EXECUTION COPY
EXHIBIT 10.12
EQUIPMENT LEASE AND REPURCHASE AGREEMENT
This Equipment Lease and Repurchase Agreement (this "Agreement") is made this
July 31, 1999 (the "Effective Date") between Semiconductor Components
Industries, LLC, a Delaware limited liability company ("SCILLC") and Motorola,
Inc., a Delaware corporation ("Motorola").
WITNESSETH:
WHEREAS, pursuant to the Reorganization Agreement and the Recapitalization
Agreement, as defined herein, the business and operations of the Semiconductor
Components Group are being reorganized as a "stand alone" business;
WHEREAS, in connection therewith, Motorola and SCILLC desire that there shall be
a lease of certain SCILLC owned equipment to Motorola;
NOW, THEREFORE, in consideration of the premises and covenants set forth herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Motorola and SCILLC agree as follows:
1 Definitions:
1.1 Closing Date means July 31, 1999.
1.2 EQUIPMENT PASS DOWN AGREEMENT shall mean the Equipment Pass Down
Agreement, dated as of the date hereof, between Motorola and SCILLC.
1.3 RECAPITALIZATION AGREEMENT means the Agreement and Plan of
Recapitalization and Merger, as amended pursuant to Amendment No. 1
to the Recapitalization Agreement dated July 28, 1999, by and among
Motorola, Inc., SCG Holding Corporation, Semiconductor Components
Industries, LLC, TPG Semiconductor Holdings LLC and TPG
Semiconductor Acquisition Corp made as of May 11, 1999.
1.4 REORGANIZATION AGREEMENT means the Reorganization Agreement by and
among Motorola, Inc., SCG Holding Corporation and Semiconductor
Components Industries, LLC dated as of May 11, 1999.
1.5 SCG ASSEMBLY AGREEMENT means the SCG Assembly Agreement, dated as of
the date hereof, between Motorola and SCILLC.
1.6 SCG FOUNDRY AGREEMENT means the SCG Foundry Agreement, dated as of
the date hereof, between Motorola and SCILLC
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2 TYPES OF EQUIPMENT
2.1 The equipment on Schedule A listed as Category A is equipment owned
by SCILLC that will be operated by Motorola and will be exclusively
used to provide the foundry and assembly services pursuant to the
SCG Foundry Agreement and the SCG Assembly Agreement. Prior to the
respective Termination Date listed on Schedule A, Motorola shall
lease such equipment from SCILLC at a rate equal to such equipment's
depreciation schedule, and at the end of such term, such equipment
will be shipped to SCILLC. Responsibilities for the decommissioning,
packing and shipping of such equipment shall be allocated in the
same manner as in the Equipment Pass Down Agreement.
2.2 The equipment on Schedule A listed as Category B is equipment owned
by SCILLC that will be operated by Motorola and will be used both to
provide the foundry and assembly services pursuant to the SCG
Foundry Agreement and the SCG Assembly Agreement and to provide
manufacturing and assembly services in connection with Motorola
products. Prior to the respective Termination Date listed on
Schedule A, Motorola shall lease such equipment from SCILLC at a
rate equal to such equipment's depreciation schedule, and at the end
of such term, such equipment will be shipped to SCILLC.
Responsibilities for the decommissioning, packing and shipping of
such equipment shall be allocated in the same manner as in the
Equipment Pass Down Agreement.
2.3 The equipment on Schedule A listed as Category C is equipment owned
by SCILLC that will be operated by Motorola exclusively in
connection with Motorola activities. For this equipment, Schedule A
also lists a planned termination date for such equipment. Prior to
the respective Termination Date listed on Schedule A, Motorola shall
lease such equipment from SCILLC at a rate equal to such equipment's
depreciation schedule, and at the end of such term, such equipment
will be shipped to SCILLC. Responsibilities for the decommissioning,
packing and shipping of such equipment shall be allocated in the
same manner as in the Equipment Pass Down Agreement.
2.4 The equipment on Schedule A listed as Category D is equipment owned
by SCILLC that will be operated by Motorola exclusively in
connection with Motorola activities. Prior to the respective
Termination Date listed on Schedule A, Motorola shall lease such
equipment from SCILLC at a rate equal to such equipment's
depreciation schedule, and at the end of such term, Motorola shall
repurchase such equipment at its then current net book value and
such equipment will be shipped to Motorola. Motorola will be
responsible for all costs related to the decommissioning, packing
and shipping of the Phoenix RF1 equipment.
2.5 The equipment on Schedule A listed as Category E is equipment owned
by SCILLC that will be operated by SCILLC exclusively in connection
with Motorola activities. Motorola shall not lease this equipment
from SCILLC. At the end of the term listed for this equipment,
Motorola shall repurchase such equipment at its then current net
book value and such equipment will be shipped
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to Motorola. SCILLC shall be responsible for all costs related to
decommissioning such equipment, and Motorola will be responsible for
all costs related to packing and shipping such equipment.
3 ASSIGNMENT
3.1 This Agreement shall be binding upon, inure to the benefit of, and
be enforceable by or against the parties hereto and their respective
successors and assigns; provided, however, that neither party hereto
may assign this Agreement without the prior written consent of the
other (which consent shall not unreasonably be withheld) except to a
party that acquires all or substantially all of the assets of the
assigning party or for the account of the lenders providing bank
financing solely and specifically for the purpose of securing such
bank financing in connection with the Recapitalization Agreement and
the transactions contemplated thereby.
