exv10w1






Exhibit 10.1




AMENDED AND RESTATED CREDIT AGREEMENT




Dated as of November 6, 2009,



among



MAGNACHIP SEMICONDUCTOR S.A.

and

MAGNACHIP SEMICONDUCTOR FINANCE COMPANY

as Borrowers,




MAGNACHIP SEMICONDUCTOR LLC

and

THE OTHER GUARANTORS PARTY HERETO,

as Guarantors,




THE LENDERS PARTY HERETO



and



WILMINGTON TRUST FSB,

as Administrative Agent,








 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	Section	 	 	 	Page 	 
	ARTICLE I 

	 
	 	 	 	 	 	 
	DEFINITIONS 

	 
	 	 	 	 	 	 
	SECTION 1.01
	 	Defined Terms	 	 	2	 
	SECTION 1.02
	 	Classification of Loans and Borrowings	 	 	32	 
	SECTION 1.03
	 	Terms Generally	 	 	32	 
	SECTION 1.04
	 	Accounting Terms; GAAP	 	 	32	 
	SECTION 1.05
	 	Resolution of Drafting Ambiguities	 	 	32	 
	 
	 	 	 	 	 	 
	ARTICLE II 

	 
	 	 	 	 	 	 
	THE CREDITS 

	 
	 	 	 	 	 	 
	SECTION 2.01
	 	Commitments	 	 	33	 
	SECTION 2.02
	 	Loans	 	 	33	 
	SECTION 2.03
	 	Borrowing Procedure	 	 	34	 
	SECTION 2.04
	 	Evidence of Debt; Repayment of Loans	 	 	34	 
	SECTION 2.05
	 	Fees	 	 	36	 
	SECTION 2.06
	 	Interest on Loans	 	 	36	 
	SECTION 2.07
	 	[Intentionally Omitted]	 	 	36	 
	SECTION 2.08
	 	Interest Elections	 	 	36	 
	SECTION 2.09
	 	Optional and Mandatory Prepayments of Loans	 	 	38	 
	SECTION 2.10
	 	Alternate Rate of Interest	 	 	40	 
	SECTION 2.11
	 	Yield Protection	 	 	40	 
	SECTION 2.12
	 	Breakage Payments	 	 	41	 
	SECTION 2.13
	 	Payments Generally; Pro Rata Treatment; Sharing of Setoffs	 	 	42	 
	SECTION 2.14
	 	Taxes	 	 	43	 
	SECTION 2.15
	 	Mitigation Obligations; Replacement of Lenders	 	 	45	 
	SECTION 2.16
	 	[Intentionally Omitted]	 	 	46	 
	SECTION 2.17
	 	[Intentionally Omitted]	 	 	46	 
	SECTION 2.18
	 	Increase in Commitments	 	 	46	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE III 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	REPRESENTATIONS AND WARRANTIES 	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 3.01
	 	Organization; Powers	 	 	47	 
	SECTION 3.02
	 	Authorization; Enforceability	 	 	48	 
	SECTION 3.03
	 	No Conflicts	 	 	48	 
	SECTION 3.04
	 	Financial Statements; Projections	 	 	48	 
	SECTION 3.05
	 	Properties	 	 	49	 
	SECTION 3.06
	 	Intellectual Property	 	 	49	 
	SECTION 3.07
	 	Equity Interests and Subsidiaries	 	 	50	 
	SECTION 3.08
	 	Litigation; Compliance with Laws	 	 	50	 
	SECTION 3.09
	 	Agreements	 	 	51	 






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	Section	 	 	 	Page 	 
	SECTION 3.10
	 	Federal Reserve Regulations	 	 	51	 
	SECTION 3.11
	 	Investment Company Act; Public Utility Holding Company Act	 	 	51	 
	SECTION 3.12
	 	Use of Proceeds	 	 	51	 
	SECTION 3.13
	 	Taxes	 	 	51	 
	SECTION 3.14
	 	No Material Misstatements	 	 	52	 
	SECTION 3.15
	 	Labor Matters	 	 	52	 
	SECTION 3.16
	 	Solvency	 	 	52	 
	SECTION 3.17
	 	Employee Benefit Plans	 	 	52	 
	SECTION 3.18
	 	Environmental Matters	 	 	53	 
	SECTION 3.19
	 	Insurance	 	 	54	 
	SECTION 3.20
	 	Security Documents	 	 	55	 
	SECTION 3.21
	 	Anti-Terrorism Law	 	 	55	 
	SECTION 3.22
	 	[Intentionally Omitted]	 	 	56	 
	SECTION 3.23
	 	UK Financial Assistance	 	 	56	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE IV 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	CONDITIONS PRECEDENT 	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 4.01
	 	Conditions to Effective Date	 	 	56	 
	SECTION 4.02
	 	Conditions to All Credit Extensions	 	 	61	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE V 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	AFFIRMATIVE COVENANTS 	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 5.01
	 	Financial Statements, Reports, etc	 	 	62	 
	SECTION 5.02
	 	Litigation and Other Notices	 	 	65	 
	SECTION 5.03
	 	Existence; Businesses and Properties	 	 	65	 
	SECTION 5.04
	 	Insurance	 	 	66	 
	SECTION 5.05
	 	Obligations and Taxes	 	 	67	 
	SECTION 5.06
	 	Employee Benefits	 	 	67	 
	SECTION 5.07
	 	Maintaining Records; Access to Properties and Inspections; Annual Meetings	 	 	68	 
	SECTION 5.08
	 	Use of Proceeds	 	 	68	 
	SECTION 5.09
	 	Compliance with Environmental Laws; Environmental Reports	 	 	68	 
	SECTION 5.10
	 	Additional Collateral; Additional Guarantors	 	 	69	 
	SECTION 5.11
	 	Security Interests; Further Assurances	 	 	70	 
	SECTION 5.12
	 	Information Regarding Collateral	 	 	71	 
	SECTION 5.13
	 	Post-Closing Collateral Matters	 	 	72	 
	SECTION 5.14
	 	Affirmative Covenants with Respect to Leases	 	 	72	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE VI 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	NEGATIVE COVENANTS 	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 6.01
	 	Indebtedness	 	 	72	 
	SECTION 6.02
	 	Liens	 	 	73	 
	SECTION 6.03
	 	Sale and Leaseback Transactions	 	 	76	 
	SECTION 6.04
	 	Investment, Loan and Advances	 	 	76	 
	SECTION 6.05
	 	Mergers and Consolidations	 	 	77	 






ii









 






	 	 	 	 	 	 	 
	Section	 	 	 	Page 	 
	SECTION 6.06
	 	Asset Sales	 	 	78	 
	SECTION 6.07
	 	Acquisitions	 	 	78	 
	SECTION 6.08
	 	Dividends	 	 	79	 
	SECTION 6.09
	 	Transactions with Affiliates	 	 	79	 
	SECTION 6.10
	 	Minimum Liquidity	 	 	80	 
	SECTION 6.11
	 	Prepayments of Other Indebtedness;
Modifications of Organizational Documents and Other Documents, etc	 	 	80	 
	SECTION 6.12
	 	Limitation on Certain Restrictions on Subsidiaries	 	 	81	 
	SECTION 6.13
	 	Limitation on Issuance of Capital Stock	 	 	82	 
	SECTION 6.14
	 	Limitation on Creation of Subsidiaries	 	 	82	 
	SECTION 6.15
	 	Business	 	 	82	 
	SECTION 6.16
	 	Limitation on Accounting Changes	 	 	82	 
	SECTION 6.17
	 	Fiscal Year	 	 	82	 
	SECTION 6.18
	 	[Intentionally Omitted]	 	 	82	 
	SECTION 6.19
	 	No Further Negative Pledge	 	 	82	 
	SECTION 6.20
	 	Anti-Terrorism Law; Anti-Money Laundering	 	 	83	 
	SECTION 6.21
	 	Embargoed Person	 	 	83	 
	SECTION 6.22
	 	Limitation on Finance Subsidiary	 	 	84	 
	SECTION 6.23
	 	Preservation of Claims Under the Korean Opco Bank Guarantees	 	 	84	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE VII 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	GUARANTEE 	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 7.01
	 	The Guarantee	 	 	84	 
	SECTION 7.02
	 	Obligations Unconditional	 	 	84	 
	SECTION 7.03
	 	Reinstatement	 	 	85	 
	SECTION 7.04
	 	Subrogation	 	 	86	 
	SECTION 7.05
	 	Remedies	 	 	86	 
	SECTION 7.06
	 	Instrument for the Payment of Money	 	 	86	 
	SECTION 7.07
	 	Continuing Guarantee	 	 	86	 
	SECTION 7.08
	 	General Limitation on Guarantee Obligations	 	 	86	 
	SECTION 7.09
	 	Release of Guarantors	 	 	86	 
	SECTION 7.10
	 	Provisions Applicable to Certain Guarantees	 	 	87	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE VIII 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	EVENTS OF DEFAULT 	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 8.01
	 	Events of Default	 	 	87	 
	SECTION 8.02
	 	Application of Proceeds	 	 	90	 
	SECTION 8.03
	 	Right to Cure	 	 	90	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE IX 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT 	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 9.01
	 	Appointment and Authority	 	 	91	 
	SECTION 9.02
	 	Rights as a Lender	 	 	91	 
	SECTION 9.03
	 	Exculpatory Provisions	 	 	91	 
	SECTION 9.04
	 	Reliance by Agent	 	 	93	 






iii









 






