agent may fix and state in the
notice of such sale. At any such sale, the Collateral, or portion thereof, to be
sold may be sold in one lot as an entirety or in separate parcels, as the
Collateral Agent may (in its sole and absolute discretion) determine. The
Collateral Agent shall not be obligated to make any sale of any Collateral if it
shall determine not to do so, regardless of the fact that notice of sale of such
Collateral shall have been given. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. In case any sale of all or any part of the
Collateral is made on credit or for future delivery, the Collateral so sold may
be retained by the Collateral Agent until the sale price is paid in full by the
purchaser or purchasers thereof, but the Collateral Agent shall not incur any
liability in case any such purchaser or purchasers shall fail to take up and pay
for the Collateral so sold and, in case of any such failure, such Collateral may
be sold again upon like notice. At any public (or, to the extent permitted by
applicable law, private) sale made pursuant to this Section 6, any Secured Party
may bid for or purchase, free from any right of redemption, stay or appraisal on
the part of any Pledgor (all said rights being also hereby waived and released),
the Collateral or any part thereof offered for sale and may make payment on
account thereof by using any Obligation then due and payable to it from such
Pledgor as a credit against the purchase price, and it may, upon compliance with
the terms of sale, hold, retain and dispose of such property without further
accountability to such Pledgor therefor. For purposes hereof, (a) a written
agreement to purchase the Collateral or any portion thereof shall be treated as
a sale thereof, (b) the Collateral Agent shall be free to carry out such sale
pursuant to such agreement and (c) such Pledgor shall not be entitled to the
return of the Collateral or any portion thereof subject thereto, notwithstanding
the fact that after the Collateral Agent shall have entered into such an
agreement all Events of Default shall have been remedied and the Obligations
paid in full. As an alternative to exercising the power of sale herein conferred
upon it, the Collateral Agent may proceed by a suit or suits at law or in equity
to foreclose upon the Collateral and to sell the Collateral or any portion
thereof pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver.
<PAGE>
                                                                               8

         SECTION 7. Application of Proceeds of Sale. In accordance with, and to
the extent consistent with, the terms of the Intercreditor Agreement, the
Collateral Agent shall apply the proceeds of any collection or sale of the
Collateral, as well as any Collateral consisting of cash, as follows:

                  FIRST, to the payment of all costs and expenses incurred by
         the Trustee or the Collateral Agent (in its capacity as such hereunder
         or under any other Indenture Document) in connection with such
         collection or sale or otherwise in connection with this Agreement or
         any of the Obligations, including all court costs and the reasonable
         fees and expenses of its agents and legal counsel, the repayment of all
         advances made by the Trustee or the Collateral Agent hereunder or under
         any other Indenture Document on behalf of any Pledgor and any other
         costs or expenses incurred in connection with the exercise of any right
         or remedy hereunder or under any other Indenture Document and any other
         amounts due to the Trustee or the Collateral Agent under Section 7.07
         of the Indenture;

                  SECOND, to the payment in full of the Obligations owed to the
         Holders and any Other Second-Lien Obligations owed to holders of such
         Indebtedness (the amounts so applied to be distributed among the
         Holders and any holders of Other Second-Lien Obligations pro rata in
         accordance with the amounts of the Obligations owed to Holders and
         Other Second-Lien Obligations owed to holders of such Indebtedness on
         the date of any such distribution); and

                  THIRD, to the Pledgors, their successors or assigns, or as a
         court of competent jurisdiction may otherwise direct.

         The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. The Collateral Agent may fix a record date and payment date for any
payment to Holders pursuant to this Section 7. At least 15 days before such
record date, the Collateral Agent shall mail to each Holder and the Issuers a
notice that states the record date, the payment and amount to be paid. Upon any
sale of the Collateral by the Collateral Agent (including pursuant to a power of
sale granted by statute or under a judicial proceeding), the receipt of the
purchase money by the Collateral Agent or of the officer making the sale shall
be a sufficient discharge to the purchaser or purchasers of the Collateral so
sold and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.

