Document:

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                                                                     EXHIBIT 4.1

                               SPEEDFAM-IPEC, INC.

                       2001 NONSTATUTORY STOCK OPTION PLAN

       1.     Purposes of the Plan. The purposes of this Nonstatutory Stock
Option Plan are:

              -      to attract and retain the best available personnel for
                     positions of substantial responsibility,

              -      to provide additional incentive to Employees and
                     Consultants, and

              -      to promote the success of the Company's business.

              Options granted under the Plan will be Nonstatutory Stock Options.

       2.     Definitions. As used herein, the following definitions shall
apply:

              (a)    "Administrator" means the Board or any of its Committees as
shall be administering the Plan, in accordance with Section 4 of the Plan.

              (b)    "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options are, or will be, granted under
the Plan.

              (c)    "Board" means the Board of Directors of the Company.

              (d)    "Change in Control" means the occurrence of any of the
following events:

                     (i)    Any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) becomes the "beneficial owner" (as defined in
Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the total voting power
represented by the Company's then outstanding voting securities; or

                     (ii)   The consummation of the sale or disposition by the
Company of all or substantially all of the Company's assets;

                     (iii)  A change in the composition of the Board occurring
within a two-year period, as a result of which fewer than a majority of the
directors are Incumbent Directors. "Incumbent Directors" means directors who
either (A) are Directors as of the date hereof, or (B) are elected, or nominated
for election, to the Board with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or nomination (but will not
include an individual
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whose election or nomination is in connection with an actual or threatened proxy
contest relating to the election of directors to the Company); or

                     (iv)   The consummation of a merger or consolidation of the
Company with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or its parent) at
least fifty percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity or its parent outstanding
immediately after such merger or consolidation.

              (e)    "Code" means the Internal Revenue Code of 1986, as amended.

              (f)    "Committee" means a committee of Directors appointed by the
Board in accordance with Section 4 of the Plan.

              (g)    "Common Stock" means the Common Stock of the Company.

              (h)    "Company" means SpeedFam-IPEC, Inc. an Illinois
corporation.

              (i)    "Consultant" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services to such
entity.

              (j)    "Director" means a member of the Board.

              (k)    "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.

              (l)    "Employee" means any person, including Officers, employed
by the Company or any Parent or Subsidiary of the Company. A Service Provider
shall not cease to be an Employee in the case of (i) any leave of absence
approved by the Company or (ii) transfers between locations of the Company or
between the Company, its Parent, any Subsidiary, or any successor. Neither
service as a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.

              (m)    "Exchange Act" means the Securities Exchange Act of 1934,
as amended.

              (n)    "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:

                     (i)    If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system on
the date of grant, as reported in The Wall Street Journal or such other source
as the Administrator deems reliable;

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                     (ii)   If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a Share of Common Stock shall be the mean between the high bid
and low asked prices for the Common Stock on the date of grant, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;

                     (iii)  In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

              (o)    "Notice of Grant" means a written or electronic notice
evidencing certain terms and conditions of an individual Option grant. The
Notice of Grant is part of the Option Agreement.

              (p)    "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

              (q)    "Option" means a nonstatutory stock option granted pursuant
to the Plan, that is not intended to qualify as an incentive stock option within
the meaning of Section 422 of the Code and the regulations promulgated
thereunder.

              (r)    "Option Agreement" means an agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the Plan.

              (s)    "Option Exchange Program" means a program whereby
outstanding options are surrendered in exchange for options with a lower
exercise price.

              (t)    "Optioned Stock" means the Common Stock subject to an
Option.

              (u)    "Optionee" means the holder of an outstanding Option
granted under the Plan.

              (v)    "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

              (w)    "Plan" means this 2001 Nonstatutory Stock Option Plan.

              (x)    "Service Provider" means an Employee including an Officer,
Consultant or Director.

              (y)    "Share" means a share of the Common Stock, as adjusted in
accordance with Section 12 of the Plan.

              (z)    "Subsidiary" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.

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       3.     Stock Subject to the Plan. Subject to the provisions of Section 12
of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is three million (3,000,000) Shares. The Shares may be
authorized, but unissued, or reacquired Common Stock.

              If an Option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated).

       4.     Administration of the Plan.

              (a)    Administration. The Plan shall be administered by (i) the
Board or (ii) a Committee, which committee shall be constituted to satisfy
Applicable Laws.

              (b)    Powers of the Administrator. Subject to the provisions of
the Plan, and in the case of a Committee, subject to the specific duties
delegated by the Board to such Committee, the Administrator shall have the
authority, in its discretion:

                     (i)    to determine the Fair Market Value of the Common
Stock;

                     (ii)   to select the Service Providers to whom Options may
be granted hereunder;

                     (iii)  to determine whether and to what extent Options are
granted hereunder;

                     (iv)   to determine the number of shares of Common Stock to
be covered by each Option granted hereunder;

                     (v)    to approve forms of agreement for use under the
Plan;

                     (vi)   to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any award granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the
time or times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Option or the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

                     (vii)  to reduce the exercise price of any Option to the
then current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option shall have declined since the date the Option was
granted;

                     (viii) to institute an Option Exchange Program;

                     (ix)   to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;

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                     (x)    to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;

                     (xi)   to modify or amend each Option (subject to Section
14(b) of the Plan), including the discretionary authority to extend the
post-termination exercisability period of Options longer than is otherwise
provided for in the Plan;

                     (xii)  to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option previously
granted by the Administrator;

                     (xiii) to determine the terms and restrictions applicable
to Options;

                     (xiv)  to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option that number of Shares having a Fair Market
Value equal to the minimum amount required to be withheld. The Fair Market Value
of the Shares to be withheld shall be determined on the date that the amount of
tax to be withheld is to be determined. All elections by an Optionee to have
Shares withheld for this purpose shall be made in such form and under such
conditions as the Administrator may deem necessary or advisable; and

                     (xv)   to make all other determinations deemed necessary or
advisable for administering the Plan.

              (c)    Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options.

       5.     Eligibility. Options may be granted to Service Providers except
Officers and Directors; provided, however, that Options may be granted to
Officers in connection with the Officer's initial employment by the Company.

       6.     Limitation. Neither the Plan nor any Option shall confer upon an
Optionee any right with respect to continuing the Optionee's relationship as a
Service Provider with the Company, nor shall they interfere in any way with the
Optionee's right or the Company's right to terminate such relationship at any
time, with or without cause.