	 	 	 	 	 	 	 
	Section	 	 	 	Page 	 
	SECTION 9.05
	 	Delegation of Duties	 	 	93	 
	SECTION 9.06
	 	Resignation of Agent	 	 	93	 
	SECTION 9.07
	 	Non-Reliance on Agent and Other Lenders	 	 	94	 
	SECTION 9.08
	 	Agents Not Required to Advance Funds	 	 	94	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE X 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	MISCELLANEOUS 	 	 	 	 
	 
	 	 	 	 	 	 
	SECTION 10.01
	 	Notices.	 	 	94	 
	SECTION 10.02
	 	Waivers; Amendment.	 	 	96	 
	SECTION 10.03
	 	Expenses; Indemnity; Damage Waiver.	 	 	99	 
	SECTION 10.04
	 	Successors and Assigns.	 	 	101	 
	SECTION 10.05
	 	Survival of Agreement	 	 	103	 
	SECTION 10.06
	 	Counterparts; Integration; Effectiveness; Electronic Execution.	 	 	104	 
	SECTION 10.07
	 	Severability	 	 	104	 
	SECTION 10.08
	 	Right of Setoff	 	 	104	 
	SECTION 10.09
	 	Governing Law; Jurisdiction; Consent to Service of Process.	 	 	105	 
	SECTION 10.10
	 	Waiver of Jury Trial	 	 	105	 
	SECTION 10.11
	 	Obligations Joint and Several	 	 	106	 
	SECTION 10.12
	 	Headings	 	 	106	 
	SECTION 10.13
	 	Treatment of Certain Information; Confidentiality	 	 	106	 
	SECTION 10.14
	 	USA PATRIOT Act Notice	 	 	106	 
	SECTION 10.15
	 	Interest Rate Limitation	 	 	107	 
	SECTION 10.16
	 	[Intentionally Omitted]	 	 	107	 
	SECTION 10.17
	 	Obligations Absolute	 	 	107	 
	SECTION 10.18
	 	Judgment Currency.	 	 	107	 
	SECTION 10.19
	 	Restatement of Pre-Petition Credit Agreement.	 	 	108	 






	 	 	 
	ANNEX	 	 
	Annex I

	 	Outstanding Term Loans






	 	 	 
	SCHEDULES	 	 
	Schedule 1.01(a)

	 	Korean Opco Security Documents
	Schedule 1.01(d)

	 	Subsidiary Guarantors
	Schedule 3.03

	 	Governmental Approvals; Compliance with Laws
	Schedule 3.05(b)

	 	Real Property
	Schedule 3.06(c)

	 	Violations or Proceedings
	Schedule 3.07(a)

	 	Equity Interests
	Schedule 3.07(c)

	 	Corporate Organizational Chart
	Schedule 3.20

	 	Financing Statements
	Schedule 4.01(d)

	 	Extinguished Indebtedness
	Schedule 4.01(g)

	 	Local and Foreign Counsel
	Schedule 5.13

	 	Post-Closing Matters






	 	 	 
	EXHIBITS	 	 
	Exhibit A

	 	Form of Administrative Questionnaire






iv









 






	 	 	 
	EXHIBITS	 	 
	Exhibit B

	 	Form of Assignment and Assumption
	Exhibit C

	 	Form of Borrowing Request
	Exhibit D

	 	Form of Compliance Certificate
	Exhibit E

	 	Form of Interest Election Request
	Exhibit F

	 	Form of Joinder Agreement
	Exhibit G

	 	Form of Note
	Exhibit H

	 	Form of Security Agreement
	Exhibit I

	 	Form of Solvency Certificate









v









 








AMENDED AND RESTATED CREDIT AGREEMENT




          This AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”), dated as of November
6, 2009, among MAGNACHIP SEMICONDUCTOR S.A., a société anonyme, organized and existing
under the laws of the Grand Duchy of Luxembourg, having its registered office at 74, rue de Merl, L
- 2146 Luxembourg, Grand Duchy of Luxembourg, registered with the Luxembourg Register of commerce
and companies under the number B 97,483, MAGNACHIP SEMICONDUCTOR FINANCE COMPANY, a Delaware
corporation (collectively, “Borrowers”), MAGNACHIP SEMICONDUCTOR LLC, a Delaware limited liability
company (“Holdings”), the Subsidiary Guarantors listed on the signature pages hereto (such term and
each other capitalized term used but not defined herein having the meaning given to it in
Article I), the Lenders, Wilmington Trust FSB, as administrative agent (in such
capacity, “Administrative Agent”) for the Lenders and as collateral agent (in such capacity,
“Collateral Agent”) for the Secured Parties.




WITNESSETH:




          WHEREAS, Holdings, the Borrowers, the subsidiary guarantors party thereto, UBS AG, Stamford
Branch, as administrative agent and as collateral agent, UBS Securities LLC, as lead arranger, as
documentation agent and as syndication agent, UBS Loan Finance LLC, as swingline lender and Korea
Exchange Bank, as issuing bank, are parties to that certain Credit Agreement, dated as of December
23, 2004 (as amended, restated, supplemented or otherwise modified from time to time prior to the
date hereof, the “Pre-Petition Credit Agreement”).




          WHEREAS, on June 12, 2009 (“Petition Date”), Holdings, the Borrowers and certain of the
Subsidiary Guarantors, as debtors and debtors-in-possession (the “Debtors”), commenced voluntary
cases under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the
District of Delaware (the “Bankruptcy Court”), which cases are being jointly administered (the
“Chapter 11 Case”).




          WHEREAS, the Plan of Reorganization of the Debtors, dated September 24, 2009, in the form
filed with the Bankruptcy Court and any amendments, supplements or modifications thereto
(the “Plan of Reorganization”) has been confirmed pursuant to the Confirmation Order, and
concurrently with the effectiveness of this Agreement, the effective date with respect to such Plan
of Reorganization has occurred.




          WHEREAS, in connection with the Plan of Reorganization, it has been agreed by the parties
hereto to amend and restate the Pre-Petition Credit Agreement to (i) terminate any unused
commitments thereunder, (ii) reduce the outstanding principal amount thereunder to $61,750,000,
(iii) to redenominate the outstanding revolving loans as outstanding Term Loans, and (iv) provide
that the “Loans” outstanding as of the Effective Date and other “Obligations” under and as defined
in the Pre-Petition Credit Agreement (including indemnities) shall be governed by and deemed to be
outstanding under this Agreement with the intent that the terms of this Agreement shall supersede
the terms of the Pre-Petition Credit Agreement, and all references to the Pre-Petition Credit
Agreement herein or in any Loan Document or other document or instrument delivered in connection
herewith or therewith shall be deemed to refer to this Agreement and the provisions hereof.




          NOW, THEREFORE, the Lenders are willing to extend such credit to Borrowers on the terms and
subject to the conditions set forth herein. Accordingly, the parties hereto agree as follows:







 









 








ARTICLE I




DEFINITIONS



          SECTION 1.01 Defined Terms. As used in this Agreement, the following terms shall have the
meanings specified below:




          “ABR”, when used in reference to any Loan or Borrowing, is used when such Loan, or the Loans
comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate
Base Rate.




          “ABR Borrowing” shall mean a Borrowing comprised of ABR Loans.