         SECTION 8. Reimbursement of Collateral Agent. In accordance with, and
to the extent consist with, the terms of the Intercreditor Agreement, (a) each
Pledgor agrees to pay upon demand to the Collateral Agent the amount of any and
all reasonable expenses, including the reasonable fees, other charges and
disbursements of its counsel and of any experts or agents, that the Collateral
Agent may incur in connection with (i) the administration of this Agreement,
(ii) the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Collateral Agent hereunder or (iv) the failure by such
Pledgor to perform or observe any of the provisions hereof.

         (b) Without limitation of its indemnification obligations under the
other Indenture Documents, each Pledgor agrees to indemnify the Collateral
Agent, the Trustee, the
<PAGE>
                                                                               9

Holders and each Affiliate of the foregoing Persons (each such Person being
called an "Indemnitee") against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses, including
reasonable counsel fees, other charges and disbursements, incurred by or
asserted against any Indemnitee arising out of, in any way connected with, or as
a result of (i) the execution or delivery of this Agreement or any other
Indenture Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto of their respective obligations
thereunder or the consummation of the other transactions contemplated thereby or
(ii) any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto, provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee.

         (c) Any amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 8 shall remain operative and in full force and effect regardless
of the termination of this Agreement, the consummation of the transactions
contemplated hereby, the repayment of any of the Obligations, the invalidity or
unenforceability of any term or provision of this Agreement or any other
Indenture Document or any investigation made by or on behalf of the Collateral
Agent or any other Secured Party. All amounts due under this Section 8 shall be
payable on written demand therefor and shall bear interest at the rate specified
in the Notes.

         SECTION 9. Collateral Agent Appointed Attorney-in-Fact. Each Pledgor
hereby appoints the Collateral Agent the attorney-in-fact of such Pledgor for
the purpose of carrying out the provisions of this Agreement and taking any
action and executing any instrument that the Collateral Agent may deem necessary
or advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the foregoing,
the Collateral Agent shall have the right, upon the occurrence and during the
continuance of an Event of Default, with full power of substitution either in
the Collateral Agent's name or in the name of such Pledgor, to ask for, demand,
sue for, collect, receive and give acquittance for any and all moneys due or to
become due under and by virtue of any Collateral, to endorse checks, drafts,
orders and other instruments for the payment of money payable to the Pledgor
representing any interest or dividend or other distribution payable in respect
of the Collateral or any part thereof or on account thereof and to give full
discharge for the same, to settle, compromise, prosecute or defend any action,
claim or proceeding with respect thereto, and to sell, assign, endorse, pledge,
transfer and to make any agreement respecting, or otherwise deal with, the same;
provided, however, that nothing herein contained shall be construed as requiring
or obligating the Collateral Agent to make any commitment or to make any inquiry
as to the nature or sufficiency of any payment received by the Collateral Agent,
or to present or file any claim or notice, or to take any action with respect to
the Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby. The Collateral Agent and the other
Secured Parties shall be accountable only for amounts actually received as a
result of the exercise of the powers granted to them herein, and neither they
nor their officers, directors, employees or agents shall be responsible to any
Pledgor for any act or failure to act hereunder, except for their own gross
negligence or wilful misconduct.
<PAGE>
                                                                              10

         Notwithstanding anything in this Section 9 to the contrary, the
Collateral Agent agrees that it will not exercise any rights under the power of
attorney provided for in this Section 9 unless it does so in accordance with,
and to the extent consistent with, the terms of the Intercreditor Agreement.

         SECTION 10. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the Collateral Agent and the other Secured Parties under the other
Indenture Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provisions of this
Agreement or consent to any departure by any Pledgor therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) below,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No notice or demand on any Pledgor in any
case shall entitle such Pledgor to any other or further notice or demand in
similar or other circumstances.

         (b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except (i) in accordance with the Indenture pursuant to a
written agreement entered into between the Collateral Agent and the Pledgor or
Pledgors with respect to which such waiver, amendment or modification is to
apply, or (ii) as otherwise provided in the Intercreditor Agreement.

