exv4w4






Exhibit 4.4




EXECUTION VERSION




      




MAGNACHIP SEMICONDUCTOR S.A.




AND



MAGNACHIP SEMICONDUCTOR FINANCE COMPANY,



as the Issuers,



AND



EACH OF THE GUARANTORS PARTY HERETO



10.500% SENIOR NOTES DUE 2018



 





INDENTURE



Dated as of April 9, 2010



 





WILMINGTON TRUST FSB,



as Trustee

 





 




 









 





CROSS-REFERENCE TABLE




	 	 	 
	Trust Indenture	 	 
	Act Section	 	Indenture Section
	310(a)(1)
	 	7.10
	(a)(2)
	 	7.10
	(a)(3)
	 	N.A.
	(a)(4)
	 	N.A.
	(a)(5)
	 	7.10
	(b)
	 	7.10
	(c)
	 	N.A.
	311(a)
	 	7.11
	(b)
	 	7.11
	(c)
	 	N.A.
	312(a)
	 	2.05
	(b)
	 	12.03
	(c)
	 	12.03
	313(a)
	 	7.06
	(b)(1)
	 	N.A.
	(b)(2)
	 	7.06; 7.07
	(c)
	 	7.06; 12.02
	(d)
	 	7.06
	314(a)
	 	4.03; 12.02; 12.05
	(b)
	 	N.A.
	(c)(1)
	 	12.04
	(c)(2)
	 	12.04
	(c)(3)
	 	N.A.
	(d)
	 	N.A.
	(e)
	 	12.05
	(f)
	 	N.A.
	315(a)
	 	7.01
	(b)
	 	7.05; 12.02
	(c)
	 	7.01
	(d)
	 	7.01
	(e)
	 	6.11
	316(a) (last sentence)
	 	2.09
	(a)(1)(A)
	 	6.05
	(a)(1)(B)
	 	6.04
	(a)(2)
	 	N.A.
	(b)
	 	6.07
	(c)
	 	2.12
	317(a)(1)
	 	6.08
	(a)(2)
	 	6.09
	(b)
	 	2.04
	318(a)
	 	12.01
	(b)
	 	N.A.
	(c)
	 	12.01





N.A. means not applicable.






 




			
	*	 	This Cross Reference Table is not part of the Indenture.




 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	ARTICLE 1

	DEFINITIONS AND INCORPORATION

	BY REFERENCE

	 
	 	 	 	 
	Section 1.01 Definitions
	 	 	1	 
	Section 1.02 Other Definitions
	 	 	23	 
	Section 1.03 Incorporation by Reference of Trust Indenture Act
	 	 	23	 
	Section 1.04 Rules of Construction
	 	 	24	 
	 
	 	 	 	 
	ARTICLE 2

	THE NOTES

	 
	 	 	 	 
	Section 2.01 Form and Dating
	 	 	24	 
	Section 2.02 Execution and Authentication
	 	 	25	 
	Section 2.03 Registrar and Paying Agent
	 	 	26	 
	Section 2.04 Paying Agent to Hold Money in Trust
	 	 	26	 
	Section 2.05 Holder Lists
	 	 	27	 
	Section 2.06 Transfer and Exchange
	 	 	27	 
	Section 2.07 Replacement Notes
	 	 	38	 
	Section 2.08 Outstanding Notes
	 	 	39	 
	Section 2.09 Treasury Notes
	 	 	39	 
	Section 2.10 Temporary Notes
	 	 	39	 
	Section 2.11 Cancellation
	 	 	39	 
	Section 2.12 Defaulted Interest
	 	 	40	 
	 
	 	 	 	 
	ARTICLE 3

	REDEMPTION AND PREPAYMENT

	 
	 	 	 	 
	Section 3.01 Notices to Trustee
	 	 	40	 
	Section 3.02 Selection of Notes to Be Redeemed or Purchased
	 	 	40	 
	Section 3.03 Notice of Redemption
	 	 	41	 
	Section 3.04 Effect of Notice of Redemption
	 	 	41	 
	Section 3.05 Deposit of Redemption or Purchase Price
	 	 	42	 
	Section 3.06 Notes Redeemed or Purchased in Part
	 	 	42	 
	Section 3.07 Optional Redemption
	 	 	42	 
	Section 3.08 Mandatory Redemption
	 	 	43	 
	Section 3.09 Offer to Purchase by Application of Excess Proceeds
	 	 	43	 
	Section 3.10 Redemption for Changes in Taxes
	 	 	45	 
	 
	 	 	 	 
	ARTICLE 4

	COVENANTS

	 
	 	 	 	 
	Section 4.01 Payment of Notes
	 	 	46	 
	Section 4.02 Maintenance of Office or Agency
	 	 	46	 
	Section 4.03 Reports
	 	 	47	 
	Section 4.04 Compliance Certificate
	 	 	48	 
	Section 4.05 Taxes
	 	 	48	 
	Section 4.06 Stay, Extension and Usury Laws
	 	 	48	 
	Section 4.07 Restricted Payments
	 	 	49	 
	Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
	 	 	52	 






 









 






	 	 	 	 	 
	 	 	Page	 
	Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock
	 	 	53	 
	Section 4.10 Asset Sales
	 	 	57	 
	Section 4.11 Transactions with Affiliates
	 	 	59	 
	Section 4.12 Liens
	 	 	61	 
	Section 4.13 Business Activities of FinanceCo.
	 	 	61	 
	Section 4.14 Corporate Existence
	 	 	61	 
	Section 4.15 Offer to Repurchase Upon Change of Control
	 	 	61	 
	Section 4.16 Additional Amounts
	 	 	63	 
	Section 4.17 Limitation on Sale and Leaseback Transactions
	 	 	65	 
	Section 4.18 Payments for Consent
	 	 	65	 
	Section 4.19 Additional Note Guarantees
	 	 	65	 
	Section 4.20 Designation of Restricted and Unrestricted Subsidiaries
	 	 	66	 
	Section 4.21 Changes in Covenants When Notes are Rated Investment Grade
	 	 	67	 
	 
	 	 	 	 
	ARTICLE 5

	SUCCESSORS

	 
	 	 	 	 
	Section 5.01 Parent Merger, Consolidation or Sale of Assets
	 	 	67	 
	Section 5.02 Parent Successor Corporation Substituted
	 	 	68	 
	Section 5.03 MagnaChip Merger, Consolidation or Sale of Assets
	 	 	68	 
	Section 5.04 MagnaChip Successor Corporation Substituted
	 	 	70	 
	Section 5.05 FinanceCo Merger, Consolidation or Sale of Assets
	 	 	70	 
	Section 5.06 FinanceCo Successor Corporation Substituted
	 	 	70	 
	 
	 	 	 	 
	ARTICLE 6

	DEFAULTS AND REMEDIES

	 
	 	 	 	 
	Section 6.01 Events of Default
	 	 	71	 
	Section 6.02 Acceleration
	 	 	72	 
	Section 6.03 Other Remedies
	 	 	73	 
	Section 6.04 Waiver of Past Defaults
	 	 	73	 
	Section 6.05 Control by Majority
	 	 	74	 
	Section 6.06 Limitation on Suits
	 	 	74	 
	Section 6.07 Rights of Holders of Notes to Receive Payment
	 	 	74	 
	Section 6.08 Collection Suit by Trustee
	 	 	74	 
	Section 6.09 Trustee May File Proofs of Claim
	 	 	75	 
	Section 6.10 Priorities
	 	 	75	 
	Section 6.11 Undertaking for Costs
	 	 	75	 
	 
	 	 	 	 
	ARTICLE 7

	TRUSTEE

	 
	 	 	 	 
	Section 7.01 Duties of Trustee
	 	 	76	 
	Section 7.02 Rights of Trustee
	 	 	77	 
	Section 7.03 Individual Rights of Trustee
	 	 	78	 
	Section 7.04 Trustee’s Disclaimer
	 	 	78	 
	Section 7.05 Notice of Defaults
	 	 	78	 
	Section 7.06 Reports by Trustee to Holders of the Notes
	 	 	78	 
	Section 7.07 Compensation and Indemnity
	 	 	79	 
	Section 7.08 Replacement of Trustee
	 	 	79	 
	Section 7.09 Successor Trustee by Merger, etc.
	 	 	80	 
	Section 7.10 Eligibility; Disqualification
	 	 	80	 
	Section 7.11 Preferential Collection of Claims Against the Issuers
	 	 	81	 






ii









 






	 	 	 	 	 
	 	 	Page	 
	ARTICLE 8

	LEGAL DEFEASANCE AND COVENANT DEFEASANCE

	 
	 	 	 	 
	Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance
	 	 	81	 
	Section 8.02 Legal Defeasance and Discharge
	 	 	81	 
	Section 8.03 Covenant Defeasance
	 	 	81	 
	Section 8.04 Conditions to Legal or Covenant Defeasance
	 	 	82	 
	Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions
	 	 	83	 
	Section 8.06 Repayment to MagnaChip
	 	 	84	 
	Section 8.07 Reinstatement
	 	 	84	 
	 
	 	 	 	 
	ARTICLE 9

	AMENDMENT, SUPPLEMENT AND WAIVER

	 
	 	 	 	 
	Section 9.01 Without Consent of Holders of Notes
	 	 	84	 
	Section 9.02 With Consent of Holders of Notes
	 	 	85	 
	Section 9.03 Compliance with Trust Indenture Act
	 	 	86	 
	Section 9.04 Revocation and Effect of Consents
	 	 	86	 
	Section 9.05 Notation on or Exchange of Notes
	 	 	87	 
	Section 9.06 Trustee to Sign Amendments, etc.
	 	 	87	 
	 
	 	 	 	 
	ARTICLE 10

	NOTE GUARANTEES

	 
	 	 	 	 
	Section 10.01 Guarantee
	 	 	87	 
	Section 10.02 Limitation on Guarantor Liability
	 	 	88	 
	Section 10.03 Execution and Delivery of Note Guarantee
	 	 	88	 
	Section 10.04 Guarantors May Consolidate, etc., on Certain Terms
	 	 	89	 
	Section 10.05. Releases
	 	 	90	 
	 
	 	 	 	 
	ARTICLE 11

	SATISFACTION AND DISCHARGE

	 
	 	 	 	 
	Section 11.01 Satisfaction and Discharge
	 	 	90	 
	Section 11.02 Application of Trust Money
	 	 	91	 
	 
	 	 	 	 
	ARTICLE 12

	MISCELLANEOUS

	 
	 	 	 	 
	Section 12.01 Trust Indenture Act Controls
	 	 	92	 
	Section 12.02 Notices
	 	 	92	 
	Section 12.03 Communication by Holders of Notes with Other Holders of Notes
	 	 	93	 
	Section 12.04 Certificate and Opinion as to Conditions Precedent
	 	 	93	 
	Section 12.05 Statements Required in Certificate or Opinion
	 	 	93	 
	Section 12.06 Rules by Trustee and Agents
	 	 	94	 
	Section 12.07 No Personal Liability of Directors, Officers, Employees and Stockholders
	 	 	94	 
	Section 12.08 Governing Law
	 	 	94	 
	Section 12.09 No Adverse Interpretation of Other Agreements
	 	 	94	 
	Section 12.10 Successors
	 	 	94	 
	Section 12.11 Severability
	 	 	95	 
	Section 12.12 Counterpart Originals
	 	 	95	 
	Section 12.13 Table of Contents, Headings, etc.
	 	 	95	 









iii









 








EXHIBITS




	 	 	 

	Exhibit A1

	 	FORM OF NOTE
	Exhibit A2

	 	FORM OF REGULATION S TEMPORARY GLOBAL NOTE
	Exhibit B

	 	FORM OF CERTIFICATE OF TRANSFER
	Exhibit C

	 	FORM OF CERTIFICATE OF EXCHANGE
	Exhibit D

	 	FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
	Exhibit E

	 	FORM OF NOTATION OF GUARANTEE
	Exhibit F

	 	FORM OF SUPPLEMENTAL INDENTURE






ii









 





     INDENTURE dated as of April 9, 2010 among MAGNACHIP SEMICONDUCTOR S.A., a Luxembourg public
limited liability company (société anonyme) with a registered office at 74, rue de Merl, B.P. 709,
L-2146 Luxembourg registered with the register of commerce and companies of Luxembourg under number
B-97483 (“MagnaChip”), MAGNACHIP SEMICONDUCTOR FINANCE COMPANY, a Delaware corporation (“FinanceCo”
and, together with MagnaChip, the “Issuers”), the Guarantors (as defined below) and WILMINGTON
TRUST FSB, as Trustee (the “Trustee”).



     The Issuers, the Guarantors and the Trustee agree as follows for the benefit of each other and
for the equal and ratable benefit of the Holders (as defined) of the 10.500% Senior Notes due 2018
(the “Notes”):



ARTICLE 1

DEFINITIONS AND INCORPORATION

BY REFERENCE



Section 1.01 Definitions.




     “144A Global Note” means a Global Note substantially in the form of Exhibit A1 hereto bearing
the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and
registered in the name of, the Depositary or its nominee that will be issued in a denomination
equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.



     “2009 Registration Rights Agreement” means the Registration Rights Agreement, dated as of
November 9, 2009, among Parent and each of the securityholders party thereto.



     “2009 Warrant Agreement” means the Warrant Agreement, dated as of November 9, 2009, between
Parent and American Stock Transfer & Trust Company, as warrant agent.



     “Acquired Debt” means, with respect to any specified Person:



     (1) Indebtedness of any other Person existing at the time such other Person is merged with or
into or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred
in connection with, or in contemplation of, such other Person merging with or into, or becoming a
Restricted Subsidiary of, such specified Person; and



     (2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.



     “Additional Notes” means additional Notes (other than the Initial Notes) issued under this
Indenture in accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the
Initial Notes.



     “Affiliate” of any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person. For
purposes of this definition, “control”, as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the management or policies
of such Person, whether through the ownership of voting securities, by agreement or otherwise;
provided that beneficial ownership of 10% or more of the Voting Stock of a Person will be deemed to
be control. For purposes of this definition, the terms “controlling”, “controlled by” and “under
common control with” have correlative meanings.



     “Agent” means any Registrar, co-registrar, Paying Agent or additional paying agent.



1









 





     “Applicable Premium” means, with respect to any Note on any redemption date, the greater of:



     (3) 1.0% of the principal amount of the Note; or



     (4) the excess of: (a) the present value at such redemption date of (i) the redemption price
of the Note at April 15, 2014 (such redemption price being set forth in the table appearing in
Section 3.07 hereof), plus (ii) all required interest payments due on the Note through April 15,
2014 (excluding accrued but unpaid interest to the redemption date), computed using a discount rate
equal to the Treasury Rate as of such redemption date plus 50 basis points; over (b) the principal
amount of the Note.



     “Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial
interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream
that apply to such transfer or exchange.



     “Asset Sale” means:



     (1) the sale, lease, conveyance or other disposition of any assets or rights by Parent or any
of its Restricted Subsidiaries; provided that the sale, lease, conveyance or other disposition of
all or substantially all of the assets of Parent and its Restricted Subsidiaries taken as a whole
will be governed by Section 4.15 and/or Article 5 hereof and not by Section 4.10 hereof; and



     (2) the issuance of Equity Interests by any of Parent’s Restricted Subsidiaries or the sale by
Parent or any of its Restricted Subsidiaries of Equity Interests in any of Parent’s Subsidiaries.



     Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:




     (1) any single transaction or series of related transactions that involves assets
having a Fair Market Value of less than $5.0 million;




     (2) a transfer of assets between or among Parent and its Restricted Subsidiaries;




     (3) an issuance of Equity Interests by a Restricted Subsidiary of Parent to Parent or
to a Restricted Subsidiary of Parent;




     (4) the sale, lease or other transfer of products, services or accounts receivable in
the ordinary course of business and any sale or other disposition of damaged, worn-out or
obsolete assets in the ordinary course of business (including the abandonment or other
disposition of intellectual property that is, in the reasonable judgment of MagnaChip, no
longer economically practicable to maintain or useful in the conduct of the business of
Parent and its Restricted Subsidiaries taken as whole);




     (5) licenses and sublicenses by Parent or any of its Restricted Subsidiaries of
software or intellectual property in the ordinary course of business;




     (6) any surrender or waiver of contract rights or settlement, release, recovery on or
surrender of contract, tort or other claims in the ordinary course of business;




     (7) the granting of Liens not prohibited by Section 4.12 hereof;




     (8) the sale or other disposition of cash or Cash Equivalents;



2









 






     (9) any exchange of like property pursuant to Section 1031 of the Internal Revenue Code
for use in a Permitted Business; and




     (10) a Restricted Payment that does not violate Section 4.07 hereof or a Permitted
Investment.



     “Attributable Debt” in respect of a sale and leaseback transaction means, at the time of
determination, the present value of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction including any period
for which such lease has been extended or may, at the option of the lessor, be extended. Such
present value shall be calculated using a discount rate equal to the rate of interest implicit in
such transaction, determined in accordance with GAAP; provided, however, that if such sale and
leaseback transaction results in a Capital Lease Obligation, the amount of Indebtedness represented
thereby will be determined in accordance with the definition of “Capital Lease Obligation.”



     “Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law for the relief
of debtors.



     “Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under
the Exchange Act, except that in calculating the beneficial ownership of any particular “person”
(as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to
have beneficial ownership of all securities that such “person” has the right to acquire by
conversion or exercise of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time. The terms “Beneficially Owns” and “Beneficially Owned”
have a corresponding meaning.



     “Board of Directors” means:



     (1) with respect to a corporation, the board of directors of the corporation or any committee
thereof duly authorized to act on behalf of such board;



     (2) with respect to a partnership, the board of directors of the general partner of the
partnership;



     (3) with respect to a limited liability company, the managing member or members or any
controlling committee of managing members thereof; and



     (4) with respect to any other Person, the board or committee of such Person serving a similar
function.



     “Borrowing Base” means, as of any date, an amount equal to:




     (1) 85% of the face amount of all accounts receivable owned by Parent and its
Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such date
that were not more than 180 days past due; plus




     (2) 50% of the book value of all inventory, net of reserves owned by Parent and its
Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such date.



     “Broker-Dealer” means any broker or dealer registered with the SEC under the Exchange Act.



     “Business Day” means any day other than a Legal Holiday.



3









 





     “Capital Lease Obligation” means, at the time any determination is to be made, the amount of
the liability in respect of a capital lease that would at that time be required to be capitalized
on a balance sheet prepared in accordance with GAAP, and the Stated Maturity thereof shall be the
date of the last payment of rent or any other amount due under such lease prior to the first date
upon which such lease may be prepaid by the lessee without payment of a penalty.



     “Capital Stock” means:



     (1) in the case of a corporation, corporate stock;



     (2) in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate stock;



     (3) in the case of a partnership or limited liability company, partnership interests (whether
general or limited) or membership interests; and



     (4) any other interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, the issuing Person, but excluding from
all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt
securities include any right of participation with Capital Stock.



     “Cash Equivalents” means:



     (1) United States dollars, South Korean Won, Pound Sterling, Hong Kong dollars, New Taiwan
dollars, Euros and Japanese yen;



     (2) securities issued or directly and fully guaranteed or insured by the United States
government, South Korean government, governments of EU member states with a S&P sovereign credit
rating of A or better, the Japanese government, the Taiwan government, the Hong Kong government, or
any agency or instrumentality of any such government (provided that the full faith and credit of
any such government is pledged in support of those securities) having maturities of not more than
one year from the date of acquisition;



     (3) United States dollar denominated and South Korean Won denominated certificates of deposit,
eurodollar time deposits and similar instruments in the United States, Hong Kong, Taiwan and Japan
with maturities of one year or less from the date of acquisition, bankers’ acceptances with
maturities not exceeding one year and overnight bank deposits, in each case, with any domestic
commercial bank having capital and surplus in excess of $500.0 million and a Thomson Bank Watch
Rating of “B” or better or a comparable rating by a comparable rating agency in the relevant
jurisdiction if such Thomson Bank Watch Rating is not available;



     (4) repurchase obligations with a term of not more than seven days for underlying securities
of the types described in clauses (2) and (3) above entered into with any financial institution
meeting the qualifications specified in clause (3) above;



     (5) commercial paper having one of the two highest ratings obtainable from Moody’s or S&P and,
in each case, maturing within one year after the date of acquisition;



     (6) money market funds at least 95% of the assets of which constitute Cash Equivalents of the
kinds described in clauses (1) through (5) of this definition; and



4









 





     (7) in the case of a Foreign Subsidiary, (a) currency of the countries in which such Foreign
Subsidiary conducts business, and (b) investments of the type and maturity described in clause (3)
above of foreign obligors, which investments or obligors have the rating described in such clause.



     “Change of Control” means the occurrence of any of the following:




     (1) the direct or indirect sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related transactions,
of all or substantially all of the properties or assets of Parent and its Subsidiaries taken
as a whole to any Person (including any “person” (as that term is used in Section 13(d)(3)
of the Exchange Act)) other than one or more of its Restricted Subsidiaries or a Principal
or a Related Party of a Principal;




     (2) the formal adoption of a plan relating to the liquidation or dissolution of Parent
(Parent’s statutory conversion into a corporation at any time prior to the consummation of
the Initial Public Offering shall not be deemed a liquidation or dissolution);




     (3) the consummation of any transaction (including, without limitation, any merger or
consolidation), the result of which is that any Person (including any “person” (as defined
above), other than the Principals and their Related Parties or a Permitted Group, becomes
the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of
Parent, measured by voting power rather than number of shares;




     (4) the first day on which a majority of the members of the Board of Directors of
Parent are not Continuing Directors; or




     (5) the first day on which Parent ceases to own, directly or indirectly, 100% of the
outstanding Equity Interests of MagnaChip (excluding for purposes of such calculation all
director qualifying shares, if any, that are outstanding).



     “Clearstream” means Clearstream Banking, S.A.



     “Consolidated EBITDA” means with respect to any specified Person for any period, the
Consolidated Net Income of such Person for such period plus, without duplication:




     (1) provision for taxes based on income or profits of such Person and its Restricted
Subsidiaries for such period, to the extent that such provision for taxes was deducted in
computing such Consolidated Net Income; plus




     (2) the Fixed Charges of such Person and its Restricted Subsidiaries for such period,
to the extent that such Fixed Charges were deducted in computing such Consolidated Net
Income; plus




     (3) any foreign currency translation losses (including losses related to currency
remeasurements of Indebtedness) of such Person and its Restricted Subsidiaries for such
period, to the extent that such losses were taken into account in computing such
Consolidated Net Income; plus




     (4) all depreciation, amortization (including amortization of intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period) and other non-cash
charges and expenses (excluding any such non-cash charge or expense to the extent that it



5









 







represents an accrual of or reserve for cash charges or expenses in any future period
or amortization of a prepaid cash charge or expense that was paid in a prior period) of such
Person and its Restricted Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash charges or expenses were deducted in computing such
Consolidated Net Income; plus




     (5) all unusual or non-recurring charges or expenses of such Person and its Restricted
Subsidiaries for such period, to the extent the same were deducted in computing such
Consolidated Net Income; plus




     (6) all restructuring and impairment charges or expenses of such Person and its
Restricted Subsidiaries for such period, to the extent the same were deducted in computing
such Consolidated Net Income; plus




     (7) any increase to cost of goods sold of such Person and its Restricted Subsidiaries
for such period arising out of the “fresh start” accounting treatment of the Reorganization;
minus




     (8) any foreign currency translation gains (including gains related to currency
remeasurements of Indebtedness) of such Person and its Restricted Subsidiaries for such
period, to the extent such gains were taken into account in computing such Consolidated Net
Income; minus




     (9) non-cash items increasing such Consolidated Net Income for such period, other than
the accrual of revenue in the ordinary course of business,


in each case, on a consolidated basis and determined in accordance with GAAP.




     “Consolidated Net Income” means, with respect to any specified Person for any period, the
aggregate of the net income (loss) of such Person and its Restricted Subsidiaries for such period,
on a consolidated basis (excluding the net income (loss) of any Unrestricted Subsidiary of such
Person), determined in accordance with GAAP and without any reduction in respect of preferred stock
dividends; provided that:




     (1) all extraordinary gains (and losses) and all gains (and losses) realized in
connection with any Asset Sale or the disposition of securities or the early extinguishment
of Indebtedness, together with any related provision for taxes on any such gain, will be
excluded;




     (2) the net income (but not loss) of any Person that is not a Restricted Subsidiary of
the specified Person or that is accounted for by the equity method of accounting will be
included only to the extent of the amount of dividends or similar distributions paid in cash
to the specified Person or a Restricted Subsidiary of the Person;




     (3) for purposes of Section 4.07(c)(A) through (E), the net income (but not loss) of
any Restricted Subsidiary will be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that net income is not
at the date of determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders, except to the extent that a
dividend or similar distribution is actually and lawfully made to such Person or to another
Restricted Subsidiary of such Person that is not subject to any such restriction on
dividends or similar distributions;



6









 







provided that restrictions under the laws of South Korea or restrictions in any Credit
Facilities that were permitted by the terms of this Indenture to be incurred will be
disregarded for purposes of this clause (3);




     (4) the cumulative effect of a change in accounting principles will be excluded; and




     (5) non-cash gains and losses attributable to movement in the mark-to-market valuation
of Hedging Obligations pursuant to Financial Accounting Standards Board Statement No. 133
will be excluded.



     “continuing” means, with respect to any default, Default or Event of Default, that such
default, Default or Event of Default has not been cured or waived. In the case of an Event of
Default under clause (6) of the definition of Event of Default, such Event of Default shall no
longer be continuing upon the cure or waiver of the default of the Indebtedness described therein
that causes such Event of Default to occur or the rescission of the declaration of acceleration of
such Indebtedness.



     “Continuing Directors” means, as of any date of determination, any member of the Board of
Directors of Parent who:




     (1) was a member of such Board of Directors on the Issue Date; or




     (2) was nominated for election or elected or appointed to such Board of Directors with
the approval of a majority of the Continuing Directors who were members of such Board of
Directors at the time of such nomination or election.



     “Corporate Trust Office of the Trustee” will be at the address of the Trustee specified in
Section 12.02 hereof or such other address as to which the Trustee may give notice to the Issuers.



     “Credit Agreement” means the Amended and Restated Credit Agreement, dated as of November 6,
2009, among MagnaChip, FinanceCo, Parent, the guarantors party thereto, the lenders party thereto
and Wilmington Trust FSB, as Administrative Agent.



     “Credit Facilities” means one or more indentures, purchase agreements, debt facilities or
commercial paper facilities providing for the issuance of debt securities, revolving credit loans,
term loans, receivables financing (including through the sale of receivables to such lenders or to
special purpose entities formed to borrow from such lenders against such receivables) or letters of
credit, in each case, as amended, restated, modified, renewed, refunded, replaced in any manner
(whether upon or after termination or otherwise) or refinanced (including by means of sales of debt
securities to institutional investors) in whole or in part from time to time.



     “Custodian” means the Trustee, as custodian with respect to the Notes in global form, or any
successor entity thereto.



     “Default” means any event that is, or with the passage of time or the giving of notice or both
would be, an Event of Default.



     “Definitive Note” means a certificated Note registered in the name of the Holder thereof and
issued in accordance with Section 2.06 hereof, substantially in the form of Exhibit A1 hereto
except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of
Exchanges of Interests in the Global Note” attached thereto.



7









 





     “Depositary” means, with respect to the Notes issuable or issued in whole or in part in global
form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and
any and all successors thereto appointed as depositary hereunder and having become such pursuant to
the applicable provision of this Indenture.



     “Designated Non-cash Consideration” means the Fair Market Value of non-cash consideration
received by Parent or a Restricted Subsidiary in connection with an Asset Sale that is so
designated as Designated Non-cash Consideration pursuant to an officers’ certificate, setting forth
the basis of such valuation, executed by Parent’s chief financial officer, less the amount of cash
or Cash Equivalents received in a subsequent sale of or collection on such Designated Non-cash
Consideration.



     “Director Indemnification Agreements” means indemnification agreements between Parent and the
members of Parent’s Board of Directors.



     “Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any
security into which it is convertible, or for which it is exchangeable, in each case, at the option
of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature. Notwithstanding the preceding sentence, any Capital Stock that
would constitute Disqualified Stock solely because the holders of the Capital Stock have the right
to require Parent to repurchase such Capital Stock upon the occurrence of a change of control or an
asset sale will not constitute Disqualified Stock if the terms of such Capital Stock provide that
Parent may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such
repurchase or redemption complies with Section 4.07 hereof. The amount of Disqualified Stock
deemed to be outstanding at any time for purposes of this Indenture will be the maximum amount that
Parent and its Restricted Subsidiaries may become obligated to pay upon the maturity of, or
pursuant to any mandatory redemption provisions of, such Disqualified Stock, exclusive of accrued
dividends.



     “Equity Interests” means Capital Stock and all warrants, options or other rights to acquire
Capital Stock (but excluding any debt security that is convertible into, or exchangeable for,
Capital Stock).



     “Euroclear” means Euroclear Bank, S.A./N.V., as operator of the Euroclear system.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended.



     “Exchange Notes” means the Notes issued in the Exchange Offer pursuant to Section 2.06(f)
hereof.



     “Exchange Offer” has the meaning set forth in the Registration Rights Agreement.



     “Exchange Offer Registration Statement” has the meaning set forth in the Registration Rights
Agreement.



     “Existing Indebtedness” means all Indebtedness of Parent and its Restricted Subsidiaries in
existence on the Issue Date, until such amounts are repaid.



     “Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated
willing seller in a transaction not involving distress or necessity of either party, determined in
good faith by the Board of Directors of Parent (unless otherwise provided in this Indenture).



8









 





     “Fixed Charge Coverage Ratio” means with respect to any specified Person for any period, the
ratio of the Consolidated EBITDA of such Person for such period to the Fixed Charges of such Person
for such period. In the event that the specified Person or any of its Restricted Subsidiaries
incurs, assumes, guarantees, repays, repurchases, redeems, defeases or otherwise discharges any
Indebtedness (other than ordinary working capital borrowings) or issues, repurchases or redeems
preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated and on or prior to the date on which the event for which the calculation
of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage
Ratio will be calculated giving pro forma effect to such incurrence, assumption, Guarantee,
repayment, repurchase, redemption, defeasance or other discharge of Indebtedness, or such issuance,
repurchase or redemption of preferred stock, and the use of the proceeds therefrom, as if the same
had occurred at the beginning of the applicable four-quarter reference period.



     In addition, for purposes of calculating the Fixed Charge Coverage Ratio:




     (1) acquisitions that have been made by the specified Person or any of its Restricted
Subsidiaries, including through mergers or consolidations, or any Person or any of its
Restricted Subsidiaries acquired by the specified Person or any of its Restricted
Subsidiaries, and including all related financing transactions and including increases in
ownership of Restricted Subsidiaries, during the four-quarter reference period or subsequent
to such reference period and on or prior to the Calculation Date, or that are to be made on
the Calculation Date, will be given pro forma effect as if they had occurred on the first
day of the four-quarter reference period, including all Pro Forma Cost Savings, as if the
same had been realized at the beginning of such four-quarter period;




     (2) the Consolidated EBITDA attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses (and ownership interests therein)
disposed of prior to the Calculation Date, will be excluded;




     (3) the Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses (and ownership interests therein)
disposed of prior to the Calculation Date, will be excluded, but only to the extent that the
obligations giving rise to such Fixed Charges will not be obligations of the specified
Person or any of its Restricted Subsidiaries following the Calculation Date;




     (4) any Person that is a Restricted Subsidiary on the Calculation Date will be deemed
to have been a Restricted Subsidiary at all times during such four-quarter period;




     (5) any Person that is not a Restricted Subsidiary on the Calculation Date will be
deemed not to have been a Restricted Subsidiary at any time during such four-quarter period;




     (6) if any Indebtedness bears a floating rate of interest, the interest expense on such
Indebtedness will be calculated as if the rate in effect on the Calculation Date had been
the applicable rate for the entire period (taking into account any Hedging Obligation
applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the
Calculation Date in excess of 12 months); and




     (7) in the case of any four-quarter reference period that includes any period of time
prior to the consummation of the Reorganization, pro forma effect shall be given to the
Reorganization as if the same had occurred at the beginning of such four-quarter period.



9









 





     “Fixed Charges” means, with respect to any specified Person for any period, the sum, without
duplication, of:




     (1) the consolidated interest expense of such Person and its Restricted Subsidiaries
for such period, whether paid or accrued, including, without limitation, amortization of
debt issuance costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to Attributable
Debt, commissions, discounts and other fees and charges incurred in respect of letter of
credit or bankers’ acceptance financings, and net of the effect of all payments made or
received pursuant to Hedging Obligations in respect of interest rates; plus




     (2) the consolidated interest expense of such Person and its Restricted Subsidiaries
that was capitalized during such period; plus




     (3) any interest on Indebtedness of another Person that is guaranteed by such Person or
one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of
its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon; plus




     (4) the product of (a) all dividends, whether paid or accrued and whether or not in
cash, on any series of preferred stock of such Person or any of its Restricted Subsidiaries,
other than dividends on Equity Interests payable solely in Equity Interests of Parent (other
than Disqualified Stock) or to Parent or a Restricted Subsidiary of Parent, times (b) a
fraction, the numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such Person, expressed as a
decimal, in each case, determined on a consolidated basis in accordance with GAAP.



     “Foreign Subsidiary” means any Restricted Subsidiary that is not formed under the laws of the
United States or any state of the United States or the District of Columbia.



     “GAAP” means United States generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved by a significant segment of the
accounting profession in the United States, which are in effect from time to time.



     “Global Note Legend” means the legend set forth in Section 2.06(g)(2) hereof, which is
required to be placed on all Global Notes issued under this Indenture.



     “Global Notes” means, individually and collectively, each of the Restricted Global Notes and
the Unrestricted Global Notes deposited with or on behalf of and registered in the name of the
Depository or its nominee, substantially in the form of Exhibit A1 hereto and that bears the Global
Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached
thereto, issued in accordance with Section 2.01, 2.06(b)(3), 2.06(b)(4), 2.06(d)(2) or 2.06(f)
hereof.



     “Government Securities” means direct obligations of, or obligations guaranteed by, the United
States of America (including any agency or instrumentality thereof) for the payment of which
obligations or guarantees the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer’s option.



10









 





     “Guarantee” means a guarantee other than by endorsement of negotiable instruments for
collection in the ordinary course of business, direct or indirect, in any manner including, without
limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements
in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or
services, to take or pay or to maintain financial statement conditions or otherwise).



     “Guarantors” means Parent and any Restricted Subsidiary of Parent (other than the Issuers)
that executes a Note Guarantee in accordance with the provisions of this Indenture, and their
respective successors and assigns, in each case, until the Note Guarantee of such Person has been
released in accordance with the provisions of this Indenture.



     “Hedging Obligations” means, with respect to any specified Person, the obligations of such
Person under:




     (1) interest rate swap agreements (whether from fixed to floating or from floating to
fixed), interest rate cap agreements and interest rate collar agreements;




     (2) other agreements or arrangements designed to manage interest rates or interest rate
risk; and




     (3) other agreements or arrangements designed to protect such Person against
fluctuations in currency exchange rates or commodity prices.



     “Holder” means a Person in whose name a Note is registered.



     “Immaterial Subsidiary” means, as of any date, any Restricted Subsidiary whose total assets,
as of that date, are less than $500,000 and whose total revenues for the most recent twelve-month
period do not exceed $500,000; provided that a Restricted Subsidiary will not be considered to be
an Immaterial Subsidiary if it, directly or indirectly, Guarantees any Indebtedness of Parent.