          “ABR Loan” shall mean any Loan bearing interest at a rate determined by reference to the
Alternate Base Rate in accordance with the provisions of Article II.




          “Acquisition Consideration” shall mean the purchase consideration for any Permitted
Acquisition and all other payments by Holdings or any of its Subsidiaries in exchange for, or as
part of, or in connection with, any Permitted Acquisition, whether paid in cash or by exchange of
Equity Interests or of properties or otherwise and whether payable at or prior to the consummation
of such Permitted Acquisition or deferred for payment at any future time, whether or not any such
future payment is subject to the occurrence of any contingency, and includes any and all payments
representing the purchase price and any assumptions of Indebtedness, “earn-outs” and other
agreements to make any payment the amount of which is, or the terms of payment of which are, in any
respect subject to or contingent upon the revenues, income, cash flow or profits (or the like) of
any person or business; provided that any such future payment that is subject to a contingency
shall be considered Acquisition Consideration only to the extent of the reserve, if any, required
under GAAP at the time of such sale to be established in respect thereof by Holdings or any of its
Subsidiaries.




          “Adjusted LIBOR Rate” shall mean, with respect to any Eurodollar Borrowing for any Interest
Period, (a) an interest rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%)
determined by the Administrative Agent to be equal to the LIBOR Rate for such Eurodollar Borrowing
in effect for such Interest Period divided by (b) 1 minus the Statutory Reserves (if any) for such
Eurodollar Borrowing for such Interest Period.




          “Administrative Agent” shall have the meaning assigned to such term in the preamble hereto and
includes each other person appointed as the successor pursuant to Article X.




          “Administrative Agent Fees” shall have the meaning assigned to such term in
Section 2.05(a).




          “Administrative Questionnaire” shall mean an Administrative Questionnaire in substantially the
form of Exhibit A.




          “Affiliate” shall mean, when used with respect to a specified person, another person that
directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is
under common Control with the person specified; provided, however, that, for purposes of
Section 6.09, the term “Affiliate” shall also include (i) any person that directly or
indirectly owns more than 10% of any class of Equity Interests of the person specified or (ii) any
person that is an executive officer or director of the person specified.





2









 








          “Agents” shall mean the Administrative Agent and the Collateral Agent; and “Agent” shall mean
any of them.




          “Agreement” shall have the meaning assigned to such term in the preamble hereto.




          “Alternate Base Rate” shall mean, for any day, a rate per annum (rounded upward, if necessary,
to the nearest 1/100th of 1%) equal to the greater of (a) the Base Rate in effect on such day and
(b) the Federal Funds Effective Rate in effect on such day plus 0.50%. If the Administrative Agent
shall have determined (which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Federal Funds Effective Rate for any reason, including the inability or
failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms of
the definition thereof, the Alternate Base Rate shall be determined without regard to clause (b) of
the preceding sentence until the circumstances giving rise to such inability no longer exist. Any
change in the Alternate Base Rate due to a change in the Base Rate or the Federal Funds Effective
Rate shall be effective on the effective date of such change in the Base Rate or the Federal Funds
Effective Rate, respectively.




          “Anti-Terrorism Laws” shall have the meaning assigned to such term in Section 3.21.




          “Applicable Margin” shall mean, for any day, (i) with respect to any Eurodollar Loan, 12.00%
per annum and (ii) with respect to any ABR Loan, 11.00% per annum.




          “Approved Fund” shall mean any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.




          “Asset Sale” shall mean (a) any conveyance, sale, assignment, transfer or other disposition
(including by way of merger or consolidation, any lease, sublease, license or sublicense that is in
effect a disposition and any Sale and Leaseback Transaction) of any property excluding sales of
inventory, dispositions of cash equivalents and Intellectual Property licenses, in each case, in
the ordinary course of business, by Holdings or any of its Subsidiaries and (b) any issuance or
sale of any Equity Interests of any Subsidiary of Holdings, in each case, to any person other than
(i) any Borrower or (ii) any Subsidiary Guarantor.




          “Assignment and Assumption” shall mean an assignment and assumption entered into by a Lender
and an Eligible Assignee (with the consent of any party whose consent is required by
Section 10.04(b)), and accepted by the Administrative Agent, in substantially the form of
Exhibit B, or any other form approved by the Administrative Agent.




          “Attributable Indebtedness” shall mean, when used with respect to any Sale and Leaseback
Transaction, as at the time of determination, the present value (discounted at a rate equivalent to
Borrowers’ then-current weighted average cost of funds for borrowed money as at the time of
determination, compounded on a semi-annual basis) of the total obligations of the lessee for rental
payments during the remaining term of the lease included in any such Sale and Leaseback
Transaction.




          “Bankruptcy Code” means the United States Bankruptcy Code, being Title 11 of the United States
Code (11 U.S.C. Sections 101-1330), as the same may be amended, modified, recodified or
supplemented, together with all official rules and regulations thereunder.




          “Bankruptcy Court” shall have the meanings set forth in the recitals hereto.







3









 








          “Base Rate” shall mean, for any day, a rate per annum that is equal to the corporate base rate
of interest determined by the Administrative Agent from time to time; each change in the Base Rate
shall be effective on the date such change is effective. The corporate base rate is not
necessarily the lowest rate charged by the Administrative Agent to its customers.




          “Board” shall mean the Board of Governors of the Federal Reserve System of the United States.




          “Board of Directors” shall mean, with respect to any person, (i) in the case of any
corporation, the board of directors of such person; (ii) in the case of any limited liability
company, the board of managers of such person; (iii) in the case of any partnership, the Board of
Directors of the general partner of such person; and (iv) in any other case, the functional
equivalent of the foregoing.




          “Borrowers” shall have the meaning assigned to such term in the preamble hereto.




          “Borrowing” shall mean Loans of the same Class and Type, made, converted or continued on the
same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect.




          “Borrowing Request” shall mean a request by any Borrower in accordance with the terms of
Section 2.03 and substantially in the form of Exhibit C, or such other form as
shall be approved by the Administrative Agent.




          “Business Day” shall mean any day other than a Saturday, Sunday or other day on which banks in
New York City are authorized or required by law to close; provided, however, that when used in
connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank market.




          “Capital Expenditures” shall mean, for any period, without duplication, the increase during
that period in the gross property, plant or equipment account in the consolidated balance sheet of
Holdings and its Subsidiaries, determined in accordance with GAAP, whether such increase is due to
purchase of properties for cash or financed by the incurrence of Indebtedness, but excluding any
portion of such increase attributable solely to acquisitions of property, plant and equipment in
Permitted Acquisitions.




          “Capital Lease Obligations” of any person shall mean the obligations of such person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in accordance with GAAP.




          “Cash Equivalents” shall mean, as to any person, (a) Dollars, Korean Won, Pound Sterling, Hong
Kong dollars, New Taiwan dollars, Euros and Japanese Yen; (b) securities issued or directly and
fully guaranteed or insured by the United States government, Korean government, EU member states
with a 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; (c) Dollar denominated and
Korean Won denominated certificates of deposit, eurodollar time deposits and other similar
instruments in






4









 







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 Lender or 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 comparable
rating by a comparable rating agency in the relevant jurisdiction if a Moody’s or S&P rating is
unavailable; (d) repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (b) and (c) above entered into with any financial
institution meeting the qualifications specified in clause (c) above; (e) commercial paper having
one of the three highest ratings obtainable from S&P and one of the two highest ratings obtainable
from Moody’s or comparable rating by a comparable rating agency in the relevant jurisdiction if a
Moody’s or S&P rating is unavailable and, in each case, maturing within one year after the date of
acquisition; and (f) money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (a) through (e) of this definition.




          “Cash Interest Expense” shall mean, for any period, Consolidated Interest Expense for such
period, less the sum of (a) interest on any debt paid by the increase in the principal amount of
such debt including by issuance of additional debt of such kind; (b) items described in clause (c)
or, other than to the extent paid in cash, clause (g) of the definition of “Consolidated Interest
Expense;” and (c) gross interest income of Holdings and its Subsidiaries for such period.