         SECTION 11. Securities Act, etc. In view of the position of the
Pledgors in relation to the Pledged Securities, or because of other current or
future circumstances, a question may arise under the Securities Act of 1933, as
now or hereafter in effect, or any similar statute hereafter enacted analogous
in purpose or effect (such Act and any such similar statute as from time to time
in effect being called the "Federal Securities Laws") with respect to any
disposition of the Pledged Securities permitted hereunder. Each Pledgor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Collateral Agent if the Collateral Agent were
to attempt to dispose of all or any part of the Pledged Securities, and might
also limit the extent to which or the manner in which any subsequent transferee
of any Pledged Securities could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Collateral Agent in any
attempt to dispose of all or part of the Pledged Securities under applicable
Blue Sky or other state securities laws or similar laws analogous in purpose or
effect. Each Pledgor recognizes that in light of such restrictions and
limitations the Collateral Agent may, with respect to any sale of the Pledged
Securities, limit the purchasers to those who will agree, among other things, to
acquire such Pledged Securities for their own account, for investment, and not
with a view to the distribution or resale thereof. Each Pledgor acknowledges and
agrees that in light of such restrictions and limitations, the Collateral Agent,
in its sole and absolute discretion, (a) may proceed to make such a sale whether
or not a registration statement for the purpose of registering such Pledged
Securities or part thereof shall have been filed under the Federal Securities
Laws and (b) may approach and negotiate with a single potential purchaser to
effect such sale, in either case in accordance with a valid exemption from
registration under the Federal Securities Laws. Each Pledgor acknowledges and
agrees that any such sale might result in prices and other terms less favorable
to the seller than if such sale were a public sale without such restrictions. In
the event of any such sale, the
<PAGE>
                                                                              11

Collateral Agent shall incur no responsibility or liability for selling all or
any part of the Pledged Securities at a price that the Collateral Agent, in its
sole and absolute discretion, may in good faith deem reasonable under the
circumstances, notwithstanding the possibility that a substantially higher price
might have been realized if the sale were deferred until after registration as
aforesaid or if more than a single purchaser were approached. The provisions of
this Section 11 will apply notwithstanding the existence of a public or private
market upon which the quotations or sales prices may exceed substantially the
price at which the Collateral Agent sells.

         SECTION 12. Registration, etc. Each Pledgor agrees that, upon the
occurrence and during the continuance of an Event of Default, if, in accordance
with, and to the extent consistent with, the terms of the Intercreditor
Agreement, for any reason the Collateral Agent desires to sell any of the
Pledged Securities at a public sale, it will, at any time and from time to time,
upon the written request of the Collateral Agent, use its reasonable best
efforts to take or to cause the issuer of such Pledged Securities to take such
action and prepare, distribute and/or file such documents, as are required or
advisable in the reasonable opinion of counsel for the Collateral Agent to
permit the public sale of such Pledged Securities. Each Pledgor further agrees
to indemnify, defend and hold harmless the Collateral Agent, each other Secured
Party, any underwriter and their respective officers, directors, affiliates and
controlling Persons from and against all loss, liability, expenses, costs of
counsel (including, without limitation, reasonable fees and expenses to the
Collateral Agent of legal counsel), and claims (including the costs of
investigation) that they may incur insofar as such loss, liability, expense or
claim arises out of or is based upon any alleged untrue statement of a material
fact contained in any prospectus (or any amendment or supplement thereto) or in
any notification or offering circular, or arises out of or is based upon any
alleged omission to state a material fact required to be stated therein or
necessary to make the statements in any thereof not misleading, except insofar
as the same may have been caused by any untrue statement or omission based upon
information furnished in writing to such Pledgor or the issuer of such Pledged
Securities by the Collateral Agent or any other Secured Party expressly for use
therein. Each Pledgor further agrees, upon such written request referred to
above, to use its reasonable best efforts to qualify, file or register, or cause
the issuer of such Pledged Securities to qualify, file or register, any of the
Pledged Securities under the Blue Sky or other securities laws of such states as
may be requested by the Collateral Agent and keep effective, or cause to be kept
effective, all such qualifications, filings or registrations. Each Pledgor
will bear all costs and expenses of carrying out its obligations under this
Section 12. Each Pledgor acknowledges that there is no adequate remedy at law
for failure by it to comply with the provisions of this Section 12 and that such
failure would not be adequately compensable in damages, and therefore agrees
that its agreements contained in this Section 12 may be specifically enforced.