       7.     Term of Plan. The Plan shall become effective upon its adoption by
the Board. It shall continue in effect for ten (10) years, unless sooner
terminated under Section 14 of the Plan.

       8.     Term of Option. The term of each Option shall be stated in the
Option Agreement.

       9.     Option Exercise Price and Consideration.

              (a)    Exercise Price. The per share exercise price for the Shares
to be issued pursuant to exercise of an Option shall be determined by the
Administrator.

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              (b)    Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised.

              (c)    Form of Consideration. The Administrator shall determine
the acceptable form of consideration for exercising an Option, including the
method of payment. Such consideration may consist entirely of:

                     (i)    cash;

                     (ii)   check;

                     (iii)  promissory note;

                     (iv)   other Shares which (A) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six months on the date of surrender, and (B) have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised;

                     (v)    consideration received by the Company under a
cashless exercise program implemented by the Company in connection with the
Plan;

                     (vi)   a reduction in the amount of any Company liability
to the Optionee, including any liability attributable to the Optionee's
participation in any Company-sponsored deferred compensation program or
arrangement;

                     (vii)  such other consideration and method of payment for
the issuance of Shares to the extent permitted by Applicable Laws; or

                     (viii) any combination of the foregoing methods of payment.

       10.    Exercise of Option.

              (a)    Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. An Option may not be exercised for a fraction of
a Share.

                     An Option shall be deemed exercised when the Company
receives: (i) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to

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be issued) such Shares promptly after the Option is exercised. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Shares are issued, except as provided in Section 12 of the Plan.

                     Exercising an Option in any manner shall decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.

              (b)    Termination of Relationship as a Service Provider. If an
Optionee ceases to be a Service Provider, other than upon the Optionee's death
or Disability, the Optionee may exercise his or her Option, but only within such
period of time as is specified in the Option Agreement, and only to the extent
that the Option is vested on the date of termination (but in no event later than
the expiration of the term of such Option as set forth in the Option Agreement).
In the absence of a specified time in the Option Agreement, the Option shall
remain exercisable for three (3) months following the Optionee's termination.
If, on the date of termination, the Optionee is not vested as to his or her
entire Option, the Shares covered by the unvested portion of the Option shall
revert to the Plan. If, after termination, the Optionee does not exercise his or
her Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

              (c)    Disability of Optionee. If an Optionee ceases to be a
Service Provider as a result of the Optionee's Disability, the Optionee may
exercise his or her Option within such period of time as is specified in the
Option Agreement, to the extent the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement). In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for twelve (12) months following
the Optionee's termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.

              (d)    Death of Optionee. If an Optionee dies while a Service
Provider, the Option may be exercised within such period of time as is specified
in the Option Agreement (but in no event later than the expiration of the term
of such Option as set forth in the Notice of Grant), by the Optionee's estate or
by a person who acquires the right to exercise the Option by bequest or
inheritance, but only to the extent that the Option is vested on the date of
death. In the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for twelve (12) months following the Optionee's
termination. If, at the time of death, the Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option
shall immediately revert to the Plan. The Option may be exercised by the
executor or administrator of the Optionee's estate or, if none, by the person(s)
entitled to exercise the Option under the Optionee's will or the laws of descent
or distribution. If the Option is not so exercised within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.

       11.    Non-Transferability of Options. Unless determined otherwise by the
Administrator, an Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option
transferable,

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such Option shall contain such additional terms and conditions as the
Administrator deems appropriate.

       12.    Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Change in Control.

              (a)    Changes in Capitalization. Subject to any required action
by the shareholders of the Company, the number of shares of Common Stock covered
by each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.

              (b)    Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated. To the extent it has not been previously exercised, an
Option will terminate immediately prior to the consummation of such proposed
action.

              (c)    Merger or Change in Control. In the event of a merger of
the Company with or into another corporation, or a Change in Control, each
outstanding Option shall be assumed or an equivalent option substituted by the
successor corporation or a Parent or Subsidiary of the successor corporation.

                     In the event that the successor corporation refuses to
assume or substitute for the Option, the Optionee shall fully vest in and have
the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which it would not otherwise be vested or exercisable. If an Option
becomes fully vested and exercisable in lieu of assumption or substitution in
the event of a merger or sale of assets, the Administrator shall notify the
Optionee in writing or electronically that the Option shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option shall terminate upon the expiration of such period.

                     For the purposes of this subsection (c), the Option shall
be considered assumed if, following the merger or Change in Control, the option
confers the right to purchase or

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receive, for each Share of Optioned Stock subject to the Option immediately
prior to the merger or Change in Control, the consideration (whether stock,
cash, or other securities or property) received in the merger or Change in
Control by holders of Common Stock for each Share held on the effective date of
the transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or Change
in Control is not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option,
for each Share of Optioned Stock subject to the Option, to be solely common
stock of the successor corporation or its Parent equal in fair market value to
the per share consideration received by holders of Common Stock in the merger or
Change in Control.

       13.    Date of Grant. The date of grant of an Option shall be, for all
purposes, the date on which the Administrator makes the determination granting
such Option, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.

       14.    Amendment and Termination of the Plan.

              (a)    Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.

              (b)    Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company. Termination of the Plan shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to options
granted under the Plan prior to the date of such termination.

       15.    Conditions Upon Issuance of Shares.

              (a)    Legal Compliance. Shares shall not be issued pursuant to
the exercise of an Option unless the exercise of such Option and the issuance
and delivery of such Shares shall comply with Applicable Laws and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.

              (b)    Investment Representations. As a condition to the exercise
of an Option the Company may require the person exercising such Option to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

       16.    Inability to Obtain Authority. The inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be

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necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.

       17.    Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

                                      -10-
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                               SPEEDFAM-IPEC, INC.

                       2001 NONSTATUTORY STOCK OPTION PLAN

                             STOCK OPTION AGREEMENT

       Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Option Agreement.