          “Casualty Event” shall mean any loss of title or any loss of or damage to or destruction of,
or any condemnation or other taking (including by any Governmental Authority) of, any property of
Holdings or any of its Subsidiaries. “Casualty Event” shall include but not be limited to any
taking of all or any part of any Real Property of any person or any part thereof, in or by
condemnation or other eminent domain proceedings pursuant to any Requirement of Law, or by reason
of the temporary requisition of the use or occupancy of all or any part of any Real Property of any
person or any part thereof by any Governmental Authority, civil or military, or any settlement in
lieu thereof.




          “CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended, 42 U.S.C. § 9601 et seq. and any implementing regulations.





     A “Change in Control” shall be deemed to have occurred if:




     (a) Holdings at any time ceases to own 99% of the Equity Interests of Lux Borrower,
100% of the Equity Interests of the U.S. Sales Subsidiary or 100% of the Equity Interests of
MagnaChip SA Holdings;




     (b) MagnaChip SA Holdings ceases to own 1% of the Equity Interests of Lux Borrower;




     (c) Lux Borrower ceases to own 100% of the Equity Interests of each of Dutch Holdco,
MagnaChip Semiconductor Finance Company or any Foreign Sales Subsidiary;




     (d) Dutch Holdco ceases to own 100% of the Equity Interests of Korean Opco;




     (e) at any time a change of control occurs under any Material Indebtedness;




     (f) prior to an IPO, (i) the Permitted Holders cease to own, or to have the power to
vote or direct the voting of, Voting Stock of Holdings representing a majority of the voting
power of the total outstanding Voting Stock of Holdings or (ii) the Permitted Holders cease
to own



5









 







Equity Interests representing a majority of the total economic interests of the Equity
Interests of Holdings;




     (g) following an IPO, (i) the Permitted Holders shall fail to own, or to have the power
to vote or direct the voting of, Voting Stock of Holdings representing more than 25% of the
voting power of the total outstanding Voting Stock of Holdings, (ii) the Permitted Holders
cease to own Equity Interests representing more than 25% of the total economic interests of
the Equity Interests of Holdings or (iii) any “person” or “group” (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders, is
or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that for purposes of this clause such person or group shall be deemed to have
“beneficial ownership” of all securities that such person or group has the right to acquire,
whether such right is exercisable immediately or only after the passage of time), directly
or indirectly, of Voting Stock of Holdings representing more than 25% of the voting power of
the total outstanding Voting Stock of Holdings; or




     (h) following an IPO, during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of Holdings (together with
any new directors whose election to such Board of Directors or whose nomination for election
was approved by a vote of a majority of the members of the Board of Directors of Holdings,
which members comprising such majority are then still in office and were either directors at
the beginning of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of Directors of
Holdings.



          For purposes of this definition, a person shall not be deemed to have beneficial ownership of
Equity Interests subject to a stock purchase agreement, merger agreement or similar agreement until
the consummation of the transactions contemplated by such agreement.




          “Change in Law” shall mean the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking into effect of any law, treaty, order, policy, rule or
regulation, (b) any change in any law, treaty, order, policy, rule or regulation or in the
administration, interpretation or application thereof by any Governmental Authority or (c) the
making or issuance of any request, guideline or directive (whether or not having the force of law)
by any Governmental Authority.




          “Chapter 11 Case” shall have the meaning set forth in the recitals hereto.




          “Charges” shall have the meaning assigned to such term in Section 10.15.




          “Class,” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are Term Loans or Incremental Loans, in each case, under this
Agreement, as originally in effect or pursuant to Section 2.18, of which such Loan or
Borrowing shall be a part.




          “Clearing House” shall mean the means the Seoul Clearing House, an institution appointed by
the Minster of the Ministry of Justice of Korea pursuant to Article 83 of the Bills of Exchange and
Promissory Notes Law of Korea and Article 69 of the Cheques Law of Korea and operated by the Korea
Financial Telecommunications and Clearing Institute for settlement activities by way of exchange of
bills of exchange, promissory notes and cheques in Korea.







6









 








          “Closing Date” shall mean December 23, 2004.




          “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.




          “Collateral” shall mean, collectively, all of the Security Agreement Collateral, the Mortgaged
Property and all other property wherever situate of whatever kind and nature subject or purported
to be subject from time to time to a Lien under any Security Document.




          “Collateral Agent” shall have the meaning assigned to such term in the preamble hereto.




          “Collateral Trust Agreement” shall mean that certain Amended and Restated Collateral Trust
Agreement dated as of the date hereof by and among the Administrative Agent, the Collateral Agent,
the Senior Secured Notes Trustee, Korean Opco and the Collateral Trustee.




          “Collateral Trustee” shall mean US Bank National Association, its successors and assigns.




          “Collateral Trust Documents” shall mean the Collateral Trust Agreement and all other documents
executed and delivered in connection therewith relating to the granting of liens or the issuance of
guarantees by Korean Opco.




          “Commitment” shall mean, from the date on which any Incremental Loan Commitment shall have
become effective pursuant to Section 2.18, with respect to any Lender, such Lender’s Incremental
Loan Commitment, if any, as the same may be reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 10.04.




          “Companies” shall mean Holdings and its Subsidiaries; and “Company” shall mean any one of
them.




          “Compliance Certificate” shall mean a certificate of a Financial Officer substantially in the
form of Exhibit D.




          “Confirmation Order” means the Findings of Fact, Conclusions of Law, and Order Confirming the
Loan Parties’ Plan of Reorganization issued by the Bankruptcy Court and entered on September 25,
2009 in the Chapter 11 Case.




          “Consolidated Amortization Expense” shall mean, for any period, the amortization expense of
Holdings and its Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP.




          “Consolidated Depreciation Expense” shall mean, for any period, the depreciation expense of
Holdings and its Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP.




          “Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for such period,
adjusted by (x) adding thereto, in each case only to the extent (and in the same proportion)
deducted in determining such Consolidated Net Income (and with respect to the portion of
Consolidated Net Income attributable to any Subsidiary of Holdings only if a corresponding amount
would be permitted at the date of determination to be distributed to a Borrower by such Subsidiary
without prior






7









 







approval (that has not been obtained), pursuant to the terms of its Organizational Documents
and all agreements, instruments and Requirements of Law applicable to such Subsidiary or its
equityholders):





     (a) Consolidated Interest Expense for such period;




     (b) Consolidated Amortization Expense for such period;




     (c) Consolidated Depreciation Expense for such period;




     (d) Consolidated Tax Expense for such period plus the amount of any Permitted Tax
Distributions made by Holdings pursuant to Section 6.08(c);




     (e) costs and expenses directly incurred in connection with the Chapter 11 Case and the
Transactions; and




     (f) the aggregate amount of all other non-cash charges reducing Consolidated Net Income
(excluding any non-cash charge that results in an accrual of a reserve for cash charges in
any future period) for such period; and


(y) subtracting therefrom the aggregate amount of all non-cash items increasing Consolidated Net
Income (other than the accrual of revenue or recording of receivables in the ordinary course of
business) for such period. For the avoidance of doubt, Consolidated EBITDA for any period shall
not include any Cure Amount received by Holdings in any period. Notwithstanding anything to the
contrary in the foregoing, for purposes of calculating Consolidated EBITDA for any period that
includes any of the fiscal quarters ended March 29, 2009, June 28, 2009 or September 27, 2009,
Consolidated EBITDA for such fiscal quarters shall be deemed to be $2,290,000, $29,010,000 and
$31,820,000, respectively, subject, in each case, to normal year-end audit adjustments.




          Consolidated EBITDA shall be calculated on a Pro Forma Basis to give effect to any Permitted
Acquisition and Asset Sales (other than any dispositions in the ordinary course of business)
consummated at any time on or after the first day of the Test Period thereof as if each such
Permitted Acquisition had been effected on the first day of such period and as if each such Asset
Sale had been consummated on the day prior to the first day of such period.




          “Consolidated Indebtedness” shall mean, as at any date of determination, the aggregate amount
of all Indebtedness of Holdings and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP.