     “Indebtedness” means, with respect to any specified Person, any indebtedness of such Person
(excluding accrued expenses and trade payables), whether or not contingent:




     (1) in respect of borrowed money;




     (2) evidenced by bonds, notes, debentures or similar instruments or letters of credit
(or reimbursement agreements in respect thereof);




     (3) in respect of banker’s acceptances;




     (4) representing Capital Lease Obligations or Attributable Debt in respect of sale and
leaseback transactions;




     (5) representing the balance deferred and unpaid of the purchase price of any property
or services due more than six months after such property is acquired or such services are
completed; or




     (6) representing any Hedging Obligations,



11









 




if and to the extent any of the preceding items (other than letters of credit, Attributable Debt
and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person
prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness
of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness
is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the
specified Person of any Indebtedness of any other Person. Indebtedness shall be calculated without
giving effect to the effects of Statement of Financial Accounting Standards No. 133 and related
interpretations to the extent such effects would otherwise increase or decrease an amount of
Indebtedness for any purpose under this Indenture as a result of accounting for any embedded
derivatives created by the terms of such Indebtedness.




     “Indenture” means this Indenture, as amended or supplemented from time to time.



     “Indirect Participant” means a Person who holds a beneficial interest in a Global Note through
a Participant.



     “Initial Notes” means the first $250 million aggregate principal amount of Notes issued under
this Indenture on the date hereof.



     “Initial Public Offering” means the first public sale of Qualifying Equity Interests of Parent
in an offering that is registered under the Securities Act that is consummated after the Issue
Date.



     “Institutional Accredited Investor” means an institution that is an “accredited investor” as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who are not also QIBs.



     “Investments” means, with respect to any Person, all direct or indirect investments by such
Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other
obligations), advances or capital contributions (excluding commission, travel and similar advances
to officers and employees made in the ordinary course of business), purchases or other acquisitions
for consideration of Indebtedness, Equity Interests or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in accordance with GAAP.
If Parent or any Restricted Subsidiary of Parent sells or otherwise disposes of any Equity
Interests of any direct or indirect Restricted Subsidiary of Parent such that, after giving effect
to any such sale or disposition, such Person is no longer a Restricted Subsidiary of Parent, Parent
will be deemed to have made an Investment on the date of any such sale or disposition equal to the
Fair Market Value of Parent’s Investments in such Subsidiary that were not sold or disposed of in
an amount determined as provided in the final paragraph of Section 4.07 hereof. The acquisition by
Parent or any Restricted Subsidiary of Parent of a Person that holds an Investment in a third
Person will be deemed to be an Investment by Parent or such Restricted Subsidiary in such third
Person in an amount equal to the Fair Market Value of the Investments held by the acquired Person
in such third Person in an amount determined as provided in the final paragraph of Section 4.07
hereof. Except as otherwise provided in this Indenture, the amount of an Investment will be
determined at the time the Investment is made and without giving effect to subsequent changes in
value.



     “Issue Date” means April 9, 2010.



     “Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in the City
of New York or at a place of payment are authorized by law, regulation or executive order to remain
closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that
place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such
payment for the intervening period.



12









 





     “Letter of Transmittal” means the letter of transmittal to be prepared by the Issuers and sent
to all Holders of the Notes for use by such Holders in connection with the Exchange Offer.



     “Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise
perfected under applicable law, including any conditional sale or other title retention agreement,
any lease in the nature thereof, any option or other agreement to sell or give a security interest
in and any filing of or agreement to give any financing statement under the Uniform Commercial Code
(or equivalent statutes) of any jurisdiction.



     “MagnaChip China Subsidiaries” means MagnaChip Semiconductor (Shanghai) Company Limited and
all other Subsidiaries of Parent at any time organized under the laws of the People’s Republic of
China.



     “MagnaChip Korea” means MagnaChip Semiconductor, Ltd.



     “Moody’s” means Moody’s Investors Service, Inc.



     “Net Proceeds” means the aggregate cash proceeds and Cash Equivalents received by Parent or
any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any
cash or Cash Equivalents received upon the sale or other disposition of any non-cash consideration
received in any Asset Sale), net of the direct costs relating to such Asset Sale, including,
without limitation, legal, accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result of the Asset Sale, taxes paid or payable as a result of
the Asset Sale, in each case, after taking into account any available tax credits or deductions and
any tax sharing arrangements, and any reserve for adjustment or indemnification obligations in
respect of the sale price of such asset or assets established in accordance with GAAP.



     “Non-Recourse Debt” means Indebtedness:




     (1) as to which neither Parent nor any of its Restricted Subsidiaries (a) provides
credit support of any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness) or (b) is directly or indirectly liable as a guarantor or
otherwise; and




     (2) as to which the lenders have been notified in writing that they will not have any
recourse to the stock or assets of Parent or any of its Restricted Subsidiaries (other than
the Equity Interests of an Unrestricted Subsidiary).



     “Non-U.S. Person” means a Person who is not a U.S. Person.



     “Note Guarantee” means the Guarantee by each Guarantor of the Issuers’ obligations under this
Indenture and the Notes, executed pursuant to the provisions of this Indenture.



     “Notes” has the meaning assigned to it in the preamble to this Indenture. The Initial Notes
and the Additional Notes shall be treated as a single class for all purposes under this Indenture,
and unless the context otherwise requires, all references to the Notes shall include the Initial
Notes and any Additional Notes.



     “Obligations” means any principal, interest, penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation governing any
Indebtedness.



13









 





     “Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer,
any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person.



     “Officers’ Certificate” means a certificate signed on behalf of an entity by two Officers of
the entity, one of whom must be the principal executive officer, the principal financial officer,
the treasurer or the principal accounting officer of the entity, that meets the requirements of
Section 12.05 hereof.



     “Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the
Trustee, that meets the requirements of Section 12.05 hereof. The counsel may be an employee of or
counsel to the Issuers, any Subsidiary of Parent or the Trustee.



     “Parent” means MagnaChip Semiconductor LLC, the direct parent company of MagnaChip, and any
successor thereto.



     “Pari Passu Indebtedness” means any Indebtedness of either Issuer or any Guarantor other than
unsecured Indebtedness that:




     (1) is contractually subordinated to the prior payment in full in cash of the Notes,
the Guarantees and all related Obligations under this Indenture (including interest accruing
after the commencement of a bankruptcy or insolvency proceeding, whether or not such
interest constitutes an allowable claim) on terms customary for “high yield” securities as
of the date of incurrence of such Indebtedness; and




     (2) has a longer Weighted Average Life to Maturity than the remaining Weighted Average
Life to Maturity of the Notes as of the date of such incurrence.



     “Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who
has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to
DTC, shall include Euroclear and Clearstream).



     “Permitted Business” means the businesses of MagnaChip, its direct and indirect parents, and
their respective subsidiaries as of the Issue Date and any other business ancillary, supplementary
or complementary to the semiconductor business, as determined in good faith by Parent’s Board of
Directors.



     “Permitted Group” means any group of investors that is deemed to be a “person” (as that term
is used in Section 13(d)(3) of the Exchange Act); provided that at least a majority of the shares
of Voting Stock Beneficially Owned by such group of investors are Beneficially Owned by the
Principals and their Related Parties. For purposes of this definition, shares Beneficially Owned
by one person will not be attributed to any other Person solely by virtue of being part of the same
group of investors for purposes of Section 13(d)(3).



     “Permitted Investments” means:




     (1) any Investment in Parent or in a Restricted Subsidiary of Parent;




     (2) any Investment in Cash Equivalents;




     (3) any Investment by Parent or any Restricted Subsidiary of Parent in a Person that is
not a Restricted Subsidiary, if as a result of such Investment:



14









 






          (a) such Person becomes a Restricted Subsidiary of Parent; or




          (b) such Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, Parent or a Restricted
Subsidiary of Parent;




     (4) any Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with Section 4.10 hereof;




     (5) any acquisition of assets or Capital Stock solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of Parent;




     (6) any Investments received in compromise or resolution of (A) obligations of trade
creditors or customers that were incurred in the ordinary course of business of Parent or
any of its Restricted Subsidiaries, including pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer; or
(B) litigation, arbitration or other disputes;




     (7) Investments represented by Hedging Obligations;




     (8) loans or advances to employees made in the ordinary course of business of Parent or
any Restricted Subsidiary of Parent in an aggregate principal amount not to exceed $5.0
million at any one time outstanding;




     (9) repurchases of the Notes;




     (10) (a) advances to customers in the ordinary course of business that are recorded as
accounts receivable on the consolidated balance sheet of such Person and (b) payroll, travel
and similar advances to cover matters that are expected at the time of the advances
ultimately to be treated as expenses for accounting purposes and that are made in the
ordinary course of business;




     (11) any guarantee of Indebtedness permitted to be incurred by Section 4.09 other than
a guarantee of Indebtedness of an Affiliate of Parent that is not a Restricted Subsidiary of
Parent;




     (12) any Investment existing on, or made pursuant to binding commitments existing on,
the Issue Date and any Investment consisting of an extension, modification or renewal of any
Investment existing on, or made pursuant to a binding commitment existing on, the Issue
Date; provided that the amount of any such Investment may be increased (a) as required by
the terms of such Investment as in existence on the Issue Date or (b) as otherwise permitted
under this Indenture;




     (13) Investments in any Person to the extent such Investments consist of prepaid
expenses, negotiable instruments held for collection and lease, utility and workers’
compensation, performance and other similar deposits made in the ordinary course of business
by Parent or any Restricted Subsidiary;




     (14) Investments acquired after the Issue Date as a result of the acquisition by Parent
or any Restricted Subsidiary of Parent of another Person, including by way of a merger,
amalgamation or consolidation with or into Parent or any of its Restricted Subsidiaries in a
transaction that is not prohibited by Section 5.01, Section 5.03 or Section 5.05 after the
Issue Date



15









 







to the extent that such Investments were not made in contemplation of such acquisition,
merger, amalgamation or consolidation and were in existence on the date of such acquisition,
merger, amalgamation or consolidation; and




     (15) other Investments in any Person having an aggregate Fair Market Value (measured on
the date each such Investment was made and without giving effect to subsequent changes in
value), when taken together with all other Investments made pursuant to this clause (15)
that are at the time outstanding not to exceed the greater of (a) $25.0 million or (b) 5% of
Total Assets as of the date of such Investment.



     “Permitted Liens” means:




     (1) Liens on assets of Parent or any of its Restricted Subsidiaries securing
Indebtedness and other Obligations under Credit Facilities that was permitted by the terms
of this Indenture to be incurred pursuant to clauses (1) or (16) of the definition of
Permitted Debt and/or securing Hedging Obligations and/or Obligations with regard to
Treasury Management Arrangements;




     (2) Liens in favor of the Issuers or the Guarantors;




     (3) Liens on property of a Person existing at the time such Person becomes a Restricted
Subsidiary of Parent or is merged with or into or consolidated with Parent or any Restricted
Subsidiary of Parent; provided that such Liens were in existence prior to the contemplation
of such Person becoming a Restricted Subsidiary of Parent or such merger or consolidation
and do not extend to any assets other than those of the Person that becomes a Restricted
Subsidiary of Parent or is merged with or into or consolidated with Parent or any Restricted
Subsidiary of Parent;




     (4) Liens on property (including Capital Stock) existing at the time of acquisition of
the property by Parent or any Restricted Subsidiary of Parent; provided that such Liens were
in existence prior to such acquisition and not incurred in contemplation of, such
acquisition;




     (5) Liens or deposits made in the ordinary course of business to secure the performance
of tenders, bids, leases, contracts (except those related to borrowed money), statutory
obligations, insurance, surety or appeal bonds, workers compensation obligations,
performance bonds or other obligations of a like nature (including Liens to secure letters
of credit issued to assure payment of such obligations) or arising as a result of progress
payments under government contracts;




     (6) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by
Section 4.09(b)(4) covering only the assets acquired with or financed by such Indebtedness;




     (7) Liens existing on the Issue Date;




     (8) Liens for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded; provided that any reserve or other appropriate
provision as is required in conformity with GAAP has been made therefor;



16









 






     (9) Liens imposed by law, such as carriers’, warehousemen’s, landlord’s, mechanics’,
materialmen’s, repairmen’s, suppliers’ or similar Liens, in each case, incurred in the
ordinary course of business;




     (10) survey exceptions, easements or reservations of, or rights of others for,
licenses, rights-of- way, sewers, electric lines, telegraph and telephone lines and other
similar purposes, or zoning or other restrictions as to the use of real property that were
not incurred in connection with Indebtedness and that do not in the aggregate materially
adversely affect the value of said properties or materially impair their use in the
operation of the business of such Person;




     (11) Liens created for the benefit of (or to secure) the Notes (or the Note
Guarantees);




     (12) Liens to secure any Permitted Refinancing Indebtedness permitted to be incurred
under this Indenture; provided, however, that:




          (a) the new Lien is limited to all or part of the same property and assets that secured
or, under the written agreements pursuant to which the original Lien arose, could secure the
original Lien (plus improvements and accessions to, such property or proceeds or
distributions thereof); and




          (b) the Indebtedness secured by the new Lien is not increased to any amount greater
than the sum of (x) the outstanding principal amount, or, if greater, committed amount, of
the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged with such
Permitted Refinancing Indebtedness and (y) an amount necessary to pay any fees and expenses,
including premiums, related to such renewal, refunding, refinancing, replacement, defeasance
or discharge;




     (13) Liens on insurance policies and proceeds thereof, or other deposits, to secure
insurance premium financings;




     (14) filing of Uniform Commercial Code financing statements as a precautionary measure
in connection with operating leases;




     (15) bankers’ Liens, rights of setoff, Liens arising out of judgments or awards not
constituting an Event of Default and notices of lis pendens and associated rights related to
litigation being contested in good faith by appropriate proceedings and for which adequate
reserves have been made;




     (16) Liens on cash, Cash Equivalents or other property arising in connection with the
defeasance, discharge or redemption of Indebtedness;




     (17) Liens on specific items of inventory or other goods (and the proceeds thereof) of
any Person securing such Person’s obligations in respect of bankers’ acceptances issued or
created in the ordinary course of business for the account of such Person to facilitate the
purchase, shipment or storage of such inventory or other goods;




     (18) grants of software and other technology licenses in the ordinary course of
business;




     (19) leases or subleases granted in the ordinary course of business to third Persons
not materially interfering with the business of Parent and its Restricted Subsidiaries taken
as a whole;



17









 






     (20) Liens arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into in the ordinary course of business;




     (21) Liens in favor of customs and revenue authorities to secure payment of customs
duties in connection with the importation of goods in the ordinary course of business and
other similar Liens arising in the ordinary course of business;




     (22) Liens in connection with escrow deposits made in connection with any acquisition
of assets; and




     (23) Liens incurred in the ordinary course of business of Parent or any Restricted
Subsidiary of Parent with respect to obligations that do not exceed $10.0 million at any one
time outstanding.



     “Permitted Refinancing Indebtedness” means any Indebtedness of Parent or any of its Restricted
Subsidiaries issued in exchange for, or the net proceeds of which are used to renew, refund,
refinance, replace, defease or discharge other Indebtedness of Parent or any of its Restricted
Subsidiaries (other than intercompany Indebtedness); provided that:




     (1) the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted value, if
applicable) of the Indebtedness renewed, refunded, refinanced, replaced, defeased or
discharged (plus all accrued interest on the Indebtedness and the amount of all fees and
expenses, including premiums, incurred in connection therewith);




     (2) such Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and has a Weighted Average Life to Maturity that is (a) equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness being renewed,
refunded, refinanced, replaced, defeased or discharged or (b) more than 90 days after the
final maturity date of the Notes;




     (3) if the Indebtedness being renewed, refunded, refinanced, replaced, defeased or
discharged is subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness is subordinated in right of payment to the Notes on terms at least as favorable
to the Holders of Notes as those contained in the documentation governing the Indebtedness
being renewed, refunded, refinanced, replaced, defeased or discharged; and




     (4) such Indebtedness is incurred either by Parent or by the Restricted Subsidiary of
Parent that was the obligor on the Indebtedness being renewed, refunded, refinanced,
replaced, defeased or discharged and is guaranteed only by Persons who were obligors on the
Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged.



     “Permitted Tax Payments” means, for so long as Parent is treated as a partnership for U.S.
federal income tax purposes, payments by Parent to direct owners of Parent’s equity interests in
respect of tax liabilities of Parent’s investors arising from direct or indirect ownership of
Parent’s equity interests under Section 951 of the Internal Revenue Code. Permitted Tax Payments
shall be calculated by reference to the amount of Parent’s and its Subsidiaries’ income determined
to be an amount required to be included in income under section 951 of the Code times .35. A
nationally recognized accounting firm chosen by Parent shall determine the amount of Permitted Tax
Payments.



18









 





     “Person” means any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, limited liability company or government or
other entity.



     “Principals” means Avenue International Master, L.P., Avenue Investments, L.P., Avenue Special
Situations Fund IV, L.P., Avenue Special Situations Fund V, L.P. and Avenue CDP-Global
Opportunities Fund, L.P.



     “Private Placement Legend” means the legend set forth in Section 2.06(g)(1) hereof to be
placed on all Notes issued under this Indenture except where otherwise permitted by the provisions
of this Indenture.



     “Pro Forma Cost Savings” means, with respect to any four-quarter period, the reduction in net
costs and expenses that:




     (1) were directly attributable to an acquisition, Investment, disposition, merger,
consolidation or discontinued operation or other specified action that occurred during the
four-quarter period or after the end of the four-quarter period and on or prior to the
Calculation Date and that would properly be reflected in a pro forma income statement
prepared in accordance with Regulation S-X under the Securities Act, as then in effect;




     (2) were actually implemented prior to the Calculation Date in connection with or as a
result of an acquisition, Investment, disposition, merger, consolidation or discontinued
operation or other specified action and that are supportable and quantifiable by the
underlying accounting records; or




     (3) relate to an acquisition, Investment, disposition, merger, consolidation or
discontinued operation or other specified action and that Parent reasonably determines are
probable based upon specifically identifiable actions to be taken within six months of the
date of the closing of the acquisition, Investment, disposition, merger, consolidation or
discontinued operation or specified action;


provided that in each case contemplated by clause (3), to the extent such reductions in cost and
expense are described in an officers’ certificate signed by the chief financial officer of Parent
and delivered to the Trustee, which officers’ certificate outlines the specific actions taken or to
be taken, the net reductions in cost and expenses achieved or to be achieved from each such action
and states that Parent’s chief financial officers has determined that such cost and expense savings
are probable.




     “QIB” means a “qualified institutional buyer” as defined in Rule 144A.



     “Qualifying Equity Interests” means Equity Interests of Parent other than Disqualified Stock.



     “Qualifying Equity Offering” means a public sale either (1) of Equity Interests of Parent by
Parent (other than Disqualified Stock and other than to a Subsidiary of Parent and other than
Equity Interests sold in the Initial Public Offering) or (2) of Equity Interests of a direct or
indirect parent entity of Parent (other than to Parent or a Subsidiary of Parent) to the extent
that the net proceeds therefrom are contributed to the common equity capital of Parent.



     “Registration Rights Agreement” means the Exchange and Registration Rights Agreement, dated
April 9, 2010, among the Issuers, the Guarantors and the other parties named on the signature pages
thereof, as such agreement may be amended, modified or supplemented from time to time, and, with
respect to any Additional Notes, one or more registration rights agreements among the Issuers, the



19









 




Guarantors and the other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Issuers to the purchasers of
Additional Notes to register such Additional Notes under the Securities Act.




     “Regulation S” means Regulation S promulgated under the Securities Act.



     “Regulation S Global Note” means a Regulation S Temporary Global Note or Regulation S
Permanent Global Note, as appropriate.



     “Regulation S Permanent Global Note” means a permanent Global Note in the form of Exhibit A1
hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on
behalf of and registered in the name of the Depositary or its nominee, issued in a denomination
equal to the outstanding principal amount of the Regulation S Temporary Global Note upon expiration
of the Restricted Period.



     “Regulation S Temporary Global Note” means a temporary Global Note in the form of Exhibit A2
hereto deposited with or on behalf of and registered in the name of the Depositary or its nominee,
issued in a denomination equal to the outstanding principal amount of the Notes initially sold in
reliance on Rule 903 of Regulation S.



     “Related Party” means:




     (1) any controlling person, limited partner, majority owned Subsidiary, or immediate
family member (in the case of an individual) of any Principal; or




     (2) any trust, corporation, partnership, limited liability company or other entity, the
beneficiaries, stockholders, partners, members, owners or Persons beneficially holding a
majority (and controlling) interest of which consist of any one or more Principals and/or
such other Persons referred to in the immediately preceding clause (1).



     “Reorganization” means the plan of reorganization that was adopted and became effective on
November 9, 2009 in the bankruptcy proceeding under Chapter 11 of the U.S. Bankruptcy Code in which
Parent and certain of its Subsidiaries were debtors.



     “Responsible Officer,” when used with respect to the Trustee, means any officer within the
Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any other
officer of the Trustee customarily performing functions similar to those performed by any of the
above designated officers and also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his knowledge of and familiarity with the
particular subject.



     “Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.



     “Restricted Global Note” means a Global Note bearing the Private Placement Legend.



     “Restricted Investment” means an Investment other than a Permitted Investment.



     “Restricted Period” means the 40-day distribution compliance period as defined in Regulation
S.



     “Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an
Unrestricted Subsidiary. Unless otherwise indicated herein, all references to Restricted
Subsidiaries shall mean Restricted Subsidiaries of Parent, including the Issuers.



20









 





     “Rule 144” means Rule 144 promulgated under the Securities Act.



     “Rule 144A” means Rule 144A promulgated under the Securities Act.



     “Rule 903” means Rule 903 promulgated under the Securities Act.



     “Rule 904” means Rule 904 promulgated under the Securities Act.



     “S&P” means Standard & Poor’s Ratings Group.



     “SEC” means the Securities and Exchange Commission.



     “Securities Act” means the Securities Act of 1933, as amended.



     “Shelf Registration Statement” means the Shelf Registration Statement as defined in the
Registration Rights Agreement.



     “Significant Subsidiary” means any Restricted Subsidiary that would be a “significant
subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the
Securities Act, as such Regulation is in effect on the Issue Date.



     “Special Interest” has the meaning assigned to that term pursuant to the Registration Rights
Agreement.



     “Stated Maturity” means, with respect to any installment of interest or principal on any
series of Indebtedness, the date on which the payment of interest or principal was scheduled to be
paid in the documentation governing such Indebtedness as of the Issue Date, and will not include
any contingent obligations to repay, redeem or repurchase any such interest or principal prior to
the date originally scheduled for the payment thereof.



     “Subsidiary” means, with respect to any specified Person:



     (1) any corporation, association or other business entity of which more than 50% of the total
voting power of shares of Capital Stock entitled (without regard to the occurrence of any
contingency and after giving effect to any voting agreement or stockholders’ agreement that
effectively transfers voting power) to vote in the election of directors, managers or trustees of
the corporation, association or other business entity is at the time owned or controlled, directly
or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a
combination thereof); and



     (2) any partnership or limited liability company of which (a) more than 50% of the capital
accounts, distribution rights, total equity and voting interests or general and limited partnership
interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or
more of the other Subsidiaries of that Person or a combination thereof, whether in the form of
membership, general, special or limited partnership interests or otherwise, and (b) such Person or
any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.



     “TIA” means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb).



     “Total Assets” means, as of any date, the total consolidated assets of Parent and its
Subsidiaries as of the most recent date for which internal financial statements are available as of
that date, calculated in accordance with GAAP.



21









 





     “Treasury Management Arrangement” means any agreement or other arrangement governing the
provision of treasury or cash management services, including deposit accounts, overdraft, credit or
debit card, funds transfer, automated clearinghouse, zero balance accounts, returned check
concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade
finance services and other cash management services.



     “Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption
date of United States Treasury securities with a constant maturity (as compiled and published in
the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available
at least two Business Days prior to the redemption date (or, if such Statistical Release is no
longer published, any publicly available source of similar market data)) most nearly equal to the
period from the redemption date to April 15, 2014; provided, however, that if the period from the
redemption date to April 15, 2014, is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one year will be used.



     “Trustee” means Wilmington Trust FSB, until a successor replaces it in accordance with the
applicable provisions of this Indenture and thereafter means the successor serving hereunder.



     “Unrestricted Definitive Note” means a Definitive Note that does not bear and is not required
to bear the Private Placement Legend.



     “Unrestricted Global Note” means a Global Note that does not bear and is not required to bear
the Private Placement Legend.



     “Unrestricted Subsidiary” means any Subsidiary of Parent that is designated by the Board of
Directors of Parent as an Unrestricted Subsidiary pursuant to a resolution of the Board of
Directors of Parent, but only to the extent that such Subsidiary:




     (1) has no Indebtedness other than Non-Recourse Debt;




     (2) except as permitted by Section 4.11 hereof, is not party to any agreement,
contract, arrangement or understanding with Parent or any Restricted Subsidiary of Parent
unless the terms of any such agreement, contract, arrangement or understanding are no less
favorable to Parent or such Restricted Subsidiary than those that might be obtained at the
time from Persons who are not Affiliates of Parent;




     (3) is a Person with respect to which neither Parent nor any of its Restricted
Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity
Interests or (b) to maintain or preserve such Person’s financial condition or to cause such
Person to achieve any specified levels of operating results; and




     (4) has not guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of Parent or any of its Restricted Subsidiaries; provided, however, that
Parent and its Restricted Subsidiaries may Guarantee the performance of Unrestricted
Subsidiaries in the ordinary course of business except for Guarantees of Indebtedness.



     “U.S. Person” means a U.S. Person as defined in Rule 902(k) promulgated under the Securities
Act.



     “Voting Stock” of any specified Person as of any date means the Capital Stock of such Person
that is at the time entitled to vote in the election of the Board of Directors of such Person.



22









 





     “Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the
number of years obtained by dividing:




     (1) the sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect of the Indebtedness, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between such date
and the making of such payment; by




     (2) the then outstanding principal amount of such Indebtedness.



Section 1.02 Other Definitions.




	 	 	 	 	 
	 	 	Defined in
	Term	 	Section
	“Affiliate Transaction”
	 	 	4.11	 
	“Asset Sale Offer”
	 	 	3.09	 
	“Authentication Order”
	 	 	2.02	 
	“Change of Control Offer”
	 	 	4.15	 
	“Change of Control Payment”
	 	 	4.15	 
	“Change of Control Payment Date”
	 	 	4.15	 
	“Covenant Defeasance”
	 	 	8.03	 
	“DTC”
	 	 	2.03	 
	“Event of Default”
	 	 	6.01	 
	“Excess Proceeds”
	 	 	4.10	 
	“incur”
	 	 	4.09	 
	“Legal Defeasance”
	 	 	8.02	 
	“Offer Amount”
	 	 	3.09	 
	“Offer Period”
	 	 	3.09	 
	“Paying Agent”
	 	 	2.03	 
	“Permitted Debt”
	 	 	4.09	 
	“Payment Default”
	 	 	6.01	 
	“Purchase Date”
	 	 	3.09	 
	“Register”
	 	 	2.03	 
	“Registrar”
	 	 	2.03	 
	“Restricted Payments”
	 	 	4.07	 
	“Subordinated Debt”
	 	 	4.07	 






Section 1.03 Incorporation by Reference of Trust Indenture Act.




     Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture.



     The following TIA terms used in this Indenture have the following meanings:



     “indenture securities” means the Notes;



     “indenture security Holder” means a Holder of a Note;



     “indenture to be qualified” means this Indenture;



23









 





     “indenture Trustee” or “institutional trustee” means the Trustee; and



     “obligor” on the Notes and the Note Guarantees means Issuers and the Guarantors, respectively,
and any successor obligor upon the Notes and the Note Guarantees, respectively.



     All other terms used in this Indenture that are defined by the TIA, defined by TIA reference
to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.


Section 1.04 Rules of Construction.




     Unless the context otherwise requires:




     (1) a term has the meaning assigned to it;




     (2) an accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;




     (3) “or” is not exclusive;




     (4) words in the singular include the plural, and in the plural include the singular;




     (5) “will” shall be interpreted to express a command;




     (6) provisions apply to successive events and transactions; and




     (7) references to sections of or rules under the Securities Act will be deemed to
include substitute, replacement of successor sections or rules adopted by the SEC from time
to time.



ARTICLE 2

THE NOTES




Section 2.01 Form and Dating.




     (a) General. The Notes and the Trustee’s certificate of authentication will be substantially
in the form of Exhibits A1 and A2 hereto. The Notes may have notations, legends or endorsements
required by law, stock exchange rule or usage. Each Note will be dated the date of its
authentication. The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in
excess thereof.



     The terms and provisions contained in the Notes will constitute, and are hereby expressly
made, a part of this Indenture and the Issuers, the Guarantors and the Trustee, by their execution
and delivery of this Indenture, expressly agree to such terms and provisions and to be bound
thereby. However, to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be controlling.



     (b) Global Notes. Notes issued in global form will be substantially in the form of Exhibits
A1 or A2 hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of
Interests in the Global Note” attached thereto). Notes issued in definitive form will be
substantially in the form of Exhibit A1 hereto (but without the Global Note Legend thereon and
without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global
Note will represent such of the outstanding Notes as will be specified therein and each shall
provide that it represents the aggregate principal amount of outstanding Notes from time to time
endorsed thereon and that the aggregate



24









 




principal amount of outstanding Notes represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note
to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding
Notes represented thereby will be made by the Trustee or the Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06
hereof.




     (c) Temporary Global Notes. Notes offered and sold in reliance on Regulation S will be issued
initially in the form of the Regulation S Temporary Global Note, which will be deposited on behalf
of the purchasers of the Notes represented thereby with the Trustee, as custodian for the
Depositary, and registered in the name of the Depositary or the nominee of the Depositary for the
accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the
Issuers and authenticated by the Trustee as hereinafter provided. The Restricted Period will be
terminated upon the receipt by the Trustee of:




     (1) a written certificate from the Depositary, together with copies of certificates
from Euroclear and Clearstream certifying that they have received certification of
non-United States beneficial ownership of 100% of the aggregate principal amount of the
Regulation S Temporary Global Note (except to the extent of any beneficial owners thereof
who acquired an interest therein during the Restricted Period pursuant to another exemption
from registration under the Securities Act and who will take delivery of a beneficial
ownership interest in a 144A Global Note bearing a Private Placement Legend, all as
contemplated by Section 2.06(b) hereof); and




     (2) an Officers’ Certificate from the Issuers.



     Following the termination of the Restricted Period, beneficial interests in the Regulation S
Temporary Global Note will be exchanged for beneficial interests in the Regulation S Permanent
Global Note pursuant to the Applicable Procedures. Simultaneously with the authentication of the
Regulation S Permanent Global Note, the Trustee will cancel the Regulation S Temporary Global Note.
The aggregate principal amount of the Regulation S Temporary Global Note and the Regulation S
Permanent Global Note may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary or its nominee, as the case may be, in connection with
transfers of interest as hereinafter provided.




     (3) Euroclear and Clearstream Procedures Applicable. The provisions of the “Operating
Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear”
and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of
Clearstream will be applicable to transfers of beneficial interests in the Regulation S
Temporary Global Note and the Regulation S Permanent Global Note that are held by
Participants through Euroclear or Clearstream.



Section 2.02 Execution and Authentication.




     At least one Officer must sign the Notes for each of the Issuers by manual or facsimile
signature.



     If an Officer whose signature is on a Note no longer holds that office at the time a Note is
authenticated, the Note will nevertheless be valid.



     A Note will not be valid until authenticated by the manual signature of the Trustee. The
signature will be conclusive evidence that the Note has been authenticated under this Indenture.



25









 





     The Trustee will, upon receipt of a written order of the Issuers signed by one Officer of each
Issuer (an “Authentication Order”), authenticate Notes for original issue that may be validly
issued under this Indenture, including any Additional Notes up to the aggregate principal amount
stated in paragraph 4 of the Notes. The aggregate principal amount of Notes outstanding at any time
may not exceed the aggregate principal amount of Notes authorized for issuance by the Issuers
pursuant to one or more Authentication Orders, except as provided in Section 2.07 hereof.



     The Trustee may appoint an authenticating agent acceptable to the Issuers to authenticate
Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes authentication by such agent.
An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of
the Issuers.



Section 2.03 Registrar and Paying Agent.




     The Issuers will maintain an office or agency where Notes may be presented for registration of
transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for
payment (“Paying Agent”). The Registrar will keep a register of the Notes and of their transfer
and exchange (the “Register”). The Issuers may appoint one or more co-registrars and one or more
additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying
Agent” includes any additional paying agent. The Issuers may change any Paying Agent or Registrar
without notice to any Holder. The Issuers will notify the Trustee in writing of the name and
address of any Agent not a party to this Indenture. If the Issuers fail to appoint or maintain
another entity as Registrar or Paying Agent, the Trustee shall act as such. The Issuers or any of
their Subsidiaries may act as Paying Agent or Registrar.



     The Issuers initially appoint The Depository Trust Company (“DTC”) to act as Depositary with
respect to the Global Notes.



     The Issuers initially appoint the Trustee to act as the Registrar and Paying Agent and to act
as Custodian with respect to the Global Notes.



     The Trustee will send or will cause to be sent a copy of the Register to MagnaChip and will
ensure to send an updated copy of the Register to MagnaChip as soon as practicable after any change
of the name of the Holder(s) of the Notes or of the total outstanding aggregate amount of Notes
held by each Holder made to the Register. MagnaChip will maintain a register based on the Register
at its registered office and will update it as soon as it receives an updated Register from the
Trustee. The Trustee shall in addition, in any event, provide MagnaChip with a copy of the
Register each semi-annual period following the record date for payment on the Notes. In case of
discrepancy between the Register and the register maintained at the registered office of MagnaChip,
the former will prevail.



Section 2.04 Paying Agent to Hold Money in Trust.




     The Issuers will require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the
Paying Agent for the payment of principal of, premium on, if any, interest or Special Interest, if
any, on, the Notes, and will notify the Trustee of any default by the Issuers in making any such
payment. While any such default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee. The Issuers at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Issuers, Parent or a Subsidiary of Parent) will have no further liability for the money. If an
Issuer, Parent or a Subsidiary of Parent acts as Paying Agent, it will segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it



26









 




as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Issuers,
the Trustee will serve as Paying Agent for the Notes.




Section 2.05 Holder Lists.




     The Trustee will preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of all Holders and shall otherwise comply with TIA
§312(a). If the Trustee is not the Registrar, the Issuers will furnish to the Trustee at least
seven Business Days before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may reasonably require
of the names and addresses of the Holders of Notes and the Issuers shall otherwise comply with TIA
§312(a).



Section 2.06 Transfer and Exchange.




     (a) Transfer and Exchange of Global Notes. A Global Note may not be transferred except as a
whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global Notes will be exchanged
by the Issuers for Definitive Notes if:




     (1) the Issuers deliver to the Trustee notice from the Depositary that it is unwilling
or unable to continue to act as Depositary or that it is no longer a clearing agency
registered under the Exchange Act and, in either case, a successor Depositary is not
appointed by the Issuers within 120 days after the date of such notice from the Depositary;




     (2) the Issuers in their sole discretion determine that the Global Notes (in whole but
not in part) should be exchanged for Definitive Notes and deliver a written notice to such
effect to the Trustee; provided that in no event shall the Regulation S Temporary Global
Note be exchanged by the Issuers for Definitive Notes prior to (A) the expiration of the
Restricted Period and (B) the receipt by the Registrar of any certificates required pursuant
to Rule 903(b)(3)(ii)(B) under the Securities Act; or




     (3) there has occurred and is continuing a Default or Event of Default with respect to
the Notes.