I.     NOTICE OF STOCK OPTION GRANT

       [OPTIONEE'S NAME AND ADDRESS]

       You have been granted an option to purchase Common Stock of the Company,
subject to the terms and conditions of the Plan and this Option Agreement, as
follows:

       Grant Number
                                          --------------------------------

       Date of Grant
                                          --------------------------------

       Vesting Commencement Date
                                          --------------------------------

       Exercise Price per Share           $
                                           -------------------------------

       Total Number of Shares Granted
                                          --------------------------------

       Total Exercise Price               $
                                           -------------------------------

       Type of Option:                    Nonstatutory Stock Option

       Term/Expiration Date:
                                          --------------------------------

       Vesting Schedule:

       Subject to the Optionee continuing to be a Service Provider on such
dates, this Option shall vest in accordance with the following schedule:

       [INSERT VESTING SCHEDULE]

       Exercise Schedule:

       This Option shall only become exercisable, to the extent vested, on the
date [INSERT DATE] days following the Date of Grant.

       Termination Period:

       This Option may be exercised for [90 DAYS] after Optionee ceases to be a
Service Provider. Upon the death or Disability of the Optionee, this Option may
be exercised for such longer period as
<PAGE>   12
provided in the Plan. In no event shall this Option be exercised later than the
Term/Expiration Date as provided above.

II.    AGREEMENT

       1.     Grant of Option. The Plan Administrator of the Company hereby
grants to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee") an option (the "Option") to purchase the number of
Shares, as set forth in the Notice of Grant, at the exercise price per share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the Plan, which is incorporated herein by reference. Subject to
Section 14(b) of the Plan, in the event of a conflict between the terms and
conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.

       2.     Exercise of Option.

              (a)    Right to Exercise. This Option is exercisable during its
term in accordance with the Vesting Schedule set out in the Notice of Grant and
the applicable provisions of the Plan and this Option Agreement.

              (b)    Method of Exercise. This Option is exercisable by delivery
of an exercise notice, in the form attached as Exhibit A (the "Exercise
Notice"), which shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised (the "Exercised
Shares"), and such other representations and agreements as may be required by
the Company pursuant to the provisions of the Plan. The Exercise Notice shall be
completed by the Optionee and delivered to [TITLE]. The Exercise Notice shall be
accompanied by payment of the aggregate Exercise Price as to all Exercised
Shares. This Option shall be deemed to be exercised upon receipt by the Company
of such fully executed Exercise Notice accompanied by such aggregate Exercise
Price.

              No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.

       3.     Method of Payment. Payment of the aggregate Exercise Price shall
be by any of the following, or a combination thereof, at the election of the
Optionee:

              (a)    cash;

              (b)    check;

              (c)    consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan; or

              (d)    surrender of other Shares which (i) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more
than six (6) months on the date of surrender, and (ii) have a Fair Market Value
on the date of surrender equal to the aggregate Exercise Price of the Exercised
Shares.

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<PAGE>   13
       4.     Non-Transferability of Option. This Option may not be transferred
in any manner otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of Optionee only by the Optionee. The
terms of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

       5.     Term of Option. This Option may be exercised only within the term
set out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.

       6.     Tax Consequences. Some of the federal tax consequences relating to
this Option, as of the date of this Option, are set forth below. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.

              (a)    Exercising the Option. The Optionee may incur regular
federal income tax liability upon exercise of an NSO. The Optionee will be
treated as having received compensation income (taxable at ordinary income tax
rates) equal to the excess, if any, of the Fair Market Value of the Exercised
Shares on the date of exercise over their aggregate Exercise Price. If the
Optionee is an Employee or a former Employee, the Company will be required to
withhold from his or her compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.

              (b)    Disposition of Shares. If the Optionee holds NSO Shares for
at least one year, any gain realized on disposition of the Shares will be
treated as long-term capital gain for federal income tax purposes.

       7.     Entire Agreement; Governing Law. The Plan is incorporated herein
by reference. The Plan and this Option Agreement constitute the entire agreement
of the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws, but not
the choice of law rules, of Illinois.

       8.     NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND
AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS
EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND
NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.

                                      -3-
<PAGE>   14
       By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions relating to the Plan
and Option Agreement. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.

OPTIONEE                                    SPEEDFAM-IPEC, INC.

------------------------------------        ------------------------------------
Signature                                   By

------------------------------------        ------------------------------------
Print Name                                  Title

------------------------------------
Residence Address

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

                                      -4-
<PAGE>   15
                                    EXHIBIT A

                               SPEEDFAM-IPEC, INC.

                       2001 NONSTATUTORY STOCK OPTION PLAN

                                 EXERCISE NOTICE

SpeedFam-IPEC, Inc.
305 North 54th Street
Chandler, Arizona  85226

Attention: [TITLE]

       1.     Exercise of Option. Effective as of today, ________________,
_____, the undersigned ("Purchaser") hereby elects to purchase ______________
shares (the "Shares") of the Common Stock of SpeedFam-IPEC, Inc. (the "Company")
under and pursuant to the 2001 Nonstatutory Stock Option Plan (the "Plan") and
the Stock Option Agreement dated, _________, ___ (the "Option Agreement"). The
purchase price for the Shares shall be [$_______], as required by the Option
Agreement.

       2.     Delivery of Payment. Purchaser herewith delivers to the Company
the full purchase price for the Shares.

       3.     Representations of Purchaser. Purchaser acknowledges that
Purchaser has received, read and understood the Plan and the Option Agreement
and agrees to abide by and be bound by their terms and conditions.

       4.     Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 12 of the
Plan.

       5.     Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.
<PAGE>   16
       6.     Entire Agreement; Governing Law. The Plan and Option Agreement are
incorporated herein by reference. This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser's interest except by
means of a writing signed by the Company and Purchaser. This agreement is
governed by the internal substantive laws, but not the choice of law rules, of
Illinois.

Submitted by:                              Accepted by:

PURCHASER                                  SPEEDFAM-IPEC, INC.

------------------------------------       -------------------------------------
Signature                                  By

------------------------------------       -------------------------------------
Print Name                                 Title

                                           -------------------------------------
                                           Date Received

Address:                                   Address: 305 North 54th Street
        ----------------------------               -----------------------------
                                                    Chandler, Arizona  85226
        ----------------------------               -----------------------------

                                      -2-<PAGE>   1
                                                                    Exhibit 10.9

                        EXCLUSIVE DISTRIBUTION AGREEMENT

         This Distribution Agreement ("Agreement") is entered into as of May 8,
2001 between Phoenix Semiconductor, Inc. an Arizona corporation with its
principal place of business located at 1706 West 10th Place, Tempe, AZ 85281,
("Supplier") and National Scientific Corporation, a Texas corporation with its
principal place of business located at 4455 East Camelback Road, Phoenix, AZ.
("Distributor").