          “Consolidated Interest Expense” shall mean, for any period, the total consolidated interest
expense of Holdings and its Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP plus, without duplication:





     (a) imputed interest on Capital Lease Obligations and Attributable Indebtedness of
Holdings and its Subsidiaries for such period;




     (b) commissions, discounts and other fees and charges owed by Holdings or any of its
Subsidiaries with respect to letters of credit securing financial obligations, bankers’
acceptance financing and receivables financings for such period;



8









 






     (c) amortization of debt issuance costs, debt discount or premium and other financing
fees and expenses incurred by any Borrower or any of its Subsidiaries for such period;




     (d) cash contributions to any employee stock ownership plan or similar trust made by
Holdings or any of its Subsidiaries to the extent such contributions are used by such plan
or trust to pay interest or fees to any person (other than any Borrower or a Wholly Owned
Subsidiary) in connection with Indebtedness incurred by such plan or trust for such period;




     (e) all interest paid or payable with respect to discontinued operations of Holdings or
any of its Subsidiaries for such period;




     (f) the interest portion of any deferred payment obligations of Holdings or any of its
Subsidiaries for such period;




     (g) all interest on any Indebtedness of Holdings or any of its Subsidiaries of the type
described in clause (f) or (k) of the definition of “Indebtedness” for such period;


provided that (a) to the extent directly related to the Transactions, debt issuance costs, debt
discount or premium and other financing fees and expenses shall be excluded from the calculation of
Consolidated Interest Expense and (b) Consolidated Interest Expense shall be calculated after
giving effect to Hedging Agreements (including associated costs), but excluding unrealized gains
and losses with respect to Hedging Agreements.




          Consolidated Interest Expense shall be calculated on a Pro Forma Basis to give effect to any
Indebtedness incurred, assumed or permanently repaid or extinguished during the relevant Test
Period in connection with any Permitted Acquisitions and Asset Sales (other than any dispositions
in the ordinary course of business) as if such incurrence, assumption, repayment or extinguishing
had been effected on the first day of such period.




          “Consolidated Net Income” shall mean, for any period, the consolidated net income (or loss) of
Holdings and its Subsidiaries determined on a consolidated basis in accordance with GAAP; provided
that there shall be excluded from such net income (to the extent otherwise included therein),
without duplication:





     (a) the net income (or loss) of any person (other than a Subsidiary of Holdings) in
which any person other than Holdings or any of its Subsidiaries has an ownership interest,
except to the extent that cash in an amount equal to any such income has actually been
received by such Borrower or (subject to clause (b) below) such Subsidiary during such
period;




     (b) the net income of any Subsidiary of Holdings during such period to the extent that
the declaration or payment of dividends or similar distributions by such Subsidiary of that
income is not permitted by operation of the terms of its Organizational Documents or any
agreement, instrument or Requirement of Law applicable to that Subsidiary during such
period, except that Borrowers’ equity in net loss of any such Subsidiary for such period
shall be included in determining Consolidated Net Income;




     (c) any gain (or loss), together with any related provisions for taxes on any such gain
(or the tax effect of any such loss), realized during such period by Holdings or any of its
Subsidiaries upon any Asset Sale (other than any dispositions in the ordinary course of
business) by any Borrower or any of its Subsidiaries;



9









 






     (d) gains and losses due solely to fluctuations in currency values and the related tax
effects determined in accordance with GAAP for such period;




     (e) unrealized gains and losses with respect to Hedging Obligations for such period;




     (f) any extraordinary gain (or extraordinary loss), together with any related provision
for taxes on any such gain (or the tax effect of any such loss), recorded or recognized by
Holdings or any of its Subsidiaries during such period; and



          For purposes of this definition of “Consolidated Net Income,” Consolidated Net Income shall be
reduced (to the extent not already reduced thereby) by the amount of any Permitted Tax
Distributions made by Holdings pursuant to Section 6.08(c).




          “Consolidated Tax Expense” shall mean, for any period, the tax expense of Holdings and its
Subsidiaries, for such period, determined on a consolidated basis in accordance with GAAP.




          “Contingent Obligation” shall mean, as to any person, any obligation, agreement, understanding
or arrangement of such person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations (“primary obligations”) of any other person (the “primary obligor”)
in any manner, whether directly or indirectly, including any obligation of such person, whether or
not contingent, (a) to purchase any such primary obligation or any property constituting direct or
indirect security therefor; (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary obligor; (c) to purchase
property, securities or services primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to make payment of such primary
obligation; (d) with respect to bankers’ acceptances, letters of credit and similar credit
arrangements, until a reimbursement obligation arises (which reimbursement obligation shall
constitute Indebtedness); or (e) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof; provided, however, that the term “Contingent
Obligation” shall not include endorsements of instruments for deposit or collection in the ordinary
course of business or any product warranties. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made (or, if less, the maximum amount of such
primary obligation for which such person may be liable, whether singly or jointly, pursuant to the
terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable,
the maximum reasonably anticipated liability in respect thereof (assuming such person is required
to perform thereunder) as determined by such person in good faith.




          “Control” shall mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a person, whether through the ownership of voting
securities, by contract or otherwise, and the terms “Controlling” and “Controlled” shall have
meanings correlative thereto.




          “Controlled Investment Affiliate” means, as to any person, any other person which directly or
indirectly is in Control of, is Controlled by, or is under common Control with, such person and is
organized by such person (or any person Controlling such person) primarily for making equity or
debt investments in Holdings or other portfolio companies.




          “Credit Extension” shall mean the making of a Loan by a Lender.







10









 








          “CRPL” shall mean the Corporate Restructuring Promotion Law of Korea (Law Number 09617
(amended in 2009)) and all regulations, rules and decrees promulgated under the CRPL and any
successor statute or law.




          “Cumulative Credit” means, at any date, an amount, not less than zero in the aggregate,
determined on a cumulative basis equal to, without duplication:





     (a) $5.0 million, plus;




     (b) the aggregate cumulative sum of 50% of Excess Cash Flow for each full fiscal
quarter ending after the Effective Date (which, for the avoidance of doubt, shall not
include the fiscal quarter ending December 31, 2009), plus;




     (c) cash proceeds from the sale of Equity Interests of Holdings (other than
Disqualified Capital Stock or any Equity Interests that provide for the making of mandatory
Dividends prior to the first anniversary of the Maturity Date) after the Effective Date,
excluding any Cure Amounts, plus;




     (d) cash contributions to the capital of Holdings after the Effective Date, excluding
any Cure Amounts, minus;




     (e) any Dividends made pursuant to Section 6.08(d) after the Effective Date,
minus;




     (f) any payments, prepayments, redemptions or acquisitions of Subordinated Indebtedness
pursuant to Section 6.11(a) after the Effective Date.



          “Cure Amount” shall have the meaning assigned to such term in Section 8.03.




          “Cure Right” shall have the meaning assigned to such term in Section 8.03.




          “Current Assets” shall mean, with respect to Holdings and its Subsidiaries on a consolidated
basis at any date of determination, the sum of all assets (other than cash and Cash Equivalents or
other cash equivalents) that would, in accordance with GAAP, be classified on a consolidated
balance sheet of Holdings and its Subsidiaries as current assets at such date of determination,
other than amounts related to current or deferred Taxes based on income or profits.




          “Current Liabilities” shall mean, with respect to Holdings and its Subsidiaries on a
consolidated basis at any date of determination, all liabilities that would, in accordance with
GAAP, be classified on a consolidated balance sheet of Holdings and its Subsidiaries as current
liabilities at such date of determination, other than (a) the current portion of any Indebtedness;
(b) accruals of Consolidated Interest Expense; (c) accruals for current or deferred Taxes based on
income or profits; (d) accruals, if any, of transaction costs resulting from the Transactions; (e)
accruals of any costs or expenses related to (i) severance or termination of employees prior to the
Effective Date or (ii) bonuses, pension and other post-retirement benefit obligations; and (f)
accruals for add-backs to Consolidated EBITDA.




          “Debt Issuance” shall mean the incurrence by Holdings or any of its Subsidiaries of any
Indebtedness after the Effective Date (other than as permitted by Section 6.01).




          “Debt Service” shall mean, for any period, Cash Interest Expense for such period plus
scheduled principal amortization of all Indebtedness for such period.







11









 








          “Default” shall mean any event, occurrence or condition which is, or upon notice, lapse of
time or both would constitute, an Event of Default.




          “Default Rate” shall have the meaning assigned to such term in Section 2.06(c).