     Upon the occurrence of any of the preceding events in (1), (2) or (3) above, Definitive Notes
shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may
be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every
Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion
thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and
delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for
another Note other than as provided in this Section 2.06(a); provided, however, that beneficial
interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or
(f) hereof.



     (b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and
exchange of beneficial interests in the Global Notes will be effected through the Depositary, in
accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial
interests in the Restricted Global Notes will be subject to restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act. Transfers of beneficial
interests in the Global Notes also will require compliance with either subparagraph (1) or (2)
below, as applicable, as well as one or more of the other following subparagraphs, as applicable:



27









 






     (1) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in
any Restricted Global Note may be transferred to Persons who take delivery thereof in the
form of a beneficial interest in the same Restricted Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend; provided, however, that
prior to the expiration of the Restricted Period, transfers of beneficial interests in the
Regulation S Temporary Global Note may not be made to a U.S. Person or
for the account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial
interests in any Unrestricted Global Note may be transferred to Persons who take delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note. No written
orders or instructions shall be required to be delivered to the Registrar to effect the
transfers described in this Section 2.06(b)(1).




     (2) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In
connection with all transfers and exchanges of beneficial interests that are not subject to
Section 2.06(b)(1) above, the transferor of such beneficial interest must deliver to the
Registrar either:




     (A) both:




     (i) a written order from a Participant or an Indirect Participant given
to the Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial interest to be
transferred or exchanged; and




     (ii) instructions given in accordance with the Applicable Procedures
containing information regarding the Participant account to be credited with
such increase; or




     (B) both:




     (i) a written order from a Participant or an Indirect Participant given
to the Depositary in accordance with the Applicable Procedures directing the
Depositary to cause to be issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged; and




     (ii) instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note shall be
registered to effect the transfer or exchange referred to in (1) above;




provided that in no event shall Definitive Notes be issued upon the transfer
or exchange of beneficial interests in the Regulation S Temporary Global
Note prior to (A) the expiration of the Restricted Period and (B) the
receipt by the Registrar of any certificates required pursuant to Rule 903
under the Securities Act.


Upon consummation of an Exchange Offer by the Issuers in accordance with Section 2.06(f) hereof,
the requirements of this Section 2.06(b)(2) shall be deemed to have been satisfied upon receipt by
the Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of
such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in Global Notes contained in this
Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust
the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof.







28









 









     (3) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial
interest in any Restricted Global Note may be transferred to a Person who takes delivery
thereof in the form of a beneficial interest in another Restricted Global Note if the
transfer complies with the requirements of Section 2.06(b)(2) above and the Registrar
receives the following:




     (A) if the transferee will take delivery in the form of a beneficial interest
in the 144A Global Note, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications in item (1) thereof; and




     (B) if the transferee will take delivery in the form of a beneficial interest
in the Regulation S Temporary Global Note or the Regulation S Permanent Global Note,
then the transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof.




     (4) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for
Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any
Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in
an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer
complies with the requirements of Section 2.06(b)(2) above and:




     (A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and the holder of the beneficial
interest to be transferred, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal that it is not
(i) a Broker-Dealer, (ii) a Person participating in the distribution of the Exchange
Notes or (iii) a Person who is an affiliate (as defined in Rule 144) of either
Issuer;




     (B) such transfer is effected pursuant to the Shelf Registration Statement in
accordance with the Registration Rights Agreement;




     (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or




     (D) the Registrar receives the following:




     (i) if the holder of such beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a beneficial interest
in an Unrestricted Global Note, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item (1)(a) thereof; or




     (ii) if the holder of such beneficial interest in a Restricted Global
Note proposes to transfer such beneficial interest to a Person who shall
take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note, a certificate from such holder in the form of
Exhibit B hereto, including the certifications in item (4) thereof;




and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on transfer
contained herein and in the



29









 







Private Placement Legend are no longer required in order to maintain compliance with
the Securities Act.



     If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an
Unrestricted Global Note has not yet been issued, the Issuers shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or
more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above.



     Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to
Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global
Note.



     (c) Transfer or Exchange of Beneficial Interests for Definitive Notes.




     (1) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. If
any holder of a beneficial interest in a Restricted Global Note proposes to exchange such
beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest
to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then,
upon receipt by the Registrar of the following documentation:




     (A) if the holder of such beneficial interest in a Restricted Global Note
proposes to exchange such beneficial interest for a Restricted Definitive Note, a
certificate from such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;




     (B) if such beneficial interest is being transferred to a QIB in accordance
with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (1) thereof;




     (C) if such beneficial interest is being transferred to a Non-U.S. Person in an
offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item (2)
thereof;




     (D) if such beneficial interest is being transferred pursuant to an exemption
from the registration requirements of the Securities Act in accordance with Rule
144, a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;




     (E) if such beneficial interest is being transferred to an Institutional
Accredited Investor in reliance on an exemption from the registration requirements
of the Securities Act other than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3) thereof, if
applicable;




     (F) if such beneficial interest is being transferred to an Issuer or any of
such Issuer’s Subsidiaries, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(b) thereof; or




     (G) if such beneficial interest is being transferred pursuant to an effective
registration statement under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,








30









 










the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the Issuers shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in
a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names
and in such authorized denomination or denominations as the holder of such beneficial interest
shall instruct the Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose
names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c)(1) shall bear the Private
Placement Legend and shall be subject to all restrictions on transfer contained therein.





     (2) Beneficial Interests in Regulation S Temporary Global Note to Definitive Notes.
Notwithstanding Sections 2.06(c)(1)(A) and (C) hereof, a beneficial interest in the
Regulation S Temporary Global Note may not be exchanged for a Definitive Note or transferred
to a Person who takes delivery thereof in the form of a Definitive Note prior to (A) the
expiration of the Restricted Period and (B) the receipt by the Registrar of any certificates
required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act, except in the case of a
transfer pursuant to an exemption from the registration requirements of the Securities Act
other than Rule 903 or Rule 904.




     (3) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes.
A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial
interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a
Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if:




     (A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and the holder of such beneficial
interest, in the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution of the Exchange Notes
or (iii) a Person who is an affiliate (as defined in Rule 144) of either Issuer;




     (B) such transfer is effected pursuant to the Shelf Registration Statement in
accordance with the Registration Rights Agreement;




     (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or




     (D) the Registrar receives the following:




     (i) if the holder of such beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for an Unrestricted
Definitive Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(b) thereof; or




     (ii) if the holder of such beneficial interest in a Restricted Global
Note proposes to transfer such beneficial interest to a Person who shall
take delivery thereof in the form of an Unrestricted Definitive Note, a
certificate from such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;




31











 






and, in each such case set forth in this subparagraph (D), if the Registrar
so requests or if the Applicable Procedures so require, an Opinion of Counsel in
form reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer required
in order to maintain compliance with the Securities Act.




     (4) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes.
If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange
such beneficial interest for a Definitive Note or to transfer such beneficial interest to a
Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction
of the conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause the
aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant
to Section 2.06(h) hereof, and the Issuers will execute and the Trustee will authenticate
and deliver to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(4) will be registered in such name or names and in
such authorized denomination or denominations as the holder of such beneficial interest
requests through instructions to the Registrar from or through the Depositary and the
Participant or Indirect Participant. The Trustee will deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange
for a beneficial interest pursuant to this Section 2.06(c)(4) will not bear the Private
Placement Legend.



     (d) Transfer and Exchange of Definitive Notes for Beneficial Interests.




     (1) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If
any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial
interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a
Person who takes delivery thereof in the form of a beneficial interest in a Restricted
Global Note, then, upon receipt by the Registrar of the following documentation:




     (A) if the Holder of such Restricted Definitive Note proposes to exchange such
Note for a beneficial interest in a Restricted Global Note, a certificate from such
Holder in the form of Exhibit C hereto, including the certifications in item (2)(b)
thereof;




     (B) if such Restricted Definitive Note is being transferred to a QIB in
accordance with Rule 144A, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof;




     (C) if such Restricted Definitive Note is being transferred to a Non-U.S.
Person in an offshore transaction in accordance with Rule 903 or Rule 904, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;




     (D) if such Restricted Definitive Note is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in accordance
with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including
the certifications in item (3)(a) thereof;




     (E) if such Restricted Definitive Note is being transferred to an Institutional
Accredited Investor in reliance on an exemption from the registration requirements
of the Securities Act other than those listed in subparagraphs (B) through (D)
above, a



32









 







certificate to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3) thereof, if
applicable;




     (F) if such Restricted Definitive Note is being transferred to an Issuer or any
of such Issuer’s Subsidiaries, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(b) thereof; or




     (G) if such Restricted Definitive Note is being transferred pursuant to an
effective registration statement under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item (3)(c)
thereof,




the Trustee will cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above, the
appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global
Note, and in the case of clause (C) above, the Regulation S Global Note.




     (2) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes.
A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in
an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who
takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note
only if:




     (A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and the Holder, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of either Issuer;




     (B) such transfer is effected pursuant to the Shelf Registration Statement in
accordance with the Registration Rights Agreement;




     (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or




     (D) the Registrar receives the following:




     (i) if the Holder of such Definitive Notes proposes to exchange such
Notes for a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit C hereto, including the
certifications in item (1)(c) thereof; or




     (ii) if the Holder of such Definitive Notes proposes to transfer such
Notes to a Person who shall take delivery thereof in the form of a
beneficial interest in the Unrestricted Global Note, a certificate from such
Holder in the form of Exhibit B hereto, including the certifications in item
(4) thereof;




and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on transfer
contained herein and in the



33









 







Private Placement Legend are no longer required in order to maintain compliance with
the Securities Act.




     Upon satisfaction of the conditions of any of the subparagraphs in this Section
2.06(d)(2), the Trustee will cancel the Definitive Notes and increase or cause to be
increased the aggregate principal amount of the Unrestricted Global Note.




     (3) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes.
A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial
interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who
takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note
at any time. Upon receipt of a request for such an exchange or transfer, the Trustee will
cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.




     If any such exchange or transfer from a Definitive Note to a beneficial interest is
effected pursuant to subparagraphs (2)(B), (2)(D) or (3) above at a time when an
Unrestricted Global Note has not yet been issued, the Issuers will issue and, upon receipt
of an Authentication Order in accordance with Section 2.02 hereof, the Trustee will
authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to
the principal amount of Definitive Notes so transferred.



     (e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder
of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the
Registrar will register the transfer or exchange of Definitive Notes. Prior to such registration
of transfer or exchange, the requesting Holder must present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in
writing. In addition, the requesting Holder must provide any additional certifications, documents
and information, as applicable, required pursuant to the following provisions of this Section
2.06(e).




     (1) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted
Definitive Note may be transferred to and registered in the name of Persons who take
delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the
following:




     (A) if the transfer will be made pursuant to Rule 144A, then the transferor
must deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;




     (B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the
transferor must deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and




     (C) if the transfer will be made pursuant to any other exemption from the
registration requirements of the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if applicable.




     (2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted
Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note
or



34









 







transferred to a Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Note if:




          (A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and the Holder, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Exchange Notes or (iii) a Person who is an
affiliate (as defined in Rule 144) of either Issuer;




          (B) any such transfer is effected pursuant to the Shelf Registration Statement
in accordance with the Registration Rights Agreement;




          (C) any such transfer is effected by a Broker-Dealer pursuant to the Exchange
Offer Registration Statement in accordance with the Registration Rights Agreement;
or




          (D) the Registrar receives the following:




          (i) if the Holder of such Restricted Definitive Notes proposes to
exchange such Notes for an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit C hereto, including the certifications in
item (1)(d) thereof; or




          (ii) if the Holder of such Restricted Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in the form
of an Unrestricted Definitive Note, a certificate from such Holder in the
form of Exhibit B hereto, including the certifications in item (4) thereof;




and, in each such case set forth in this subparagraph (D), if the Registrar so
requests, an Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the Securities
Act.




     (3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of
Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof
in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such
a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.




     (f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance with the
Registration Rights Agreement, the Issuers will issue and, upon receipt of an Authentication Order
in accordance with Section 2.02 hereof, the Trustee will authenticate:




     (1) one or more Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of the beneficial interests in the Restricted Global Notes accepted for
exchange in the Exchange Offer by Persons that certify in the applicable Letters of
Transmittal that (A) they are not Broker-Dealers, (B) they are not participating in a
distribution of the Exchange Notes and (C) they are not affiliates (as defined in Rule 144)
of the Issuers; and



35









 






     (2) Unrestricted Definitive Notes in an aggregate principal amount equal to the
principal amount of the Restricted Definitive Notes accepted for exchange in the Exchange
Offer by Persons that certify in the applicable Letters of Transmittal that (A) they are not
Broker-Dealers, (B) they are not participating in a distribution of the Exchange Notes and
(C) they are not affiliates (as defined in Rule 144) of the Issuers.



     Concurrently with the issuance of such Notes, the Trustee will cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and the Issuers will
execute and the Trustee will authenticate and deliver to the Persons designated by the Holders of
Definitive Notes so accepted Unrestricted Definitive Notes in the appropriate principal amount.



     (g) Legends. The following legends will appear on the face of all Global Notes and Definitive
Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions
of this Indenture.




     (1) Private Placement Legend.




     (A) Except as permitted by subparagraph (B) below, each Global Note and each
Definitive Note (and all Notes issued in exchange therefor or substitution thereof)
shall bear the legend in substantially the following form:


“THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”) AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF
REGULATION S UNDER THE
SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR
WITHIN THE MEANING OF RULE 501 OF REGULATION D UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS”





     (B) Notwithstanding the foregoing, any Global Note or Definitive Note issued
pursuant to subparagraphs (b)(4), (c)(3), (c)(4), (d)(2), (d)(3), (e)(2), (e)(3) or
(f) of this Section 2.06 (and all Notes issued in exchange therefor or substitution
thereof) will not bear the Private Placement Legend.




     (2) Global Note Legend. Each Global Note will bear a legend in substantially the
following form:


“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR
ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS






36









 







GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF
THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE ISSUERS.



UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE ISSUERS OR THEIR AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.”





     (3) Regulation S Temporary Global Note Legend. The Regulation S Temporary Global Note
will bear a Legend in substantially the following form:


“THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES
GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED
HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE
SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.”




     (h) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests
in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note
has been redeemed, repurchased or canceled in whole and not in part, each such Global Note will be
returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any
time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or
transferred to a Person who will take delivery thereof in the form of a beneficial interest in
another Global Note or for Definitive Notes, the principal amount of Notes represented by such
Global Note will be reduced accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the
beneficial interest is being exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Global Note, such other Global Note will be
increased accordingly and an endorsement will be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.



     (i) General Provisions Relating to Transfers and Exchanges.




     (1) To permit registrations of transfers and exchanges, the Issuers will execute and
the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an
Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.



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     (2) No service charge will be made to a Holder of a beneficial interest in a Global
Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but
the Issuers may require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10,
3.06, 3.09, 4.10, 4.15 and 9.05 hereof).




     (3) The Registrar will not be required to register the transfer of or exchange of any
Note selected for redemption in whole or in part, except the unredeemed portion of any Note
being redeemed in part.




     (4) All Global Notes and Definitive Notes issued upon any registration of transfer or
exchange of Global Notes or Definitive Notes will be the valid obligations of the Issuers,
evidencing the same debt, and entitled to the same benefits under this Indenture, as the
Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.




     (5) Neither the Registrar nor the Issuers will be required:




     (A) to issue, to register the transfer of or to exchange any Notes during a
period beginning at the opening of business 15 days before the day of any selection
of Notes for redemption under Section 3.02 hereof and ending at the close of
business on the day of selection;




     (B) to register the transfer of or to exchange any Note selected for redemption
in whole or in part, except the unredeemed portion of any Note being redeemed in
part; or




     (C) to register the transfer of or to exchange a Note between a record date and
the next succeeding interest payment date.




     (6) Prior to due presentment for the registration of a transfer of any Note, the
Trustee, any Agent and the Issuers may deem and treat the Person in whose name any Note is
registered as the absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and none of the Trustee,
any Agent or the Issuers shall be affected by notice to the contrary.




     (7) The Trustee will authenticate Global Notes and Definitive Notes in accordance with
the provisions of Section 2.02 hereof.




     (8) All certifications, certificates and Opinions of Counsel required to be submitted
to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or
exchange may be submitted by facsimile.



Section 2.07 Replacement Notes.




     If any mutilated Note is surrendered to the Trustee or the Issuers and the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Note, the Issuers will issue
and the Trustee, upon receipt of an Authentication Order, will authenticate a replacement Note if
the Trustee’s requirements are met. If required by the Trustee or the Issuers, an indemnity bond
must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuers to
protect the Issuers, the



38









 




Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a
Note is replaced. The Issuers may charge for their expenses in replacing a Note.




     Every replacement Note is an additional obligation of the Issuers and will be entitled to all
of the benefits of this Indenture equally and proportionately with all other Notes duly issued
hereunder.



Section 2.08 Outstanding Notes.




     The Notes outstanding at any time are all the Notes authenticated by the Trustee except for
those canceled by it, those delivered to it for cancellation, those reductions in the interest in a
Global Note effected by the Trustee in accordance with the provisions hereof, and those described
in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does
not cease to be outstanding because the Issuers or an Affiliate of either Issuer holds the Note;
however, Notes held by an Issuer or a Subsidiary of an Issuer shall not be deemed to be outstanding
for purposes of Section 3.07(a) hereof.



     If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.



     If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to
be outstanding and interest on it ceases to accrue.



     If the Paying Agent (other than Parent or any of its Subsidiaries or an Affiliate of any
thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on
that date, then on and after that date such Notes will be deemed to be no longer outstanding and
will cease to accrue interest.



Section 2.09 Treasury Notes.




     In determining whether the Holders of the required principal amount of Notes have concurred in
any direction, waiver or consent, Notes owned by the Issuers or any Guarantor, or by any Person
directly or indirectly controlling or controlled by or under direct or indirect common control with
the Issuers or any Guarantor, will be considered as though not outstanding, except that for the
purposes of determining whether the Trustee will be protected in relying on any such direction,
waiver or consent, only Notes that the Trustee knows are so owned will be so disregarded.



Section 2.10 Temporary Notes.




     Until certificates representing Notes are ready for delivery, the Issuers may prepare and the
Trustee, upon receipt of an Authentication Order, will authenticate temporary Notes. Temporary
Notes will be substantially in the form of certificated Notes but may have variations that the
Issuers consider appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Issuers will prepare and the Trustee will authenticate
definitive Notes in exchange for temporary Notes.



     Holders of temporary Notes will be entitled to all of the benefits of this Indenture.



Section 2.11 Cancellation.




     The Issuers at any time may deliver Notes to the Trustee for cancellation. The Registrar and
Paying Agent will forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else will cancel all Notes surrendered for
registration of



39









 




transfer, exchange, payment, replacement or cancellation and will destroy canceled Notes
(subject to the record retention requirement of the Exchange Act). Certification of the
destruction of all canceled Notes will be delivered to the Issuers. The Issuers may not issue new
Notes to replace Notes that they have paid or that have been delivered to the Trustee for
cancellation.




Section 2.12 Defaulted Interest.




     If the Issuers default in a payment of interest on the Notes, they will pay the defaulted
interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date, in each case at the
rate provided in the Notes and in Section 4.01 hereof. The Issuers will notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and the date of the
proposed payment. The Issuers will fix or cause to be fixed each such special record date and
payment date; provided that no such special record date may be less than 10 days prior to the
related payment date for such defaulted interest. At least 15 days before the special record date,
the Issuers (or, upon the written request of the Issuers, the Trustee in the name and at the
expense of the Issuers) will mail or cause to be mailed to Holders a notice that states the special
record date, the related payment date and the amount of such interest to be paid.



ARTICLE 3

REDEMPTION AND PREPAYMENT




Section 3.01 Notices to Trustee.




     If the Issuers elect to redeem Notes pursuant to the optional redemption provisions of Section
3.07 hereof, they must furnish to the Trustee, at least 30 days but not more than 60 days before a
redemption date, an Officers’ Certificate setting forth:




	 	(1)	 	the clause of this Indenture pursuant to which the redemption shall occur;
	 
	 	(2)	 	the redemption date;
	 
	 	(3)	 	the principal amount of Notes to be redeemed; and
	 
	 	(4)	 	the redemption price.





Section 3.02 Selection of Notes to Be Redeemed or Purchased.




     If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any
time, the Trustee will select Notes for redemption or purchase on a pro rata basis (or, in the case
of Notes issued in global form pursuant to Article 2 hereof, based on a method that most nearly
approximates a pro rata selection as the Trustee deems fair and appropriate) unless otherwise
required by law or applicable stock exchange or depositary requirements. No Notes of $2,000 or
less may be redeemed or purchased in part.



     In the event of partial redemption, the particular Notes to be redeemed or purchased will be
selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the
redemption or purchase date by the Trustee from the outstanding Notes not previously called for
redemption or purchase.



     The Trustee will promptly notify the Issuers in writing of the Notes selected for redemption
or purchase and, in the case of any Note selected for partial redemption or purchase, the principal
amount



40









 




thereof to be redeemed or purchased. Notes and portions of Notes selected will be in amounts
of $2,000 or whole multiples of $1,000 in excess thereof; except that if all of the Notes of a
Holder are to be redeemed or purchased, the entire outstanding amount of Notes held by such Holder
shall be redeemed or purchased. Except as provided in the preceding sentence, provisions of this
Indenture that apply to Notes called for redemption or purchase also apply to portions of Notes
called for redemption or purchase.




Section 3.03 Notice of Redemption.




     Subject to the provisions of Section 3.09 hereof, at least 30 days but not more than 60 days
before a redemption date, the Issuers will mail or cause to be mailed, by first class mail, a
notice of redemption to each Holder whose Notes are to be redeemed at its registered address,
except that redemption notices may be mailed more than 60 days prior to a redemption date if the
notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of
this Indenture pursuant to Articles 8 or 11 hereof.



     The notice will identify the Notes to be redeemed and will state:




     (1) the redemption date;




     (2) the redemption price;




     (3) if any Note is being redeemed in part, the portion of the principal amount of such
Note to be redeemed and that, after the redemption date upon surrender of such Note, a new
Note or Notes in principal amount equal to the unredeemed portion will be issued in the name
of the Holder of such Note upon cancellation of the original Note;




     (4) the name and address of the Paying Agent;




     (5) that Notes called for redemption must be surrendered to the Paying Agent to collect
the redemption price;




     (6) that, unless the Issuers default in making such redemption payment, interest on
Notes called for redemption ceases to accrue on and after the redemption date;




     (7) the paragraph of the Notes and/or Section of this Indenture pursuant to which the
Notes called for redemption are being redeemed; and




     (8) that no representation is made as to the correctness or accuracy of the CUSIP
number, if any, listed in such notice or printed on the Notes.



     At the Issuers’ request, the Trustee will give the notice of redemption in the Issuers’ names
and at their expense; provided, however, that the Issuers have delivered to the Trustee, at least
45 days prior to the redemption date, an Officers’ Certificate requesting that the Trustee give
such notice and setting forth the information to be stated in such notice as provided in the
preceding paragraph.



Section 3.04 Effect of Notice of Redemption.




     Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for
redemption become irrevocably due and payable on the redemption date at the redemption price. A
notice of redemption may not be conditional.



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Section 3.05 Deposit of Redemption or Purchase Price.




     One Business Day prior to the redemption or purchase date, the Issuers will deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of,
accrued interest and Special Interest, if any, on all Notes to be redeemed or purchased on that
date. The Trustee or the Paying Agent will promptly return to the Issuers any money deposited with
the Trustee or the Paying Agent by the Issuers in excess of the amounts necessary to pay the
redemption or purchase price of, accrued interest and Special Interest, if any, on all Notes to be
redeemed or purchased.



     If the Issuers comply with the provisions of the preceding paragraph, on and after the
redemption or purchase date, interest will cease to accrue on the Notes or the portions of Notes
called for redemption or purchase. If a Note is redeemed or purchased on or after an interest
record date but on or prior to the related interest payment date, then any accrued and unpaid
interest shall be paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption or purchase is not so paid upon
surrender for redemption or purchase because of the failure of the Issuers to comply with the
preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or
purchase date until such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.



Section 3.06 Notes Redeemed or Purchased in Part.




     Upon surrender of a Note that is redeemed or purchased in part, the Issuers will issue and,
upon receipt of an Authentication Order, the Trustee will authenticate for the Holder at the
expense of the Issuers a new Note equal in principal amount to the unredeemed or unpurchased
portion of the Note surrendered.



Section 3.07 Optional Redemption.




     (a) At any time prior to April 15, 2013, MagnaChip may on any one or more occasions redeem up
to 35% of the aggregate principal amount of Notes issued under this Indenture, upon not less than
30 nor more than 60 days’ notice, at a redemption price equal to 110.500% of the principal amount
of the Notes redeemed, plus accrued and unpaid interest and Special Interest, if any, to the date
of redemption (subject to the rights of holders of Notes on the relevant record date to receive
interest on the relevant interest payment date), with the net cash proceeds of a Qualifying Equity
Offering by Parent; provided that:




     (1) at least 65% of the aggregate principal amount of Notes originally issued under
this Indenture (excluding Notes held by Parent and its Subsidiaries) remains outstanding
immediately after the occurrence of such redemption; and




     (2) the redemption occurs within 90 days of the date of the closing of such Qualifying
Equity Offering.



     (b) At any time prior to April 15, 2014, MagnaChip may on any one or more occasions redeem all
or a part of the Notes, upon not less than 30 nor more than 60 days’ notice, at a redemption price
equal to 100% of the principal amount of the Notes redeemed, plus the Applicable Premium as of, and
accrued and unpaid interest and Special Interest, if any, to the date of redemption, subject to the
rights of holders of Notes on the relevant record date to receive interest due on the relevant
interest payment date.



42









 





     (c) Except pursuant to the preceding paragraphs and in Section 3.10, the Notes will not be
redeemable at MagnaChip’s option prior to April 15, 2014.



     (d) On or after April 15, 2014, MagnaChip may on any one or more occasions redeem all or a
part of the Notes, upon not less than 30 nor more than 60 days’ notice, at the redemption prices
(expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest
and Special Interest, if any, on the Notes redeemed, to the applicable date of redemption, if
redeemed during the twelve-month period beginning on April 15 of the years indicated below, subject
to the rights of holders of Notes on the relevant record date to receive interest on the relevant
interest payment date:



	 	 	 	 	 
	Year	 	Percentage
	2014

	 	 	105.250	%
	2015

	 	 	102.625	%
	2016 and thereafter

	 	 	100.000	%






     Unless MagnaChip defaults in the payment of the redemption price, interest will cease to
accrue on the Notes or portions thereof called for redemption on the applicable redemption date.



     (e) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.


Section 3.08 Mandatory Redemption.




     The Issuers are not required to make mandatory redemption or sinking fund payments with
respect to the Notes.



Section 3.09 Offer to Purchase by Application of Excess Proceeds.




     In the event that, pursuant to Section 4.10 hereof, the Issuers are required to commence an
offer to all Holders to purchase Notes (an “Asset Sale Offer”), they will follow the procedures
specified below.



     The Asset Sale Offer shall be made to all Holders and all holders of other Indebtedness that
is pari passu with the Notes containing provisions similar to those set forth in this Indenture
with respect to offers to purchase, prepay or redeem with the proceeds of sales of assets. The
Asset Sale Offer will remain open for a period of at least 20 Business Days following its
commencement and not more than 30 Business Days, except to the extent that a longer period is
required by applicable law (the “Offer Period”). No later than three Business Days after the
termination of the Offer Period (the “Purchase Date”), MagnaChip will apply all Excess Proceeds
(the “Offer Amount”) to the purchase of Notes and such other pari passu Indebtedness (on a pro rata
basis based on the principal amount of Notes and such other pari passu Indebtedness surrendered, if
applicable) or, if less than the Offer Amount has been tendered, all Notes and other Indebtedness
tendered in response to the Asset Sale Offer. Payment for any Notes so purchased will be made in
the same manner as interest payments are made.



     If the Purchase Date is on or after an interest record date and on or before the related
interest payment date, any accrued and unpaid interest and Special Interest, if any, will be paid
to the Person in whose name a Note is registered at the close of business on such record date, and
no additional interest will be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.



     Upon the commencement of an Asset Sale Offer, the Issuers will send, by first class mail, a
notice to each of the Holders, with a copy to the Trustee. The notice will contain all
instructions and materials



43









 




necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The
notice, which will govern the terms of the Asset Sale Offer, will state:





     (1) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section
4.10 hereof and the length of time the Asset Sale Offer will remain open;




     (2) the Offer Amount, the purchase price and the Purchase Date;




     (3) that any Note not tendered or accepted for payment will continue to accrue
interest;




     (4) that, unless the Issuers default in making such payment, any Note accepted for
payment pursuant to the Asset Sale Offer will cease to accrue interest after the Purchase
Date;




     (5) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may
elect to have Notes purchased in denominations of $2,000 or an integral multiple of $1,000
in excess thereof;




     (6) that Holders electing to have Notes purchased pursuant to any Asset Sale Offer will
be required to surrender the Notes, with the form entitled “Option of Holder to Elect
Purchase” attached to the Notes completed, or transfer by book-entry transfer, to the
Issuers, a Depositary, if appointed by the Issuers, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;




     (7) that Holders will be entitled to withdraw their election if the Issuers, the
Depositary or the Paying Agent, as the case may be, receives, not later than the expiration
of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Note purchased;




     (8) that, if the aggregate principal amount of Notes and other pari passu Indebtedness
surrendered by holders thereof exceeds the Offer Amount, the Trustee will select the Notes
and the agent or trustee for such other pari passu Indebtedness will select such other pari
passu Indebtedness to be purchased on a pro rata basis based on the principal amount of
Notes and such other pari passu Indebtedness surrendered (with such adjustments as may be
deemed appropriate by the Issuers so that only Notes in denominations of $2,000, or an
integral multiple of $1,000 in excess thereof, will be purchased); and




     (9) that Holders whose Notes were purchased only in part will be issued new Notes equal
in principal amount to the unpurchased portion of the Notes surrendered (or transferred by
book-entry transfer).



     On or before the Purchase Date, the Issuers will, to the extent lawful, accept for payment, on
a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof tendered
pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes
tendered, and will deliver or cause to be delivered to the Trustee the Notes properly accepted
together with an Officers’ Certificate stating that such Notes or portions thereof were accepted
for payment by the Issuers in accordance with the terms of this Section 3.09. The Issuers, the
Depositary or the Paying Agent, as the case may be, will promptly (but in any case not later than
five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the
purchase price of the Notes tendered by such Holder and accepted by the Issuers for purchase, and
the Issuers will promptly issue a new Note, and the



44









 




Trustee, upon written request from the Issuers, will authenticate and mail or deliver (or
cause to be transferred by book entry) such new Note to such Holder, in a principal amount equal to
any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed
or delivered by the Issuers to the Holder thereof. The Issuers will publicly announce the results
of the Asset Sale Offer on the Purchase Date.




     Other than as specifically provided in this Section 3.09, any purchase pursuant to this
Section 3.09 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.



Section 3.10 Redemption for Changes in Taxes




     (a) MagnaChip may redeem the Notes, in whole but not in part, upon not less than 30 nor more
than 60 days’ notice, at a redemption price equal to the principal amount thereof, together with
accrued and unpaid interest and Special Interest, if any, to the date of redemption (a “Tax
Redemption Date”) and all Additional Amounts (if any) then due and that will become due on the Tax
Redemption Date as a result of the redemption or otherwise (subject to the right of holders of the
Notes on the relevant record date to receive interest (including Special Interest) due on the
relevant interest payment date and Additional Amounts (if any) in respect thereof), if on the next
date on which any amount would be payable in respect of the Notes, MagnaChip is or would be
required to pay Additional Amounts, and MagnaChip cannot avoid any such payment obligation taking
reasonable measures available, and the requirement arises as a result of:




     (1) any change in, or amendment to, the laws or treaties (or any regulations or rulings
promulgated thereunder) of the relevant Tax Jurisdiction (as defined in Section 4.16)
affecting taxation; or




     (2) any change in, or amendment to, the existing official position regarding the
application, administration or interpretation of such laws, treaties, regulations or rulings
(including a holding, judgment or order by a court of competent jurisdiction or a change in
published practice),


which change or amendment is publicly announced as formally proposed after and becomes effective
after the Issue Date (or, if the relevant Tax Jurisdiction was not a Tax Jurisdiction on the Issue
Date, the date on which the then current Tax Jurisdiction became the applicable Tax Jurisdiction
under this Indenture). MagnaChip shall not have the right to redeem the Notes under this Section
3.10 based on Additional Amounts being due as a result of a merger or consolidation of MagnaChip in
which MagnaChip is not the surviving Person in such merger or consolidation.




     MagnaChip will not give any such notice of redemption earlier than 60 days prior to the
earliest date on which the relevant Issuer would be obligated to make such payment or withholding
if a payment in respect of the Notes were then due, and at the time such notice is given, the
obligation to pay Additional Amounts must remain in effect. Prior to the publication or, where
relevant, mailing of any notice of redemption of the Notes pursuant to the foregoing, the Issuers
will deliver to the Trustee a written opinion of independent tax counsel to the effect that there
has been a change or amendment that would entitle MagnaChip to redeem the Notes under this Section
3.10. In addition, before the Issuers publish or mail notice of redemption of the Notes as
described above, they will deliver to the Trustee an Officers’ Certificate to the effect that the
relevant Issuer cannot avoid its obligation to pay Additional Amounts by the relevant Issuer taking
reasonable measures available to it.



45









 





     The Trustee shall rely on such Officers’ Certificate and Opinion of Counsel as sufficient
evidence of the existence and satisfaction of the conditions precedent as described above, in which
event it will be conclusive and binding on the Note holders.



     For the avoidance of doubt, the implementation of European Council Directive 2003/48/EC or any
other directive implementing the conclusions of the ECOFIN Council meeting of 26 and 27 November
2000 on the taxation of savings income or any law implementing or complying with or introduced in
order to conform to such directive will not be a change or amendment for such purposes.



ARTICLE 4

COVENANTS




Section 4.01 Payment of Notes.




     MagnaChip will pay or cause to be paid the principal of, premium on, if any, interest and
Special Interest, if any, on, the Notes on the dates and in the manner provided in the Notes.
Principal, premium, if any, interest and Special Interest, if any, will be considered paid on the
date due if the Paying Agent, if other than Parent or any Subsidiary thereof, holds as of 10:00
a.m. Eastern Time on the due date money deposited by MagnaChip in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and interest, if any, then
due. MagnaChip will pay all Special Interest, if any, in the same manner on the dates and in the
amounts set forth in the Registration Rights Agreement.



     MagnaChip will pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal at a rate that is 1% higher than the then applicable interest
rate on the Notes to the extent lawful; it will pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest and Special Interest,
if any (without regard to any applicable grace period), at the same rate to the extent lawful.



Section 4.02 Maintenance of Office or Agency.




     The Issuers will maintain an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or upon the Issuers in
respect of the Notes and this Indenture may be served. The Issuers will give prompt written notice
to the Trustee of the location, and any change in the location, of such office or agency. If at
any time the Issuers fail to maintain any such required office or agency or fails to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee.



     The Issuers may also from time to time designate one or more other offices or agencies where
the Notes may be presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or rescission will in any
manner relieve the Issuers of their obligation to maintain an office or agency for such purposes.
The Issuers will give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.