4 NOTIFICATION
4.1 Unless otherwise indicated herein, all notices, requests, demands or
other communications to the respective parties hereto shall be
deemed to have been given or made when deposited in the mails,
registered mail, return receipt requested, postage prepaid, or by
facsimile to the respective party at the following address:
If to Motorola for Motorola, Inc.
Technical 0000 Xxxxxxx Xxxxxx Xxxxx Xxxx
Matters: Xxxxxx, Xxxxx 00000
Facsimile Number: (000) 000-0000
Attn: Xxx Xxxx
If to Motorola: Motorola, Inc.
Law Department
0000 X. Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile Number: (000) 000-0000
Attn: General Counsel
and to Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile Number:(000) 000-0000
Attn: Xxxxx X. Xxxxx, Esq.
If to SCILLC: SCG Holding Corporation
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0000 X. XxXxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile Number: (000) 000-0000
Attn: Xxxxx Xxxxxxxx
With copies to: Xxxxx Xxxxxxx
Texas Pacific Group
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile Number: (000) 000-0000
and
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxx, Esq.
Facsimile Number: (000) 000-0000
5 TRANSLATION
5.1 If this Agreement is translated into a language other than English,
the English language version will be the only version binding upon
the parties.
6 ENTIRE AGREEMENT
6.1 This Agreement, the SCG Foundry Agreement, the SCG Assembly
Agreement, the Equipment Pass Down Agreement, the Reorganization
Agreement and the Recapitalization Agreement contain the entire
agreement and understanding between the parties hereto with respect
to the subject matter hereof and supersede all prior agreements and
understandings, whether written or oral, relating to such subject
matter.
7 MODIFICATION, NONWAIVER, SEVERABILITY
7.1 No alleged waiver, modification or amendment to this Agreement or to
Schedule A attached hereto shall be effective against either party
hereto, unless in writing, signed by the party against which such
waiver, modification or amendment is asserted, and referring
specifically to the provision hereof alleged to be waived, modified
or amended. The failure or delay of either party to insist upon the
other party's strict performance of the provisions in this Agreement
or to exercise in any respect any right, power, privilege, or remedy
provided for under this Agreement shall not operate as a waiver or
relinquishment thereof, nor shall any single or partial exercise of
any right, power, privilege, or remedy preclude other or further
exercise thereof, or the exercise of any other right, power,
privilege, or
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remedy; provided, however, that the obligations and duties of either
party with respect to the performance of any term or condition in
this Agreement shall continue in full force and effect.
8 APPLICABLE LAW AND DISPUTE RESOLUTION
8.1 New York law governs this Agreement. The parties will settle any
claim or controversy arising out of this Agreement in the manner set
forth in Article IV.3 of the Reorganization Agreement.
9 COMPLIANCE WITH LAWS
9.1 Both parties will comply with all applicable state, federal or local
laws, regulations or ordinances in the performance of their
respective duties and obligations under this Agreement.
10 EXPORT CONTROL AND GOVERNMENTAL APPROVAL
10.1 The parties acknowledge that each must comply with all applicable
rules and laws in the performance of their respective duties and
obligations including, but not limited to, those relating to
restrictions on export and to approval of agreements. Each party
will be responsible for obtaining and maintaining all approvals and
licenses, including export licenses, permits and governmental
authorizations from the appropriate governmental authorities as may
be required to enable such party to fulfill its obligations under
this Agreement. Each party agrees to use its best efforts to the
other in obtaining any such approvals, export licenses, permits or
governmental authorizations.
10.2 Each party agrees that, unless prior written authorization is
obtained from the United States Bureau of Export Administration, it
will not export, re-export, or transship, directly or indirectly,
any products or technical information that would be in contravention
of the Export Administration Regulations then in effect as published
by the United States Department of Commerce.
11 SECTION TITLES
11.1 Section titles as to the subject matter of particular sections
herein are for convenience only and are in no way to be construed as
part of this Agreement or as a limitation of the scope of the
particular sections to which they refer.
12 INTERPRETATION
12.1 The headings and captions contained in this Agreement and in the
Schedule attached hereto are for reference purposes only and shall
not affect in any way the meaning or interpretation of this
Agreement. The use of the word "including" herein shall mean
"including without limitation." Capitalized terms not defined herein
shall have the terms set forth in the Recapitalization Agreement.
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13 NO STRICT CONSTRUCTION
13.1 The language used in this Agreement shall be deemed to be the
language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against
any person.
14 COUNTERPARTS
14.1 This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original, but all of which shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives as of the date and year first set forth
above.
MOTOROLA, INC.
By: /s/ Xxxx X. Xxxxxxxxx
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Name: Xxxx X. Xxxxxxxxx
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Title: Executive Vice-President and
Chief Financial Officer
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SEMICONDUCTOR COMPONENTS INDUSTRIES,
LLC
By: SCG Holding Corporation, its sole
member
By: /s/ Xxxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
----------------------------------------
Title: Vice-President
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Equipment Pass Lease and Repurchase Agreement
SCHEDULE A
FACTORY CATEGORY TERMINATION DATE
------- -------- ----------------
MKL A 07/31/99
OJ A 03/31/01
BP6 A 09/30/01
TLSBE A 01/31/00
MOS3 B 08/31/99
TJN B 01/31/00
MOS1 B 02/01/00
KLM B 08/31/00
BP4* B 03/31/01
BMC* B
MEMS1 C 01/31/00
RF1 D 09/30/01
SBN1 E 09/30/01
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* Includes Probe