          “Disqualified Capital Stock” shall mean any Equity Interest which, by its terms (or by the
terms of any security into which it is convertible or for which it is exchangeable), or upon the
happening of any event; (a) matures (excluding any maturity as the result of an optional redemption
by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior
to the first anniversary of the Maturity Date; (b) is convertible into or exchangeable (unless at
the sole option of the issuer thereof) for (i) debt securities or (ii) any Equity Interests
referred to in (a) above, in each case at any time on or prior to the first anniversary of the
Maturity Date; or (c) contains any repurchase obligation which may come into effect prior to
payment in full of all Obligations; provided, however, that any Equity Interests that would not
constitute Disqualified Capital Stock but for provisions thereof giving holders thereof (or the
holders of any security into or for which such Equity Interests is convertible, exchangeable or
exercisable) the right to require the issuer thereof to redeem such Equity Interests upon the
occurrence of a change in control or an asset sale occurring prior to the first anniversary of the
Maturity Date shall not constitute Disqualified Capital Stock if such Equity Interests provide that
the issuer thereof will not redeem any such Equity Interests pursuant to such provisions prior to
the repayment in full of the Obligations.




          “Dividend” with respect to any person shall mean that such person has declared or paid a
dividend or returned any equity capital to the holders of its Equity Interests or authorized or
made any other distribution, payment or delivery of property (other than Qualified Capital Stock of
such person) or cash to the holders of its Equity Interests as such, or redeemed, retired,
purchased or otherwise acquired, directly or indirectly, for consideration any of its Equity
Interests outstanding (or any options or warrants issued by such person with respect to its Equity
Interests), or set aside any funds for any of the foregoing purposes, or shall have permitted any
of its Subsidiaries to purchase or otherwise acquire for consideration any of the Equity Interests
of such person outstanding (or any options or warrants issued by such person with respect to its
Equity Interests). Without limiting the foregoing, “Dividends” with respect to any person shall
also include all payments made or required to be made by such person with respect to any stock
appreciation rights, plans, equity incentive or achievement plans or any similar plans or setting
aside of any funds for the foregoing purposes.




          “Dutch Holdco” shall mean MagnaChip Semiconductor B.V., a Dutch privately held limited
liability company.




          “Dollars” or “$” shall mean lawful money of the United States.




          “Early Excess Cash Flow Prepayment” means a prepayment of Loans pursuant to Section
2.09(d).




          “Effective Date” shall mean the date on which the conditions precedent set forth in Section
4.01 shall have been satisfied or waived with the consent of the Supermajority Lenders, which date
is November 6, 2009.







12









 








          “Eligible Assignee” shall mean (i) any Lender; (ii) an Affiliate of any Lender; (iii) an
Approved Fund; and (iv) any other person (other than a natural person) approved by the
Supermajority Lenders and Borrowers.




          “Embargoed Person” shall have the meaning assigned to such term in Section 6.21.




          “Enforcement Lenders” shall mean (i) to the extent that Permitted Holders and their Affiliates
hold more than 50% of the sum of all the Loans outstanding and unused Commitments, all Lenders who
are not Permitted Holders or Affiliates thereof, and (ii) otherwise, the Required Lenders.




          “Environment” shall mean ambient air, surface water and groundwater (including potable water,
navigable water and wetlands), the land surface and subsurface strata, natural resources, the
workplace, and any other area or medium in any Environmental Law.




          “Environmental Claim” shall mean any claim, notice, demand, order, action, suit, proceeding or
other communication alleging liability for an obligation with respect to any investigation,
remediation, removal, cleanup, response, corrective action, damages to natural resources, personal
injury, property damage, fines, penalties or other costs resulting from, related to or arising out
of (i) the presence, Release or threatened Release in or into the Environment of Hazardous Material
at any location or (ii) any violation or alleged violation of any Environmental Law, and shall
include any claim seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from, related to or arising out of the presence, Release or threatened
Release of Hazardous Material or alleged injury or threat of injury to health, safety or the
Environment.




          “Environmental Law” shall mean any and all applicable present and future treaties, laws,
statutes, ordinances, regulations, rules, decrees, orders, judgments, consent orders, consent
decrees, code or other binding requirements, and the common law, in any jurisdiction relating to
protection of public health or the Environment, the Release or threatened Release of Hazardous
Material, natural resources or natural resource damages, or occupational safety or health.




          “Environmental Permit” shall mean any permit, license, approval, registration, notification,
exemption, consent or other authorization required in any jurisdiction by or from a Governmental
Authority under Environmental Law.




          “Equity Interest” shall mean, with respect to any person, any and all shares, interests,
participations or other equivalents, including membership interests (however designated, whether
voting or nonvoting), of equity of such person, including, if such person is a partnership,
partnership interests (whether general or limited) and 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
property of, such partnership, whether outstanding on the date hereof or issued after the Effective
Date, but excluding debt securities convertible or exchangeable into such equity.




          “Equity Issuance” shall mean, without duplication, (i) any issuance or sale by Holdings after
the Effective Date of any Equity Interests in Holdings (including any Equity Interests issued upon
exercise of any warrant or option) or any warrants or options to purchase Equity Interests or
(ii) any contribution to the capital of Holdings.




          “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the same may be
amended from time to time.







13









 








          “ERISA Affiliate” shall mean, with respect to any person, any trade or business (whether or
not incorporated) that, together with such person, is treated as a single employer under
Section 414 of the Code.




          “ERISA Event” shall mean (a) any “reportable event,” as defined in Section 4043 of ERISA or
the regulations issued thereunder, with respect to a Plan (other than an event for which the 30-day
notice period is waived); (b) prior to the effectiveness of the applicable provisions of the
Pension Protection Act, the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), or on and after the
effective date of the applicable provisions of the Pension Protection Act, any failure by any Plan
to satisfy the minimum funding standard (within the meaning of Sections 412 and 430 of the Code or
Section 302 of ERISA) applicable to such Plan, in each case whether or not waived; (c) the failure
to make by its due date a required installment under Section 412(m) of the Code with respect to any
Plan or the failure to make any required contribution to a Multiemployer Plan; (d) the filing
pursuant to, prior to the effectiveness of the applicable provisions of the Pension Protection Act,
Section 412(d) of the Code or Section 303(d) of ERISA, or on and after the effectiveness of the
applicable provisions of the Pension Protection Act, Section 412(c) of the Code or Section 302(c)
of ERISA, of an application for a waiver of the minimum funding standard with respect to any Plan;
(e) the incurrence by any Company or any of its ERISA Affiliates of any liability under Title IV of
ERISA with respect to the termination of any Plan; (f) the receipt by any Company or any of its
ERISA Affiliates from the PBGC or a plan administrator of any notice relating to the intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan, or the occurrence of
any event or condition which could reasonably be expected to constitute grounds under ERISA for the
termination of, or the appointment of a trustee to administer, any Plan; (g) the incurrence by any
Company or any of its ERISA Affiliates of any liability with respect to the withdrawal from any
Plan or Multiemployer Plan; (h) the receipt by any Company or its ERISA Affiliates of any notice,
concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is,
or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA or on
and after the effective date of the applicable provisions of the Pension Protection Act, is in
endangered or critical status, with the meaning of Section 305 of ERISA; (i) the “substantial
cessation of operations” within the meaning of Section 4062(e) of ERISA with respect to a Plan;
(j) the making of any amendment to any Plan which could result in the imposition of a lien or the
posting of a bond or other security; (k) the occurrence of a nonexempt prohibited transaction
(within the meaning of Section 4975 of the Code or Section 406 of ERISA) which could reasonably be
expected to result in liability to any Company; and (l) on and after the effectiveness of the
applicable provisions of the Pension Protection Act, a determination that any Plan is, or is
expected to be, in “at-risk” status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4)
of the Code).




          “Eurodollar Borrowing” shall mean a Borrowing comprised of Eurodollar Loans.




          “Eurodollar Loan” shall mean any Loan bearing interest at a rate determined by reference to
the Adjusted LIBOR Rate in accordance with the provisions of Article II.




          “Event of Default” shall have the meaning assigned to such term in Section 8.01.