                                   BACKGROUND

         The Supplier manufactures certain "Thyristor" and "Schottky" wafer
related products (as more fully defined below, the "Products"), and as described
on Exhibit A, attached.

         The Distributor wishes to purchase up to 100% of the Supplier's
production of the Products and to distribute and sell the Product to retailers,
wholesalers and other customers under the name of the Distributor.

         The Distributor wishes to obtain from the Supplier, and the Supplier is
willing to grant to the Distributor, the exclusive right to distribute the
Products for resale.

         In consideration for the mutual promises, covenants, and agreements
made below, the parties, intending to be legally bound, agree as follows:

1.       DEFINITIONS.

         For purposes of this Agreement, the following terms will have the
indicated definitions:

         "AGREEMENT" as defined in the preamble, above.

         "CONFIDENTIAL INFORMATION" as defined in Section 13.

         "END-USER" means any person or entity that obtains the Products from
Distributor.

         "INTELLECTUAL PROPERTY RIGHTS" means the intangible legal rights or
interests evidenced by or embodied in (1) any idea, design, concept, technique,
technology, software, firmware, configuration files, drivers or hardware,
invention, discovery, or improvement regardless of patentability, but including
patents, patent applications, trade secrets and know-how, trade name, trademark,
service mark, trade or business secret; (2) any work of authorship, regardless
of copyrightability, but including copyrights and any moral rights recognized by
law; and (3) any other similar rights, in each case on a worldwide basis.

         "LOSS" shall mean any and all dues, penalties, fines, costs, amounts
paid in settlement, liabilities, obligations, taxes, liens, losses, expenses and
fees, including court costs and reasonable attorneys' fees and expenses arising
out of any actions, suits, proceedings, hearings, investigations, charges,
complaints, claims, demands, injunctions, judgments, orders, decrees or rulings.

         "PRODUCTS" means the Thryistor and Schottky products developed and
manufactured by the Supplier, as set forth on Exhibit A, attached.

         "TERRITORY" means anywhere in the world.

                                  Page 1 of 14
<PAGE>   2
         "DISTRIBUTOR PROJECT MANAGER" is defined as the NSC Director of Global
Sales and Marketing, Mr. Graham Clark.

         "SUPPLIER PROJECT MANAGER" is defined as the PSI Chief Executive
Officer, Mr. John Rhee.

2.       TERM

         2.1      TERM. This Agreement shall be for a term of one year,
commencing on the date first written above (the "Term"), and is renewable for
successive one-year terms by mutual agreement.

         2.2      CANCELLATION. This Agreement may be terminated by either party
giving the other party at least sixty day's written notice.

         2.3      CONTINUATION OR SURVIVAL OF CERTAIN SECTIONS. Certain
sections, as indicated below, will survive and remain effective even after the
termination of this Agreement. All other rights and obligations of each party to
the other shall terminate upon the termination of this Agreement.

3.       DISTRIBUTION RIGHTS.

         3.1      EXCLUSIVITY

                  3.1.1 The Supplier hereby grants the Distributor a
transferable, exclusive right and license to distribute the Products in the
Territory during the Term.

                  3.1.2 The Distributor may resell or distribute the Products to
any customer in the Territory without restriction.

         3.2      PRODUCTS. The Supplier shall not sell any products with
specifications comparable to those of the Products in the Territory The Supplier
has a semiconductor product development program and as such will offer other
products to the to the Distributor, who shall have first right of refusal to
sell such newly developed products. Should the Distributor either refuse this
offer or fail to commercialize the offered product within six month, then the
Supplier can market these products through different marketing channels.

         3.3      MANUFACTURING AGREEMENT. Distributor wishes to obtain
manufacturing rights to Thyristor products and related technology and Sckottky
products and related technology on a global basis, for which Supplier will
obtain a royalty that will be commensurate with industry standard rates for
similar technology licensing arrangements. Both Distributor and Supplier agree
to negotiate in good faith toward such an agreement during the first six months
of this Agreement.

         3.4      DISTRIBUTOR'S DISCRETION TO MARKET AND SELL PRODUCTS. The
Distributor may incorporate, combine, or integrate the Products and sell them
either alone or in combination with other Products. All aspects of the
distribution and marketing of the Products by the Distributor shall be in the
Distributor's sole control, including without limitation the methods of
marketing, pricing, and advertising, and the terms and conditions of any sale,
unless and except as otherwise provided for in this Agreement. The Distributor
may sell the Products to any person or entity.

                                  Page 2 of 14
<PAGE>   3
4.       PURCHASE ORDERS; PACKAGING; SHIPPING.

         4.1      PROCEDURES FOR PLACING ORDERS. Distributor will deliver to
Supplier purchase orders that will specify the Product being purchased, quantity
ordered, and the terms of payment, delivery and any other information that
Supplier and Distributor may mutually negotiate with customers. Supplier and
Distributor may mutually negotiate purchase orders from customers.

         4.2      INVOICES. Upon fulfillment of a purchase order by Supplier,
and delivery of the Products in accordance with the purchase order, Supplier
will forward to Distributor a correct invoice for the Products delivered.

         4.3      PACKAGING. The Supplier agrees to provide appropriate
packaging, as agreed between the Distributor and Supplier, in order to permit
the Products to be shipped directly to the customers or the Distributor's
distribution system without reopening the boxes or otherwise re-handling the
finished goods. The Distributor will distribute Products with all packaging,
warranties, disclaimers, and end-user Agreements if any, intact as shipped by
the Supplier.

         4.4      DIRECT SHIPPING. The Distributor may request that the Supplier
ship directly to any location designated by the Distributor. The Supplier agrees
to comply with these requests at no additional charge other than transportation.

5.       PRODUCT AVAILABILITY. Supplier represents and warrants that it has
the capacity to produce and deliver processed silicon wafers in the following
amounts:
<TABLE>
<CAPTION>
                                          Monthly Wafer Start        Monthly Wafer Out        Monthly Yield
      Date                                     Capability               Capability                 Target
      ----                                     ----------               ----------                 ------
<S>                                        <C>                        <C>                    <C>
May, 2001                                          500
June, 2001                                        1000
July, 2001                                        1000                      500                     85%
August, 2001                                      1000                      700                     85%
September, 2001                                   1000                     1000                     85%
October, 2001                                     1000                     1000                     92%
November, 2001                                    1250                     1000                     92%
December, 2001                                    1250                     1000                     92%
January, 2002                                     1500                     1250                     95%
February, 2002                                    1500                     1250                     95%
March, 2002                                       1500                     1500                     95%
April, 2002                                       1500                     1500                     95%
May, 2002                                         2000                     1500                     95%
</TABLE>

5.1 Supplier will make up any deficiency in yield with additional product
supplied FOC.

                                  Page 3 of 14
<PAGE>   4
6.       PREPAYMENTS BY DISTRIBUTOR; PAYMENT BY DISTRIBUTOR .