         SECTION 13. Security Interest Absolute. All rights of the Collateral
Agent hereunder, the grant of a security interest in the Collateral and all
obligations of each Pledgor hereunder, shall be absolute and unconditional
irrespective of (a) any lack of validity or enforceability of the Indenture, any
other Indenture Document, any agreement with respect to any of the Obligations
or any other agreement or instrument relating to any of the foregoing, (b) any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Obligations, or any other amendment or waiver of or any consent to
any departure from the Indenture, any other Indenture Document or any other
agreement or instrument relating to any of the foregoing, (c) any exchange,
release or nonperfection of any other collateral, or any release or amendment or
waiver of or
<PAGE>
                                                                              12

consent to or departure from any guaranty, for all or any of the Obligations or
(d) any other circumstance that might otherwise constitute a defense available
to, or a discharge of, any Pledgor in respect of the Obligations or in respect
of this Agreement (other than the indefeasible payment in full of all the
Obligations).

         SECTION 14. Termination or Release. (a) This Agreement and the security
interests granted hereby shall terminate at the time provided in Section 10.08
of the Indenture.

         (b) Upon any sale or other transfer by any Pledgor of any Collateral
that is permitted under the Indenture or the Intercreditor agreement to any
Person that is not a Pledgor, or, if any of the Collateral shall otherwise
become subject to the release provisions set forth in Section 10.03 of the
Indenture or Section 5.1 of the Intercreditor Agreement, such Collateral shall
be automatically released from the Security Interest to the extent provided in
Section 10.03 of the Indenture or Section 5.1 of the Intercreditor Agreement, as
applicable.

         (c) In connection with any termination or release pursuant to paragraph
(a) or (b) or Section 17, the Collateral Agent shall execute and deliver to any
Pledgor, at such Pledgor's expense, all documents that such Pledgor shall
reasonably request to evidence such termination or release. Any execution and
delivery of documents pursuant to this Section 14 shall be without recourse to
or warranty by the Collateral Agent.

         SECTION 15. Notices. All communications and notices hereunder shall be
in writing and given as provided in Section 12.02 of the Indenture. All
communications and notices hereunder to any Subsidiary Pledgor shall be given to
it at the address or telecopy number set forth on Schedule I, with a copy to the
Company.

         SECTION 16. Further Assurances. Each Pledgor agrees to do such further
acts and things, and to execute and deliver such additional conveyances,
assignments, agreements and instruments, as the Collateral Agent, in accordance
with, and to the extent consistent with, the terms of the Intercreditor
Agreement, may at any time reasonably request in connection with the
administration and enforcement of this Agreement or with respect to the
Collateral or any part thereof or in order better to assure and confirm unto the
Collateral Agent its rights and remedies hereunder.

         SECTION 17. Binding Effect; Several Agreement; Assignments. Whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of any Pledgor that are contained in
this Agreement shall bind and inure to the benefit of its successors and
assigns. This Agreement shall become effective as to any Pledgor when a
counterpart hereof executed on behalf of such Pledgor shall have been delivered
to the Collateral Agent and a counterpart hereof shall have been executed on
behalf of the Collateral Agent, and thereafter shall be binding upon such
Pledgor and the Collateral Agent and their respective successors and assigns,
and shall inure to the benefit of such Pledgor, the Collateral Agent and the
other Secured Parties, and their respective successors and assigns, except that
no Pledgor shall have the right to assign its rights hereunder or any interest
herein or in the Collateral (and any such attempted assignment shall be void),
except as expressly contemplated by this Agreement or the other Indenture
Documents. In the event that a Pledgor ceases to be a Subsidiary of the Company
pursuant to a transaction permitted under the Indenture Documents, such
<PAGE>
                                                                              13

Pledgor shall be released from its obligations under this Agreement without
further action. This Agreement shall be construed as a separate agreement with
respect to each Pledgor and may be amended, modified, supplemented, waived or
released with respect to any Pledgor without the approval of any other Pledgor
and without affecting the obligations of any other Pledgor hereunder.