          “Excess Cash Flow” shall mean, with respect to Holdings and its Subsidiaries on a consolidated
basis for any applicable period, Consolidated EBITDA for such period, minus, without duplication:







14









 









     (a) Debt Service for such period (other than principal repayments in respect of any
revolving credit facility unless there is an equivalent permanent reduction in commitments
thereunder);




     (b) the amount of any voluntary prepayment permitted hereunder of term Indebtedness
during such period (other than any voluntary prepayment of the Loans), so long as the amount
of such prepayment is not already reflected in Debt Service;




     (c) (i) Capital Expenditures by Holdings and its Subsidiaries on a consolidated basis
during such period that are paid in cash (to the extent permitted under this Agreement)
other than any such Capital Expenditures that are financed with the Net Cash Proceeds of any
Asset Sale pursuant to Section 2.09(c)(ii) and (ii) the aggregate consideration paid
in cash during the period in respect of Permitted Acquisitions and other Investments
permitted hereunder less any amounts received in cash in respect thereof;




     (d) Capital Expenditures that Holdings or any of its Subsidiaries shall, during such
period, become obligated to make but that are not made during such period (to the extent
permitted under this Agreement); provided that (i) such Capital Expenditures and the
delivery of the related equipment will be made within 180 days after the end of such period,
and (ii) any amount so deducted shall not be deducted again in a subsequent period;




     (e) Taxes paid in cash by Holdings and its Subsidiaries (or Permitted Tax Distributions
permitted by Section 6.08(c)) on a consolidated basis during such period or that will be
paid within six months after the close of such period; provided that with respect to any
such amounts to be paid after the close of such period, (i) any amount so deducted shall not
be deducted again in a subsequent period, and (ii) appropriate reserves shall have been
established in accordance with GAAP;




     (f) an amount equal to any increase in Working Capital for such period;




     (g) cash expenditures made in respect of Hedging Agreements permitted under this
Agreement during such period, to the extent not reflected in the computation of Consolidated
EBITDA or Consolidated Interest Expense;




     (h) Dividends (including repurchases by Holdings of its Qualified Capital Stock
expressly permitted under Section 6.08(b)) paid in cash in such period by Holdings or any of
its Subsidiaries to any person other than Holdings, any other Borrower or any of the
Subsidiaries and to the extent expressly permitted under Section 6.08 (other than
Section 6.08(d));




     (i) amounts paid in cash during such period on account of (A) items that were accounted
for as noncash reductions of net income in determining Consolidated Net Income or as noncash
reductions of Consolidated Net Income in determining Consolidated EBITDA of Holdings and its
Subsidiaries in a prior period and (B) reserves or accruals established in purchase
accounting (provided that any amounts that are deducted from Excess Cash Flow pursuant to
this clause (i) shall not thereafter be deducted from Excess Cash Flow in any succeeding
period);




     (j) to the extent not deducted in the computation of Net Cash Proceeds in respect of
any Asset Sale or Casualty Event giving rise thereto, the amount of any mandatory prepayment
of



15









 







Indebtedness (other than Indebtedness created hereunder or under any other Loan
Document) made in cash in such period, together with the cash portion of any interest,
premium or penalties required to be paid (and actually paid) in connection therewith; and




     (k) the aggregate amount of items (including the cash funding of pensions and
retirement obligations) that were added to or not deducted from net income in calculating
Consolidated Net Income or were added to or not deducted from Consolidated Net Income in
calculating Consolidated EBITDA to the extent such items represented a cash payment (which
had not reduced Excess Cash Flow upon the accrual thereof in a prior period), or an accrual
for a cash payment, by Holdings or any of its Subsidiaries or did not represent cash
received by Holdings or any of its Subsidiaries, in each case on a consolidated basis during
such period;




     plus, without duplication:




     (l) an amount equal to any decrease in Working Capital for such period;




     (m) all amounts referred to in clauses (b), (c), (d) and (h) above to the extent funded
with the proceeds of the issuance or the incurrence of Indebtedness (including Capital Lease
Obligations and purchase money Indebtedness), the sale or issuance of any Equity Interests
(including any capital contributions) and any loss, damage, destruction or condemnation of,
or any sale, transfer or other disposition (including any sale and leaseback of assets and
any mortgage or lease of Real Property) to any person of any asset or assets, in each case
to the extent there is a corresponding deduction from Excess Cash Flow above;




     (n) to the extent any permitted Capital Expenditures referred to in clause (d) above
and the delivery of the related equipment have not occurred within 180 days of the end of
the period in which such adjustment was made pursuant to clause (d) above, the amount of
such Capital Expenditures that were not so made;




     (o) cash payments received in respect of Hedging Agreements during such period to the
extent (i) not included in the computation of Consolidated EBITDA or (ii) such payments do
not reduce Cash Interest Expense;




     (p) any extraordinary or nonrecurring gain realized in cash during such period (except
to the extent such gain consists of Net Cash Proceeds subject to Section 2.09(c) or
(f));




     (q) to the extent deducted in the computation of Consolidated EBITDA, cash interest
income; and




     (r) the aggregate amount of items that were deducted from or not added to net income in
connection with calculating Consolidated Net Income or were deducted from or not added to
Consolidated Net Income in calculating Consolidated EBITDA to the extent either (i) such
items represented cash received by Holdings or any of its Subsidiaries or (ii) such items do
not represent cash paid by Holdings or any of its Subsidiaries, in each case on a
consolidated basis during such period.



          “Excess Cash Flow Prepayment” shall have the meaning assigned to such term in Section
2.09(b).




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







16









 








          “Excluded Taxes” shall mean, with respect to the Administrative Agent, any Lender or any other
recipient of any payment to be made by or on account of any obligation of any Borrower hereunder,
(a) taxes imposed on or measured by the recipient’s overall net income (however denominated),
franchise taxes imposed on the recipient (in lieu of net income taxes) and branch profits taxes
imposed on the recipient, by the jurisdiction (or any political subdivision thereof) under the laws
of which such recipient is organized or in which its principal office is located or, in the case of
any Lender, in which its applicable lending office is located and (b) any Luxembourg federal
withholding tax that is imposed on amounts payable to any Lender at the time such Lender becomes a
party hereto (or designates a new lending office) or is attributable to such Lender’s failure to
comply with Section 2.14(e), except to the extent that such Lender (or its assignor, if
any) was entitled, at the time of designation of a new lending office (or assignment), to receive
additional amounts from Borrower with respect to such withholding tax pursuant to Section
2.14(a); provided that this clause (b) shall not apply to any Tax imposed on a Lender in
connection with an interest or participation in any Loan or other obligation that such Lender was
required to acquire pursuant to Section 2.13(c).




          “Executive Order” shall have the meaning assigned to such term in Section 3.22.




          “Existing Lien” shall have the meaning assigned to such term in Section 6.02(c).




          “Existing Obligations” shall have the meaning assigned to such term in Section
10.19(b).




          “Federal Funds Effective Rate” shall mean, for any day, the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System of the United
States arranged by federal funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for the day for such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing selected by it.




          “Fee Letter” shall mean that certain Fee Letter dated as of November 6, 2009 among the
Borrowers and the Administrative Agent.




          “Final Order” shall mean an order or judgment of a court of competent jurisdiction that has
been entered on the docket maintained by the clerk of such court and has not been reversed, vacated
or stayed and as to which (a) the time to appeal, petition for certiorari or move for a stay, new
trial, reargument or rehearing has expired and as to which no appeal, petition for certiorari or
other proceedings for a stay, new trial, reargument or rehearing shall then be pending or (b) if an
appeal, writ of certiorari, stay, new trial, reargument or rehearing thereof has been sought, (i)
such order or judgment shall have been affirmed by the highest court to which such order was
appealed, certiorari shall have been denied or a stay, new trial, reargument or rehearing shall
have been denied or resulted in no modification of such order and (ii) the time to take any further
appeal, petition for certiorari or move for a stay, new trial, reargument or rehearing shall have
expired.




          “Finance Subsidiary” shall mean MagnaChip Semiconductor Finance Company, a Delaware limited
liability company.




          “Financial Officer” of any person shall mean the chief financial officer, principal accounting
officer, treasurer or controller of such person.







17









 








          “FIRREA” shall mean the Federal Institutions Reform, Recovery and Enforcement Act of 1989, as
amended.




          “Foreign Plan” shall mean any employee benefit plan, program, policy, arrangement or agreement
(other than a Plan or Multiemployer Plan) maintained or contributed to by any Company with respect
to employees employed outside the United States.




          “Foreign Sales Subsidiaries” means each of the Sales Subsidiaries other than the US Sales
Subsidiary.




          “Foreign Subsidiary” shall mean a Subsidiary that is organized under the laws of a
jurisdiction other than the United States or any state thereof or the District of Columbia.




          “Fund” shall mean any person that is (or will be) engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of credit in the ordinary course of
its business.




          “GAAP” shall mean generally accepted accounting principles in the United States applied on a
consistent basis.