         6.1      PREPAYMENTS BY DISTRIBUTOR. Upon the execution of this
agreement and the execution of a confirmed purchase order from a valid customer
(as determined by Distributor) issued to Distributor for approximately 1000
wafers per month for a period of 12 months, Distributor will pay Supplier a
prepayment toward the purchase of Products of $50,000 plus accrued interest
which is represented by an existing note receivable from Supplier to Distributor
and $95,000 in the form of a cashiers check and, subject to the other provisions
of this Section 6.1, will continue to make continuing $95,000 monthly
prepayments. These payments will be referred to as "PrePayments" and will be
accrued as prepayments against any obligations by Distributor to make payments
pursuant to Section 6.3 below. When the aggregate amount of payments to be made
to Supplier pursuant to Section 6.3 below have exceeded the sum total of all
PrePayments, this Section 6.1 will no longer apply and no further PrePayments
will be made. The note receivable for $50,000 will be so that it is no longer in
default, but instead in a current status that is payable on request by
Distributor due, and this note receivable will be canceled when all Prepayments
as well as the $50,000 of this note and accrued interest on the note have been
paid to Distributor. Until such time, any and all payments due to Supplier
pursuant to Section 6.1, will be retained by Distributor and applied against the
then outstanding balance of PrePayments. On the date this Section 6.1 no longer
applies, Supplier will pay Distributor a one-time PrePayment advance charge of
one percent of the aggregate amount of PrePayments made.

         6.2      CHANGES TO PREPAYMENT AMOUNT. Should the Supplier and
Distributor agree that the monthly prepayments require to be altered due to a
change in business conditions, then the prepayment amount or schedule can be
revised, subject to the following guidelines:

                  6.2.1 Where increases to the prepayment amount are suggested
due to increases in volume of production, such changes shall be approximately
proportional to the change in direct variance cash expense to achieve the
desired production increase. Variance cash expense increases shall include
incremental direct labor and incremental direct materials.

                  6.2.2 Where changes are made for reasons other than increasing
manufacturing volume, the Distributor and the Supplier agree that the
Distributor Project Manager may authorize a monthly alteration in the
prepayment, subject solely to his discretion.

         6.3      PAYMENTS FOR PRODUCTS. Distributor will make payments to the
Supplier for the Products supplied and delivered by Supplier equal to the
collected accounts receivable for Product sales less

                  o        8% of such collections for processed wafers delivered
                           in the first 4 months of this Agreement; 10% for
                           deliveries in the subsequent 4 months; and 11%
                           thereafter on all products delivered to the named
                           Customer Protek Devices.

                  o        11% of collections on all other processed wafers over
                           $150 selling price.

                  o        17% of collections for Products encapsulated by or on
                           behalf of Supplier.

         6.4      PAYMENT DATE. Payments will be made by the fifteenth day
following the last day of the calendar month in which the Products were
delivered, subject to the provisions of Section 6.1 above.

                                  Page 4 of 14
<PAGE>   5
         6.5      DISTRIBUTOR PRICING. The Distributor is free to determine its
own resale prices for the Products. Although the Supplier may suggest list
prices, these are suggestions only and are not binding in any way. The
Distributor will not use price to jeopardize the commercialization of the
product.

         6.6      DEMAND PAYMENT. Notwithstanding Section 6.1, Supplier will pay
Distributor any then outstanding PrePayment amount that has not been offset by
payments to be made by Distributor under Section 6.2, at any time requested by
the Distributor.

         6.7      RIGHT TO REVIEW RECORDS. The Supplier will provide the
Distributor's Project Manager with a written monthly report by the 10th day of
each month showing an accounting for the distributions of all prepayments made
by Distributor to Supplier. The Supplier will agree to have these project
records promptly reviewed for accuracy and completeness by an outside accounting
firm acceptable to and paid for by the Distributor, if so requested by the
Distributor.

7.       SHIPMENT.

         7.1      SHIPMENT. All Products will be shipped by the Supplier F.O.B.
from their shipping point. Shipments will be made to the Distributor's
identified facilities, freight forwarder or directly to the customer, as set
forth in the purchase order. The Distributor shall select the mode of shipment
and the carrier. The Distributor shall be responsible for and shall pay all
shipping, freight, and insurance charges.

         7.2      DELIVERY SCHEDULE. The Supplier shall use its best efforts to
meet the Distributor's requested delivery schedules for the Products.

8.       GRANT OF SECURITY INTEREST. As security against the obligation of
Supplier to repay any Prepayments, Supplier hereby grants a first priority
security interest in and to the equipment and property set forth on Exhibit B.

9.       PRODUCT LIABILITY

         9.1      SUPPLIER INDEMNIFICATION. The Supplier shall indemnify and
hold harmless the Distributor for damages or expenses resulting from any claim,
suit or proceeding brought against the Distributor on the issue of product
liability related to the Products or any part thereof. The Distributor agrees
that the Supplier has the right to defend, or at its option to settle, and the
Supplier agrees, at its own expense, to defend or at its option to settle, any
claim, suit or proceeding brought against the Distributor or its Customer on the
issue of product liability, subject to the limitations set forth in this
Agreement. The Supplier shall have sole control of any such action or settlement
negotiations, and the Supplier agrees to pay, subject to the limitations of this
Agreement, any final judgment entered against the Distributor or its customer on
such issue in any such suit or proceeding defended by the Supplier.

         9.2      DISTRIBUTOR INDEMNIFICATION. The Distributor shall indemnify
and hold harmless the Supplier for damages or expenses resulting from any claim,
suit or proceeding brought against the Supplier as a result of representations
or warranties made by the Distributor that are different from those made by the
Supplier to the Distributor or any method of marketing, pricing, labeling, or
advertising not authorized by the Supplier.