     The Issuers hereby designate the Corporate Trust Office of the Trustee as one such office or
agency of the Issuers in accordance with Section 2.03 hereof.



46









 





Section 4.03 Reports.




     (a) Whether or not required by the rules and regulations of the SEC, so long as any Notes are
outstanding, Parent will furnish to the holders of Notes or cause the Trustee to furnish to the
holders of Notes (or file with the SEC for public availability), not later than 30 days after
expiration of the time periods specified in the SEC’s rules and regulations:




     (1) all quarterly and annual reports that would be required to be filed with the SEC on
Forms 10-Q and 10-K if Parent were required to file such reports, including a “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and, with respect
to the annual information only, a report thereon by Parent’s certified independent
accountants; and




     (2) all current reports that would be required to be filed with the SEC on Form 8-K if
Parent were required to file such reports.



     All such reports will be prepared in all material respects in accordance with all of the rules
and regulations applicable to such reports. In addition, following the consummation of the
Exchange Offer contemplated by the Registration Rights Agreement, Parent will file a copy of each
of the reports referred to in clauses (1) and (2) above with the SEC for public availability within
the time periods specified in the rules and regulations applicable to such reports (unless the SEC
will not accept such a filing) and will post the reports on its website within those time periods.
Parent will at all times comply with § 314(a) of the Trust Indenture Act.



     If, at any time after the consummation of the Exchange Offer contemplated by the Registration
Rights Agreement, Parent is no longer subject to the periodic reporting requirements of the
Exchange Act for any reason, Parent will nevertheless continue filing the reports specified in the
preceding paragraphs of this Section 4.03 with the SEC within the time periods specified above
unless the SEC will not accept such a filing. Parent will not take any action for the purpose of
causing the SEC not to accept any such filings. If, notwithstanding the foregoing, the SEC will
not accept Parent’s filings for any reason, Parent will post the reports referred to in the
preceding paragraphs on its website within the time periods that would apply if Parent were
required to file those reports with the SEC.



     (b) If Parent has designated any of its Subsidiaries as Unrestricted Subsidiaries, then Parent
will disclose in Management’s Discussion and Analysis of Financial Condition and Results of
Operations, the revenues for the applicable period and assets as of the end of the applicable
period attributable to Unrestricted Subsidiaries of Parent.



     (c) For so long as any Notes remain outstanding, if at any time the Issuers and the Guarantors
are not required to file with the SEC the reports required by paragraphs (a) and (b) of this
Section 4.03, they will furnish to the holders of Notes and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.



     (d) Notwithstanding the foregoing, Parent will be deemed to have furnished the reports
referred to above to the Trustee and the Holders on the date Parent files such reports with the SEC
via the EDGAR filing system (or any successor thereto, including Interactive Data Electronic
Applications) and such reports become publicly available. For the avoidance of doubt, prior to the
consummation of the Exchange Offer contemplated by the Registration Rights Agreement, Parent will
be deemed to have furnished the reports referred to above to the Trustee and the Holders on the
date that all material disclosures that would be required to be included in such reports are filed
with the SEC via the EDGAR



47









 




filing system (or any successor thereto, including Interactive Data Electronic Applications)
in a registration statement on Form S-1 in connection with the Initial Public Offering.




Section 4.04 Compliance Certificate.




     (a) MagnaChip and each Guarantor (to the extent that such Guarantor is so required under the
TIA) shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers’
Certificate stating that a review of the activities of the Parent and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing Officers with a view to
determining whether the Issuers have kept, observed, performed and fulfilled their obligations
under this Indenture, and further stating, as to each such Officer signing such certificate, that
to the best of his or her knowledge the Issuers have kept, observed, performed and fulfilled each
and every covenant contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default has occurred, describing all such Defaults or Events of Default of which he or she
may have knowledge and what action the Issuers are taking or propose to take with respect thereto)
and that to the best of his or her knowledge no event has occurred and remains in existence by
reason of which payments on account of the principal of, premium on, if any, interest or Special
Interest, if any, on, the Notes is prohibited or if such event has occurred, a description of the
event and what action the Issuers are taking or propose to take with respect thereto.



     (b) So long as not contrary to the then current recommendations of the American Institute of
Certified Public Accountants, the year-end financial statements delivered pursuant to Section 4.03
above shall be accompanied by a written statement of MagnaChip’s independent public accountants
(who shall be a firm of established national reputation) that in making the examination necessary
for certification of such financial statements, nothing has come to their attention that would lead
them to believe that the Issuers have violated any provisions of Article 4 or Article 5 hereof or,
if any such violation has occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.



     (c) So long as any of the Notes are outstanding, MagnaChip will deliver to the Trustee,
forthwith upon any Officer becoming aware of any Default or Event of Default, an Officers’
Certificate specifying such Default or Event of Default and what action MagnaChip is taking or
proposes to take with respect thereto.



Section 4.05 Taxes.




     The Issuers will pay, and will cause each of their Subsidiaries and Parent to pay, prior to
delinquency, all material taxes, assessments, and governmental levies except such as are contested
in good faith and by appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.



Section 4.06 Stay, Extension and Usury Laws.




     Each of the Issuers and each of the Guarantors covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this Indenture; and the
Issuers and the Guarantors (to the extent that they may lawfully do so) hereby expressly waive all
benefit or advantage of any such law, and covenants that they will not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law has been enacted.



48









 





Section 4.07 Restricted Payments.




     (a) Parent will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly:




     (1) declare or pay any dividend or make any other payment or distribution on account of
Parent’s or any of its Restricted Subsidiaries’ Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation involving Parent or
any of its Restricted Subsidiaries) or to the direct or indirect holders of Parent’s or any
of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than
dividends or distributions payable in Equity Interests (other than Disqualified Stock) of
Parent and other than dividends or distributions payable to Parent or a Restricted
Subsidiary of Parent);




     (2) purchase, redeem or otherwise acquire or retire for value (including, without
limitation, in connection with any merger or consolidation involving Parent) any Equity
Interests of Parent or any direct or indirect parent of Parent;




     (3) make any payment on or with respect to, or purchase, redeem, defease or otherwise
acquire or retire for value any Indebtedness of the Issuers or any Guarantor that is
contractually subordinated to the Notes or to any Note Guarantee (excluding any intercompany
Indebtedness between or among Parent and any of its Restricted Subsidiaries) (collectively,
“Subordinated Debt”), except a payment of interest or principal at the Stated Maturity
thereof; or




     (4) make any Restricted Investment (all such payments and other actions set forth in
these clauses (1) through (4) above being collectively referred to as “Restricted
Payments”),




unless, at the time of and after giving effect to such Restricted Payment:




          (a) no Default or Event of Default has occurred and is continuing or would occur as a
consequence of such Restricted Payment;




          (b) Parent would, at the time of such Restricted Payment and after giving pro forma
effect thereto as if such Restricted Payment had been made at the beginning of the
applicable four-quarter period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 4.09(a)
hereof; and




          (c) such Restricted Payment, together with the aggregate amount of all other Restricted
Payments made by Parent and its Restricted Subsidiaries since the Issue Date (excluding
Restricted Payments permitted by clauses (2) through (12) of Section 4.07(b)), is less than
the sum, without duplication, of:




     (A) 50% of the Consolidated Net Income of Parent for the period (taken as one
accounting period) from the beginning of the first fiscal quarter commencing after
the Issue Date to the end of Parent’s most recently ended fiscal quarter for which
internal financial statements are available at the time of such Restricted Payment
(or, if such Consolidated Net Income for such period is a deficit, less 100% of such
deficit); plus




     (B) 100% of the aggregate cash proceeds, including cash and Cash Equivalents,
and the Fair Market Value of assets (as to which an opinion or appraisal issued by
an accounting, appraisal or investment bank firm of national standing shall be



49









 







required if the Fair Market Value exceeds $15.0 million), received by Parent
since the Issue Date as a contribution to its common equity capital or from the
issue or sale of Qualifying Equity Interests of Parent or from the issue or sale of
convertible or exchangeable Disqualified Stock of Parent or convertible or
exchangeable debt securities of Parent, in each case that have been converted into
or exchanged for Qualifying Equity Interests of Parent (other than Qualifying Equity
Interests and convertible or exchangeable Disqualified Stock or debt securities (a)
sold to a Subsidiary of Parent or (b) sold in the Initial Public Offering); plus




     (C) to the extent that any Restricted Investment that was made after the Issue
Date is (a) sold for cash or otherwise cancelled, liquidated or repaid for cash, or
(b) made in an entity that subsequently becomes a Restricted Subsidiary of Parent,
the initial amount of such Restricted Investment (or, if less, the amount of cash
received upon repayment or sale); plus




     (D) to the extent that any Unrestricted Subsidiary of Parent designated as such
after the Issue Date is redesignated as a Restricted Subsidiary after the Issue
Date, the lesser of (i) the Fair Market Value of Parent’s Restricted Investment in
such Subsidiary as of the date of such redesignation or (ii) such Fair Market Value
as of the date on which such Subsidiary was originally designated as an Unrestricted
Subsidiary after the Issue Date; plus




     (E) 100% of any dividends received in cash by Parent or a Restricted Subsidiary
after the Issue Date from an Unrestricted Subsidiary, to the extent that such
dividends were not otherwise included in the Consolidated Net Income of Parent for
such period;




provided, however, that the aggregate amount of Restricted Payments of the type described in
clauses (1) and (2) of the definition of “Restricted Payments” in this Section 4.07(a) shall
not exceed 50% of the aggregate amount of Restricted Payments otherwise permitted by this
clause (c).



     (b) The provisions of Section 4.07(a) hereof will not prohibit:




     (1) the payment of any dividend or the consummation of any irrevocable redemption
within 60 days after the date of declaration of the dividend or giving of the redemption
notice, as the case may be, if at the date of declaration or notice, the dividend or
redemption payment would have complied with the provisions of this Indenture;




     (2) the making of any Restricted Payment in exchange for, or out of or with the net
cash proceeds of the substantially concurrent sale (other than to a Subsidiary of Parent)
of, Equity Interests of Parent (other than Disqualified Stock or Equity Interests sold in
the Initial Public Offering) or from the substantially concurrent contribution of common
equity capital to Parent; provided that the amount of any such net cash proceeds that are
utilized for any such Restricted Payment will not be considered to be net proceeds of
Qualifying Equity Interests for purposes of Section 4.07(a)(4)(c)(B);




     (3) the payment of any dividend (or, in the case of any partnership or limited
liability company, any similar distribution) by a Restricted Subsidiary to the holders of
its Equity Interests on a pro rata basis;



50









 






     (4) the repurchase, redemption, defeasance or other acquisition or retirement for value
of Indebtedness of either Issuer or any Guarantor that is contractually subordinated to the
Notes or to any Note Guarantee with the net cash proceeds from a substantially concurrent
incurrence of Permitted Refinancing Indebtedness;




     (5) so long as no Default or Event of Default has occurred and is continuing, the
repurchase, redemption or other acquisition or retirement for value of any Equity Interests
of Parent or any Restricted Subsidiary of Parent held by any current or former officer,
director or employee of Parent or any of its Restricted Subsidiaries pursuant to any
employment agreement, equity subscription agreement, stock option agreement, stockholders’
agreement or similar agreement; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests may not exceed $5.0 million in
any twelve-month period plus the amount of cash proceeds from any key man life insurance
received during such twelve-month period; provided, further, that such amount may be
increased by an amount not to exceed the cash proceeds from the sale of Equity Interests of
Parent to current or former members of management, directors, managers or consultants of
Parent or any of its Subsidiaries that occurs after the Issue Date, to the extent the cash
proceeds from the sale of such Equity Interests have not otherwise been applied to the
making of Restricted Payments by virtue of Section 4.07(a)(4)(c)(B);




     (6) the repurchase of Equity Interests deemed to occur upon the exercise of stock
options to the extent such Equity Interests represent a portion of the exercise price of
those stock options, and repurchases of Equity Interests deemed to occur upon the
withholding of a portion of the Equity Interests granted or awarded to a current or former
officer, director, employee or consultant to pay for the taxes payable by such Person upon
such grant or award (or upon vesting thereof);




     (7) so long as no Default or Event of Default has occurred and is continuing, the
declaration and payment of regularly scheduled or accrued dividends to holders of any class
or series of Disqualified Stock of Parent or any preferred stock of any Restricted
Subsidiary of Parent issued on or after the Issue Date in accordance with the Fixed Charge
Coverage Ratio test described in Section 4.09(a) hereof;




     (8) payments of cash, dividends, distributions, advances or other Restricted Payments
by Parent or any of its Restricted Subsidiaries to allow the payment of cash in lieu of the
issuance of fractional shares upon (i) the exercise of options or warrants or (ii) the
conversion or exchange of Capital Stock of any such Person;




     (9) Permitted Tax Payments;




     (10) upon the occurrence of a Change of Control and within 60 days after the completion
of the offer to repurchase the Notes pursuant to Section 4.15 hereof, any purchase or
redemption of Subordinated Debt required pursuant to the terms thereof as a result of such
Change of Control; provided, however, that at the time of such purchase or redemption no
Event of Default shall have occurred and be continuing (or would result therefrom);




     (11) any purchase or redemption of Subordinated Debt using any remaining Excess
Proceeds of an Asset Sale within 60 days after completion of an Asset Sale Offer; provided,
however, that at the time of such purchase or redemption no Event of Default shall have
occurred and be continuing (or would result therefrom);



51









 






     (12) the application of the proceeds of the Notes issued on the Issue Date as follows:
approximately $129.7 million to make a distribution to the unitholders of Parent,
approximately $61.8 million to repay the aggregate principal balance of the Indebtedness
under the Credit Agreement and the remaining proceeds to fund working capital and for
general corporate purposes; and




     (13) other Restricted Payments in an aggregate amount not to exceed $25.0 million since
the Issue Date; provided, however, that the aggregate amount of Restricted Payments of the
type described in clauses (1) and (2) of the definition of “Restricted Payments” in Section
4.07(a) hereof permitted by this clause (13) shall not exceed $12.5 million since the Issue
Date.



     The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the
date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued
by Parent or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The Fair Market Value of any assets or securities that are required to be valued by this Section
4.07 will be determined by the Board of Directors of Parent, whose resolution with respect thereto
will be delivered to the Trustee.



Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.




     (a) Parent will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create or permit to exist or become effective any consensual encumbrance or restriction
on the ability of any Restricted Subsidiary to:




     (1) pay dividends or make any other distributions on its Capital Stock to Parent or any
of its Restricted Subsidiaries, or with respect to any other interest or participation in,
or measured by, its profits, or pay any indebtedness owed to Parent or any of its Restricted
Subsidiaries;




     (2) make loans or advances to Parent or any of its Restricted Subsidiaries; or




     (3) sell, lease or transfer any of its properties or assets to Parent or any of its
Restricted Subsidiaries.



     (b) The restrictions in Section 4.08(a) hereof will not apply to encumbrances or restrictions
existing under or by reason of:




     (1) agreements governing Existing Indebtedness as in effect on the Issue Date and any
amendments, restatements, modifications, renewals, supplements, refundings, replacements or
refinancings of those agreements; provided that the amendments, restatements, modifications,
renewals, supplements, refundings, replacements or refinancings are not materially more
restrictive, taken as a whole, with respect to such dividend and other payment restrictions
than those contained in those agreements on the Issue Date;




     (2) this Indenture, the Notes and the Note Guarantees;




     (3) agreements governing other Indebtedness permitted to be incurred under Section 4.09
hereof and any amendments, restatements, modifications, renewals, supplements, refundings,
replacements or refinancings of those agreements; provided that the Board of Directors of
Parent determines in good faith that the encumbrances and restrictions in the agreements
governing such Indebtedness (or any such amendment, restatement, modification,



52









 







renewal, supplement, refunding, replacement or refinancing) will not materially
adversely affect the ability of MagnaChip to make payments on the Notes when due;




     (4) applicable law, rule, regulation or order;




     (5) any instrument governing Indebtedness or Capital Stock of a Person acquired by
Parent or any of its Restricted Subsidiaries as in effect at the time of such acquisition
(except to the extent such Indebtedness or Capital Stock was incurred in connection with or
in contemplation of such acquisition), which encumbrance or restriction is not applicable to
any Person, or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired; provided that, in the case of Indebtedness,
such Indebtedness was permitted by the terms of this Indenture to be incurred;




     (6) customary non-assignment provisions in contracts and licenses entered into in the
ordinary course of business;




     (7) purchase money obligations for property acquired in the ordinary course of business
and Capital Lease Obligations that impose restrictions on the property purchased or leased
of the nature described in clause (4) of Section 4.09(b) hereof;




     (8) any agreement for the sale or other disposition of a Restricted Subsidiary or all
or substantially all of the assets thereof that restricts distributions by that Restricted
Subsidiary pending its sale or other disposition;




     (9) Permitted Refinancing Indebtedness; provided that the restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are not materially more
restrictive, taken as a whole, than those contained in the agreements governing the
Indebtedness being refinanced;




     (10) Liens permitted to be incurred under the provisions of Section 4.12 hereof that
limit the right of the debtor to dispose of the assets subject to such Liens;




     (11) provisions limiting the disposition or distribution of assets or property in joint
venture agreements, asset sale agreements, sale-leaseback agreements, stock sale agreements
and other similar agreements (including agreements entered into in connection with a
Restricted Investment) entered into with the approval of Parent’s Board of Directors, which
limitation is applicable only to the assets that are the subject of such agreements;




     (12) restrictions on cash or other deposits or net worth imposed by customers under
contracts entered into in the ordinary course of business; and




     (13) restrictions under customary provisions in partnership agreements, limited
liability company organizational or governance documents, joint venture agreements,
corporate charters, stockholders’ agreements and other similar agreements and documents on
the transfer of ownership interests in such partnership, limited liability company, joint
venture or similar Person.



Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.




     (a) Parent will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly
liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness
(including Acquired



53









 




Debt), and Parent will not issue any Disqualified Stock and will not permit any of its
Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that Parent may
incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, and the Issuers and the
Guarantors (other than Parent) may incur Indebtedness (including Acquired Debt) or issue preferred
stock, if:





     (1) the Fixed Charge Coverage Ratio for Parent’s most recently ended four full fiscal
quarters for which internal financial statements are available immediately preceding the
date on which such additional Indebtedness is incurred or such Disqualified Stock or such
preferred stock is issued, as the case may be, would have been at least (a) at any time
prior to the completion of the Initial Public Offering, 2.25 to 1.0, and (b) at any time on
or after completion of the Initial Public offering, 2.0 to 1.0, in each case determined on a
pro forma basis (including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred or the Disqualified Stock or the preferred stock
had been issued, as the case may be, at the beginning of such four-quarter period; and




     (2) in the case of any such Indebtedness that is Pari Passu Indebtedness, the sum of
the aggregate principal amount of Pari Passu Indebtedness incurred pursuant to this
paragraph since the Issue Date that is outstanding on the date of such incurrence plus the
aggregate principal amount of notes outstanding on the date of such incurrence (in each
case, after giving pro forma effect to the incurrence of such Pari Passu Indebtedness and
application of the net proceeds therefrom) does not exceed (a) at any time prior to the
completion of the Initial Public Offering, $350.0 million, or (b) at any time on or after
completion of the Initial Public Offering, $500.0 million.



     (b) The provisions of Section 4.09(a) hereof will not prohibit the incurrence of any of the
following items of Indebtedness (collectively, “Permitted Debt”):




     (1) the incurrence by Parent and any of its Restricted Subsidiaries of additional
Indebtedness and letters of credit under Credit Facilities in an aggregate principal amount
at any one time outstanding under this clause (1)(with letters of credit being deemed to
have a principal amount equal to the maximum potential liability of Parent and its
Restricted Subsidiaries thereunder) not to exceed the greater of (a) $75.0 million or (b)
the Borrowing Base as of the date of incurrence;




     (2) the incurrence by Parent and its Restricted Subsidiaries of the Existing
Indebtedness;




     (3) the incurrence by Issuers and the Guarantors of Indebtedness represented by the
Notes and the related Note Guarantees to be issued under this Indenture and the Exchange
Notes and the related Note Guarantees to be issued pursuant to the Registration Rights
Agreement;




     (4) the incurrence by Parent or any of its Restricted Subsidiaries of Indebtedness
represented by Capital Lease Obligations, mortgage financings or purchase money obligations,
in each case, incurred for the purpose of financing all or any part of the purchase price,
taxes or cost of design, construction, installation or improvement of property, plant or
equipment (including software) used in the business of Parent or any of its Restricted
Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing
Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any
Indebtedness incurred pursuant to this clause (4), not to exceed the greater of (a) $25.0
million or (b) 5% of Total Assets as of any date of incurrence;



54









 






     (5) the incurrence by Parent or any of its Restricted Subsidiaries of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew,
refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany
Indebtedness) that was permitted by this Indenture to be incurred under Section 4.09(a)
hereof or clauses (2), (3), (4), (5) or (16) of this Section 4.09(b);




     (6) the incurrence by Parent or any of its Restricted Subsidiaries of intercompany
Indebtedness between or among Parent and any of its Restricted Subsidiaries; provided,
however, that:




     (A) if either Issuer or any Guarantor is the obligor on such Indebtedness and
the payee is not an Issuer or a Guarantor, such Indebtedness must be unsecured and
expressly subordinated to the prior payment in full in cash of all Obligations then
due with respect to the Notes, in the case of an Issuer, or the Note Guarantee, in
the case of a Guarantor; and




     (B) (1) any subsequent issuance or transfer of Equity Interests that results in
any such Indebtedness being held by a Person other than Parent or a Restricted
Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a Person
that is not either Parent or a Restricted Subsidiary of Parent,




will be deemed, in each case, to constitute an incurrence of such Indebtedness by Parent or
such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);




     (7) the issuance by any of Parent’s Restricted Subsidiaries to Parent or to any of its
Restricted Subsidiaries of shares of preferred stock; provided, however, that:




     (A) any subsequent issuance or transfer of Equity Interests that results in any
such preferred stock being held by a Person other than Parent or a Restricted
Subsidiary of Parent; and




     (B) any sale or other transfer of any such preferred stock to a Person that is
not either Parent or a Restricted Subsidiary of Parent,




will be deemed, in each case, to constitute an issuance of such preferred stock by such
Restricted Subsidiary that was not permitted by this clause (7);




     (8) the incurrence by Parent or any of its Restricted Subsidiaries of Hedging
Obligations in the ordinary course of business;




     (9) the guarantee by the Issuers or any of the Guarantors of Indebtedness of Parent or
a Restricted Subsidiary of Parent to the extent that the guaranteed Indebtedness was
permitted to be incurred by another provision of this Section 4.09; provided that if the
Indebtedness being guaranteed is subordinated to or pari passu with the Notes, then the
Guarantee must be subordinated or pari passu, as applicable, to the same extent as the
Indebtedness guaranteed;




     (10) the incurrence by Parent or any of its Restricted Subsidiaries of Indebtedness in
respect of workers’ compensation claims, health, disability or other employee benefits or
property, casualty or liability insurance, self-insurance obligations and bankers’
acceptances in the ordinary course of business;



55









 






     (11) the incurrence by Parent or any of its Restricted Subsidiaries of Indebtedness
arising from the honoring by a bank or other financial institution of a check, draft or
similar instrument inadvertently drawn against insufficient funds, so long as such
Indebtedness is covered within five Business Days;




     (12) the incurrence of Indebtedness by Parent or any of its Restricted Subsidiaries in
the form of performance bonds, completion guarantees and surety or appeal bonds and similar
obligations entered into by Parent or any of its Restricted Subsidiaries in the ordinary
course of their business;




     (13) Indebtedness of Parent or any Restricted Subsidiary issued to any of its
directors, employees, officers or consultants or to a Restricted Subsidiary in connection
with the redemption or purchase of Capital Stock that, by its terms or by operation of law,
is subordinated to the Notes, is not secured by any of the assets of Parent or the
Restricted Subsidiaries and does not require cash payments prior to the Stated Maturity of
the Notes, in an aggregate principal amount which, when added with the amount of
Indebtedness incurred under this clause (13) and then outstanding, does not exceed $5.0
million at any one time outstanding;




     (14) the incurrence of Indebtedness by Parent or any of the Restricted Subsidiaries
arising from agreements of Parent or any of the Restricted Subsidiaries providing for
adjustment of purchase price or other similar obligations, in each case, incurred or assumed
in connection with the acquisition or disposition of any business, assets or a Restricted
Subsidiary of Parent;




     (15) Indebtedness incurred by Parent or any of the Restricted Subsidiaries constituting
reimbursement obligations under letters of credit issued in the ordinary course of business,
including, without limitation, letters of credit to procure raw materials or relating to
workers’ compensation claims or self-insurance, or other Indebtedness relating to
reimbursement-type obligations regarding workers’ compensation claims; and




     (16) the incurrence by the Issuers or any of the Guarantors of additional Indebtedness
or Disqualified Stock in an aggregate principal amount (or accreted value, as applicable) at
any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew,
refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this
clause (16), not to exceed $25.0 million.



     Parent will not, and will not permit any Guarantor to, incur any Indebtedness (including
Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of
the Issuers or such Guarantor unless such Indebtedness is also contractually subordinated in right
of payment to the Notes and the applicable Note Guarantee on substantially identical terms;
provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of
payment to any other Indebtedness of the Issuers or any Guarantor solely by virtue of being
unsecured or by virtue of being secured on a junior priority basis.



     For purposes of determining compliance with this Section 4.09, in the event that an item of
Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in
clauses (1) through (16) above, or is entitled to be incurred pursuant to Section 4.09(a) hereof,
MagnaChip will be permitted to classify such item of Indebtedness on the date of its incurrence, or
later reclassify all or a portion of such item of Indebtedness, in any manner that complies with
this Section 4.09. The accrual of interest or preferred stock dividends, the accretion or
amortization of original issue discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, the reclassification of preferred stock as
Indebtedness due to a change in accounting principles, and the



56









 




payment of dividends on preferred stock or Disqualified Stock in the form of additional shares
of the same class of preferred stock or Disqualified Stock will not be deemed to be an incurrence
of Indebtedness or an issuance of preferred stock or Disqualified Stock for purposes of this
Section 4.09; provided, in each such case, that the amount thereof is included in Fixed Charges of
Parent as accrued. For purposes of determining compliance with any U.S. dollar-denominated
restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of
Indebtedness denominated in a foreign currency shall be utilized, calculated based on the relevant
currency exchange rate in effect on the date such Indebtedness was incurred. Notwithstanding any
other provision of this Section 4.09, the maximum amount of Indebtedness that Parent or any
Restricted Subsidiary may incur pursuant to this Section 4.09 shall not be deemed to be exceeded
solely as a result of fluctuations in exchange rates or currency values.




     The amount of any Indebtedness outstanding as of any date will be:



     (1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with
original issue discount;



     (2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and



     (3) in respect of Indebtedness of another Person secured by a Lien on the assets of the
specified Person, the lesser of:




     (A) the Fair Market Value of such assets at the date of determination; and




     (B) the amount of the Indebtedness of the other Person.



Section 4.10 Asset Sales.




     Parent will not, and will not permit any of its Restricted Subsidiaries to, consummate an
Asset Sale unless:




     (1) Parent (or the Restricted Subsidiary, as the case may be) receives consideration at
the time of the Asset Sale at least equal to the Fair Market Value (measured as of the date
of the definitive agreement with respect to such Asset Sale) of the assets or Equity
Interests issued or sold or otherwise disposed of; and




     (2) at least 75% of the consideration received in the Asset Sale by Parent or such
Restricted Subsidiary is in the form of cash or Cash Equivalents. For purposes of this
provision, each of the following will be deemed to be cash:




     (A) any liabilities of Parent or such Restricted Subsidiary (other than
contingent liabilities and liabilities that are by their terms subordinated to the
Notes or any Note Guarantee) that are assumed by the transferee of any such assets
pursuant to a customary novation or indemnity agreement that releases Parent or such
Restricted Subsidiary from or indemnifies against further liability;




     (B) any securities, notes or other obligations received by Parent or any such
Restricted Subsidiary from such transferee that are converted by Parent or such
Restricted Subsidiary into cash or Cash Equivalents within 60 days of consummation
of such Asset Sale, to the extent of the cash and Cash Equivalents received in that
conversion;



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     (C) any Designated Non-cash Consideration received by Parent or such Restricted
Subsidiary in such Asset Sale having an aggregate Fair Market Value, taken together
will all other Designated Non-cash Consideration received pursuant to this clause
(C) that is at that time outstanding, not to exceed 5.0% of Total Assets at the time
of the receipt of such Designated Non-cash Consideration, with the Fair Market Value
of each item of Designated Non-cash Consideration being measured at the time
received and without giving effect to subsequent changes in value; and




     (D) any stock or assets of the kind referred to in clauses (2) or (4) of the
next paragraph of this Section 4.10.



     Within 365 days after the receipt of any Net Proceeds from an Asset Sale, Parent (or the
applicable Restricted Subsidiary, as the case may be) may apply such Net Proceeds:




     (1) to repay (a) Obligations under a Credit Facility that are secured by a Lien
permitted by this Indenture; or (b) other Indebtedness (other than Subordinated
Indebtedness) of Parent or any Restricted Subsidiary that is secured by a Lien permitted by
this Indenture;




     (2) to acquire all or substantially all of the assets of, or any Capital Stock of,
another Permitted Business, if, after giving effect to any such acquisition of Capital
Stock, the Permitted Business is or becomes a Restricted Subsidiary of Parent;




     (3) to make a capital expenditure;




     (4) to acquire other assets that are not classified as current assets under GAAP and
that are used or useful in a Permitted Business; or




     (5) any combination of (1) through (4) of this paragraph.


In the case of clauses (2) and (4), Parent will be deemed to have complied with its obligations
above if it enters into a binding commitment to acquire such assets or Capital Stock within the
required time frame above, provided that such binding commitment shall be subject only to customary
conditions and such acquisition shall be consummated within six months from the date of signing
such binding commitment




     Pending the final application of any Net Proceeds, Parent (or the applicable Restricted
Subsidiary) may temporarily reduce revolving credit borrowings or otherwise invest the Net Proceeds
in any manner that is not prohibited by this Indenture.



     Any Net Proceeds from Asset Sales that are not applied or invested as provided in the second
paragraph of this Section 4.10 will constitute “Excess Proceeds.” When the aggregate amount of
Excess Proceeds exceeds $20.0 million, within 30 days thereof, MagnaChip will make an offer (an
“Asset Sale Offer”) to all holders of Notes and all holders of other Indebtedness that is pari
passu with the Notes containing provisions similar to those set forth in this Indenture with
respect to offers to purchase, prepay or redeem with the proceeds of sales of assets to purchase,
prepay or redeem the maximum principal amount of Notes and such other pari passu Indebtedness (plus
all accrued interest on the Indebtedness and the amount of all fees and expenses, including
premiums, incurred in connection therewith) that may be purchased, prepaid or redeemed out of the
Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of the principal
amount, plus accrued and unpaid interest and Special Interest, if any, to the date of purchase,
prepayment or redemption, subject to the rights of holders of Notes on the relevant record date to
receive interest due on the relevant interest payment date, and will be payable in cash. If any
Excess Proceeds remain after consummation of an Asset Sale Offer, MagnaChip may use



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those Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate
principal amount of Notes and other pari passu Indebtedness tendered in (or required to be prepaid
or redeemed in connection with) such Asset Sale Offer exceeds the amount of Excess Proceeds, the
Trustee will select the Notes and the agent or trustee for such pari passu Indebtedness shall
select such other pari passu Indebtedness to be purchased on a pro rata basis, based on the amounts
tendered or required to be prepaid or redeemed (with such adjustments as may be deemed appropriate
by MagnaChip so that only Notes in denominations of $2,000, or an integral multiple of $1,000 in
excess thereof, will be purchased). Upon completion of each Asset Sale Offer, the amount of Excess
Proceeds will be reset at zero.




     MagnaChip will comply with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent those laws and regulations are applicable
in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent that
the provisions of any securities laws or regulations conflict with the provisions of Section 3.09
hereof or this Section 4.10, MagnaChip will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under Section 3.09 hereof or
this Section 4.10 by virtue of such compliance.



Section 4.11 Transactions with Affiliates.




     (a) Parent will not, and will not permit any of its Restricted Subsidiaries to, make any
payment to or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate of
MagnaChip (each, an “Affiliate Transaction”) involving aggregate payments or consideration in
excess of $2.5 million, unless:




     (1) the Affiliate Transaction is on terms that are no less favorable to Parent or the
relevant Restricted Subsidiary than those that would have been obtained in a comparable
transaction by Parent or such Restricted Subsidiary with an unrelated Person; and




     (2) MagnaChip delivers to the Trustee:




     (A) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $10.0 million, a
resolution of the Board of Directors of Parent set forth in an officers’ certificate
certifying that such Affiliate Transaction complies with this Section 4.11(a) and
that such Affiliate Transaction has been approved by a majority of the disinterested
members of the Board of Directors of Parent; and




     (B) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $20.0 million, an
opinion by (A) a nationally recognized investment banking firm or (B) an accounting
or appraisal firm nationally recognized in making determinations of this kind that
such Affiliate Transaction is fair, from a financial standpoint, to Parent or the
applicable Restricted Subsidiary.



     (b) The following items will not be deemed to be Affiliate Transactions and, therefore, will
not be subject to the provisions of Section 4.11(a) hereof:




     (1) any employment agreement, employee compensation or benefit plan, officer or
director indemnification agreement or any similar arrangement entered into by Parent or any
of its



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Restricted Subsidiaries, and payments made pursuant thereto, in the ordinary course of
business and payments pursuant thereto;




     (2) transactions between or among Parent and/or its Restricted Subsidiaries;




     (3) transactions with a Person (other than an Unrestricted Subsidiary of Parent) that
is an Affiliate of MagnaChip solely because Parent owns, directly or through a Restricted
Subsidiary, an Equity Interest in, or controls, such Person;




     (4) payment of reasonable and customary fees and reimbursements of expenses (pursuant
to indemnity arrangements or otherwise) of officers, directors, employees or consultants of
Parent or any of its Restricted Subsidiaries;




     (5) the grant of equity incentives or similar rights to employees and directors of
Parent or MagnaChip Korea pursuant to plans approved by the Board of Directors of Parent or
MagnaChip Korea or a committee thereof comprised solely of independent directors;




     (6) any issuance of securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, stock options and
stock ownership plans approved by Parent’s Board of Directors or a committee thereof
comprised solely of independent directors;




     (7) any issuance of Equity Interests (other than Disqualified Stock) of Parent to
Affiliates of MagnaChip;




     (8) Restricted Payments that do not violate Section 4.07 hereof;




     (9) transactions pursuant to any contract or agreement with Parent or any of the
Restricted Subsidiaries in effect on the Issue Date, as the same may be amended, modified or
replaced from time to time so long as any such amendment, modification or replacement is not
more disadvantageous to the holders of the Notes in any material respect than the terms
contained in such contract or agreement as in effect on the Issue Date;




     (10) transactions pursuant to or under the 2009 Registration Rights Agreement, the 2009
Warrant Agreement, the Director Indemnification Agreements and the Credit Agreement as in
effect on the Issue Date or any similar agreement or any amendment, modification or
replacement of the 2009 Registration Rights Agreement, the 2009 Warrant Agreement, the
Director Indemnification Agreements or the Credit Agreement or similar agreement; provided
that the terms of such amendment, modification or replacement are not more disadvantageous
to the holders of the Notes in any material respect than the terms contained in the 2009
Registration Rights Agreement, the 2009 Warrant Agreement, the Director Indemnification
Agreements or the Credit Agreement, as the case may be, as in effect on the Issue Date, and
the repayment of the obligations outstanding under the Credit Agreement;




     (11) the payment of management, consulting and advisory fees and related expenses made
pursuant to the Advisory Agreements and the payment of other customary management,
consulting and advisory fees and related expenses to the Principals and any of their
respective Affiliates in connection with transactions of Parent or its Subsidiaries or
pursuant to any management, consulting, financial advisory, financing, underwriting or
placement agreement or in respect of other investment banking activities, including in
connection with acquisitions or



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divestitures, which fees and expenses are made pursuant to arrangements approved by the
Board of Directors of Parent or such Subsidiary in good faith;




     (12) the provision by an Affiliate of commercial banking or lending services or other
similar services on terms that are no less favorable to Parent or the relevant Restricted
Subsidiary than those that would have been obtained by an unaffiliated party and that are
approved in good faith by the Board of Directors of Parent; and




     (13) loans or advances to employees in the ordinary course of business not to exceed
$5.0 million in the aggregate at any one time outstanding.