         SECTION 18. Survival of Agreement; Severability. (a) All covenants,
agreements, representations and warranties made by each Pledgor herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Indenture Document shall be
considered to have been relied upon by the Collateral Agent and the other
Secured Parties and shall survive the purchase of the Notes by the Initial
Purchasers, regardless of any investigation made by the Secured Parties or on
their behalf, and shall continue in full force and effect as long as any
Obligation remains unpaid.

         (b) In the event any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby (it being understood
that the invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.

         SECTION 19. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

         SECTION 20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute a single contract, and shall become effective
as provided in Section 17. Delivery of an executed counterpart of a signature
page to this Agreement by facsimile transmission shall be as effective as
delivery of a manually executed counterpart of this Agreement.

         SECTION 21. Rules of Interpretation. The rules of interpretation
specified in Section 1.03 of the Security Agreement shall be applicable to this
Agreement. Section headings used herein are for convenience of reference only,
are not part of this Agreement and are not to affect the construction of, or to
be taken into consideration in interpreting this Agreement.

         SECTION 22. Jurisdiction; Consent to Service of Process. (a) Each
Pledgor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Indenture Documents, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that, to the extent permitted by
applicable law, all claims in respect of any such action or proceeding may be
heard and determined in such New York State or, to the extent permitted by law,
in such
<PAGE>
                                                                              14

Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Collateral Agent or
any other Secured Party may otherwise have to bring any action or proceeding
relating to this Agreement or the other Indenture Documents against any Pledgor
or its properties in the courts of any jurisdiction.

         (b) Each Pledgor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Indenture Documents in
any New York State or Federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

         (c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 15. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

         SECTION 23. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER INDENTURE DOCUMENTS.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER INDENTURE DOCUMENTS, AS APPLICABLE, BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 23.

         SECTION 24. Additional Pledgors. If, pursuant to Sections 4.11 and
11.06 of the Indenture, the Company is required to cause any Subsidiary of the
Company that is not a Subsidiary Pledgor to become a Subsidiary Pledgor, upon
execution and delivery by the Collateral Agent and such Subsidiary of an
instrument in the form of Annex 1, such Subsidiary shall become a Subsidiary
Pledgor hereunder with the same force and effect as if originally named as a
Subsidiary Pledgor herein. The execution and delivery of such instrument shall
not require the consent of any Pledgor hereunder. The rights and obligations of
each Pledgor hereunder shall remain in full force and effect notwithstanding the
addition of any new Subsidiary Pledgor as a party to this Agreement.

         SECTION 25. Subject to Intercreditor Agreement. Notwithstanding
anything herein to the contrary, the lien and security interest granted to the
Collateral Agent pursuant to this Agreement and the exercise of any right or
remedy by the Collateral Agent hereunder are subject to the provisions of the
Intercreditor Agreement. In the event of any conflict between the terms of the
Intercreditor Agreement and this Agreement, the terms of the Intercreditor
Agreement shall govern.
<PAGE>
                                                                              15

         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.

                                        SEMICONDUCTOR COMPONENTS
                                        INDUSTRIES, LLC,

                                        By /s/ John T. Kurtzweil
                                           ------------------------------------
                                             Name John T. Kurtzweil
                                             Title: Chief Financial Officer

                                        ON SEMICONDUCTOR CORPORATION,

                                        By /s/ John T. Kurtzweil
                                           ------------------------------------
                                             Name: John T. Kurtzweil
                                             Title: Chief Financial Officer

                                        EACH OF THE OTHER SUBSIDIARIES
                                        LISTED ON SCHEDULE I HERETO,

                                        By /s/ John T. Kurtzweil
                                           ------------------------------------
                                             Name: John T. Kurtzweil
                                             Title: Chief Financial Officer

                                        WELLS FARGO BANK MINNESOTA,
                                        NATIONAL ASSOCIATION, as Collateral
                                        Agent,