         9.3      ENTIRE LIABILITY. The foregoing provisions of this Section 9
state the entire liability and obligations of the Supplier and the exclusive
remedy of the Distributor and its Customers, with respect to any alleged product
liability suit related to the Products or any part thereof.

                                  Page 5 of 14
<PAGE>   6
10.      OWNERSHIP WARRANTY AND INDEMNIFICATION

         10.1     SUPPLIER OWNERSHIP WARRANTY. The Supplier represents and
warrants to the Distributor that: (1) the Products do not infringe upon any
patent, Copyright, trade secret or other proprietary rights of others; (2) the
Supplier has full power and authority to grant the rights granted within this
Agreement to the Distributor; and (3) the Supplier has not previously or
otherwise granted any other rights in the Products to any third party that
conflict with the rights in this Agreement granted to the Distributor.

         10.2     INDEMNIFICATION. The Supplier agrees to defend at its expense
and hold the Distributor harmless from any claim, demand, or suit against the
Distributor resulting from a breach of any of the warranties set forth above in
Section 10.1 and to pay any damages arising from any such claim, demand, or
suit. The Supplier shall have sole control of the defense of such action and all
negotiations for its compromise or settlement. However, no defense, compromise
or settlement may be made without the prior written consent of the Distributor
if it could result in a Loss to Distributor, whether or not such Loss is the
obligation of Supplier under this Section 10. The Distributor shall timely
notify the Supplier in writing of any such claim, demand, or suit, and, at the
Supplier's request, provide the Supplier with all available information,
assistance and authority to enable the Supplier to defend the same. The Supplier
shall indemnify the Distributor for all such costs and damages as they are
incurred.

         10.3     LIMITED WARRANTY.

                  10.3.1 Subject to the terms and conditions of this Agreement,
Supplier warrants that the Products, when and as delivered to Distributor,
conform to their specifications in all material respects, most particularly that
they meet or exceed specified holding current and surge current, and are free
from defects in materials and workmanship.

                  10.3.2 Supplier agrees to honor all commercially reasonable
requests for repair or replacement made by Distributor.

                  10.3.3 If, within any twelve-month period, two percent (2%) or
more of the Products, while within the warranty period specified above, exhibit
defects of the same kind and nature, and such defects are the result of faulty
design or workmanship by Supplier or defects in materials arising from any cause
for which Supplier is responsible, then Supplier agrees to give compensation, or
render assistance, at Supplier's sole expense, to Distributor as specified
below:

                         10.3.3.1 Delivery of replacement Products found to be
defective to the place designated by Distributor;

                         10.3.3.2 Field service for the replacement of such
defective Products or reimbursement to Distributor of Distributor's labor costs
in replacing such defective Products at such rates as may be mutually agreed
upon from time to time; and

                         10.3.3.3 Redesign or reprogramming of the Products to
the extent necessary to cure such defects.

         10.4     WARRANTY CONDITIONS. The warranty provided in this section
shall be subject to Distributor's satisfaction of the following conditions:
(1) a description of the failure of the Products alleged or found to be
defective shall be furnished to Supplier in writing within fifteen (15) days of
discovery by Distributor of such defect; (2) the defects so described shall be
subject to Supplier's

                                  Page 6 of 14
<PAGE>   7
verification; (3) no Products alleged or found to be defective shall be disposed
of by Distributor for at least sixty (60) days after Supplier receives such
description in writing; and (4) such defective Products shall forthwith be
returned to Supplier by Distributor, freight payable at destination, if Supplier
so requests.

         10.5     REPORT OF WARRANTY CLAIMS. Distributor shall provide Supplier
a written report of all warranty claims at least once every six (6) months if
one is requested.

         10.6     CONTINUED USE. Following a final determination that a Product
infringes the Intellectual Property Rights of a third party, the Supplier shall
immediately, at its own expense, procure for the Distributor the right to
continue to distribute the Products subject to such claim, demand or suit, or,
having failed to obtain such right, replace or modify such Products to make them
non-infringing, or, having failed to replace or modify the Products, refund to
the Distributor the purchase price of all unsold Products.

         10.7     SURVIVAL OF WARRANTIES. The warranties and indemnities stated
in this Section 10 shall survive the expiration or termination of this
Agreement.

         10.8     NOTIFICATION. The Distributor shall promptly notify the
Supplier and the Supplier shall notify the Distributor of (1) any claims,
allegations, or notification that its marketing, licensing, support, or service
of the Products may or will infringe the Intellectual Property Rights of any
other person or entity; and (2) any determination, discovery, or notification
that any person or entity is or may be infringing the Intellectual Property
Rights of the Supplier. The Distributor shall not take any legal action relating
to the protection or defense of any Intellectual Property Rights pertaining to
the Products without the prior written approval of the Supplier, except if the
Supplier fails to react in a timely fashion to a claim, in which case the
Distributor retains the right to defend itself at the sole cost and expense of
the Supplier. The Distributor shall assist in the protection and defense of such
Intellectual Property Rights but is not liable for the cost of defense of such
intellectual property rights.

11.      TERMINATION

         11.1     TERMINATION EVENTS. It is in the best interest of both parties
not to terminate this agreement. However, recognition must be given to the fact
that Distributor is advancing funds to Supplier in order to finance production
of Products, and that Supplier has sole control of funds received. To prevent
advancing funds from Distributor to Supplier that for whatever reason are not
deployed in a productive way for mutual benefit under this agreement,
Distributor may terminate this contract upon Supplier failing to deliver
Products on the agreed upon date. In addition, this Agreement may be terminated
by either party upon written notice of termination given by registered or
certified mail, in which event this Agreement shall terminate 60 days from the
date of mailing of the notice or upon the occurrence of any of the following
circumstances.

                  11.1.1 Any assignment for the benefit of the creditors, or any
bankruptcy, reorganization, or other proceeding under any bankruptcy or
insolvency law is initiated by the other party, or is initiated against the
other party and not dismissed or stayed within 60 days;

                  11.1.2 A material breach by the other party of any of the
terms of this Agreement, which breach is not remedied by the other party within
60 days of the other party's receipt of written notice of such breach.

                                  Page 7 of 14
<PAGE>   8
         11.2     FULFILLMENT OF OBLIGATIONS. The termination of this Agreement
shall not otherwise release either party from its obligation to pay any sum that
may be then or thereafter owing to the other party nor operate to discharge any
liability that had been incurred by either party prior to any such termination.
Except as qualified by the preceding sentence, neither party shall, by reason of
the termination of this Agreement, be liable to the other for any damages
(whether direct, consequential or incidental to and including loss of profit or
prospective profits of any kind) sustained or arising out of any such
termination.