Section 4.12 Liens.




     Parent will not, and will not permit any of its Restricted Subsidiaries to, create, incur,
assume or otherwise cause or suffer to exist or become effective any Lien of any kind (other than
Permitted Liens) securing Indebtedness, Attributable Debt or trade payables upon any of its or
their property or assets, now owned or hereafter acquired, unless all payments due under this
Indenture and the Notes are secured on an equal and ratable basis with the obligations so secured
until such time as such obligations are no longer secured by a Lien.



Section 4.13 Business Activities of FinanceCo.




     FinanceCo will not hold any material assets, become liable for any material obligations or
engage in any significant business activities; provided that FinanceCo may be a co-obligor or
guarantor with respect to Indebtedness if MagnaChip is an obligor on such Indebtedness and the net
proceeds of such Indebtedness are received by MagnaChip, FinanceCo or one or more Guarantors.



Section 4.14 Corporate Existence.




     Subject to Article 5 hereof, each of the Issuers shall do or cause to be done all things
necessary to preserve and keep in full force and effect:




     (1) its corporate existence, and the corporate, partnership or other existence of each
of Parent and its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of such Issuer, Parent or any such
Subsidiary; and




     (2) the rights (charter and statutory), licenses and franchises of the Parent and its
Subsidiaries; provided, however, that an Issuer shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of any of its
Subsidiaries, if the Board of Directors of Parent shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Issuers, Parent and
Parent’s Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any
material respect to the Holders of the Notes.



Section 4.15 Offer to Repurchase Upon Change of Control.




     (a) Upon the occurrence of a Change of Control, MagnaChip will make an offer (a “Change of
Control Offer”) to each Holder to repurchase all or any part (equal to $2,000 or an integral
multiple of $1,000 in excess thereof) of that Holder’s Notes at a purchase price in cash equal to
101% of the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest and
Special Interest, if any, on the Notes repurchased to the date of purchase, subject to the rights
of holders of Notes on the relevant record date to receive interest due on the relevant interest
payment date (the “Change of Control



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Payment”). Within 30 days following any Change of Control, MagnaChip will mail a notice to
each Holder describing the transaction or transactions that constitute the Change of Control and
offering to repurchase Notes on the Change of Control Payment Date specified in the notice, which
date will be no earlier than ten Business Days and no later than 60 days from the date such notice
is mailed:





     (1) that the Change of Control Offer is being made pursuant to this Section 4.15 and
that all Notes tendered will be accepted for payment;




     (2) the purchase price and the purchase date, which shall be no earlier than 30 days
and no later than 60 days from the date such notice is mailed (the “Change of Control
Payment Date”);




     (3) that any Note not tendered will continue to accrue interest;




     (4) that, unless the Issuers default in the payment of the Change of Control Payment,
all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue
interest after the Change of Control Payment Date;




     (5) that Holders electing to have any Notes purchased pursuant to a Change of Control
Offer will be required to surrender the Notes, with the form entitled “Option of Holder to
Elect Purchase” attached to the Notes completed, or transfer by book-entry transfer, to the
Paying Agent at the address specified in the notice prior to the close of business on the
third Business Day preceding the Change of Control Payment Date;




     (6) that Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the second Business Day preceding the
Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have the Notes purchased; and




     (7) that Holders whose Notes are being purchased only in part will be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $2,000 in principal amount or an integral multiple of
$1,000 in excess thereof.



     MagnaChip will comply with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent those laws and regulations are applicable
in connection with the repurchase of the Notes as a result of a Change of Control. To the extent
that the provisions of any securities laws or regulations conflict with Section 4.15 hereof,
MagnaChip will comply with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under this Section 4.15 by virtue of such compliance.



     (b) On the Change of Control Payment Date, MagnaChip will, to the extent lawful:




     (1) accept for payment all Notes or portions of Notes properly tendered pursuant to the
Change of Control Offer;




     (2) deposit with the Paying Agent an amount equal to the Change of Control Payment in
respect of all Notes or portions of Notes properly tendered; and



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     (3) deliver or cause to be delivered to the Trustee the Notes properly accepted
together with an Officers’ Certificate stating the aggregate principal amount of Notes or
portions of Notes being purchased by MagnaChip.



     The Paying Agent will promptly mail to each Holder of Notes properly tendered the Change of
Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be
transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered, if any; provided that each such new Note will be in a
denomination of $2,000 or an integral multiple of $1,000 in excess thereof. MagnaChip will
publicly announce the results of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.



     (c) Notwithstanding anything to the contrary in this Section 4.15, MagnaChip will not be
required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the
Change of Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 4.15 hereof made by MagnaChip and purchases all Notes
properly tendered and not withdrawn under the Change of Control Offer, or (2) notice of redemption
has been given pursuant to Section 3.07 hereof, unless and until there is a default in payment of
the applicable redemption price.



     (d) Notwithstanding anything to the contrary contained herein, a Change of Control Offer may
be made in advance of a Change of Control, conditioned upon the consummation of such Change of
Control, if a definitive agreement is in place for the Change of Control at the time the Change of
Control Offer is made.



Section 4.16 Additional Amounts




     (a) All payments made under or with respect to the Notes (whether or not in the form of
Certificated Notes) or with respect to any Note Guarantee will be made free and clear of and
without withholding or deduction for, or on account of, any present or future tax, duty, levy,
impost, assessment or other governmental charge (including, without limitation, penalties, interest
and other similar liabilities related thereto) of whatever nature (collectively, “Taxes”) unless
the withholding or deduction of such Taxes is then required by law. If any deduction or
withholding for, or on account of, any Taxes imposed or levied by or on behalf of any jurisdiction
in which either of the Issuers or any Guarantor (including any successor entity), is then
incorporated, engaged in business or resident for tax purposes or any jurisdiction from or through
which payment is made by or on behalf of either of the Issuers or any Guarantor (including any
successor entity), including, without limitation, the jurisdiction of any paying agent, or in each
case any political subdivision thereof or therein (each, a “Tax Jurisdiction”), will at any time be
required to be made from any payments made under or with respect to the Notes or with respect to
any Note Guarantee, including, without limitation, payments of principal, redemption price,
purchase price, interest, Special Interest or premium, the relevant Issuer, the relevant Guarantor
or other payor, as applicable, will pay such additional amounts (the “Additional Amounts”) as may
be necessary in order that the net amounts received in respect of such payments (including
Additional Amounts) by each holder after such withholding, deduction or imposition will equal the
respective amounts that would have been received in respect of such payments in the absence of such
withholding or deduction; provided, however, that no Additional Amounts will be payable with
respect to:




     (1) any Taxes that would not have been imposed but for the Holder or the beneficial
owner of the Notes being a citizen or resident or national of, incorporated in or carrying
on a business in the relevant Tax Jurisdiction in which such Taxes are imposed or having any
other present or former connection with the relevant Tax Jurisdiction other than the mere
acquisition, holding, enforcement or receipt of payment in respect of the Notes or with
respect to any Note Guarantee;



63









 






     (2) any Taxes that are imposed or withheld as a result of the failure of the Holder of
the Note or beneficial owner of the Note to comply with any reasonable written request, made
to that Holder or beneficial owner in writing at least 90 days before any such withholding
or deduction would be payable, by either of the Issuers or any of the Guarantors to provide
timely and accurate information concerning the nationality, residence or identity of such
Holder or beneficial owner or to make any valid and timely declaration or similar claim or
satisfy any certification information or other reporting requirement, in each case which is
required or imposed by a statute, treaty, regulation or administrative practice of the
relevant Tax Jurisdiction as a precondition to any exemption from or reduction in all or
part of such Taxes to which such Holder or beneficial owner is entitled;




     (3) any Taxes that are imposed or levied by reason of the presentation (where
presentation is required in order to receive payment) of such Notes for payment on a date
more than 30 days after the date on which such payment became due and payable or the date on
which payment thereof is duly provided for, whichever is later, except to the extent that
the beneficial owner or Holder thereof would have been entitled to Additional Amounts had
the Notes been presented for payment on any date during such 30-day period;




     (4) any estate, inheritance, gift, sales, transfer, personal property or similar Taxes;




     (5) any Taxes withheld, deducted or imposed on a payment to an individual, which
withholding, deduction or imposition is required to be made pursuant to European Council
Directive 2003/48/EC or any other directive implementing the conclusions of the ECOFIN
Council meeting of 26 and 27 November 2000 on the taxation of savings income or any law
implementing or complying with or introduced in order to conform to, such Directive;




     (6) any Note presented for payment by or on behalf of a Holder of Notes who would have
been able to avoid such withholding or deduction by presenting the relevant Note to another
paying agent in a member state of the European Union; or




     (7) any combination of items (1) through (6) above.



     (b) In addition to the foregoing, the Issuers and the Guarantors will also pay and indemnify
each holder of Notes for any present or future stamp, issue, registration, court, documentary,
excise, property and any other similar Taxes which are levied by any Tax Jurisdiction on the
execution, issuance, delivery, registration or enforcement of any of the Notes, this Indenture, any
Note Guarantee, or any other document or instrument referred to therein or the receipt of any
payment with respect to the Notes, this Indenture or any Note Guarantee.



     (c) At least 30 calendar days prior to each date on which any payment under or with respect to
the Notes or a Note Guarantee is due and payable, if either of the Issuers or any Guarantor, as the
case may be, becomes aware that it will be obligated to pay Additional Amounts with respect to such
payment (unless such obligation to pay Additional Amounts arises after the 30th day prior to the
date on which payment under or with respect to the Notes or a Note Guarantee is due and payable, in
which case it will be promptly thereafter), the relevant Issuer or the relevant Guarantor, as the
case may be, will deliver to the Trustee an officers’ certificate stating the fact that Additional
Amounts will be payable and the amount estimated to be so payable. The officers’ certificate must
also set forth any other information reasonably necessary to enable the paying agents to pay
Additional Amounts to holders on the relevant payment date. The Trustee shall be entitled to rely
solely on such officers’ certificate as conclusive proof that such payments are necessary. The
relevant Issuer or the relevant Guarantor will provide the Trustee with documentation evidencing
the payment of Additional Amounts.



64









 





     (d) The relevant Issuer or the relevant Guarantor will make all withholdings and deductions
required by law and will remit the full amount deducted or withheld to the relevant Tax authority
in accordance with applicable law. The relevant Issuer or the relevant Guarantor will provide to
the Trustee an official receipt or, if official receipts are not obtainable, other documentation
evidencing the payment of any Taxes so deducted or withheld. The relevant Issuer or the relevant
Guarantor will attach to each certified copy or other document a certificate stating the amount of
such Taxes paid per $1,000 in principal amount of Notes then outstanding. Upon request, copies of
those receipts or other documentation, as the case may be, will be made available by the Issuers to
the Holders of the Notes.



     (e) Whenever in this Indenture there is mentioned, in any context, the payment of amounts
based upon the principal amount of the Notes or of principal, interest, Special Interest or of any
other amount payable under, or with respect to, any Note or Note Guarantee, such mention shall be
deemed to include mention of the payment of Additional Amounts to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof.



Section 4.17 Limitation on Sale and Leaseback Transactions.




     Parent will not, and will not permit any of its Restricted Subsidiaries to, enter into any
sale and leaseback transaction; provided that Parent or any Restricted Subsidiary may enter into a
sale and leaseback transaction if:




     (1) Parent or that Restricted Subsidiary, as applicable, could have (a) incurred
Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback
transaction under the Fixed Charge Coverage Ratio test in Section 4.09(a) hereof and (b)
incurred a Lien to secure such Indebtedness pursuant to Section 4.12 hereof;




     (2) the gross cash proceeds of that sale and leaseback transaction are at least equal
to the Fair Market Value, as determined in good faith by the Board of Directors of Parent
and set forth in an officers’ certificate delivered to the Trustee, of the property that is
the subject of that sale and leaseback transaction; and




     (3) the transfer of assets in that sale and leaseback transaction is permitted by, and
Parent applies the proceeds of such transaction in compliance with, Section 4.10 hereof.



Section 4.18 Payments for Consent.




     Parent will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder of Notes
for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of
this Indenture or the Notes unless such consideration is offered to be paid and is paid to all
Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.



Section 4.19 Additional Note Guarantees.




     If Parent or any of its Restricted Subsidiaries acquires or creates another Subsidiary after
the Issue Date, then that newly acquired or created Subsidiary will become a Guarantor and execute
a supplemental Indenture and deliver an opinion of counsel satisfactory to the Trustee within 10
Business Days of the date on which it was acquired or created; provided that:



65









 






     (1) any Subsidiary that constitutes an Immaterial Subsidiary need not become a
Guarantor until such time as it ceases to be an Immaterial Subsidiary;




     (2) in the event Parent or a Restricted Subsidiary forms or otherwise acquires,
directly or indirectly, a Restricted Subsidiary organized under the laws of a jurisdiction
other than the United States and such jurisdiction prohibits by law, regulation or order
such Restricted Subsidiary from becoming a Guarantor, Parent shall use all commercially
reasonable efforts (including pursuing required waivers) over a period up to one year, to
have such Subsidiary become a Restricted Subsidiary; provided, however, that Parent shall
not be required to use such commercially reasonable efforts with respect to such Restricted
Subsidiaries for more than a one-year period or such shorter period as it shall determine in
good faith that it has used all commercially reasonable efforts and if Parent or such
Restricted Subsidiary is unable during such period to obtain an enforceable Guarantee in
such jurisdiction, then such Restricted Subsidiary will not be required to provide a
Guarantee of the Notes pursuant to the Note Guarantee so long as such Restricted Subsidiary
does not Guarantee any other Indebtedness of Parent and its Restricted Subsidiaries and no
Default or Event of Default shall be deemed to exist during the period that Parent uses its
commercially reasonable efforts to have such Restricted Subsidiary enter into a Note
Guarantee; and




     (3) neither MagnaChip Korea nor any of its Subsidiaries nor any of the MagnaChip China
Subsidiaries will be required to become a Guarantor under any circumstances.



Section 4.20 Designation of Restricted and Unrestricted Subsidiaries.




     The Board of Directors of Parent may designate any Restricted Subsidiary of Parent (other than
the Issuers) to be an Unrestricted Subsidiary if that designation would not cause a Default;
provided that in no event will the business currently operated by MagnaChip Korea be transferred to
or held by an Unrestricted Subsidiary. If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by Parent and its
Restricted Subsidiaries in the Subsidiary designated as Unrestricted will be deemed to be an
Investment made as of the time of the designation and will reduce the amount available for
Restricted Payments under Section 4.07 hereof or under one or more clauses of the definition of
Permitted Investments, as determined by MagnaChip. That designation will only be permitted if the
Investment would be permitted at that time and if the Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary. The Board of Directors of Parent may redesignate any
Unrestricted Subsidiary to be a Restricted Subsidiary if that redesignation would not cause a
Default.



     Any designation of a Subsidiary of Parent as an Unrestricted Subsidiary will be evidenced to
the Trustee by filing with the Trustee a certified copy of a resolution of the Board of Directors
of Parent giving effect to such designation and an officers’ certificate certifying that such
designation complied with the preceding conditions and was permitted by Section 4.07 hereof. If,
at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of
this Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a
Restricted Subsidiary of Parent as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, MagnaChip will be in default of such covenant.
The Board of Directors of Parent may at any time designate any Unrestricted Subsidiary to be a
Restricted Subsidiary of Parent; provided that such designation will be deemed to be an incurrence
of Indebtedness by a Restricted Subsidiary of Parent of any outstanding Indebtedness of such
Unrestricted Subsidiary, and such designation will only be permitted if (1) such Indebtedness is
permitted under Section 4.09 hereof, calculated on a pro forma basis as if such designation had
occurred at the



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beginning of the applicable reference period; and (2) no Default or Event of Default would be
in existence following such designation.




Section 4.21 Changes in Covenants When Notes are Rated Investment Grade





     (a) If on any date following the Issue Date:




          (1) the Notes are rated Baa3 or better by Moody’s and BBB- or better by S&P (or, if
either such entity ceases to rate the Notes for reasons outside of the control of Parent,
the equivalent investment grade credit rating from any other “nationally recognized
statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the
Exchange Act selected by Parent as a replacement agency); and




          (2) no Default or Event of Default shall have occurred and be continuing,


then, beginning on that day and continuing at all times thereafter regardless of any subsequent
changes in the rating of the Notes, the provisions and covenants specifically listed in Section
4.07, Section 4.08, Section 4.09, Section 4.10, Section 4.11, Section 4.17(1)(a), Section 4.17(3),
Section 4.20, Section 5.01(4) and Section 5.03(4) of this Indenture will be suspended.




     (b) During any period that the covenants listed in Section 4.07, Section 4.08, Section 4.09,
Section 4.10, Section 4.11, Section 4.17(1)(a), Section 4.17(3), Section 4.20, Section 5.01(4) and
Section 5.03(4) of this Indenture have been suspended, Parent’s Board of Directors may not
designate any of its Subsidiaries as Unrestricted Subsidiaries pursuant to Section 4.20 or clause
(2) of the definition of “Unrestricted Subsidiary” in Section 1.01.



     (c) Notwithstanding clause (a) or (b) of this Section 4.21, if the rating assigned by either
such rating agency should subsequently decline to below Baa3 or BBB-, respectively, the covenants
listed in Section 4.07, Section 4.08, Section 4.09, Section 4.10, Section 4.11, Section 4.17(1)(a),
Section 4.17(3), Section 4.20, Section 5.01(4) and Section 5.03(4) of this Indenture will be
reinstated as of and from the date of such rating decline. Calculations under Section 4.07 hereof
will be made as if Section 4.07 had been in effect since the date of this Indenture except that no
Default will be deemed to have occurred solely by reason of a Restricted Payment made while Section
4.07 was suspended.



     (d) The Issuers shall give the Trustee prompt written notice of the suspension or reimposition
of the covenants in accordance with this Section 4.21; delay or failure in providing such notice
shall not affect the effectiveness of such covenant suspension or reimposition.



ARTICLE 5

SUCCESSORS




Section 5.01 Parent Merger, Consolidation or Sale of Assets.




     Parent will not, directly or indirectly: (1) consolidate or merge with or into another Person
(whether or not Parent is the surviving corporation), or (2) sell, assign, transfer, convey or
otherwise dispose of all or substantially all of the properties or assets of Parent and its
Restricted Subsidiaries taken as a whole, in one or more related transactions, to another Person,
unless:




     (1) either:




     (A) Parent is the surviving entity; or



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     (B) the Person formed by or surviving any such consolidation or merger (if
other than Parent) or to which such sale, assignment, transfer, conveyance or other
disposition has been made is an entity organized or existing under the laws of the
United States, any state of the United States or the District of Columbia; and, if
such entity is not a corporation, a co-obligor of the Notes is a corporation
organized or existing under any such laws;




     (2) the Person formed by or surviving any such consolidation or merger (if other than
Parent) or the Person to which such sale, assignment, transfer, conveyance or other
disposition has been made assumes all the obligations of Parent under the Notes, its Note
Guarantee, this Indenture and the Registration Rights Agreement pursuant to agreements as
required under the terms of this Indenture and the Registration Rights Agreement;




     (3) immediately after such transaction, no Default or Event of Default exists; and




     (4) Parent or the Person formed by or surviving any such consolidation or merger (if
other than Parent), or to which such sale, assignment, transfer, conveyance or other
disposition has been made would, on the date of such transaction after giving pro forma
effect thereto and any related financing transactions as if the same had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 4.09(a) hereof.


In addition, Parent will not, directly or indirectly, lease all or substantially all of the
properties and assets of it and its Restricted Subsidiaries, taken as a whole, in one or more
related transactions, to any other Person. This Section 5.01 will not apply to any sale,
assignment, transfer, conveyance, lease or other disposition of assets between or among Parent and
its Restricted Subsidiaries. Clauses (3) and (4) of this Section 5.01 will not apply to (1) any
merger or consolidation of Parent with or into (A) one of its Restricted Subsidiaries for any
purpose or (B) an Affiliate solely for the purpose of reincorporating Parent in another
jurisdiction, or (2) the corporate conversion at any time prior to the consummation of the Initial
Public Offering.




Section 5.02 Parent Successor Corporation Substituted.




     Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of the properties or assets of Parent in a
transaction that is subject to, and that complies with the provisions of, Section 5.01 hereof, the
successor Person formed by such consolidation or into or with which Parent is merged or to which
such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to,
and be substituted for (so that from and after the date of such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition, the provisions of this Indenture
referring to the “Parent” shall refer instead to the successor Person and not to Parent), and may
exercise every right and power of Parent under this Indenture with the same effect as if such
successor Person had been named as Parent herein; provided, however, that the predecessor Parent
shall not be relieved from the obligation to pay the principal of, premium on, if any, interest and
Special Interest, if any, on, the Notes except in the case of a sale of all of Parent’s assets in a
transaction that is subject to, and that complies with the provisions of, Section 5.01 hereof.



Section 5.03 MagnaChip Merger, Consolidation or Sale of Assets.




     MagnaChip will not, directly or indirectly: (1) consolidate or merge with or into another
Person (whether or not MagnaChip is the surviving corporation), or (2) sell, assign, transfer,
convey or otherwise



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dispose of all or substantially all of the properties or assets of MagnaChip and its
Restricted Subsidiaries taken as a whole, in one or more related transactions, to another Person,
unless:





     (1) either:




     (A) MagnaChip is the surviving corporation; or




     (B) the Person formed by or surviving any such consolidation or merger (if
other than MagnaChip) or to which such sale, assignment, transfer, conveyance or
other disposition has been made is an entity organized or existing under the laws of
South Korea, Luxembourg, the Netherlands, Bermuda, the United States, any state of
the United States or the District of Columbia; and, if such entity is not a
corporation, a co-obligor of the Notes is a corporation organized or existing under
any such laws;




     (2) the Person formed by or surviving any such consolidation or merger (if other than
MagnaChip) or the Person to which such sale, assignment, transfer, conveyance or other
disposition has been made assumes all the obligations of MagnaChip under the Notes, this
Indenture and the Registration Rights Agreement pursuant to agreements necessary under the
terms of this Indenture and Registration Rights Agreement;




     (3) immediately after such transaction, no Default or Event of Default exists;




     (4) MagnaChip or the Person formed by or surviving any such consolidation or merger (if
other than MagnaChip), or to which such sale, assignment, transfer, conveyance or other
disposition has been made would, on the date of such transaction after giving pro forma
effect thereto and any related financing transactions as if the same had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 4.09(a) hereof; and




     (5) if MagnaChip is not the surviving Person in such consolidation or merger, MagnaChip
shall have delivered to the Trustee an opinion of counsel from Luxembourg and any other
jurisdiction as necessary that no Taxes on income, including capital gains, other than Taxes
to the extent that Additional Amounts are required to be paid with respect thereto, will be
payable by holders of the Notes under the laws of any jurisdiction where the Person formed
by or surviving any such consolidation or merger is or becomes organized, resident or
engaged in business for tax purposes relating to the acquisition, ownership or disposition
of the Notes, including the receipt of interest or principal thereon; provided that the
Holder does not use or hold, and for relevant tax purposes is not deemed to use or hold, the
Notes in carrying on a business in the jurisdiction where the Person formed by or surviving
any such consolidation or merger is or becomes organized, resident or engaged in business
for tax purposes.


In addition, MagnaChip will not, directly or indirectly, lease all or substantially all of the
properties and assets of it and its Restricted Subsidiaries taken as a whole, in one or more
related transactions, to any other Person. This Section 5.03 will not apply to any sale,
assignment, transfer, conveyance, lease or other disposition of assets between or among Parent and
its Restricted Subsidiaries. Clauses (3) and (4) of this Section 5.03 will not apply to any merger
or consolidation of MagnaChip with or into (1) one of its Restricted Subsidiaries for any purpose
or (2) an Affiliate solely for the purpose of reincorporating MagnaChip in another jurisdiction.





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Section 5.04 MagnaChip Successor Corporation Substituted.




     Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of the properties or assets of MagnaChip in a
transaction that is subject to, and that complies with the provisions of, Section 5.03 hereof, the
successor Person formed by such consolidation or into or with which MagnaChip is merged or to which
such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to,
and be substituted for (so that from and after the date of such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition, the provisions of this Indenture
referring to the “MagnaChip” shall refer instead to the successor Person and not to MagnaChip), and
may exercise every right and power of MagnaChip under this Indenture with the same effect as if
such successor Person had been named as MagnaChip herein; provided, however, that the predecessor
MagnaChip shall not be relieved from the obligation to pay the principal of, premium on, if any,
interest and Special Interest, if any, on, the Notes except in the case of a sale of all of
MagnaChip’s assets in a transaction that is subject to, and that complies with the provisions of,
Section 5.03 hereof.



Section 5.05 FinanceCo Merger, Consolidation or Sale of Assets.




     FinanceCo may not, directly or indirectly, consolidate or merge with or into (whether or not
FinanceCo is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of FinanceCo’s properties or assets, in one or more related
transactions, to any Person unless:




     (1) concurrently therewith, a corporate wholly-owned Restricted Subsidiary of MagnaChip
organized and validly existing under the laws of the United States, any state of the United
States or the District of Columbia (which may be the successor Person as a result of such
transaction) expressly assumes all the obligations of FinanceCo under the under the Notes,
this Indenture and the Registration Rights Agreement pursuant to agreements as required
under the terms of this Indenture and the Registration Rights Agreement; and




     (2) immediately after such transaction, no Default or Event of Default exists.



Section 5.06 FinanceCo Successor Corporation Substituted.




     Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of the properties or assets of FinanceCo in a
transaction that is subject to, and that complies with the provisions of, Section 5.05 hereof, the
successor Person formed by such consolidation or into or with which FinanceCo is merged or to which
such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to,
and be substituted for (so that from and after the date of such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition, the provisions of this Indenture
referring to the “FinanceCo” shall refer instead to the successor Person and not to FinanceCo), and
may exercise every right and power of FinanceCo under this Indenture with the same effect as if
such successor Person had been named as FinanceCo herein; provided, however, that the predecessor
FinanceCo shall not be relieved from the obligation to pay the principal of, premium on, if any,
interest and Special Interest, if any, on, the Notes except in the case of a sale of all of
FinanceCo’s assets in a transaction that is subject to, and that complies with the provisions of,
Section 5.05 hereof.



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ARTICLE 6

DEFAULTS AND REMEDIES




Section 6.01 Events of Default.




     Each of the following is an “Event of Default”:




     (1) default for 30 days in the payment when due of interest and Special Interest, if
any, on, the Notes;




     (2) default in the payment when due (at maturity, upon redemption or otherwise) of the
principal of, or premium on, if any, the Notes;




     (3) failure by Parent or any of its Restricted Subsidiaries to comply with the
provisions of Article 5 hereof;




     (4) failure by Parent or any of its Restricted Subsidiaries for 30 days after notice to
MagnaChip by the Trustee or the holders of at least 25% in aggregate principal amount of the
Notes then outstanding, voting as a single class, to comply with Section 4.10 or Section
4.15 hereof;




     (5) failure by Parent or any of its Restricted Subsidiaries for 60 days after notice to
MagnaChip by the Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding voting as a single class to comply with any of the other agreements
in this Indenture;




     (6) default under any mortgage, indenture or instrument under which there may be issued
or by which there may be secured or evidenced any Indebtedness for money borrowed by Parent
or any of its Restricted Subsidiaries (or the payment of which is guaranteed by Parent or
any of its Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists, or
is created after the date of this Indenture, if that default:




     (A) is caused by a failure to pay principal of, premium on, if any, or interest
on, if any, such Indebtedness in an aggregate amount in excess of $250,000 prior to
the expiration of the grace period provided in such Indebtedness on the date of such
default (a “Payment Default”); or




     (B) results in the acceleration of such Indebtedness prior to its express
maturity,




and, in each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a Payment
Default or the maturity of which has been so accelerated, aggregates $25.0 million
or more;




     (7) failure by Parent or any of its Restricted Subsidiaries to pay final judgments
entered by a court or courts of competent jurisdiction aggregating in excess of $25.0
million (excluding amounts covered by insurance provided by a carrier that has acknowledged
coverage in writing and has the ability to perform), which judgments are not paid, bonded,
discharged, stayed, annulled or rescinded for a period of 60 days;



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     (8) except as permitted by this Indenture, any Note Guarantee is held in any judicial
proceeding to be unenforceable or invalid or ceases for any reason to be in full force and
effect, or any Guarantor, or any Person acting on behalf of any Guarantor, denies or
disaffirms its obligations under its Note Guarantee; and




     (9) Parent or any of its Restricted Subsidiaries that is a Significant Subsidiary or
any group of Restricted Subsidiaries of Parent that, taken together, would constitute a
Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law:




     (A) commences a voluntary case,




     (B) consents to the entry of an order for relief against it in an involuntary
case,




     (C) consents to the appointment of a custodian of it or for all or
substantially all of its property,




     (D) makes a general assignment for the benefit of its creditors, or




     (E) generally is not paying its debts as they become due;




     (10) a court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:




     (A) is for relief against Parent or any of its Restricted Subsidiaries that is
a Significant Subsidiary or any group of Restricted Subsidiaries of Parent that,
taken together, would constitute a Significant Subsidiary in an involuntary case;




     (B) appoints a custodian of Parent or any of its Restricted Subsidiaries that
is a Significant Subsidiary or any group of Restricted Subsidiaries of Parent that,
taken together, would constitute a Significant Subsidiary or for all or
substantially all of the property of Parent or any of its Restricted Subsidiaries
that is a Significant Subsidiary or any group of Restricted Subsidiaries of Parent
that, taken together, would constitute a Significant Subsidiary; or




     (C) orders the liquidation of Parent or any of its Restricted Subsidiaries that
is a Significant Subsidiary or any group of Restricted Subsidiaries of Parent that,
taken together, would constitute a Significant Subsidiary;




and the order or decree remains unstayed and in effect for 60 consecutive days.



Section 6.02 Acceleration.




     In the case of an Event of Default specified in clause (9) or (10) of Section 6.01 hereof,
with respect to Parent, either Issuer or any of the other Restricted Subsidiaries of Parent that is
a Significant Subsidiary or any group of Restricted Subsidiaries of Parent that, taken together,
would constitute a Significant Subsidiary, all outstanding Notes will become due and payable
immediately without further action or notice. If any other Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately; provided that no
such declaration will be permitted with respect to an Event of



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Default of the type referred to in clause (6) of Section 6.01 hereof if the underlying Payment
Default has been cured or waived or the underlying acceleration has been waived or rescinded, as
the case may be.




     Upon any such declaration, the Notes shall become due and payable immediately.



     The Holders of a majority in aggregate principal amount of the then outstanding Notes by
written notice to the Trustee may, on behalf of all of the Holders of all the Notes, rescind an
acceleration and its consequences hereunder, if the rescission would not conflict with any judgment
or decree and if all existing Events of Default (except nonpayment of principal of, premium on, if
any, interest or Special Interest, if any, on the Notes that has become due solely because of the
acceleration) have been cured or waived.



     To the extent that the Issuers elect, the sole remedy for an Event of Default relating to the
reporting obligations in this Indenture, as set forth in Section 4.03, will, for the 180 days after
the occurrence of such Event of Default, consist exclusively of the right to receive additional
interest on the Notes at a rate equal to 0.50% per annum of the principal amount of the Notes.
This additional interest will be payable in the same manner and on the same dates as the stated
interest payable on the Notes. The additional interest will accrue on all outstanding Notes from,
and including, the date on which an Event of Default relating to a failure to comply with the
reporting obligations in this Indenture first occurs to, but not including, the 180th day
thereafter (or such earlier date on which the Event of Default relating to the reporting
obligations shall have been cured or waived). On such 180th day, such additional interest shall
cease to accrue and the Notes will be subject to acceleration as provided above. If the Issuers do
not elect to pay the additional interest during the continuance of such an Event of Default in
accordance with this paragraph, the Notes will be subject to acceleration as provided above.



Section 6.03 Other Remedies.




     If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy
to collect the payment of principal of, premium on, if any, interest or Special Interest, if any,
on, the Notes or to enforce the performance of any provision of the Notes or this Indenture.



     The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not
produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note
in exercising any right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.



Section 6.04 Waiver of Past Defaults.




     The Holders of a majority in aggregate principal amount of the then outstanding Notes by
written notice to the Trustee may, on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences hereunder, except a continuing Default or Event of
Default in the payment of principal of, premium on, if any, interest or Special Interest, if any,
on, the Notes (including in connection with an offer to purchase); provided, however, that the
Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an
acceleration and its consequences, including any related payment default that resulted from such
acceleration. Upon any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.



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Section 6.05 Control by Majority.




     Holders of a majority in aggregate principal amount of the then outstanding Notes may direct
the time, method and place of conducting any proceeding for exercising any remedy available to the
Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to
follow any direction that conflicts with law or this Indenture that the Trustee determines may be
unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in
personal liability. The Trustee may withhold from Holders of the Notes notice of any Default or
Event of Default if it determines that withholding notice is in the Holders’ interest, except a
Default or Event of Default specified in clauses (1), (2), (9) or (10) of Section 6.01.



Section 6.06 Limitation on Suits.




     No Holder of a Note may pursue any remedy with respect to this Indenture or the Notes unless:




     (1) such Holder has previously given to the Trustee written notice that an Event of
Default is continuing;




     (2) Holders of at least 25% in aggregate principal amount of the then outstanding Notes
make a written request to the Trustee to pursue the remedy;




     (3) such Holder or Holders offer and, if requested, provide to the Trustee security or
indemnity reasonably satisfactory to the Trustee against any loss, liability or expense;




     (4) the Trustee does not comply with such request within 60 days after receipt of the
request and the offer of security or indemnity; and




     (5) during such 60-day period, Holders of a majority in aggregate principal amount of
the then outstanding Notes do not give the Trustee a direction inconsistent with such
request.



     A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a
Note or to obtain a preference or priority over another Holder of a Note.



Section 6.07 Rights of Holders of Notes to Receive Payment.




     Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to
receive payment of principal of, premium on, if any, interest or Special Interest, if any, on, the
Note, on or after the respective due dates expressed in the Note (including in connection with an
offer to purchase), or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such Holder.



Section 6.08 Collection Suit by Trustee.




     If an Event of Default specified in Section 6.01(1) or (2) hereof occurs and is continuing,
the Trustee is authorized to recover judgment in its own name and as trustee of an express trust
against the Issuers for the whole amount of principal of, premium on, if any, interest and Special
Interest, if any, remaining unpaid on, the Notes and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel.



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Section 6.09 Trustee May File Proofs of Claim.




     The Trustee is authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel) and the Holders of the Notes allowed in any judicial proceedings relative to either of the
Issuers (or any other obligor upon the Notes), its creditors or its property and shall be entitled
and empowered to collect, receive and distribute any money or other property payable or deliverable
on any such claims and any custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder
in any such proceeding.