                                        By /s/ Joseph P. O'Donnell
                                           ------------------------------------
                                             Name: Joseph P. O'Donnell
                                             Title: Corporate Trust Officer
<PAGE>
                                                               Schedule I to the
                                                                Pledge Agreement

                               SUBSIDIARY PLEDGORS

<TABLE>
<CAPTION>
                  Name                                                          Address
                  ----                                                          -------
<S>                                                                    <C>
SCG International Development LLC                                      5005 East McDowell Road
                                                                       Phoenix, AZ 85008

SCG (Malaysia SMP) Holding Corporation                                 5005 East McDowell Road
                                                                       Phoenix, AZ 85008

SCG (Czech) Holding Corporation                                        5005 East McDowell Road
                                                                       Phoenix, AZ 85008

SCG (China) Holding Corporation                                        5005 East McDowell Road
                                                                       Phoenix, AZ 85008

Semiconductor Components Industries Puerto Rico, Inc.                  5005 East McDowell Road
                                                                       Phoenix, AZ 85008

Semiconductor Components Industries of Rhode Island,                   2000 South County Trail
Inc.                                                                   East Greenwich, RI 02818

Semiconductor Components Industries International of                   2000 South County Trail
Rhode Island, Inc.                                                     East Greenwich, RI 02818
</TABLE>
<PAGE>
                                                              Schedule II to the
                                                                Pledge Agreement

                    CAPITAL STOCK OR OTHER EQUITY INTERESTS

<TABLE>
<CAPTION>
                                                                 Number and           Percentage
                                                                 Class of             of
                                                                 Shares               Shares
                                                                 or Other             or Other
                      Number of            Registered            Equity               Equity
Issuer                Certificate             Owner              Interests            Interests
------                -----------             -----              ---------            ---------
<S>                   <C>                  <C>                   <C>                  <C>

</TABLE>

                                         DEBT SECURITIES

<TABLE>
<CAPTION>
                               Principal
Issuer                           Amount                   Date of Note                Maturity Date
------                           ------                   ------------                -------------
<S>                            <C>                        <C>                         <C>

</TABLE>
<PAGE>
                                                                  Annex 1 to the
                                                                Pledge Agreement

                                          SUPPLEMENT NO. [ ] dated as of [ ], to

                           the PLEDGE AGREEMENT dated as of May 6, 2002, among
                           SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC, a Delaware
                           limited liability company (the "SCI LLC"), ON
                           SEMICONDUCTOR CORPORATION, a Delaware corporation
                           (the "Company" and, together with SCI LLC, the
                           "Issuers"), and each subsidiary of the Company listed
                           on Schedule I thereto (each such subsidiary
                           individually a "Subsidiary Pledgor" and collectively,
                           the "Subsidiary Pledgors"; the Subsidiary Pledgors
                           and the Issuers are referred to herein individually
                           as a "Pledgor" and collectively as the "Pledgors")
                           and WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
                           a national banking association ("Wells Fargo Bank"),
                           as trustee under the Indenture referred to below and
                           as collateral agent (in such capacity, the
                           "Collateral Agent") for the Secured Parties (as
                           defined in the Security Agreement )

         A. Reference is made to (a) the Indenture dated as of May 6, 2002 (as
amended, supplemented or otherwise modified from time to time, the "Indenture"),
among the Company, SCI LLC, the Guarantors and Wells Fargo Bank, as trustee, and
(b) the Intercreditor Agreement dated as of May 6, 2002 (as amended,
supplemented or otherwise modified from time to time, the "Intercreditor
Agreement"), among the Issuers, the Collateral Agent and the Senior Agent.

         B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Pledge Agreement and the
Indenture.

         C. The Pledgors have entered into the Pledge Agreement in order to
induce the Trustee to enter into the Indenture and the Initial Purchasers to
purchase the Notes. Pursuant to Section 4.11 of the Indenture, the Company is
required to cause certain of its Subsidiaries to enter into the Pledge Agreement
as a Subsidiary Pledgor. Section 24 of the Pledge Agreement provides that such
Subsidiaries may become Subsidiary Pledgors under the Pledge Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the "New Pledgor") is executing this Supplement in
accordance with the requirements of the Indenture to become a Subsidiary Pledgor
under the Pledge Agreement as consideration for the purchase of the Notes by the
Initial Purchasers and the Holders.