         11.3     EFFECT OF TERMINATION AND SURVIVAL. Upon termination of this
Agreement, the Distributor may continue to dispose of its existing inventories
of Products, but the Distributor shall otherwise discontinue all further
promotion, marketing, and support of the Products. Upon termination of this
Agreement, the due date of all outstanding invoices for the Products shall
automatically be accelerated and all such invoices shall become due and payable.
All orders or portions thereof remaining unshipped as of the effective date of
termination may be canceled by the Supplier, at its option, to the extent they
call for delivery more than 60 days after the date of termination. Upon
termination of this Agreement by Supplier other than a for a material breach by
Distributor, the Supplier will repurchase all of the entire remaining inventory
of the Products held by the Distributor, and Products in transit to the
Distributor, at the Distributors sole discretion. The Supplier shall pay the
Distributor for all Products so repurchased an amount equal to the landed cost
paid by the Distributor. Upon receipt of any Products so reacquired from the
Distributor, the Supplier shall issue a check to the Distributor within 10 days
of the receipt of the returned goods.

         11.4     RETURN OF PROPERTY. Upon termination of this Agreement, the
Distributor must return to the Supplier all property of the Supplier then in the
Distributor's possession other than inventory to be sold to End-Users including,
without limitation, all advertising, marketing, and promotional materials.

12.      TRADEMARKS, TRADE NAMES AND TRADE DRESS. The Supplier shall have and
retain sole ownership of the Trademarks, including the goodwill pertaining
thereto, as described in Exhibit C. Subject to the Distributor's compliance with
the Supplier's standard cooperative advertising policies, the Supplier hereby
grants to the Distributor a license to use and display the trademarks set forth
in Exhibit C, along with related trade names and trade dress, solely in
connection with and solely to the extent reasonably necessary for the marketing,
distribution, and support of the Products within the Territory in accordance
with the terms and conditions of this Agreement. The Distributor shall not
remove or alter the Products' copyright notices, trademarks, color schemes,
fonts, designs and logos, or packaging, but may apply its own. To protect and
preserve the goodwill and image of the Products, the Distributor shall (1)
conduct business in a manner that reflects favorably at all times on the
Products and the reputation of the Supplier; (2) avoid deceptive, misleading, or
unethical practices that are or might be detrimental to the Supplier, the
Products, Dealers, or the public, including any disparagement of the Supplier or
the Products; (3) make no false or misleading representations with regard to the
Supplier or the Products; (4) refrain from publishing or employing any
misleading or deceptive advertising material; and (5) refrain from making any
representations, warranties, or guarantees to Customers or to the trade with
respect to the specifications, features, or capabilities of the Products that
are inconsistent with the literature distributed by the Supplier, including all
warranties and disclaimers contained in such literature.

13.      CONFIDENTIALITY Each party agrees that during the course of this
Agreement, information that is confidential or proprietary may be disclosed to
the other party, including, but not limited to software, technical processes and
formulas, source codes, product designs, sales, cost and other unpublished
financial information, product and business plans, advertising revenues, usage
rates, advertising relationships, projections, and marketing data ("Confidential
Information"). Confidential Information

                                  Page 8 of 14
<PAGE>   9
shall not include information that the receiving party can demonstrate (a) is,
as of the time of its disclosure, or thereafter becomes part of the public
domain through a source other than the receiving party, (b) was known to the
receiving party as of the time of its disclosure, (c) is independently developed
by the receiving party, or (d) is subsequently learned from a third party not
under a confidentiality obligation to the providing party. Except as provided
for in this Agreement, each party shall not make any disclosure of the
Confidential Information to anyone other than its employees who have a need to
know in connection with this Agreement. Each party shall notify its employees of
their confidentiality obligations with respect to the Confidential Information
and shall require its employees to comply with these obligations. The
confidentiality obligations of each party and its employees shall survive the
expiration or termination of this Agreement for a period of three years.

14.      GENERAL PROVISIONS.

         14.1     ASSIGNMENT. Except as set forth in this section, neither this
Agreement nor any rights under this Agreement, in whole or in part, shall be
assignable or otherwise transferable by either party without the express written
consent of the other party. Any attempt by either party to assign any of its
rights or delegate any of its duties under this Agreement without the prior
written consent of the other party shall be null and void. Subject to the above,
this Agreement shall be binding upon and take effect for the benefit of the
successors and assigns of the parties to this Agreement.

         14.2     SUPPLIER AND DISTRIBUTOR AS INDEPENDENT CONTRACTORS. The
Supplier and the Distributor agree that their relationship is that of the seller
and the buyer and not that of joint venturers, principals or agents, or
franchiser and franchisee. Both are independent contractors acting for their own
accounts, and neither is authorized to make any commitment or representation,
express or implied, on the other's behalf unless authorized to do so by the
other in writing.

         14.3     WAIVER, AMENDMENT, MODIFICATION. No waiver, amendment or
modification, including those by custom, usage of trade, or course of dealing,
of any provision of this Agreement will be effective unless in writing and
signed by the party against whom such waiver, amendment or modification is
sought to be enforced. No waiver by any party of any default in performance by
the other party under this Agreement or of any breach or series of breaches by
the other party of any of the terms or conditions of this Agreement shall
constitute a waiver of any subsequent default in performance under this
Agreement or any subsequent breach of any terms or conditions of that Agreement.
Performance of any obligation required of a party under this Agreement may be
waived only by a written waiver signed by a duly authorized officer of the other
party, that waiver shall be effective only with respect to the specific
obligation described in that waiver.

         14.4     FORCE MAJEURE. Neither party will be deemed in default of this
Agreement to the extent that performance of its obligations, or attempts to cure
any breach, are delayed or prevented by reason of circumstance beyond its
reasonable control, including without limitation fire, natural disaster,
earthquake, accident or other acts of God ("Force Majeure"), provided that the
party seeking to delay its performance gives the other written notice of any
such Force Majeure within 15 days after the discovery of the Force Majeure, and
further provided that such party uses its good faith efforts to cure the Force
Majeure. If there is a Force Majeure, the time for performance or cure will be
extended for a period equal to the duration of the Force Majeure. This section
shall not be applicable to any payment obligations of either party.