Section 6.10 Priorities.




     If the Trustee collects any money or property pursuant to this Article 6, it shall pay out the
money or property in the following order:




     First: to the Trustee, its agents and attorneys for amounts due under Section 7.07
hereof, including payment of all compensation, expenses and liabilities incurred, and all
advances made, by the Trustee and the costs and expenses of collection;




     Second: to Holders of Notes for amounts due and unpaid on the Notes for principal,
premium, if any, interest and Special Interest, if any, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes for principal,
premium, if any, interest and Special Interest, if any, respectively; and




     Third: to the Issuers or to such party as a court of competent jurisdiction shall
direct.



     The Trustee may fix a record date and payment date for any payment to Holders of Notes
pursuant to this Section 6.10.



Section 6.11 Undertaking for Costs.




     In any suit for the enforcement of any right or remedy under this Indenture or in any suit
against the Trustee for any action taken or omitted by it as a trustee, a court in its discretion
may require the filing by any party litigant in the suit of an undertaking to pay the costs of the
suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’
fees, against any party litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder of a Note pursuant to Section 6.07



75









 




hereof, or a suit by Holders of more than 10% in aggregate principal amount of the then
outstanding Notes.




ARTICLE 7

TRUSTEE




Section 7.01 Duties of Trustee.




     (a) If an Event of Default has occurred and is continuing, the Trustee will exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of care and skill in
its exercise, as a prudent person would exercise or use under the circumstances in the conduct of
such person’s own affairs.



     (b) Except during the continuance of an Event of Default:




     (1) the duties of the Trustee will be determined solely by the express provisions of
this Indenture and the Trustee need perform only those duties that are specifically set
forth in this Indenture and no others, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and




     (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee will examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.



     (c) The Trustee may not be relieved from liabilities for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:




     (1) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;




     (2) the Trustee will not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts; and




     (3) the Trustee will not be liable with respect to any action it takes or omits to take
in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.



     (d) Whether or not therein expressly so provided, every provision of this Indenture that in
any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section 7.01.



     (e) No provision of this Indenture will require the Trustee to expend or risk its own funds or
incur any liability. The Trustee will be under no obligation to exercise any of its rights and
powers under this Indenture at the request of any Holders, unless such Holder has offered to the
Trustee security and indemnity satisfactory to it against any loss, liability or expense.



     (f) The Trustee will not be liable for interest on any money received by it except as the
Trustee may agree in writing with the Issuers. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.



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     (g) The Trustee shall not be liable with respect to any action taken or omitted to be taken by
it in good faith in accordance with the written direction of the Holders of not less than a
majority in principal amount of the Notes at the time outstanding determined as provided in Section
2.08.



     (h) The Trustee shall not be liable in respect of any payment (as to the correctness of
amount, entitlement to receive or any other matters relating to payment) or notice effected by the
Issuers or any Paying Agent (other than the Trustee) or any records maintained by any co-registrar
(other than the Trustee) with respect to the Notes.



     (i) If any party fails to deliver a notice relating to an event the fact of which, pursuant to
this Indenture, requires notice to be sent to the Trustee, the Trustee may conclusively rely on its
failure to receive such notice as reason to act as if no such event occurred unless a Responsible
Officer of the Trustee has actual knowledge therefore or unless the Trustee has otherwise received
written notice thereof.



     (j) The Trustee shall not be deemed to have knowledge of any Event of Default hereunder unless
a Responsible Officer of the Trustee has actual knowledge thereof or unless the Trustee shall have
been notified in writing of such Event of Default by the Issuers or a Holder.



Section 7.02 Rights of Trustee.




     (a) The Trustee may conclusively rely upon any document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document.



     (b) Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate
or an Opinion of Counsel or both. The Trustee will not be liable for any action it takes or omits
to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee
may consult with counsel and the written advice of such counsel or any Opinion of Counsel will be
full and complete authorization and protection from liability in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.



     (c) The Trustee may act through its attorneys and agents and will not be responsible for the
misconduct or negligence of any agent appointed with due care.



     (d) The Trustee will not be liable for any action it takes or omits to take in good faith that
it believes to be authorized or within the rights or powers conferred upon it by this Indenture.



     (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction
or notice from either of the Issuers will be sufficient if signed by an Officer of the relevant
Issuer.



     (f) The Trustee will be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any of the Holders unless such Holders have
offered to the Trustee reasonable indemnity or security satisfactory to it against the losses,
liabilities and expenses that might be incurred by it in compliance with such request or direction.



     (g) The rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and
other Person employed to act hereunder.



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     (h) The Trustee may request that the Issuers deliver an Officers’ Certificate setting forth
the names of individuals and/or titles of officers authorized at such time to take specified
actions pursuant to this Indenture, which Officers’ Certificate may be signed by any person
authorized to sign an Officers’ Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.



     (i) Any permissive right or authority granted to the Trustee shall not be construed as a
mandatory duty.



Section 7.03 Individual Rights of Trustee.




     The Trustee in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuers or any Affiliate of the Issuers with the same rights it
would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for permission to
continue as Trustee (if this Indenture has been qualified under the TIA) or resign. Any Agent may
do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11
hereof.



Section 7.04 Trustee’s Disclaimer.




     The Trustee will not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the Issuers’ use of the
proceeds from the Notes or any money paid to the Issuers or upon the Issuers’ direction under any
provision of this Indenture, it will not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it will not be responsible for any
statement or recital herein or any statement in the Notes or any other document in connection with
the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.



Section 7.05 Notice of Defaults.




     If a Default or Event of Default occurs and is continuing and if it is known to the Trustee,
the Trustee will mail to Holders of Notes a notice of the Default or Event of Default within 90
days after it occurs. Except in the case of a Default or Event of Default in payment of principal
of, premium on, if any, interest or Special Interest, if any, on, any Note, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the Notes.



Section 7.06 Reports by Trustee to Holders of the Notes.




     (a) Within 60 days after each May 15 beginning with the May 15 following the date of this
Indenture, and for so long as Notes remain outstanding, the Trustee will mail to the Holders of the
Notes a brief report dated as of such reporting date that complies with TIA §313(a) (but if no
event described in TIA §313(a) has occurred within the twelve months preceding the reporting date,
no report need be transmitted). The Trustee also will comply with TIA §313(b)(2). The Trustee
will also transmit by mail all reports as required by TIA §313(c).



     (b) A copy of each report at the time of its mailing to the Holders of Notes will be mailed by
the Trustee to the Issuers and filed by the Trustee with the SEC and each stock exchange on which
the Notes are listed in accordance with TIA §313(d). The Issuers will promptly notify the Trustee
when the Notes are listed on any stock exchange.



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Section 7.07 Compensation and Indemnity.




     (a) The Issuers will pay to the Trustee from time to time compensation as agreed to in writing
for its acceptance of this Indenture and services hereunder. The Trustee’s compensation will not
be limited by any law on compensation of a Trustee of an express trust. The Issuers will reimburse
the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred
or made by it in addition to the compensation for its services. Such expenses will include the
reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.



     (b) The Issuers and the Guarantors will indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and expenses of enforcing
this Indenture against the Issuers and the Guarantors (including this Section 7.07) and defending
itself against any claim (whether asserted by the Issuers, the Guarantors, any Holder or any other
Person) or liability in connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be attributable to its
negligence or bad faith. The Trustee will notify the Issuers promptly of any claim for which it
may seek indemnity. Failure by the Trustee to so notify the Issuers will not relieve the Issuers
or any of the Guarantors of their obligations hereunder. The Issuers or such Guarantor will defend
the claim and the Trustee will cooperate in the defense. The Trustee may have separate counsel and
the Issuers will pay the reasonable fees and expenses of such counsel. Neither of the Issuers nor
any Guarantor need pay for any settlement made without its consent, which consent will not be
unreasonably withheld.



     (c) The obligations of the Issuers and the Guarantors under this Section 7.07 will survive the
satisfaction and discharge of this Indenture.



     (d) To secure the Issuers’ and the Guarantors’ payment obligations in this Section 7.07, the
Trustee will have a Lien prior to the Notes on all money or property held or collected by the
Trustee, except that held in trust to pay principal of, premium on, if any, interest or Special
Interest, if any, on, particular Notes. Such Lien will survive the satisfaction and discharge of
this Indenture.



     (e) When the Trustee incurs expenses or renders services after an Event of Default specified
in Section 6.01(9) or (10) hereof occurs, the expenses and the compensation for the services
(including the fees and expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.



     (f) The Trustee will comply with the provisions of TIA §313(b)(2) to the extent applicable.



Section 7.08 Replacement of Trustee.




     (a) A resignation or removal of the Trustee and appointment of a successor Trustee will become
effective only upon the successor Trustee’s acceptance of appointment as provided in this Section
7.08.



     (b) The Trustee may resign in writing at any time and be discharged from the trust hereby
created by so notifying the Issuers. The Holders of a majority in aggregate principal amount of
the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuers in
writing. The Issuers may remove the Trustee if:




     (1) the Trustee fails to comply with Section 7.10 hereof;



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     (2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is
entered with respect to the Trustee under any Bankruptcy Law;




     (3) a custodian or public officer takes charge of the Trustee or its property; or




     (4) the Trustee becomes incapable of acting.



     (c) If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for
any reason, the Issuers will promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in aggregate principal amount of the then
outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the
Issuers.



     (d) If a successor Trustee does not take office within 60 days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Issuers, or the Holders of at least 10% in
aggregate principal amount of the then outstanding Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.



     (e) If the Trustee, after written request by any Holder who has been a Holder for at least six
months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.



     (f) A successor Trustee will deliver a written acceptance of its appointment to the retiring
Trustee and to the Issuers. Thereupon, the resignation or removal of the retiring Trustee will
become effective, and the successor Trustee will have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee will mail a notice of its succession to
Holders. The retiring Trustee will promptly transfer all property held by it as Trustee to the
successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to
the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Issuers’ obligations under Section 7.07 hereof will continue for the
benefit of the retiring Trustee.



Section 7.09 Successor Trustee by Merger, etc.




     If the Trustee consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation without any further
act will be the successor Trustee.



Section 7.10 Eligibility; Disqualification.




     There will at all times be a Trustee hereunder that is a corporation organized and doing
business under the laws of the United States of America or of any state thereof that is authorized
under such laws to exercise corporate Trustee power, that is subject to supervision or examination
by federal or state authorities and that has a combined capital and surplus of at least $100.0
million as set forth in its most recent published annual report of condition.



     This Indenture will always have a Trustee who satisfies the requirements of TIA §310(a)(1),
(2) and (5). The Trustee is subject to TIA §310(b).



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Section 7.11 Preferential Collection of Claims Against the Issuers.




     The Trustee is subject to TIA §311(a), excluding any creditor relationship listed in TIA
§311(b). A Trustee who has resigned or been removed shall be subject to TIA §311(a) to the extent
indicated therein.



ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE




Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.




     MagnaChip may at any time, at the option of its Board of Directors evidenced by a resolution
set forth in an Officers’ Certificate, elect to have either Section 8.02 or 8.03 hereof be applied
to all outstanding Notes upon compliance with the conditions set forth below in this Article 8.



Section 8.02 Legal Defeasance and Discharge.




     Upon the MagnaChip’s exercise under Section 8.01 hereof of the option applicable to this
Section 8.02, the Issuers and each of the Guarantors will, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their
obligations with respect to all outstanding Notes (including the Note Guarantees) on the date the
conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose,
Legal Defeasance means that the Issuers and the Guarantors will be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Notes (including the Note
Guarantees), which will thereafter be deemed to be “outstanding” only for the purposes of Section
8.05 hereof and the other Sections of this Indenture referred to in clauses (1) and (2) below, and
to have satisfied all their other obligations under such Notes, the Note Guarantees and this
Indenture (and the Trustee, on demand of and at the expense of the Issuers, shall execute proper
instruments acknowledging the same), except for the following provisions which will survive until
otherwise terminated or discharged hereunder:




     (1) the rights of Holders of outstanding Notes to receive payments in respect of the
principal of, premium on, if any, interest or Special Interest, if any, on, such Notes when
such payments are due from the trust referred to in Section 8.04 hereof;




     (2) the Issuers’ obligations with respect to such Notes under Article 2 and Section
4.02 hereof;




     (3) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the
Issuers’ and the Guarantors’ obligations in connection therewith; and




     (4) this Article 8.



     Subject to compliance with this Article 8, MagnaChip may exercise its option under this
Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.



Section 8.03 Covenant Defeasance.




     Upon MagnaChip’s exercise under Section 8.01 hereof of the option applicable to this Section
8.03, the Issuers and each of the Guarantors will, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be released from each of their obligations under the covenants
contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18, 4.19 and
4.20 hereof and clause (4) of



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Section 5.01 and clause (4) of Section 5.03 hereof with respect to the outstanding Notes on
and after the date the conditions set forth in Section 8.04 hereof are satisfied (hereinafter,
“Covenant Defeasance”), and the Notes will thereafter be deemed not “outstanding” for the purposes
of any direction, waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all
other purposes hereunder (it being understood that such Notes will not be deemed outstanding for
accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes and Note Guarantees, the Issuers and the Guarantors may omit to comply with and
will have no liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other provision herein or in any
other document and such omission to comply will not constitute a Default or an Event of Default
under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such
Notes and Note Guarantees will be unaffected thereby. In addition, upon MagnaChip’s exercise under
Section 8.01 hereof of the option applicable to this Section 8.03, subject to the satisfaction of
the conditions set forth in Section 8.04 hereof, Sections 6.01(3), (4), (5), (6), (7) and (8)
hereof will not constitute Events of Default.




Section 8.04 Conditions to Legal or Covenant Defeasance.




     In order to exercise either Legal Defeasance or Covenant Defeasance under either Section 8.02
or 8.03 hereof:




     (1) MagnaChip must irrevocably deposit with the Trustee, in trust, for the benefit of
the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized
investment bank, appraisal firm, or firm of independent public accountants, to pay the
principal of, premium on, if any, interest and Special Interest, if any, on, the outstanding
Notes on the stated date for payment thereof or on the applicable redemption date, as the
case may be, and MagnaChip must specify whether the Notes are being defeased to such stated
date for payment or to a particular redemption date;




     (2) in the case of an election under Section 8.02 hereof, MagnaChip must deliver to the
Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that:




     (A) MagnaChip has received from, or there has been published by, the Internal
Revenue Service a ruling; or




     (B) since the date of this Indenture, there has been a change in the applicable
federal income tax law,



in either case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders of the outstanding Notes will not recognize income, gain,
deduction or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;




     (3) in the case of an election under Section 8.03 hereof, MagnaChip must deliver to the
Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the
Holders of the outstanding Notes will not recognize income, gain, deduction or loss for
federal income tax purposes as a result of such Covenant Defeasance and will be subject to
federal



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income tax on the same amounts, in the same manner and at the same times as would have
been the case if such Covenant Defeasance had not occurred;




     (4) no Default or Event of Default shall have occurred and is continuing on the date of
such deposit (other than a Default or Event of Default resulting from the borrowing of funds
to be applied to such deposit (and any similar concurrent deposit relating to other
Indebtedness), and the granting of Liens to secure such borrowings);




     (5) such Legal Defeasance or Covenant Defeasance will not result in a breach or
violation of, or constitute a default under, any material agreement or instrument (other
than this Indenture and the agreements governing any other Indebtedness being defeased,
discharged or replaced) to which the Issuers or any of the Guarantors is a party or by which
either of the Issuers or any of the Guarantors is bound;




     (6) MagnaChip must deliver to the Trustee an Officers’ Certificate stating that the
deposit was not made by MagnaChip with the intent of preferring the Holders of Notes over
the other creditors of MagnaChip with the intent of defeating, hindering, delaying or
defrauding any creditors of MagnaChip or others; and




     (7) MagnaChip must deliver to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.


Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions.




     Subject to Section 8.06 hereof, all money and non-callable Government Securities (including
the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of the
outstanding Notes will be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Issuers acting as Paying Agent) as the Trustee may determine, to the Holders
of such Notes of all sums due and to become due thereon in respect of principal, premium, if any,
interest and Special Interest, if any, but such money need not be segregated from other funds
except to the extent required by law.



     The Issuers will pay and indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against the cash or non-callable Government Securities deposited pursuant to Section
8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the outstanding Notes.



     Notwithstanding anything in this Article 8 to the contrary, the Trustee will deliver or pay to
the Issuers from time to time upon the request of the Issuers any money or non-callable Government
Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section 8.04(1) hereof), are in
excess of the amount thereof that would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance.



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Section 8.06 Repayment to MagnaChip.




     Subject to any applicable abandoned property laws, any money deposited with the Trustee or any
Paying Agent, or then held by the Issuers, in trust for the payment of the principal of, premium
on, if any, interest or Special Interest, if any, on, any Note and remaining unclaimed for two
years after such principal, premium, if any, interest or Special Interest, if any, has become due
and payable shall be paid to MagnaChip on its request or (if then held by MagnaChip) will be
discharged from such trust; and the Holder of such Note will thereafter be permitted to look only
to the Issuers for payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Issuers as Trustee thereof, will thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being required to make any
such repayment, may at the expense of the Issuers cause to be published once, in the New York Times
and The Wall Street Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which will not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining will be repaid to
MagnaChip.



Section 8.07 Reinstatement.




     If the Trustee or Paying Agent is unable to apply any U.S. dollars or non-callable Government
Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any
order or judgment of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Issuers’ and the Guarantors’ obligations under this
Indenture and the Notes and the Note Guarantees will be revived and reinstated as though no deposit
had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent
is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case
may be; provided, however, that, if the Issuers make any payment of principal of, premium on, if
any, interest or Special Interest, if any, on, any Note following the reinstatement of their
obligations, the Issuers will be subrogated to the rights of the Holders of such Notes to receive
such payment from the money held by the Trustee or Paying Agent.



ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER




Section 9.01 Without Consent of Holders of Notes.




     Notwithstanding Section 9.02 of this Indenture, without the consent of any Holder of Notes,
the Issuers, the Guarantors and the Trustee may amend or supplement this Indenture, the Notes or
the Note Guarantees:




     (1) to cure any ambiguity, defect or inconsistency;




     (2) to provide for uncertificated Notes in addition to or in place of certificated
Notes;




     (3) to provide for the assumption of the Issuers’ or a Guarantor’s obligations to the
Holders of the Notes and Note Guarantees by a successor to the Issuers or such Guarantor
pursuant to Article 5 or Article 10 hereof;




     (4) to make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights hereunder of any
Holder;




     (5) to comply with requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the TIA;



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     (6) to conform the text of this Indenture, the Notes, the Note Guarantees to any
provision of the “Description of Notes” section of the Issuers’ Offering Circular, dated
April 6, 2010, relating to the initial offering of the Notes, to the extent that such
provision in that “Description of Notes” was intended to be a verbatim recitation of a
provision of this Indenture, the Notes, the Note Guarantees, which intent may be evidenced
by an Officers’ Certificate to that effect;




     (7) to provide for the issuance of Additional Notes in accordance with the limitations
set forth in this Indenture as of the date hereof; or




     (8) to allow any Guarantor to execute a supplemental Indenture and/or a Note Guarantee
with respect to the Notes.



     Upon the request of the Issuers accompanied by a resolution of each Issuer’s Board of
Directors authorizing the execution of any such amended or supplemental indenture, and upon receipt
by the Trustee of the documents described in Section 7.02 hereof, the Trustee will join with the
Issuers and the Guarantors in the execution of any amended or supplemental indenture authorized or
permitted by the terms of this Indenture and to make any further necessary agreements and
stipulations that may be therein contained, but the Trustee will not be obligated to enter into
such amended or supplemental indenture that affects its own rights, duties or immunities under this
Indenture or otherwise.



Section 9.02 With Consent of Holders of Notes.




     Except as provided below in this Section 9.02, the Issuers and the Trustee may amend or
supplement this Indenture (including, without limitation, Section 3.09, 4.10 and 4.15 hereof) and
the Notes and the Note Guarantees with the consent of the Holders of at least a majority in
aggregate principal amount of the then outstanding Notes (including, without limitation, Additional
Notes, if any) voting as a single class (including, without limitation, consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to
Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or
Event of Default in the payment of the principal of, premium on, if any, interest or Special
Interest, if any, on, the Notes, except a payment default resulting from an acceleration that has
been rescinded) or compliance with any provision of this Indenture or the Notes or the Note
Guarantees may be waived with the consent of the Holders of a majority in aggregate principal
amount of the then outstanding Notes (including, without limitation, Additional Notes, if any)
voting as a single class (including, without limitation, consents obtained in connection with a
tender offer or exchange offer for, or purchase of, the Notes). Section 2.08 hereof shall determine
which Notes are considered to be “outstanding” for purposes of this Section 9.02.



     Upon the request of the Issuers accompanied by a resolution of each Issuer’s Board of
Directors authorizing the execution of any such amended or supplemental indenture, and upon the
filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of
Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02
hereof, the Trustee will join with the Issuers and the Guarantors in the execution of such amended
or supplemental indenture unless such amended or supplemental indenture directly affects the
Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but will not be obligated to, enter into such amended or
supplemental indenture.



     It is not necessary for the consent of the Holders of Notes under this Section 9.02 to approve
the particular form of any proposed amendment, supplement or waiver, but it is sufficient if such
consent approves the substance thereof.



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     After an amendment, supplement or waiver under this Section 9.02 becomes effective, the
Issuers will mail to the Holders of Notes affected thereby a notice briefly describing the
amendment, supplement or waiver. Any failure of the Issuers to mail such notice, or any defect
therein, will not, however, in any way impair or affect the validity of any such amended or
supplemental indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding voting as a single class may
waive compliance in a particular instance by the Issuers with any provision of this Indenture, the
Notes or the Note Guarantees. However, without the consent of each Holder affected, an amendment,
supplement or waiver under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):




     (1) reduce the principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver;




     (2) reduce the principal of or change the fixed maturity of any Note or alter or waive
any of the provisions with respect to the redemption of the Notes (except as provided above
with respect to Sections 3.09, 4.10 and 4.15 hereof);




     (3) reduce the rate of or change the time for payment of interest, including default
interest, on any Note;




     (4) waive a Default or Event of Default in the payment of principal of, premium on, if
any, interest or Special Interest, if any, on, the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate principal
amount of the then outstanding Notes and a waiver of the payment default that resulted from
such acceleration);




     (5) make any Note payable in money other than that stated in the Notes;




     (6) make any change in the provisions of this Indenture relating to waivers of past
Defaults or the rights of Holders of Notes to receive payments of principal of, premium on,
if any, interest or Special Interest, if any, on, the Notes;




     (7) waive a redemption payment with respect to any Note (other than a payment required
by Sections 3.09, 4.10 or 4.15 hereof);




     (8) release any Guarantor from any of its obligations under its Note Guarantee or this
Indenture, except in accordance with the terms of this Indenture; or




     (9) make any change in the preceding amendment and waiver provisions.



Section 9.03 Compliance with Trust Indenture Act.




     Every amendment or supplement to this Indenture or the Notes will be set forth in a amended or
supplemental indenture that complies with the TIA as then in effect.



Section 9.04 Revocation and Effect of Consents.




     Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a
Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of
the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written notice of revocation
before the date the amendment,



86









 




supplement or waiver becomes effective. An amendment, supplement or waiver becomes effective
in accordance with its terms and thereafter binds every applicable Holder.




Section 9.05 Notation on or Exchange of Notes.




     The Trustee may place an appropriate notation about an amendment, supplement or waiver on any
Note thereafter authenticated. The Issuers in exchange for all Notes may issue and the Trustee
shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.



     Failure to make the appropriate notation or issue a new Note will not affect the validity and
effect of such amendment, supplement or waiver.



Section 9.06 Trustee to Sign Amendments, etc.




     The Trustee will sign any amended or supplemental indenture authorized pursuant to this
Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. The Issuers may not sign an amended or supplemental indenture until
the Board of Directors of each Issuer approves it. In executing any amended or supplemental
indenture, the Trustee will be entitled to receive and (subject to Section 7.01 hereof) will be
fully protected in relying upon, in addition to the documents required by Section 12.04 hereof, an
Officers’ Certificate and an Opinion of Counsel stating that the execution of such amended or
supplemental indenture is authorized or permitted by this Indenture.



ARTICLE 10

NOTE GUARANTEES




Section 10.01 Guarantee.




     (a) Subject to this Article 10, each of the Guarantors hereby, jointly and severally,
unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and
to the Trustee and its successors and assigns, irrespective of the validity and enforceability of
this Indenture, the Notes or the obligations of the Issuers hereunder or thereunder, that:




     (1) the principal of, premium on, if any, interest and Special Interest, if any, on,
the Notes will be promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of, premium on, if any,
interest and Special Interest, if any, on, the Notes, if lawful, and all other obligations
of the Issuers to the Holders or the Trustee hereunder or thereunder will be promptly paid
in full or performed, all in accordance with the terms hereof and thereof; and




     (2) in case of any extension of time of payment or renewal of any Notes or any of such
other obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.



     Failing payment when due of any amount so guaranteed or any performance so guaranteed for
whatever reason, the Guarantors will be jointly and severally obligated to pay the same
immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.



87









 





     (b) The Guarantors hereby agree that their obligations hereunder are unconditional,
irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with
respect to any provisions hereof or thereof, the recovery of any judgment against the Issuers, any
action to enforce the same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Issuers, any right to require a proceeding first against the Issuers, protest,
notice and all demands whatsoever and covenant that this Note Guarantee will not be discharged
except by complete performance of the obligations contained in the Notes and this Indenture.



     (c) If any Holder or the Trustee is required by any court or otherwise to return to the
Issuers, the Guarantors or any custodian, trustee, liquidator or other similar official acting in
relation to either the Issuers or the Guarantors, any amount paid by either to the Trustee or such
Holder, this Note Guarantee, to the extent theretofore discharged, will be reinstated in full force
and effect.



     (d) Each Guarantor agrees that it will not be entitled to any right of subrogation in relation
to the Holders in respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on
the one hand, and the Holders and the Trustee, on the other hand, (1) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes
of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (2) in the event of any
declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations
(whether or not due and payable) will forthwith become due and payable by the Guarantors for the
purpose of this Note Guarantee. The Guarantors will have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the rights of the
Holders under the Note Guarantee.



Section 10.02 Limitation on Guarantor Liability.




     Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the
intention of all such parties that the Note Guarantee of such Guarantor not constitute a fraudulent
transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any
Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors
hereby irrevocably agree that the obligations of such Guarantor will be limited to the maximum
amount that will, after giving effect to such maximum amount and all other contingent and fixed
liabilities of such Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under this Article 10, result in
the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent transfer
or conveyance.



Section 10.03 Execution and Delivery of Note Guarantee.




     To evidence its Note Guarantee set forth in Section 10.01 hereof, each Guarantor hereby agrees
that a notation of such Note Guarantee substantially in the form attached as Exhibit E hereto will
be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee
and that this Indenture will be executed on behalf of such Guarantor by one of its Officers.



88









 





     Each Guarantor hereby agrees that its Note Guarantee set forth in Section 10.01 hereof will
remain in full force and effect notwithstanding any failure to endorse on each Note a notation of
such Note Guarantee.



     If an Officer whose signature is on this Indenture or on the Note Guarantee no longer holds
that office at the time the Trustee authenticates the Note on which a Note Guarantee is endorsed,
the Note Guarantee will be valid nevertheless.



     The delivery of any Note by the Trustee, after the authentication thereof hereunder, will
constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of the
Guarantors.



     In the event that Parent or any of its Restricted Subsidiaries creates or acquires any
Subsidiary after the Issue Date, if required by Section 4.19 hereof, the Issuers will cause such
Subsidiary to comply with the provisions of Section 4.19 hereof and this Article 10, to the extent
applicable.



Section 10.04 Guarantors May Consolidate, etc., on Certain Terms.




     Except as otherwise provided in Section 10.05 hereof, no Guarantor may sell or otherwise
dispose of all or substantially all of its assets to, or consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person) another Person, other than either Issuer or
another Guarantor, unless:




     (1) immediately after giving effect to such transaction, no Default or Event of Default
exists; and




     (2) either:




          (a) subject to Section 10.05 hereof, the Person acquiring the property in any such sale
or disposition or the Person formed by or surviving any such consolidation or merger
unconditionally assumes all the obligations of that Guarantor under its Note Guarantee, this
Indenture and the Registration Rights Agreement on the terms set forth herein or therein,
pursuant to a supplemental indenture in form and substance reasonably satisfactory to the
Trustee; or




          (b) the Net Proceeds of such sale or other disposition are applied in accordance with
the applicable provisions of this Indenture, including without limitation, Section 4.10
hereof to the extent that such sale or disposition constitutes an Asset Sale.



     In case of any such consolidation, merger, sale or conveyance and upon the assumption by the
successor Person, by supplemental indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the Note Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be performed by the
Guarantor, such successor Person will succeed to and be substituted for the Guarantor with the same
effect as if it had been named herein as a Guarantor. Such successor Person thereupon may cause to
be signed any or all of the Note Guarantees to be endorsed upon all of the Notes issuable hereunder
which theretofore shall not have been signed by the Issuers and delivered to the Trustee. All the
Note Guarantees so issued will in all respects have the same legal rank and benefit under this
Indenture as the Note Guarantees theretofore and thereafter issued in accordance with the terms of
this Indenture as though all of such Note Guarantees had been issued at the date of the execution
hereof.



     Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses 2(a) and (b)
above, nothing contained in this Indenture or in any of the Notes will prevent any consolidation or
merger of a



89









 




Guarantor with or into the Issuers or another Guarantor, or will prevent any sale or
conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the
Issuers or another Guarantor.




Section 10.05. Releases.




     (a) In the event of any sale or other disposition of all or substantially all of the assets of
any Guarantor, by way of merger, consolidation or otherwise, to a Person that is not (either before
or after giving effect to such transaction) Parent or a Restricted Subsidiary of Parent, then the
corporation acquiring the property will be released and relieved of any obligations under the Note
Guarantee;



     (b) In the event of any sale or other disposition of Capital Stock of any Guarantor to a
Person that is not (either before or after giving effect to such transaction) Parent or a
Restricted Subsidiary of Parent and such Guarantor ceases to be a Restricted Subsidiary of Parent
as a result of the sale or other disposition, then such Guarantor will be released and relieved of
any obligations under its Note Guarantee;



provided, in both cases, that the Net Proceeds of such sale or other disposition are applied in
accordance with the applicable provisions of this Indenture, including without limitation Section
4.10 hereof. Upon delivery by the Issuers to the Trustee of an Officers’ Certificate and an
Opinion of Counsel to the effect that such sale or other disposition was made by the Issuers in
accordance with the provisions of this Indenture, including without limitation Section 4.10 hereof,
the Trustee will execute any documents reasonably required, as prepared by the Issuers and
delivered to the Trustee, in order to evidence the release of any Guarantor from its obligations
under its Note Guarantee.




     (c) Upon designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted
Subsidiary in accordance with the terms of this Indenture, such Guarantor will be released and
relieved of any obligations under its Note Guarantee.



     (d) Upon Legal Defeasance or Covenant Defeasance in accordance with Article 8 hereof or
satisfaction and discharge of this Indenture in accordance with Article 11 hereof, each Guarantor
will be released and relieved of any obligations under its Note Guarantee.



     Any Guarantor not released from its obligations under its Note Guarantee as provided in this
Section 10.05 will remain liable for the full amount of principal of, premium on, if any, interest
and Special Interest, if any, on, the Notes and for the other obligations of any Guarantor under
this Indenture as provided in this Article 10.



ARTICLE 11

SATISFACTION AND DISCHARGE




Section 11.01 Satisfaction and Discharge.




     This Indenture will be discharged and will cease to be of further effect as to all Notes
issued hereunder, when:




     (1) either:




          (a) all Notes that have been authenticated, except lost, stolen or destroyed Notes that
have been replaced or paid and Notes for whose payment money has been deposited in trust and
thereafter repaid to MagnaChip, have been delivered to the Trustee for cancellation; or



90









 






          (b) all Notes that have not been delivered to the Trustee for cancellation have become
due and payable by reason of the mailing of a notice of redemption or otherwise or will
become due and payable within one year and MagnaChip or any Guarantor has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust solely for the
benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient, without consideration of any
reinvestment of interest, to pay and discharge the entire Indebtedness on the Notes not
delivered to the Trustee for cancellation for principal, premium, if any, interest and
Special Interest, if any, to the date of maturity or redemption;




     (2) in respect of subclause (b) of clause (1) of this Section 11.01, no Default or
Event of Default has occurred and is continuing on the date of the deposit (other than a
Default or Event of Default resulting from the borrowing of funds to be applied to such
deposit and any similar deposit relating to other Indebtedness and, in each case, the
granting of Liens to secure such borrowings) and the deposit will not result in a breach or
violation of, or constitute a default under, any other instrument to which either Issuer or
any Guarantor is a party or by which the Issuers or any Guarantor is bound (other than with
respect to the borrowing of funds to be applied concurrently to make the deposit required to
effect such satisfaction and discharge and any similar concurrent deposit relating to other
Indebtedness, and in each case the granting of Liens to secure such borrowings);




     (3) an Issuer or any Guarantor has paid or caused to be paid all sums payable by it
under this Indenture; and




     (4) an Issuer has delivered irrevocable instructions to the Trustee under this
Indenture to apply the deposited money toward the payment of the Notes at maturity or on the
redemption date, as the case may be.


In addition, the Issuers must deliver an Officers’ Certificate and an Opinion of Counsel to the
Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.




     Notwithstanding the satisfaction and discharge of this Indenture, if money has been deposited
with the Trustee pursuant to subclause (b) of clause (1) of this Section 11.01, the provisions of
Sections 11.02 and 8.06 hereof will survive. In addition, nothing in this Section 11.01 will be
deemed to discharge those provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.



Section 11.02 Application of Trust Money.




     Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee
pursuant to Section 11.01 hereof shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Issuers acting as their own Paying Agent) as the Trustee may determine, to the
Persons entitled thereto, of the principal, premium, if any, interest and Special Interest, if any,
for whose payment such money has been deposited with the Trustee; but such money need not be
segregated from other funds except to the extent required by law.



     If the Trustee or Paying Agent is unable to apply any money or Government Securities in
accordance with Section 11.01 hereof by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Issuers’ and any Guarantor’s obligations under this Indenture and the Notes
shall be



91









 




revived and reinstated as though no deposit had occurred pursuant to Section 11.01 hereof;
provided that if the Issuers have made any payment of principal of, premium on, if any, interest or
Special Interest, if any, on, any Notes because of the reinstatement of their obligations, the
Issuers shall be subrogated to the rights of the Holders of such Notes to receive such payment from
the money or Government Securities held by the Trustee or Paying Agent.




ARTICLE 12

MISCELLANEOUS




Section 12.01 Trust Indenture Act Controls.




     If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by
TIA §318(c), the imposed duties will control.



Section 12.02 Notices.




     Any notice or communication by the Issuers, any Guarantor or the Trustee to the others is duly
given if in writing and delivered in Person or by first class mail (registered or certified, return
receipt requested), facsimile transmission or overnight air courier guaranteeing next day delivery,
to the others’ address:



     If to the Issuers and/or any Guarantor:


MagnaChip Semiconductor, Inc.