         Accordingly, the Collateral Agent and the New Pledgor agree as follows:

         SECTION 1. In accordance with Section 24 of the Pledge Agreement, the
New Pledgor by its signature below becomes a Pledgor under the Pledge Agreement
with the same force and effect as if originally named therein as a Pledgor and
the New Pledgor hereby agrees (a) to all the terms and provisions of the Pledge
Agreement applicable to it as a Pledgor thereunder and (b) represents and
warrants that the representations and warranties made by it as a Pledgor
thereunder are true and correct on and as of the date hereof except to the
extent a representation and warranty expressly relates solely to a specific date
in which case such representation and warranty shall be true and correct on such
date. In furtherance of the foregoing, the New Pledgor, as security for the
payment
<PAGE>
                                                                               2

and performance in full of the Obligations (as defined in the Pledge Agreement),
does hereby create and grant to the Collateral Agent, its successors and
assigns, for the benefit of the Secured Parties, their successors and assigns, a
security interest in and lien on all of the New Pledgor's right, title and
interest in and to the Collateral (as defined in the Pledge Agreement) of the
New Pledgor. Each reference to a "Subsidiary Pledgor" or a "Pledgor" in the
Pledge Agreement shall be deemed to include the New Pledgor. The Pledge
Agreement is hereby incorporated herein by reference.

         SECTION 2. The New Pledgor represents and warrants to the Collateral
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.

         SECTION 3. This Supplement may be executed in counterparts, each of
which shall constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when the
Collateral Agent shall have received counterparts of this Supplement that, when
taken together, bear the signatures of the New Pledgor and the Collateral Agent.
Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.

         SECTION 4. The New Pledgor hereby represents and warrants that set
forth on Schedule I attached hereto is a true and correct schedule of all its
Pledged Securities.

         SECTION 5. Except as expressly supplemented hereby, the Pledge
Agreement shall remain in full force and effect.

         SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

         SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect,
neither party hereto shall be required to comply with such provision for so long
as such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein and in the Pledge Agreement shall not in any way be affected or impaired
(it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties hereto shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close
as possible to that of the invalid, illegal or unenforceable provisions.

         SECTION 8. All communications and notices hereunder shall be in writing
and given as provided in Section 15 of the Pledge Agreement. All communications
and notices hereunder to the New Pledgor shall be given to it at the address set
forth under its signature hereto, below, with a copy to the Company.

         SECTION 9. The New Pledgor agrees to reimburse the Collateral Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent.
<PAGE>
                                                                               3

         IN WITNESS WHEREOF, the New Pledgor and the Collateral Agent have duly
executed this Supplement to the Pledge Agreement as of the day and year first
above written.

                                           [NAME OF NEW PLEDGOR],

                                           By
                                             ----------------------------------
                                                Name:
                                                Title:
                                                Address:

                                           WELLS FARGO BANK MINNESOTA,
                                           NATIONAL ASSOCIATION, as Collateral
                                           Agent,

                                           By
                                             ----------------------------------
                                                Name:
                                                Title:
<PAGE>
                                                                   Schedule I to
                                                              Supplement No. [ ]
                                                         to the Pledge Agreement

                      Pledged Securities of the New Pledgor

                    CAPITAL STOCK OR OTHER EQUITY INTERESTS

<TABLE>
<CAPTION>
                                                                 Number and           Percentage
                                                                 Class of             of
                                                                 Shares               Shares
                                                                 or Other             or Other
                      Number of            Registered            Equity               Equity
Issuer                Certificate             Owner              Interests            Interests
------                -----------             -----              ---------            ---------
<S>                   <C>                  <C>                   <C>                  <C>

</TABLE>

                                 DEBT SECURITIES

<TABLE>
<CAPTION>
                               Principal
Issuer                           Amount                   Date of Note                Maturity Date
------                           ------                   ------------                -------------
<S>                            <C>                        <C>                         <C>

</TABLE>

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