         14.5     GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the United States of
America and the State of Arizona, without regard to conflict of laws provisions
of that state. As between the parties hereto, the United Nations convention

                                  Page 9 of 14
<PAGE>   10
related to the sale of goods shall not apply to any sale of goods deemed to
arise under or related to this Agreement. This Agreement is entered into in the
United States of America; all funds shall be paid to Supplier in U.S. dollars in
the United States of America.

         14.6     ENTIRE AGREEMENT. The parties acknowledge that this Agreement
expresses their entire understanding and Agreement, and that there have been no
warranties, representations, covenants or understandings made by either party to
the other except such as are expressly set forth in this section. The parties
further acknowledge that this Agreement supersedes, terminates and otherwise
renders null and void any and all prior Agreements or contracts, whether written
or oral.

         14.7     SEVERABILITY. If any provision of this Agreement is found
invalid or unenforceable under judicial decree or decision, the remainder shall
remain valid and enforceable according to its terms. Without limiting the
previous, it is expressly understood and agreed that each and every provision of
this Agreement that provides for a limitation of liability, disclaimer of
warranties, or exclusion of damages is intended by the parties to be severable
and independent of any other provision and to be enforced as such. Further, it
is expressly understood and agreed that if any remedy under this Agreement is
determined to have failed of its essential purpose, all other limitations of
liability and exclusion of damages set forth in this section shall remain in
full force and effect.

         We have carefully reviewed this contract and agree to and accept its
terms and conditions. We are executing this Agreement as of the day and year
first written above.

Supplier                                    Distributor

Phoenix Semiconductor                       National Scientific Corporation

By:      /s/ John Rhee                      By:      /s/ L.L. Ross
   -----------------------------            ------------------------------------
          President                                  Chairman, CEO

                                 Page 10 of 14
<PAGE>   11
                                    Exhibit A

Description of Products

THYRISTOR

Thyristor is a semiconductor device that can be turned on via a gate signal. By
way of example and not of limitation, the thyristor model is simulated as a
resistor (Ron), an inductor (Lon), and a DC voltage source (Vf), connected in
series with a switch. The switch is controlled by a logical signal depending on
the voltage Vak, the current Iak and the gate signal (g).

The Thyristor block also contains a series Rs-Cs snubber circuit that can be
connected in parallel with the thyristor device.

The static VI characteristic of this model is shown in figure below.

The thyristor device turns on when the anode-cathode voltage is greater than Vf
and a positive pulse signal is applied at the gate input (g>0). The pulse height
must be greater than zero and last long enough to allow the thyristor anode
current to become larger than the latching current Il.

The thyristor device turns off when the current flowing in the device becomes
zero (Iak=0) and a negative voltage appears across the anode and cathode for at
least a period of time equal to the turn-off time Tq. If the voltage across the
device becomes positive within a period of time less than Tq, the device will
turn on automatically even if the gate signal is low (g = 0) and the anode
current is less than the latching current. Furthermore, if during turn on, the

                                 Page 11 of 14
<PAGE>   12
device current amplitude stays below the latching current level specified in the
dialog box, the device turns off after the gate signal level becomes low (g =
0).

The turn-off time Tq represents the carrier recovery time: it is the time
interval between the instant the anode current has decreased to zero and the
instant when the thyristor is capable of withstanding positive voltage Vak
without turning on again.

Supplier produces Thyristors on 4" silicon wafers with a variety of different
holding current and surge current capabilities.

SCHOTTKY DIODES

Schottky diode is a special type of diode with a very low forward-voltage drop.
When current flows through a diode, it has some internal resistance to that
current flow, which causes a small voltage drop across the diode terminals. A
normal diode has between 0.7-1.7 volt drops, while a Schottky diode voltage drop
is between approximately 0.15-0.45 - this lower voltage drop translates into
higher system efficiency.

Supplier produces Schottky diodes on 4" silicon wafers with a variety of
different holding current and surge current capabilities

                                 Page 12 of 14
<PAGE>   13
                                    EXHIBIT B

                      SUPPLIER GRANTING OF SECURITY INTEREST
<TABLE>
<CAPTION>
QUANTITY    EQUIPMENT                                                  $ VALUE

<S>         <C>                                                        <C>
1           MRC-903 Sputer System                                       $ 40,000.00
1           Sputer Films Inc Sputer System                              $ 25,000.00
3           Evaporators- $10,000 each                                   $ 30,000.00
1           PECVD System                                                $ 12,500.00
3           700 series Tegal Plasma Etchers- $9,500                     $ 28,500.00
1           Edwards Evaporator                                          $ 15,000.00
1           STI Single Station Rinser/Dryer                             $  3,700.00
1           Gaertner Ellipsometer L-117                                 $ 15,000.00
1           Taylor-Hobson Talley-Step                                   $  4,500.00
6           Ovens - $2K each                                            $ 12,000.00
1           FSI Developer                                               $  3,000.00
2           Cabilt Contract Aligner Model 800 - $5K each                $ 10,000.00
6           3 stack Thermo Furnaces with Gas Cabinets - $15K each       $ 90,000.00
1           4 stack Thermo Furnaces with Gas Cabinets - $50K each       $ 50,000.00
2           AMT-1200 Epi Reactors - $5K each                            $ 10,000.00
10          Wet Chemical Stations - $5K each                            $ 50,000.00
1           1034 Electro-Glass Probe                                    $  9,500.00
1           576 Curve Station                                           $  1,200.00
1           2 Track Cobilt Coater/Developer                             $  3,000.00

                                     Subtotal:                          $412,900.00

            FACILITIES IMPROVEMENT

1           Liquid Nitrogen system with Evaporator                      $ 50,000.00
1           Deionized Water System                                      $ 25,000.00
1           Chiller & HVAC                                              $ 25,000.00
1           Electrical Service & Distribution                           $ 50,000.00
1           Neutralization System                                       $ 50,000.00
1           Scrubber                                                    $ 20,000.00
1           O2 Distribution                                             $ 10,000.00
1           Deionized Water Distribution                                $ 10,000.00
1           Hydrogen Distribution                                       $ 10,000.00

                                     Subtotal:                          $250,000.00

                                      Total:                           $ 662,900.00
</TABLE>

                                 Page 13 of 14
<PAGE>   14
                                    Exhibit C

No Supplier Trademarks, trade names, or trade dress are specified in this
Agreement.

                                 Page 14 of 14

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