20400 Stevens Creek Boulevard, Suite 370

Cupertino, CA 95014

Facsimile No.: (408) 625-5990

Attention: General Counsel




     With a copy (which shall not constitute notice to an Issuer or a Guarantor) to:


DLA Piper LLP (US)

2000 University Avenue

East Palo Alto, California 94303

Facsimile No.: (650) 833-2000

Attention: Micheal J. Reagan




     If to the Trustee:


Wilmington Trust FSB

Corporate Capital Markets

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402-1544

Facsimile No.: (612) 217-5651

Attention: MagnaChip Semiconductor Administrator




     An Issuer, any Guarantor or the Trustee, by notice to the others, may designate additional or
different addresses for subsequent notices or communications.



     All notices and communications (other than those sent to Holders) will be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five Business Days after being



92









 




deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if transmitted
by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery.




     Any notice or communication to a Holder will be mailed by first class mail, certified or
registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to
its address shown on the register kept by the Registrar. Any notice or communication will also be
so mailed to any Person described in TIA §313(c), to the extent required by the TIA. Failure to
mail a notice or communication to a Holder or any defect in it will not affect its sufficiency with
respect to other Holders.



     If a notice or communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it.



     If the Issuers mail a notice or communication to Holders, they will mail a copy to the Trustee
and each Agent at the same time.



Section 12.03 Communication by Holders of Notes with Other Holders of Notes.




     Holders may communicate pursuant to TIA §312(b) with other Holders with respect to their
rights under this Indenture or the Notes. The Issuers, the Trustee, the Registrar and anyone else
shall have the protection of TIA §312(c).



Section 12.04 Certificate and Opinion as to Conditions Precedent.




     Upon any request or application by the Issuers to the Trustee to take any action under this
Indenture, the Issuers shall furnish to the Trustee:




     (1) an Officers’ Certificate in form and substance reasonably satisfactory to the
Trustee (which must include the statements set forth in Section 12.05 hereof) stating that,
in the opinion of the signers, all conditions precedent and covenants, if any, provided for
in this Indenture relating to the proposed action have been satisfied; and




     (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
(which must include the statements set forth in Section 12.05 hereof) stating that, in the
opinion of such counsel, all such conditions precedent and covenants have been satisfied.



Section 12.05 Statements Required in Certificate or Opinion.




     Each certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture (other than a certificate provided pursuant to TIA §314(a)(4)) must comply
with the provisions of TIA §314(e) and must include:




     (1) a statement that the Person making such certificate or opinion has read such
covenant or condition;




     (2) a brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion are based;




     (3) a statement that, in the opinion of such Person, he or she has made such
examination or investigation as is necessary to enable him or her to express an informed
opinion as to whether or not such covenant or condition has been satisfied; and



93









 






     (4) a statement as to whether or not, in the opinion of such Person, such condition or
covenant has been satisfied.



Section 12.06 Rules by Trustee and Agents.




     The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar
or Paying Agent may make reasonable rules and set reasonable requirements for its functions.



Section 12.07 No Personal Liability of Directors, Officers, Employees and Stockholders.




     No director, officer, employee, incorporator, stockholder, member or manager of either Issuer
or any Guarantor, as such, will have any liability for any obligations of the Issuers or the
Guarantors under the Notes, this Indenture, the Note Guarantees, or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting
a Note waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to waive liabilities
under the federal securities laws.



Section 12.08 Governing Law.




     THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE,
THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF
LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY. FOR THE AVOIDANCE OF DOUBT, ARTICLES 86 TO 94-8 OF THE LUXEMBOURG LAW OF 10 AUGUST 1915
ON COMMERCIAL COMPANIES AS AMENDED ARE HEREBY EXCLUDED. The Issuers and the Guarantors agree that
any suit or proceeding arising in respect of this Indenture will be tried exclusively in the U.S.
District Court for the Southern District of New York or, if that court does not have subject matter
jurisdiction, in any state court located in The City and County of New York and the Issuers and the
Guarantors agree to submit to the jurisdiction of, and to venue in, such courts.



     Luxco and each Guarantor not organized under the laws of the United States or any state
thereof acknowledges that it has, by separate written agreement, irrevocably designated and
appointed National Corporate Research, Ltd. (and its successors and assigns) as its authorized
agent for service of process in any suit, action or proceeding arising out of or relating to this
Agreement or brought with respect to the Notes under U.S. federal or state securities laws.



Section 12.09 No Adverse Interpretation of Other Agreements.




     This Indenture may not be used to interpret any other indenture, loan or debt agreement of the
Issuers, Parent or Parent’s Subsidiaries or of any other Person. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.



Section 12.10 Successors.




     All agreements of the Issuers in this Indenture and the Notes will bind their successors. All
agreements of the Trustee in this Indenture will bind its successors. All agreements of each
Guarantor in this Indenture will bind its successors, except as otherwise provided in Section 10.05
hereof.



94









 





Section 12.11 Severability.




     In case any provision in this Indenture or in the Notes is invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions will not in any way be
affected or impaired thereby.



Section 12.12 Counterpart Originals.




     The parties may sign any number of copies of this Indenture. Each signed copy will be an
original, but all of them together represent the same agreement.



Section 12.13 Table of Contents, Headings, etc.




     The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be considered a part of
this Indenture and will in no way modify or restrict any of the terms or provisions hereof.



[Signatures on following page]









95









 








SIGNATURES



Dated as of the date first written above.




	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR S.A.

 	 
	 	By:  	/s/ John McFarland
 	 
	 	 	Name:  	John McFarland 	 
	 	 	Title:  	Director 	 
	 



	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR FINANCE COMPANY

 	 
	 	By:  	/s/ Margaret Sakai
 	 
	 	 	Name:  	Margaret Sakai 	 
	 	 	Title:  	Chief Financial Officer 	 
	 



	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR LLC

 	 
	 	By:  	/s/ Margaret Sakai
 	 
	 	 	Name:  	Margaret Sakai 	 
	 	 	Title:  	Senior Vice President and Chief Financial
Officer 	 
	 
	 	MAGNACHIP SEMICONDUCTOR SA HOLDINGS LLC

 	 
	 	By:  	/s/ Margaret Sakai
 	 
	 	 	Name:  	Margaret Sakai 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	MAGNACHIP SEMICONDUCTOR, INC. (U.S.)

 	 
	 	By:  	/s/ Margaret Sakai
 	 
	 	 	Name:  	Margaret Sakai 	 
	 	 	Title:  	Treasurer and Chief Financial Officer 	 
	 



[Signature Page to Indenture]





 









 





	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR B.V. (NETHERLANDS)

 	 
	 	By:  	/s/ John McFarland
 	 
	 	 	Name:  	John McFarland 	 
	 	 	Title:  	Attorney-in-fact 	 
	 
	 	MAGNACHIP SEMICONDUCTOR LTD. (TAIWAN)

 	 
	 	By:  	/s/ Margaret Sakai
 	 
	 	 	Name:  	Margaret Sakai 	 
	 	 	Title:  	Director 	 
	 
	 	MAGNACHIP SEMICONDUCTOR LTD. (UNITED KINGDOM)

 	 
	 	By:  	/s/ Brent Rowe
 	 
	 	 	Name:  	Brent Rowe 	 
	 	 	Title:  	Director 	 
	 
	 	MAGNACHIP SEMICONDUCTOR INC. (JAPAN)

 	 
	 	By:  	                 /s/ Margaret Sakai
 	 
	 	 	Name:  	Margaret Sakai 	 
	 	 	Title:  	Director 	 
	 
	 	MAGNACHIP SEMICONDUCTOR HOLDING 

COMPANY LIMITED (BRITISH VIRGIN ISLANDS)

 	 
	 	By:  	/s/ John McFarland
 	 
	 	 	Name:  	John McFarland 	 
	 	 	Title:  	Director 	 
	 



[Signature Page to Indenture]







 









 








	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR LTD. (HONG KONG)

 	 
	 	By:  	/s/ Margaret Sakai
 	 
	 	 	Name:  	Margaret Sakai 	 
	 	 	Title:  	Director 	 
	 



	 	 	 	 	 	 	 	 	 

	SEALED with the COMMON SEAL of

	 	 	)	 	 	 	 	 
	MAGNACHIP SEMICONDUCTOR

	 	 	)	 	 	 	 	 
	LIMITED

	 	 	)	 	 	 	 	 
	and SIGNED by

	 	 	)	 	 	 	 	 
	in the presence of:

	 	 	)	 	 	 

	 	 
	 
	 	 	 	 	 	 

	 	 
	Witness: /s/ [ILLEGIBLE]
 

Name:

	 	 	 	 	 	Witness: /s/ [ILLEGIBLE]
 

Name:
	 	 
	Address:

	 	 	 	 	 	Address:	 	 






[Signature Page to Indenture]





 









 








	 	 	 	 	 
	 	WILMINGTON TRUST FSB,

as Trustee

 	 
	 	By:  	/s/ Jane Schwelger
 	 
	 	 	Name:  	Jane Schwelger 	 
	 	 	Title:  	Vice President 	 
	 



[Signature Page to Indenture]




 











 





EXHIBIT A1




[Face of Senior Note]



CUSIP/CINS [55932R AG2][L62495 AD5]

ISIN[US55932RAG20][USL62495AD58]




10.500% Senior Notes due 2018




			
	 	 	 
	No. ___
	 	$                    






MAGNACHIP SEMICONDUCTOR S.A.

and

MAGNACHIP SEMICONDUCTOR FINANCE COMPANY



jointly and severally promise to pay to                      or registered assigns,




the principal sum of 






DOLLARS* on April 15, 2018.



Interest Payment Dates: April 15 and October 15



Record Dates: April 1 and October 1



Dated:                     , 2010




	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR S.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	MAGNACHIP SEMICONDUCTOR FINANCE COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



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This is one of the Notes referred to

in the within-mentioned Indenture:



WILMINGTON TRUST FSB,

as Trustee




	 	 	 	 	 

	By:
	 	 	 	 
	 

	 

Authorized Signatory
	 
	 
	 	 	 	 
	Date:
	 	 	 	 
	 

	 

	 






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[Back of Note]

10.500% Senior Notes due 2018



[Insert the following Global Note Legend, if applicable pursuant to the provisions of the
Indenture:



THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS
NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE
BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED
TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE
MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS.



UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE ISSUERS OR THEIR AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]



[Insert the following Private Placement Legend, if applicable pursuant to the provisions of the
Indenture:



THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”) AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (A) (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR
WITHIN THE MEANING OF RULE 501 OF REGULATION D UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.]







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     Capitalized terms used herein have the meanings assigned to them in the Indenture referred to
below unless otherwise indicated.




     (1) Interest. MagnaChip Semiconductor S.A., a Luxembourg public
limited liability company (société anonyme) with a registered office at 74, rue de Merl,
B.P. 709 L-2146 Luxembourg registered with the register of commerce and companies of
Luxembourg under number B-97483 (“MagnaChip”), and MagnaChip Semiconductor Finance Company,
a Delaware corporation (“FinanceCo” and, together with MagnaChip, the “Issuers”), jointly
and severally promise to pay or cause to be paid interest on the principal amount of this
Note at 10.500% per annum from                     , ___until maturity and shall pay the
Special Interest, if any, payable pursuant to the Registration Rights Agreement referred to
below. The Issuers will pay interest and Special Interest, if any, semi-annually in arrears
on April 15 and October 15 of each year, or if any such day is not a Business Day, on the
next succeeding Business Day (each, an “Interest Payment Date”). Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance; provided that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall accrue from
such next succeeding Interest Payment Date; provided further that the first Interest Payment
Date shall be                     , 20___. The Issuers will pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, from time to time on demand at a rate that is 1% higher than the then applicable
interest rate on the Notes to the extent lawful; they will pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments
of interest and Special Interest, if any (without regard to any applicable grace period),
from time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.




     (2) Method of Payment. The Issuers will pay interest on the Notes
(except defaulted interest) and Special Interest, if any, to the Persons who are registered
Holders of Notes at the close of business on the April 1 or October 1 next preceding the
Interest Payment Date, even if such Notes are canceled after such record date and on or
before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with
respect to defaulted interest. The Notes will be payable as to principal, premium, if any,
interest and Special Interest, if any, at the office or agency of the Paying Agent and
Registrar or, at the option of the Issuers, payment of interest and Special Interest, if
any, may be made by check mailed to the Holders at their addresses set forth in the register
of Holders; provided that payment by wire transfer of immediately available funds will be
required with respect to principal of, premium on, if any, interest and Special Interest, if
any, on, all Global Notes and all other Notes the Holders of which will have provided wire
transfer instructions to the Issuers or the Paying Agent. Such payment will be in such coin
or currency of the United States of America as at the time of payment is legal tender for
payment of public and private debts.




     (3) Paying Agent and Registrar. Initially, Wilmington Trust FSB, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuers may change
the Paying Agent or Registrar without prior notice to the Holders of the Notes. The Issuers
or any of their Subsidiaries may act as Paying Agent or Registrar.




     (4) Indenture. The Issuers issued the Notes under an Indenture dated
as of April 9, 2010 (the “Indenture”) among the Issuers, the Guarantors and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the TIA. The Notes are subject to all such terms, and Holders are
referred to the Indenture and



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such Act for a statement of such terms. To the extent any provision of this Note
conflicts with the express provisions of the Indenture, the provisions of the Indenture
shall govern and be controlling. The Notes are unsecured obligations of the Issuers. The
Indenture does not limit the aggregate principal amount of Notes that may be issued
thereunder.




     (5) Optional Redemption.




          (a) At any time prior to April 15, 2013, MagnaChip may on any one or more occasions
redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture, upon
not less than 30 nor more than 60 days’ notice, at a redemption price equal to 110.500% of
the principal amount of the Notes redeemed, plus accrued and unpaid interest and Special
Interest, if any, to the date of redemption (subject to the rights of holders of Notes on
the relevant record date to receive interest on the relevant interest payment date), with
the net cash proceeds of a Qualifying Equity Offering by Parent; provided that:




     (A) at least 65% of the aggregate principal amount of Notes originally issued
under the Indenture (excluding Notes held by Parent and its Subsidiaries) remains
outstanding immediately after the occurrence of such redemption; and




     (B) the redemption occurs within 90 days of the date of the closing of such
Qualifying Equity Offering.




          (b) At any time prior to April 15, 2014, MagnaChip may on any one or more occasions
redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ notice, at a
redemption price equal to 100% of the principal amount of the Notes redeemed, plus the
Applicable Premium as of, and accrued and unpaid interest and Special Interest, if any, to
the applicable date of redemption, subject to the rights of Holders on the relevant record
date to receive interest due on the relevant Interest Payment Date.




          (c) Except pursuant to the preceding paragraphs and in paragraph 10 hereof, the Notes
will not be redeemable at MagnaChip’s option prior to April 15, 2014.




          (d) On or after April 15, 2014, MagnaChip may on any one or more occasions redeem all
or a part of the Notes, upon not less than 30 nor more than 60 days’ notice, at the
redemption prices (expressed as percentages of principal amount) set forth below, plus
accrued and unpaid interest and Special Interest, if any, on the Notes redeemed, to the
applicable date of redemption, if redeemed during the twelve-month period beginning on April
15 of the years indicated below, subject to the rights of Holders on the relevant record
date to receive interest on the relevant Interest Payment Date:



	 	 	 	 	 
	Year	 	Percentage
	2014
	 	 	105.250	%
	2015
	 	 	102.625	%
	2016 and thereafter
	 	 	100.000	%







Unless MagnaChip defaults in the payment of the redemption price, interest will cease to
accrue on the Notes or portions thereof called for redemption on the applicable redemption
date.




     (6) Mandatory Redemption. The Issuers are not required to make
mandatory redemption or sinking fund payments with respect to the Notes.



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     (7) Repurchase at the Option of Holder.




          (a) If there is a Change of Control, MagnaChip will be required to make an offer (a
“Change of Control Offer”) to each Holder to repurchase all or any part (equal to $2,000 or
an integral multiple of $1,000 in excess thereof) of each Holder’s Notes at a purchase price
in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Special Interest, if any, thereon to the date of purchase, subject to the
rights of Holders on the relevant record date to receive interest due on the relevant
interest payment date (the “Change of Control Payment”). Within 30 days following any
Change of Control, the Issuers will mail a notice to each Holder setting forth the
procedures governing the Change of Control Offer as required by the Indenture.




          (b) If Parent or any of its Restricted Subsidiaries consummates any Asset Sales, within
30 days of each date on which the aggregate amount of Excess Proceeds exceeds $20.0 million,
MagnaChip will make an Asset Sale Offer to all Holders of Notes and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to those set
forth in the Indenture with respect to offers to purchase, prepay or redeem with the
proceeds of sales of assets in accordance with the Indenture to purchase, prepay or redeem
the maximum principal amount of Notes and such other pari passu Indebtedness (plus all
accrued interest on the Indebtedness and the amount of all fees and expenses, including
premiums, incurred in connection therewith) that may be purchased, prepaid or redeemed out
of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of
the principal amount, plus accrued and unpaid interest and Special Interest, if any, to the
date of purchase, prepayment or redemption, subject to the rights of Holders of Notes on the
relevant record date to receive interest due on the relevant interest payment date, and will
be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale
Offer, MagnaChip may use those Excess Proceeds for any purpose not otherwise prohibited by
the Indenture. If the aggregate principal amount of Notes and other pari passu Indebtedness
tendered in (or required to be prepaid or redeemed in connection with) such Asset Sale Offer
exceeds the amount of Excess Proceeds, the Trustee will select the Notes and such other pari
passu Indebtedness to be purchased on a pro rata basis, based on the amounts tendered or
required to be prepaid or redeemed (with such adjustments as may be deemed appropriate by
MagnaChip so that only Notes in denominations of $2,000, or an integral multiple of $1,000
in excess thereof, will be purchased). Upon completion of each Asset Sale Offer, the amount
of Excess Proceeds will be reset at zero.. Holders of Notes that are the subject of an
offer to purchase will receive an Asset Sale Offer from MagnaChip prior to any related
purchase date and may elect to have such Notes purchased by completing the form entitled
“Option of Holder to Elect Purchase” attached to the Notes.




     (8) Notice of Redemption. At least 30 days but not more than 60 days
before a redemption date, the Issuers will mail or cause to be mailed, by first class mail,
a notice of redemption to each Holder whose Notes are to be redeemed at its registered
address, except that redemption notices may be mailed more than 60 days prior to a
redemption date if the notice is issued in connection with a defeasance of the Notes or a
satisfaction and discharge of the Indenture pursuant to Articles 8 or 11 thereof. Notes in
denominations larger than $2,000 may be redeemed in part but only in whole multiples of
$1,000 unless all of the Notes held by a Holder are to be redeemed or purchased.




     (9) Denominations, Transfer, Exchange. The Notes are in registered
form in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The
transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture.
The Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and



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transfer documents and the Issuers may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. The Issuers need not exchange or register
the transfer of any Note or portion of a Note selected for redemption, except for the
unredeemed portion of any Note being redeemed in part. Also, the Issuers need not exchange
or register the transfer of any Notes for a period of 15 days before a selection of Notes to
be redeemed or during the period between a record date and the next succeeding Interest
Payment Date.




     (10) REDEMPTION FOR CHANGES IN TAXES. MagnaChip may redeem the Notes, in whole but not
in part, upon not less than 30 nor more than 60 days’ notice, at a redemption price equal to
the principal amount thereof, together with accrued and unpaid interest and Special
Interest, if any, to the date of redemption (a “Tax Redemption Date”) and all Additional
Amounts (if any) then due and that will become due on the Tax Redemption Date as a result of
the redemption or otherwise (subject to the right of holders of the Notes on the relevant
record date to receive interest (including Special Interest) due on the relevant interest
payment date and Additional Amounts (if any) in respect thereof), if on the next date on
which any amount would be payable in respect of the Notes, MagnaChip is or would be required
to pay Additional Amounts, and MagnaChip cannot avoid any such payment obligation taking
reasonable measures available, and the requirement arises as a result of:




          (a) any change in, or amendment to, the laws or treaties (or any regulations or rulings
promulgated thereunder) of the relevant Tax Jurisdiction (as defined above) affecting
taxation; or




          (b) any change in, or amendment to, the existing official position regarding the
application, administration or interpretation of such laws, treaties, regulations or rulings
(including a holding, judgment or order by a court of competent jurisdiction or a change in
published practice), which change or amendment is publicly announced as formally proposed
after and becomes effective after the Issue Date (or, if the relevant Tax Jurisdiction was
not a Tax Jurisdiction on the Issue Date, the date on which the then current Tax
Jurisdiction became the applicable Tax Jurisdiction under this Indenture). MagnaChip shall
not have the right to redeem the Notes under this paragraph based on Additional Amounts
being due as a result of a merger or consolidation of MagnaChip in which MagnaChip is not
the surviving Person in such merger or consolidation.




MagnaChip will not give any such notice of redemption earlier than 60 days prior to the
earliest date on which the relevant Issuer would be obligated to make such payment or
withholding if a payment in respect of the Notes were then due, and at the time such notice
is given, the obligation to pay Additional Amounts must remain in effect. Prior to the
publication or, where relevant, mailing of any notice of redemption of the Notes pursuant to
the foregoing, the Issuers will deliver to the Trustee a written opinion of independent tax
counsel to the effect that there has been a change or amendment that would entitle MagnaChip
to redeem the Notes under this provision. In addition, before the Issuers publish or mail
notice of redemption of the Notes as described above, they will deliver to the Trustee an
Officers’ Certificate to the effect that the relevant Issuer cannot avoid its obligation to
pay Additional Amounts by the relevant Issuer taking reasonable measures available to it.




     (11) Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes. Only registered Holders have rights under the
Indenture.




     (12) Amendment, Supplement and Waiver. Subject to certain
exceptions, the Indenture, the Notes or the Note Guarantees may be amended or supplemented
with the consent



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of the Holders of at least a majority in aggregate principal amount of the then
outstanding Notes including Additional Notes, if any, voting as a single class, and any
existing Default or Event of Default or compliance with any provision of the Indenture or
the Notes or the Note Guarantees may be waived with the consent of the Holders of a majority
in aggregate principal amount of the then outstanding Notes including Additional Notes, if
any, voting as a single class. Without the consent of any Holder of Notes, the Indenture,
the Notes or the Note Guarantees may be amended or supplemented to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to provide for the assumption of either Issuer’s or a Guarantor’s
obligations to Holders of the Notes and Note Guarantees by a successor to such Issuer or
such Guarantor pursuant to the Indenture, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not adversely affect
the legal rights under the Indenture of any Holder, to comply with the requirements of the
SEC in order to effect or maintain the qualification of the Indenture under the TIA, to
conform the text of the Indenture, the Notes, the Note Guarantees to any provision of the
“Description of Notes” section of the Issuers’ Offering Circular dated April 6, 2010,
relating to the initial offering of the Notes, to the extent that such provision in that
“Description of Notes” was intended to be a verbatim recitation of a provision of the
Indenture, the Notes, the Note Guarantees, which intent may be evidenced by an Officers’
Certificate to that effect, to provide for the issuance of Additional Notes in accordance
with the limitations set forth in the Indenture or to allow any Guarantor to execute a
supplemental indenture to the Indenture and/or a Note Guarantee with respect to the Notes.




     (13) Defaults and Remedies. Events of Default include: (i) default
for 30 days in the payment when due of interest and Special Interest, if any, on, the Notes;
(ii) default in the payment when due (at maturity, upon redemption or otherwise) of the
principal of, or premium on, if any, the Notes, (iii) failure by Parent or any of its
Restricted Subsidiaries to comply with the provisions of Article 5 of the Indenture; (iv)
failure by Parent or any of its Restricted Subsidiaries for 30 days after notice to
MagnaChip by the Trustee or the holders of at least 25% in aggregate principal amount of the
Notes then outstanding, voting as a single class, to comply with Section 4.10 or Section
4.15 of the Indenture; (v) failure by Parent or any of its Restricted Subsidiaries for 60
days after notice to MagnaChip by the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding voting as a single class to comply with any
of the other agreements in the Indenture; (vi) default under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by Parent or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by Parent or any of its Restricted Subsidiaries), whether
such Indebtedness or Guarantee now exists, or is created after the date of this Indenture,
if that default: (A) is caused by a failure to pay principal of, premium on, if any, or
interest on, if any, such Indebtedness in an aggregate amount in excess of $250,000 prior to
the expiration of the grace period provided in such Indebtedness on the date of such default
(a “Payment Default”) or (B) results in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates $25.0 million
or more; (vii) failure by Parent or any of its Restricted Subsidiaries to pay final
judgments entered by a court or courts of competent jurisdiction aggregating in excess of
$25.0 million (excluding amounts covered by insurance provided by a carrier that has
acknowledged coverage in writing and has the ability to perform), which judgments are not
paid, bonded, discharged, stayed, annulled or rescinded for a period of 60 days; (viii)
certain events of bankruptcy or insolvency with respect to Parent, either Issuer or any of
the other Restricted Subsidiaries of Parent that is a Significant Subsidiary or any group of
Restricted Subsidiaries of Parent that, taken together, would constitute a Significant
Subsidiary; and (ix)



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except as permitted by the Indenture, any Note Guarantee is held in any judicial
proceeding to be unenforceable or invalid or ceases for any reason to be in full force and
effect, or any Guarantor, or any Person acting on behalf of any Guarantor, denies or
disaffirms its obligations under its Note Guarantee. In the case of an Event of Default
arising from certain events of bankruptcy or insolvency with respect to Parent, either
Issuer or any of the other Restricted Subsidiaries of Parent that is a Significant
Subsidiary or any group of Restricted Subsidiaries of Parent that, taken together, would
constitute a Significant Subsidiary, all outstanding Notes will become due and payable
immediately without further action or notice. If any other Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the
then outstanding Notes may declare all the Notes to be due and payable immediately; provided
that no such declaration will be permitted with respect to an Event of Default of the type
referred to in clause (vi) of this paragraph 13 if the underlying Payment Default has been
cured or waived or the underlying acceleration has been waived or rescinded, as the case may
be. Holders may not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in aggregate principal amount of the
then outstanding Notes may direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default relating to the
payment of principal, premium, if any, interest or Special Interest, if any,) if it
determines that withholding notice is in their interest. The Holders of a majority in
aggregate principal amount of the then outstanding Notes by notice to the Trustee may, on
behalf of all the Holders, rescind an acceleration or waive an existing Default or Event of
Default and its respective consequences under the Indenture except a continuing Default or
Event of Default in the payment of principal of, premium on, if any, interest or Special
Interest, if any, on, the Notes (including in connection with an offer to purchase).
MagnaChip is required to deliver to the Trustee annually a statement regarding compliance
with the Indenture, and MagnaChip is required, upon becoming aware of any Default or Event
of Default, to deliver to the Trustee a statement specifying such Default or Event of
Default.




     (14) Trustee Dealings with Issuers. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform services for the
Issuers or their Affiliates, and may otherwise deal with the Issuers or their Affiliates, as
if it were not the Trustee.




     (15) No Recourse Against Others. No director, officer, employee,
incorporator, stockholder, member or manager of either Issuer or any Guarantor, as such,
will have any liability for any obligations of the Issuers or the Guarantors under the
Notes, the Indenture, the Note Guarantees or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to waive
liabilities under the federal securities laws.




     (16) Authentication. This Note will not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.




     (17) Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in
common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).




     (18) Additional Rights of Holders of Restricted Global Notes and
Restricted Definitive Notes. In addition to the rights provided to Holders of Notes
under the



A1-9









 






Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes will have
all the rights set forth in the Exchange and Registration Rights Agreement dated as of April
9, 2010, among the Issuers, the Guarantors and the other parties named on the signature
pages thereof or, in the case of Additional Notes, Holders of Restricted Global Notes and
Restricted Definitive Notes will have the rights set forth in one or more registration
rights agreements, if any, among the Issuers, the Guarantors and the other parties thereto,
relating to rights given by the Issuers and the Guarantors to the purchasers of any
Additional Notes (collectively, the “Registration Rights Agreement”).




     (19) CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have caused CUSIP
numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is made as to the accuracy of
such numbers either as printed on the Notes or as contained in any notice of redemption, and
reliance may be placed only on the other identification numbers placed thereon.




     (20) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. FOR THE AVOIDANCE
OF DOUBT, ARTICLES 86 TO 94-8 OF THE LUXEMBOURG LAW OF 10 AUGUST 1915 ON COMMERCIAL
COMPANIES AS AMENDED ARE HEREBY EXCLUDED.



     The Issuers will furnish to any Holder upon written request and without charge a copy of the
Indenture and/or the Registration Rights Agreement. Requests may be made to:



MagnaChip Semiconductor, Inc.

20400 Stevens Creek Boulevard, Suite 370

Cupertino, CA 95014

Attention: General Counsel




A1-10









 





Assignment Form




     To assign this Note, fill in the form below:




	 	 	 

	(I) or (we) assign and transfer this Note to:	 
	 





  





(Insert assignee’s legal name)




  




(Insert assignee’s soc. sec. or tax I.D. no.)




 





 





 





 




(Print or type assignee’s name, address and zip code)



and irrevocably appoint  






to transfer this Note on the books of the Issuers. The agent may substitute another to act for
him.





Date:                     




	 	 	 	 	 	 	 

	 

	 	 	 	Your Signature:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	(Sign exactly as your name appears on the face of this Note)
	Signature Guarantee*:
	 	 	 	 	 	 
	 

	 	 

	 	 	 	 








 




			
	*	 	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor
acceptable to the Trustee).




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Option of Holder to Elect Purchase




     If you want to elect to have this Note purchased by the Issuers pursuant to Section 4.10
or 4.15 of the Indenture, check the appropriate box below:



	 	 	 

	-Section 4.10
	 	-Section 4.15






     If you want to elect to have only part of the Note purchased by the Issuers pursuant to
Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased:



$                    



Date:                     




	 	 	 	 	 	 	 

	 

	 	 	 	Your Signature: 	 	 
	 

	 	 	 	 	 
	 

	 	 	 	 	 	(Sign exactly as your name appears on the face of this Note)
	 
	 	 	 	 	 	 
	 	 	 	 	Tax Identification No.:
	 

	 	 	 	 	 	 
	Signature Guarantee*:
	 	 	 	 	 	 
	 

	 	 

	 	 	 	 








 




			
	*	 	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor
acceptable to the Trustee).




A1-12









 










Schedule of Exchanges of Interests in the Global Note *




     The following exchanges of a part of this Global Note for an interest in another Global
Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for
an interest in this Global Note, have been made:






	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Principal Amount	 	 
	 	 	 	 	 	 	of this Global Note	 	 
	 	 	Amount of decrease in	 	Amount of increase in	 	following such	 	Signature of authorized
	 	 	Principal Amount of	 	Principal Amount of	 	decrease	 	officer of Trustee or
	Date of Exchange	 	this Global Note	 	this Global Note	 	(or increase)	 	Custodian
	 	 	 	 	 	 	 	 	 







 




			
	*	 	This schedule should be included only if the Note is issued in global form.




A1-13









 










EXHIBIT A2




[Face of Regulation S Temporary Global Note]



CUSIP/CINS [55932R AG2][L62495 AD5]

ISIN[US55932RAG20][USL62495AD58]




10.500% Senior Notes due 2018




			
	 	 	 
	No. ___
	 	$                    






MAGNACHIP SEMICONDUCTOR S.A.

and

MAGNACHIP SEMICONDUCTOR FINANCE COMPANY



jointly and severally promise to pay to CEDE & CO. or registered assigns,



the principal sum of                                                              DOLLARS on April
15, 2018.



Interest Payment Dates: April 15 and October 15



Record Dates: April 1 and October 1



Dated:                     , 2010




	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR S.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	MAGNACHIP SEMICONDUCTOR FINANCE COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



A2-1









 






	 	 	 	 	 



This is one of the Notes referred to

in the within-mentioned Indenture:




WILMINGTON TRUST FSB,

as Trustee




	 	 	 	 	 

	By:
	 	 	 	 
	 

	 

Authorized Signatory
	 
	 
	 	 	 	 
	Date:
	 	 	 	 
	 

	 

	 








A2-2









 






[Back of Regulation S Temporary Global Note]

10.500% Senior Notes due 2018



THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES
GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED
HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE
SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.



THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS
NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE
BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED
TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE
MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS.



UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE ISSUERS OR THEIR AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.



THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”) AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (A) (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR
WITHIN THE MEANING OF RULE 501 OF REGULATION D UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT






A2-3









 







AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND
OTHER JURISDICTIONS.




     Capitalized terms used herein have the meanings assigned to them in the Indenture
referred to below unless otherwise indicated.




     (1) Interest. MagnaChip Semiconductor S.A., a Luxembourg public
limited liability company (société anonyme) with a registered office at 74, rue de Merl,
B.P. 709 L-2146 Luxembourg registered with the register of commerce and companies of
Luxembourg under number B-97483 (“MagnaChip”), and MagnaChip Semiconductor Finance Company,
a Delaware corporation (“FinanceCo” and, together with MagnaChip, the “Issuers”) , jointly
and severally promise to pay or cause to be paid interest on the principal amount of this
Note at 10.500% per annum from                     , ___until maturity and shall pay the
Special Interest, if any, payable pursuant to the Registration Rights Agreement referred to
below. The Issuers will pay interest and Special Interest, if any, semi-annually in arrears
on April 15 and October 15 of each year, or if any such day is not a Business Day, on the
next succeeding Business Day (each, an “Interest Payment Date”). Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance; provided that if there is no existing Default in the
payment of interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall accrue from
such next succeeding Interest Payment Date; provided further that the first Interest Payment
Date shall be                     , 20___. The Issuers will pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, from time to time on demand at a rate that is 1% higher than the then applicable
interest rate on the Notes to the extent lawful; they will pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments
of interest and Special Interest, if any (without regard to any applicable grace period),
from time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.




     Until this Regulation S Temporary Global Note is exchanged for one or more Regulation S
Permanent Global Notes, the Holder hereof shall not be entitled to receive payments of
interest hereon; until so exchanged in full, this Regulation S Temporary Global Note shall
in all other respects be entitled to the same benefits as other Notes under the Indenture.




     (2) Method of Payment. The Issuers will pay interest on the Notes
(except defaulted interest) and Special Interest, if any, to the Persons who are registered
Holders of Notes at the close of business on the April 1 or October 1 next preceding the
Interest Payment Date, even if such Notes are canceled after such record date and on or
before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with
respect to defaulted interest. The Notes will be payable as to principal, premium, if any,
interest and Special Interest, if any, at the office or agency of the Paying Agent and
Registrar or, at the option of the Issuers, payment of interest and Special Interest, if
any, may be made by check mailed to the Holders at their addresses set forth in the register
of Holders; provided that payment by wire transfer of immediately available funds will be
required with respect to principal of, premium on, if any, interest and Special Interest, if
any, on, all Global Notes and all other Notes the Holders of which will have provided wire
transfer instructions to the Issuers or the Paying Agent. Such payment will be in such coin
or currency of the United States of America as at the time of payment is legal tender for
payment of public and private debts.



A2-4









 






     (3) Paying Agent and Registrar. Initially, Wilmington Trust FSB, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The Issuers may change
the Paying Agent or Registrar without prior notice to the Holders of the Notes. The Issuers
or any of their Subsidiaries may act as Paying Agent or Registrar.




     (4) Indenture. The Issuers issued the Notes under an Indenture dated
as of April 9, 2010 (the “Indenture”) among the Issuers, the Guarantors and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the TIA. The Notes are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms. To the extent any
provision of this Note conflicts with the express provisions of the Indenture, the
provisions of the Indenture shall govern and be controlling. The Notes are unsecured
obligations of the Issuers. The Indenture does not limit the aggregate principal amount of
Notes that may be issued thereunder.




     (5) Optional Redemption.




          (a) At any time prior to April 15, 2013, MagnaChip may on any one or more occasions
redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture, upon
not less than 30 nor more than 60 days’ notice, at a redemption price equal to 110.500% of
the principal amount of the Notes redeemed, plus accrued and unpaid interest and Special
Interest, if any, to the date of redemption (subject to the rights of holders of Notes on
the relevant record date to receive interest on the relevant interest payment date), with
the net cash proceeds of a Qualifying Equity Offering by Parent; provided that:




     (A) at least 65% of the aggregate principal amount of Notes originally issued
under the Indenture (excluding Notes held by Parent and its Subsidiaries) remains
outstanding immediately after the occurrence of such redemption; and




     (B) the redemption occurs within 90 days of the date of the closing of such
Qualifying Equity Offering.




          (b) At any time prior to April 15, 2014, MagnaChip may on any one or more occasions
redeem all or a part of the Notes, upon not less than 30 nor more than 60 days’ notice, at a
redemption price equal to 100% of the principal amount of the Notes redeemed, plus the
Applicable Premium as of, and accrued and unpaid interest and Special Interest, if any, to
the applicable date of redemption, subject to the rights of Holders on the relevant record
date to receive interest due on the relevant Interest Payment Date.




          (c) Except pursuant to the preceding paragraphs and in paragraph 10 hereof, the Notes
will not be redeemable at MagnaChip’s option prior to April 15, 2014.




          (d) On or after April 15, 2014, MagnaChip may on any one or more occasions redeem all
or a part of the Notes, upon not less than 30 nor more than 60 days’ notice, at the
redemption prices (expressed as percentages of principal amount) set forth below, plus
accrued and unpaid interest and Special Interest, if any, on the Notes redeemed, to the
applicable date of redemption, if redeemed during the twelve-month period beginning on April
15 of the years indicated below, subject to the rights of Holders on the relevant record
date to receive interest on the relevant Interest Payment Date:





A2-5









 






	 	 	 	 	 
	Year	 	Percentage
	2014
	 	 	105.250	%
	2015
	 	 	102.625	%
	2016 and thereafter
	 	 	100.000	%







Unless MagnaChip defaults in the payment of the redemption price, interest will cease to
accrue on the Notes or portions thereof called for redemption on the applicable redemption
date.




     (6) Mandatory Redemption. The Issuers are not required to make
mandatory redemption or sinking fund payments with respect to the Notes.




     (7) REPURCHASE AT THE OPTION OF HOLDER.




          (a) If there is a Change of Control, MagnaChip will be required to make an offer (a
“Change of Control Offer”) to each Holder to repurchase all or any part (equal to $2,000 or
an integral multiple of $1,000 in excess thereof) of each Holder’s Notes at a purchase price
in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Special Interest, if any, thereon to the date of purchase, subject to the
rights of Holders on the relevant record date to receive interest due on the relevant
interest payment date (the “Change of Control Payment”). Within 30 days following any
Change of Control, the Issuers will mail a notice to each Holder setting forth the
procedures governing the Change of Control Offer as required by the Indenture.




          (b) If Parent or any of its Restricted Subsidiaries consummates any Asset Sales, within
30 days of each date on which the aggregate amount of Excess Proceeds exceeds $20.0 million,
MagnaChip will make an Asset Sale Offer to all Holders of Notes and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to those set
forth in the Indenture with respect to offers to purchase, prepay or redeem with the
proceeds of sales of assets in accordance with the Indenture to purchase, prepay or redeem
the maximum principal amount of Notes and such other pari passu Indebtedness (plus all
accrued interest on the Indebtedness and the amount of all fees and expenses, including
premiums, incurred in connection therewith) that may be purchased, prepaid or redeemed out
of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of
the principal amount, plus accrued and unpaid interest and Special Interest, if any, to the
date of purchase, prepayment or redemption, subject to the rights of Holders of Notes on the
relevant record date to receive interest due on the relevant interest payment date, and will
be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale
Offer, MagnaChip may use those Excess Proceeds for any purpose not otherwise prohibited by
the Indenture. If the aggregate principal amount of Notes and other pari passu Indebtedness
tendered in (or required to be prepaid or redeemed in connection with) such Asset Sale Offer
exceeds the amount of Excess Proceeds, the Trustee will select the Notes and such other pari
passu Indebtedness to be purchased on a pro rata basis, based on the amounts tendered or
required to be prepaid or redeemed (with such adjustments as may be deemed appropriate by
MagnaChip so that only Notes in denominations of $2,000, or an integral multiple of $1,000
in excess thereof, will be purchased). Upon completion of each Asset Sale Offer, the amount
of Excess Proceeds will be reset at zero.. Holders of Notes that are the subject of an
offer to purchase will receive an Asset Sale Offer from MagnaChip prior to any related
purchase date and may elect to have such Notes purchased by completing the form entitled
“Option of Holder to Elect Purchase” attached to the Notes.




     (8) Notice of Redemption. At least 30 days but not more than 60 days
before a redemption date, the Issuers will mail or cause to be mailed, by first class mail,
a notice of redemption to each Holder whose Notes are to be redeemed at its registered
address, except that redemption notices may be mailed more than 60 days prior to a
redemption date if the notice is



A2-6









 






issued in connection with a defeasance of the Notes or a satisfaction and discharge of
the Indenture pursuant to Articles 8 or 11 thereof. Notes in denominations larger than
$2,000 may be redeemed in part but only in whole multiples of $1,000 unless all of the Notes
held by a Holder are to be redeemed or purchased.




     (9) Denominations, Transfer, Exchange. The Notes are in registered
form in denominations of $2,000 and integral multiples of $1,000 in excess thereof. The
transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture.
The Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Issuers may require a Holder to pay
any taxes and fees required by law or permitted by the Indenture. The Issuers need not
exchange or register the transfer of any Note or portion of a Note selected for redemption,
except for the unredeemed portion of any Note being redeemed in part. Also, the Issuers
need not exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and the next
succeeding Interest Payment Date.




     This Regulation S Temporary Global Note is exchangeable in whole or in part for one or
more Global Notes only (i) on or after the termination of the 40-day distribution compliance
period (as defined in Regulation S) and (ii) upon presentation of certificates (accompanied
by an Opinion of Counsel, if applicable) required by Article 2 of the Indenture. Upon
exchange of this Regulation S Temporary Global Note for one or more Global Notes, the
Trustee shall cancel this Regulation S Temporary Global Note.




     (10) REDEMPTION FOR CHANGES IN TAXES. MagnaChip may redeem the Notes, in whole but not
in part, upon not less than 30 nor more than 60 days’ notice, at a redemption price equal to
the principal amount thereof, together with accrued and unpaid interest and Special
Interest, if any, to the date of redemption (a “Tax Redemption Date”) and all Additional
Amounts (if any) then due and that will become due on the Tax Redemption Date as a result of
the redemption or otherwise (subject to the right of holders of the Notes on the relevant
record date to receive interest (including Special Interest) due on the relevant interest
payment date and Additional Amounts (if any) in respect thereof), if on the next date on
which any amount would be payable in respect of the Notes, MagnaChip is or would be required
to pay Additional Amounts, and MagnaChip cannot avoid any such payment obligation taking
reasonable measures available, and the requirement arises as a result of:




          (a) any change in, or amendment to, the laws or treaties (or any regulations or rulings
promulgated thereunder) of the relevant Tax Jurisdiction (as defined above) affecting
taxation; or




          (b) any change in, or amendment to, the existing official position regarding the
application, administration or interpretation of such laws, treaties, regulations or rulings
(including a holding, judgment or order by a court of competent jurisdiction or a change in
published practice), which change or amendment is publicly announced as formally proposed
after and becomes effective after the Issue Date (or, if the relevant Tax Jurisdiction was
not a Tax Jurisdiction on the Issue Date, the date on which the then current Tax
Jurisdiction became the applicable Tax Jurisdiction under this Indenture). MagnaChip shall
not have the right to redeem the Notes under this paragraph based on Additional Amounts
being due as a result of a merger or consolidation of MagnaChip in which MagnaChip is not
the surviving Person in such merger or consolidation.



A2-7









 






MagnaChip will not give any such notice of redemption earlier than 60 days prior to the
earliest date on which the relevant Issuer would be obligated to make such payment or
withholding if a payment in respect of the Notes were then due, and at the time such notice
is given, the obligation to pay Additional Amounts must remain in effect. Prior to the
publication or, where relevant, mailing of any notice of redemption of the Notes pursuant to
the foregoing, the Issuers will deliver to the Trustee a written opinion of independent tax
counsel to the effect that there has been a change or amendment that would entitle MagnaChip
to redeem the Notes under this provision. In addition, before the Issuers publish or mail
notice of redemption of the Notes as described above, they will deliver to the Trustee an
Officers’ Certificate to the effect that the relevant Issuer cannot avoid its obligation to
pay Additional Amounts by the relevant Issuer taking reasonable measures available to it.




     (11) Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes. Only registered Holders have rights under the
Indenture.




     (12) Amendment, Supplement and Waiver. Subject to certain
exceptions, the Indenture, the Notes or the Note Guarantees may be amended or supplemented
with the consent of the Holders of at least a majority in aggregate principal amount of the
then outstanding Notes including Additional Notes, if any, voting as a single class, and any
existing Default or Event of Default or compliance with any provision of the Indenture or
the Notes or the Note Guarantees may be waived with the consent of the Holders of a majority
in aggregate principal amount of the then outstanding Notes including Additional Notes, if
any, voting as a single class. Without the consent of any Holder of Notes, the Indenture,
the Notes or the Note Guarantees may be amended or supplemented to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to provide for the assumption of either Issuer’s or a Guarantor’s
obligations to Holders of the Notes and Note Guarantees by a successor to such Issuer or
such Guarantor pursuant to the Indenture, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not adversely affect
the legal rights under the Indenture of any Holder, to comply with the requirements of the
SEC in order to effect or maintain the qualification of the Indenture under the TIA, to
conform the text of the Indenture, the Notes, the Note Guarantees to any provision of the
“Description of Notes” section of the Issuers’ Offering Circular dated April 6, 2010,
relating to the initial offering of the Notes, to the extent that such provision in that
“Description of Notes” was intended to be a verbatim recitation of a provision of the
Indenture, the Notes, the Note Guarantees, which intent may be evidenced by an Officers’
Certificate to that effect, to provide for the issuance of Additional Notes in accordance
with the limitations set forth in the Indenture or to allow any Guarantor to execute a
supplemental indenture to the Indenture and/or a Note Guarantee with respect to the Notes.




     (13) Defaults and Remedies. Events of Default include: (i) default
for 30 days in the payment when due of interest and Special Interest, if any, on, the Notes;
(ii) default in the payment when due (at maturity, upon redemption or otherwise) of the
principal of, or premium on, if any, the Notes, (iii) failure by Parent or any of its
Restricted Subsidiaries to comply with the provisions of Article 5 of the Indenture; (iv)
failure by Parent or any of its Restricted Subsidiaries for 30 days after notice to
MagnaChip by the Trustee or the holders of at least 25% in aggregate principal amount of the
Notes then outstanding, voting as a single class, to comply with Section 4.10 or Section
4.15 of the Indenture; (v) failure by Parent or any of its Restricted Subsidiaries for 60
days after notice to MagnaChip by the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding voting as a single class to comply with any
of the other agreements in the Indenture; (vi) default under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or evidenced any



A2-8









 






Indebtedness for money borrowed by Parent or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by Parent or any of its Restricted Subsidiaries), whether
such Indebtedness or Guarantee now exists, or is created after the date of this Indenture,
if that default: (A) is caused by a failure to pay principal of, premium on, if any, or
interest on, if any, such Indebtedness in an aggregate amount in excess of $250,000 prior to
the expiration of the grace period provided in such Indebtedness on the date of such default
(a “Payment Default”) or (B) results in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates $25.0 million
or more; (vii) failure by Parent or any of its Restricted Subsidiaries to pay final
judgments entered by a court or courts of competent jurisdiction aggregating in excess of
$25.0 million (excluding amounts covered by insurance provided by a carrier that has
acknowledged coverage in writing and has the ability to perform), which judgments are not
paid, bonded, discharged, stayed, annulled or rescinded for a period of 60 days; (viii)
certain events of bankruptcy or insolvency with respect to Parent, either Issuer or any of
the other Restricted Subsidiaries of Parent that is a Significant Subsidiary or any group of
Restricted Subsidiaries of Parent that, taken together, would constitute a Significant
Subsidiary; and (ix) except as permitted by the Indenture, any Note Guarantee is held in any
judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full
force and effect, or any Guarantor, or any Person acting on behalf of any Guarantor, denies
or disaffirms its obligations under its Note Guarantee. In the case of an Event of Default
arising from certain events of bankruptcy or insolvency with respect to Parent, either
Issuer or any of the other Restricted Subsidiaries of Parent that is a Significant
Subsidiary or any group of Restricted Subsidiaries of Parent that, taken together, would
constitute a Significant Subsidiary, all outstanding Notes will become due and payable
immediately without further action or notice. If any other Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the
then outstanding Notes may declare all the Notes to be due and payable immediately; provided
that no such declaration will be permitted with respect to an Event of Default of the type
referred to in clause (vi) of this paragraph 13 if the underlying Payment Default has been
cured or waived or the underlying acceleration has been waived or rescinded, as the case may
be. Holders may not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in aggregate principal amount of the
then outstanding Notes may direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default relating to the
payment of principal, premium, if any, interest or Special Interest, if any,) if it
determines that withholding notice is in their interest. The Holders of a majority in
aggregate principal amount of the then outstanding Notes by notice to the Trustee may, on
behalf of all the Holders, rescind an acceleration or waive an existing Default or Event of
Default and its respective consequences under the Indenture except a continuing Default or
Event of Default in the payment of principal of, premium on, if any, interest or Special
Interest, if any, on, the Notes (including in connection with an offer to purchase).
MagnaChip is required to deliver to the Trustee annually a statement regarding compliance
with the Indenture, and MagnaChip is required, upon becoming aware of any Default or Event
of Default, to deliver to the Trustee a statement specifying such Default or Event of
Default.




     (14) Trustee Dealings with Issuers. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform services for the
Issuers or their Affiliates, and may otherwise deal with the Issuers or their Affiliates, as
if it were not the Trustee.



A2-9









 






     (15) No Recourse Against Others. No director, officer, employee,
incorporator, stockholder, member or manager of either Issuer or any Guarantor, as such,
will have any liability for any obligations of the Issuers or the Guarantors under the
Notes, the Indenture, the Note Guarantees or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to waive
liabilities under the federal securities laws.




     (16) Authentication. This Note will not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.




     (17) Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in
common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).




     (18) Additional Rights of Holders of Restricted Global Notes and
Restricted Definitive Notes. In addition to the rights provided to Holders of Notes
under the Indenture, Holders of Restricted Global Notes (including Holders of this
Regulation S Temporary Global Note) and of Restricted Definitive Notes will have all the
rights set forth in the Exchange and Registration Rights Agreement dated as of April 9,
2010, among the Issuers, the Guarantors and the other parties named on the signature pages
thereof or, in the case of Additional Notes, Holders of Restricted Global Notes (including
Holders of this Regulation S Temporary Global Note) and of Restrictive Definitive Notes will
have the rights set forth in one or more registration rights agreements, if any, among the
Issuers, the Guarantors and the other parties thereto, relating to rights given by the
Issuers and the Guarantors to the purchasers of any Additional Notes (collectively, the
“Registration Rights Agreement”).




     (19) CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have caused CUSIP
numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is made as to the accuracy of
such numbers either as printed on the Notes or as contained in any notice of redemption, and
reliance may be placed only on the other identification numbers placed thereon.




     (20) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. FOR THE
AVOIDANCE OF DOUBT, ARTICLES 86 TO 94-8 OF THE LUXEMBOURG LAW OF 10 AUGUST 1915 ON
COMMERCIAL COMPANIES AS AMENDED ARE HEREBY EXCLUDED.



     The Issuers will furnish to any Holder upon written request and without charge a copy of the
Indenture and/or the Registration Rights Agreement. Requests may be made to:



MagnaChip Semiconductor, Inc.

20400 Stevens Creek Boulevard, Suite 370

Cupertino, CA 95014

Attention: General Counsel




A2-10









 





Assignment Form




     To assign this Note, fill in the form below:




	 	 	 

	(I) or (we) assign and transfer this Note to:	 
	 





  





(Insert assignee’s legal name)




  




(Insert assignee’s soc. sec. or tax I.D. no.)




 





 





 





 




(Print or type assignee’s name, address and zip code)



and irrevocably appoint


 




to transfer this Note on the books of the Issuers. The agent may substitute another to act for
him.



Date:                     




	 	 	 	 	 	 	 

	 

	 	 	 	Your Signature:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	(Sign exactly as your name appears on the face of this Note)
	Signature Guarantee*:
	 	 	 	 	 	 
	 

	 	 

	 	 	 	 








 




			
	*	 	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor
acceptable to the Trustee).




A2-11









 










Option of Holder to Elect Purchase




     If you want to elect to have this Note purchased by the Issuers pursuant to Section 4.10
or 4.15 of the Indenture, check the appropriate box below:



	 	 	 

	 	 	 
	-Section 4.10
	 	-Section 4.15






     If you want to elect to have only part of the Note purchased by the Issuers pursuant to
Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased:



$_______________



Date:                     




	 	 	 	 	 	 	 

	 

	 	 	 	Your Signature: 	 	 
	 

	 	 	 	 	 
	 

	 	 	 	 	 	(Sign exactly as your name appears on the face of this Note)
	 
	 	 	 	 	 	 
	 	 	 	 	Tax Identification No.:
	 

	 	 	 	 	 	 
	Signature Guarantee*:
	 	 	 	 	 	 
	 

	 	 

	 	 	 	 








 




			
	*	 	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor
acceptable to the Trustee).




A2-12









 










Schedule of Exchanges of Interests in the Regulation S Temporary Global Note




     The following exchanges of a part of this Regulation S Temporary Global Note for an
interest in another Global Note, or exchanges of a part of another other Restricted Global Note for
an interest in this Regulation S Temporary Global Note, have been made:




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Principal Amount of	 	 
	 	 	 	 	 	 	this Global Note	 	 
	 	 	Amount of decrease in	 	Amount of increase in	 	following such	 	Signature of authorized
	 	 	Principal Amount of	 	Principal Amount of	 	decrease	 	officer of Trustee or
	Date of Exchange	 	this Global Note	 	this Global Note	 	(or increase)	 	Custodian
	 	 	 	 	 	 	 	 	 






A2-13











 





EXHIBIT B




FORM OF CERTIFICATE OF TRANSFER




MagnaChip Semiconductor, Inc.

20400 Stevens Creek Boulevard, Suite 370

Cupertino, CA 95014

Attention: General Counsel




Wilmington Trust FSB

Corporate Capital Markets

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402-1544

Attention: MagnaChip Semiconductor Administrator




     Re: 10.500% Senior Notes due 2018



     Reference is hereby made to the Indenture, dated as of April 9, 2010 (the “Indenture”), among
MagnaChip Semiconductor S.A., a Luxembourg public limited liability company (société anonyme) with
a registered office at 74, rue de Merl, B.P. 709 L-2146 Luxembourg registered with the register of
commerce and companies of Luxembourg under number B-97483 (“MagnaChip”), MagnaChip Semiconductor
Finance Company, a Delaware corporation (“FinanceCo” and, together with MagnaChip, the “Issuers”),
the Guarantors party thereto and Wilmington Trust FSB, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.



                                             , (the “Transferor”) owns and proposes to transfer the Note[s] or interest
in such Note[s] specified in Annex A hereto, in the principal amount of $                     in such
Note[s] or interests (the “Transfer”), to                                          (the “Transferee”), as
further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby
certifies that:



[CHECK ALL THAT APPLY]




     1.  ̈ Check if Transferee will take delivery of a beneficial interest in the 144A
Global Note or a Restricted Definitive Note pursuant to Rule 144A. The Transfer is being
effected pursuant to and in accordance with Rule 144A under the Securities Act of 1933, as amended
(the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the
beneficial interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believes is purchasing the beneficial interest or Definitive Note for its own account,
or for one or more accounts with respect to which such Person exercises sole investment discretion,
and such Person and each such account is a “qualified institutional buyer” within the meaning of
Rule 144A in a transaction meeting the requirements of Rule 144A, and such Transfer is in
compliance with any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Restricted
Definitive Note and in the Indenture and the Securities Act.



     2.  ̈ Check if Transferee will take delivery of a beneficial interest in the
Regulation S Temporary Global Note, the Regulation S Permanent Global Note or a Restricted
Definitive Note pursuant to Regulation S. The Transfer is being effected pursuant to and in
accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor
hereby further certifies that (i) the Transfer is not being made to a Person in the United States
and (x) at the time the buy order was



B-1









 




originated, the Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on its behalf knows
that the transaction was prearranged with a buyer in the United States, (ii) no directed selling
efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act and (iv) if the proposed transfer is
being made prior to the expiration of the Restricted Period, the transfer is not being made to a
U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon
consummation of the proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer
enumerated in the Private Placement Legend printed on the Regulation S Permanent Global Note, the
Regulation S Temporary Global Note and/or the Restricted Definitive Note and in the Indenture and
the Securities Act.




     3.  ̈ Check and complete if Transferee will take delivery of a beneficial interest
in a Restricted Definitive Note pursuant to any provision of the Securities Act other than Rule
144A or Regulation S. The Transfer is being effected in compliance with the transfer
restrictions applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue
sky securities laws of any state of the United States, and accordingly the Transferor hereby
further certifies that (check one):




     (a)  ̈ such Transfer is being effected pursuant to and in accordance with Rule
144 under the Securities Act;



or





     (b)  ̈ such Transfer is being effected to an Issuer or a subsidiary thereof;



or





     (c)  ̈ such Transfer is being effected pursuant to an effective registration
statement under the Securities Act and in compliance with the prospectus delivery
requirements of the Securities Act;



or





     (d)  ̈ such Transfer is being effected to an Institutional Accredited Investor
and pursuant to an exemption from the registration requirements of the Securities Act
other than Rule 144A, Rule 144, Rule 903 or Rule 904, and the Transferor hereby further
certifies that it has not engaged in any general solicitation within the meaning of
Regulation D under the Securities Act and the Transfer complies with the transfer
restrictions applicable to beneficial interests in a Restricted Global Note or Restricted
Definitive Notes and the requirements of the exemption claimed, which certification is
supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the
Indenture and (2) if such Transfer is in respect of a principal amount of Notes at the
time of transfer of less than $250,000, an Opinion of Counsel provided by the Transferor
or the Transferee (a copy of which the Transferor has attached to this certification), to
the effect that such Transfer is in compliance with the Securities Act. Upon consummation
of the proposed transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Definitive Notes and
in the Indenture and the Securities Act.



B-2









 





     4.  ̈ Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Note or of an Unrestricted Definitive Note.



     (a)  ̈ Check if Transfer is pursuant to Rule 144. (i) The Transfer is being effected
pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the
transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with the Securities Act.
Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on
Restricted Definitive Notes and in the Indenture.



     (b)  ̈ Check if Transfer is Pursuant to Regulation S. (i) The Transfer is being
effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in
compliance with the transfer restrictions contained in the Indenture and any applicable blue sky
securities laws of any state of the United States and (ii) the restrictions on transfer contained
in the Indenture and the Private Placement Legend are not required in order to maintain compliance
with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms
of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject
to the restrictions on transfer enumerated in the Private Placement Legend printed on the
Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.



     (c)  ̈ Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is being
effected pursuant to and in compliance with an exemption from the registration requirements of the
Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky securities laws of any State of
the United States and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will not be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Indenture.



     This certificate and the statements contained herein are made for your benefit and the benefit
of the Issuers.



	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	[Insert Name of Transferor]
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:
	 

	 	 	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 	 	 
	 

	 	Dated:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 





B-3









 





ANNEX A TO CERTIFICATE OF TRANSFER





	1.	 	The Transferor owns and proposes to transfer the following:





[CHECK ONE OF (a) OR (b)]





	 	(a)	 	 ̈ a beneficial interest in the:






	 	(i)	 	 ̈ 144A Global Note (CUSIP 55932R AG2), or
	 
	 	(ii)	 	 ̈ Regulation S Global Note (CUSIP L62495 AD5), or
	 
	 	(b)	 	 ̈ a Restricted Definitive Note.






	2.	 	After the Transfer the Transferee will hold:





[CHECK ONE]





	 	(a)	 	 ̈ a beneficial interest in the:






	 	(i)	 	 ̈ 144A Global Note (CUSIP 55932R AG2), or
	 
	 	(ii)	 	 ̈ Regulation S Global Note (CUSIP L62495 AD5), or
	 
	 	(iii)	 	 ̈ Unrestricted Global Note (CUSIP ___); or






	 	(b)	 	 ̈ a Restricted Definitive Note; or
	 
	 	(c)	 	 ̈ an Unrestricted Definitive Note,






	 	 	in accordance with the terms of the Indenture.





B-4









 





EXHIBIT C




FORM OF CERTIFICATE OF EXCHANGE




MagnaChip Semiconductor, Inc.

20400 Stevens Creek Boulevard, Suite 370

Cupertino, CA 95014

Attention: General Counsel




Wilmington Trust FSB

Corporate Capital Markets

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402-1544

Attention: MagnaChip Semiconductor Administrator




     Re: 10.500% Senior Notes due 2018



(CUSIP [55932R AG2][L62495 AD5])




     Reference is hereby made to the Indenture, dated as of April 9, 2010 (the “Indenture”), among
MagnaChip Semiconductor S.A., a Luxembourg public limited liability company (société anonyme) with
a registered office at 74, rue de Merl, B.P. 709 L-2146 Luxembourg registered with the register of
commerce and companies of Luxembourg under number B-97483 (“MagnaChip”), MagnaChip Semiconductor
Finance Company, a Delaware corporation (“FinanceCo” and, together with MagnaChip, the “Issuers”),
the Guarantors party thereto and Wilmington Trust FSB, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.



                                             , (the “Owner”) owns and proposes to exchange the Note[s] or
interest in such Note[s] specified herein, in the principal amount of $                     in such Note[s]
or interests (the “Exchange”). In connection with the Exchange, the Owner hereby certifies that:



     1. Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global
Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global Note



     (a)  ̈ Check if Exchange is from beneficial interest in a Restricted Global Note to
beneficial interest in an Unrestricted Global Note. In connection with the Exchange of the Owner’s
beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global
Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in
accordance with the Securities Act of 1933, as amended (the “Securities Act”), (iii) the
restrictions on transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the beneficial interest
in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.



     (b)  ̈ Check if Exchange is from beneficial interest in a Restricted Global Note to
Unrestricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest
in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the
Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange
has been effected in compliance with the transfer restrictions applicable to the Restricted Global
Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in order to maintain
compliance with the



C-1









 




Securities Act and (iv) the Definitive Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.




     (c)  ̈ Check if Exchange is from Restricted Definitive Note to beneficial interest in an
Unrestricted Global Note. In connection with the Owner’s Exchange of a Restricted Definitive Note
for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions applicable to Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions
on transfer contained in the Indenture and the Private Placement Legend are not required in order
to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired
in compliance with any applicable blue sky securities laws of any state of the United States.



     (d)  ̈ Check if Exchange is from Restricted Definitive Note to Unrestricted Definitive
Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired
for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.



     2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted Global
Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes



     (a)  ̈ Check if Exchange is from beneficial interest in a Restricted Global Note to
Restricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in
a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner
hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account
without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the
Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and
in the Indenture and the Securities Act.



     (b)  ̈ Check if Exchange is from Restricted Definitive Note to beneficial interest in a
Restricted Global Note. In connection with the Exchange of the Owner’s Restricted Definitive Note
for a beneficial interest in the [CHECK ONE]  ̈ 144A Global Note,  ̈ Regulation S Global
Note with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner’s own account without transfer and (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and
pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue
sky securities laws of any state of the United States. Upon consummation of the proposed Exchange
in accordance with the terms of the Indenture, the beneficial interest issued will be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant
Restricted Global Note and in the Indenture and the Securities Act.



     This certificate and the statements contained herein are made for your benefit and the benefit
of the Issuers.



C-2









 





	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	[Insert Name of Transferor]
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:
	 

	 	 	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 	 	 
	 

	 	Dated:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 





C-3









 





EXHIBIT D




FORM OF CERTIFICATE FROM

ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR




MagnaChip Semiconductor, Inc.

20400 Stevens Creek Boulevard, Suite 370

Cupertino, CA 95014

Attention: General Counsel




Wilmington Trust FSB

Corporate Capital Markets

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402-1544

Attention: MagnaChip Semiconductor Administrator




     Re: 10.500% Senior Notes due 2018



     Reference is hereby made to the Indenture, dated as of April 9, 2010 (the “Indenture”), among
MagnaChip Semiconductor S.A., a Luxembourg public limited liability company (société anonyme) with
a registered office at 74, rue de Merl, B.P. 709 L-2146 Luxembourg registered with the register of
commerce and companies of Luxembourg under number B-97483 (“MagnaChip”), MagnaChip Semiconductor
Finance Company, a Delaware corporation (“FinanceCo” and, together with MagnaChip, the “Issuers”),
the Guarantors party thereto and Wilmington Trust FSB, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.



     In connection with our proposed purchase of $                     aggregate principal amount of:



     (a)  ̈ a beneficial interest in a Global Note, or



     (b)  ̈ a Definitive Note,



     we confirm that:



     1. We understand that any subsequent transfer of the Notes or any interest therein is subject
to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be
bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except
in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended
(the “Securities Act”).



     2. We understand that the offer and sale of the Notes have not been registered under the
Securities Act, and that the Notes and any interest therein may not be offered or sold except as
permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for
which we are acting as hereinafter stated, that if we should sell the Notes or any interest
therein, we will do so only (A) to an Issuer or any subsidiary thereof, (B) in accordance with Rule
144A under the Securities Act to a “qualified institutional buyer” (as defined therein), (C) to an
institutional “accredited investor” (as defined below) that, prior to such transfer, furnishes (or
has furnished on its behalf by a U.S. broker-dealer) to you and to the Issuers a signed letter
substantially in the form of this letter and, if such transfer is in respect of a principal amount
of Notes, at the time of transfer of less than $250,000, an Opinion of Counsel in form reasonably
acceptable to the Issuers to the effect that such transfer is in compliance with the Securities
Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144 under the Securities Act or (F) pursuant to an
effective registration statement under the Securities Act, and we further agree to provide to any
Person purchasing the Definitive Note or beneficial interest in a Global Note from us in a
transaction meeting the



D-1









 




requirements of clauses (A) through (E) of this paragraph a notice advising such purchaser
that resales thereof are restricted as stated herein.




     3. We understand that, on any proposed resale of the Notes or beneficial interest therein, we
will be required to furnish to you and the Issuers such certifications, legal opinions and other
information as you and the Issuers may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.



     4. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act) and have such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting are each able to bear the economic risk of
our or its investment.



     5. We are acquiring the Notes or beneficial interest therein purchased by us for our own
account or for one or more accounts (each of which is an institutional “accredited investor”) as to
each of which we exercise sole investment discretion.



     You and the Issuers are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby.



	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	[Insert Name of Accredited Investor]
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:
	 

	 	 	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 	 	 
	Dated:	 	 	 	 	 	 
	 

	 	 	 	 	 	 





D-2









 





EXHIBIT E




[FORM OF NOTATION OF GUARANTEE]




     For value received, each Guarantor (which term includes any successor Person under the
Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in the
Indenture and subject to the provisions in the Indenture, dated as of April 9, 2010 (the
“Indenture”), among MagnaChip Semiconductor S.A., a Luxembourg public limited liability company
(société anonyme) with a registered office at 74, rue de Merl, B.P. 709 L-2146 Luxembourg
registered with the register of commerce and companies of Luxembourg under number B-97483
(“MagnaChip”), MagnaChip Semiconductor Finance Company, a Delaware corporation (“FinanceCo” and,
together with MagnaChip, the “Issuers”), the Guarantors party thereto and Wilmington Trust FSB, as
Trustee (the “Trustee”), (a) the due and punctual payment of the principal of, premium on, if any,
interest and Special Interest, if any, on, the Notes, whether at maturity, by acceleration,
redemption or otherwise, the due and punctual payment of interest on overdue principal of, premium
on, if any, interest and Special Interest, if any, on, the Notes, if any, if lawful, and the due
and punctual performance of all other obligations of the Issuers to the Holders or the Trustee all
in accordance with the terms of the Indenture and (b) in case of any extension of time of payment
or renewal of any Notes or any of such other obligations, that the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise. The obligations of the Guarantors to the Holders of
Notes and to the Trustee pursuant to the Note Guarantee and the Indenture are expressly set forth
in Article 10 of the Indenture and reference is hereby made to the Indenture for the precise terms
of the Note Guarantee. Each Holder of a Note, by accepting the same, (a) agrees to and shall be
bound by such provisions (b) authorizes and directs the Trustee, on behalf of such Holder, to take
such action as may be necessary or appropriate to effectuate the subordination as provided in the
Indenture and (c) appoints the Trustee attorney-in-fact of such Holder for such purpose; provided,
however, that the Indebtedness evidenced by this Note Guarantee shall cease to be so subordinated
and subject in right of payment upon any defeasance of this Note in accordance with the provisions
of the Indenture.



     Capitalized terms used but not defined herein have the meanings given to them in the
Indenture.



	 	 	 	 	 
	 	[Name of Guarantor(s)]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




E-1









 





EXHIBIT F




[FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS]




     Supplemental Indenture (this “Supplemental Indenture”), dated as of                     ___,
among                     ___(the “Guaranteeing Subsidiary”), a subsidiary of [ ] (or its
permitted successor), a [Delaware] corporation (the “Company”), the Issuers (as defined in the
Indenture referred to herein), the other Guarantors (as defined in the Indenture referred to
herein) and [ ], as Trustee under the Indenture referred to below (the “Trustee”).



W I T N E S S E T H




     WHEREAS, the Issuers have heretofore executed and delivered to the Trustee an Indenture (the
“Indenture”), dated as of April 9, 2010 providing for the issuance of 10.500% Senior Notes due 2018
(the “Notes”);



     WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary
shall execute and deliver to the Trustee a supplemental indenture pursuant to which the
Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuers’ Obligations under the
Notes and the Indenture on the terms and conditions set forth herein (the “Note Guarantee”); and



     WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and
deliver this Supplemental Indenture.



     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the
Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes
as follows:



     1. Capitalized Terms. Capitalized terms used herein without definition shall have
the meanings assigned to them in the Indenture.



     2. Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees to provide an
unconditional Guarantee on the terms and subject to the conditions set forth in the Note Guarantee
and in the Indenture including but not limited to Article 10 thereof.



     4. No Recourse Against Others. No director, officer, employee, incorporator,
stockholder, member or manager of the Issuers or any Guarantor, as such, will have any liability
for any obligations of the Issuers or the Guarantors under the Notes, this Indenture, the Note
Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes. The waiver may not be
effective to waive liabilities under the federal securities laws.



     5. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED
TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS
OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.



     6. Counterparts. The parties may sign any number of copies of this Supplemental
Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement.



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     7. Effect of Headings. The Section headings herein are for convenience only and
shall not affect the construction hereof.



     8. The Trustee. The Trustee shall not be responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of
the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary
and the Issuers.



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     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed and attested, all as of the date first above written.



     Dated:                     ,



	 	 	 	 	 

	 	 	[Guaranteeing Subsidiary]
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	[Issuer]
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	[Issuer]
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	[Existing Guarantors]
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	[Trustee],
	 	 	 as Trustee
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Authorized Signatory







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