          “Governmental Authority” shall mean the government of the United States of America or any
other nation, or of any political subdivision thereof, whether state, provincial or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government (including any supra-national bodies such as the European Union or the
European Central Bank) in any jurisdiction.




          “Governmental Real Property Disclosure Requirements” shall mean any Requirement of Law of any
Governmental Authority requiring notification of the buyer, lessee, mortgagee, assignee or other
transferee of any Real Property, facility, establishment or business, or notification, registration
or filing to or with any Governmental Authority, in connection with the sale, lease, mortgage,
assignment or other transfer (including any transfer of control) of any Real Property, facility,
establishment or business, of the actual or threatened presence or Release in or into the
Environment, or the use, disposal or handling of Hazardous Material on, at, under or near the Real
Property, facility, establishment or business to be sold, leased, mortgaged, assigned or
transferred.




          “Guaranteed Obligations” shall have the meaning assigned to such term in Section 7.01.




          “Guarantees” shall mean the guarantees issued pursuant to Article VII by Holdings and
the Subsidiary Guarantors and the Korean Opco Bank Guarantee.




          “Guarantors” shall mean Holdings and the Subsidiary Guarantors.




          “Hazardous Materials” shall mean the following: hazardous substances; hazardous wastes;
polychlorinated biphenyls (“PCBs”) or any substance or compound containing PCBs; asbestos or any
asbestos-containing materials in any form or condition; radon or any other radioactive materials
including any source, special nuclear or by-product material; petroleum, crude oil or any fraction
thereof; and any other pollutant or contaminant or chemicals, wastes, materials, compounds,
constituents or substances, subject to regulation or which can give rise to liability under any
Environmental Laws.







18









 








          “Hedging Agreement” shall mean any swap, cap, collar, forward purchase or similar agreements
or arrangements dealing with interest rates, currency exchange rates or commodity prices, either
generally or under specific contingencies.




          “Hedging Obligations” shall mean obligations under or with respect to Hedging Agreements.




          “Holdings” shall have the meaning assigned to such term in the preamble hereto.




          “Hynix Related Account Debtors” shall mean Hynix Semiconductor Inc. and each of its
Subsidiaries that is an account debtor with respect to any Hynix Related Receivable.




          “Hynix Related Receivables” shall mean any “accounts” as defined in the New York UCC owing to
any of the Companies by any Hynix Related Account Debtors.




          “Increase Effective Date” shall have the meaning assigned to such term in
Section 2.18(a).




          “Increase Joinder” shall have the meaning assigned to such term in Section 2.18(c).




          “Incremental Loan” shall have the meaning assigned to such term in Section 2.18(c)(i).




          “Incremental Loan Commitments” shall have the meaning assigned to such term in Section
2.18(a).




          “Indebtedness” of any person shall mean, without duplication, (a) all obligations of such
person for borrowed money or advances; (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments; (c) all obligations of such person upon which interest
charges are customarily paid or accrued; (d) all obligations of such person under conditional sale
or other title retention agreements relating to property purchased by such person; (e) all
obligations of such person issued or assumed as the deferred purchase price of property or services
(excluding trade accounts payable and accrued obligations incurred in the ordinary course of
business on normal trade terms and, unless subject to a good faith dispute, not overdue by more
than 90 days); (f) all Indebtedness of others secured by any Lien on property owned or acquired by
such person, whether or not the obligations secured thereby have been assumed, but limited to the
fair market value of such property; (g) all Capital Lease Obligations, Purchase Money Obligations
and synthetic lease obligations of such person; (h) all Hedging Obligations to the extent required
to be reflected on a balance sheet of such person; (i) all Attributable Indebtedness of such
person; (j) all obligations of such person for the reimbursement of any obligor in respect of
letters of credit, letters of guaranty, bankers’ acceptances and similar credit transactions; and
(k) all Contingent Obligations of such person in respect of Indebtedness or obligations of others
of the kinds referred to in clauses (a) through (j) above. The Indebtedness of any person shall
include the Indebtedness of any other entity (including any partnership in which such person is a
general partner) to the extent such person is liable therefor as a result of such person’s
ownership interest in or other relationship with such entity, except (other than in the case of
general partner liability) to the extent that terms of such Indebtedness expressly provide that
such person is not liable therefor.




          “Indemnified Party” shall have the meaning assigned to such term in Section 9.03.




          “Indemnified Taxes” shall mean all Taxes other than Excluded Taxes.







19









 








          “Indemnitee” shall have the meaning assigned to such term in Section 10.03(b).




          “Information” shall have the meaning assigned to such term in Section 10.13.




          “Insurance Policies” shall mean the insurance policies and coverages required to be maintained
by each Loan Party which is an owner of Mortgaged Property with respect to the applicable Mortgaged
Property pursuant to Section 5.04 and all renewals and extensions thereof.




          “Insurance Requirements” shall mean, collectively, all provisions of the Insurance Policies,
all requirements of the issuer of any of the Insurance Policies and all orders, rules, regulations
and any other requirements of the National Board of Fire Underwriters (or any other body exercising
similar functions) binding upon each Loan Party which is an owner of Mortgaged Property and
applicable to the Mortgaged Property or any use or condition thereof.




          “Intellectual Property” shall mean collectively, all rights, privileges relating to
intellecttual property, whether arising under United States, state, multinational or foreign laws
or otherwise, including, without limitation, copyrights, patents, trademarks, service-marks, trade
names, domain names, technology, proprietary information, know-how and processes, recipes,
formulas, trade secrets, all applications for registration or issuance of any of the foregoing, and
all rights to sue at law or in equity for any past, present or future infringement or other
impairment thereof, including the right to receive all proceeds and damages therefrom.




          “Intercompany Loan Documents” shall mean any promissory note or other instrument evidencing
any extension of credit by any Loan Party to Holdings or any of its Subsidiaries.




          “Interest Election Request” shall mean a request by any Borrower to convert or continue a
Borrowing in accordance with Section 2.08(b), substantially in the form of
Exhibit E.




          “Interest Payment Date” shall mean (a) with respect to any ABR Loan, the last Business Day of
each March, June, September and December to occur during any period in which such Loan is
outstanding; (b) with respect to any Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Loan with
an Interest Period of more than three months’ duration, each day prior to the last day of such
Interest Period that occurs at intervals of three months’ duration after the first day of such
Interest Period; and (c) with respect to any Loan, the Maturity Date or such earlier date on which
the maturity of the Loans is accelerated, as the case may be.




          “Interest Period” shall mean, with respect to any Eurodollar Borrowing, the period commencing
on the date of such Borrowing and ending on the numerically corresponding day in the calendar month
that is one, two, three or six months (or, if each affected Lender so agrees, nine months)
thereafter, as any Borrower may elect; provided that (a) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next succeeding Business
Day unless such next succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day; and (b) any Interest Period that
commences on the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest Period) shall end on the
last Business Day of the last calendar month of such Interest Period. For purposes hereof, the
date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter
shall be the effective date of the most recent conversion or





20











 





     continuation of such Borrowing; provided, however, that an Interest Period shall be
limited to the extent required under Section 2.02(e).



          “Investments” shall have the meaning assigned to such term in Section 6.04.



          “IPO” shall mean the first underwritten public offering by Holdings of its Equity Interests
after the Effective Date pursuant to a registration statement filed with the Securities and
Exchange Commission in accordance with the Securities Act that results in cumulative gross proceeds
of not less than $25 million.



          “Joinder Agreement” shall mean a joinder agreement substantially in the form of Exhibit
F.



          “Judgment Currency” shall have the meaning assigned to such term in Section 10.18(a).



          “Judgment Currency Conversion Date” shall have the meaning assigned to such term in
Section 10.18(a).



          “Korean Opco” shall mean MagnaChip Semiconductor Ltd., a Korean yuhan hoesa.



          “Korean Opco Bank Guarantee” shall have the meaning assigned to such term in Section
4.01(q)(i).



          “Korean Opco Loan Documents” shall mean the Korean Opco Bank Guarantee, the Korean Opco
Security Documents, and all other documents executed and delivered with respect thereto.



          “Korean Opco Security Documents” shall mean each of the documents executed by Korean Opco
granting liens and/or security interests in each of its assets in favor of the Collateral Trustee
as security for the obligations of Korean Opco under the Korean Opco Bank Guarantee and all
documents and other instruments related, directly or indirectly, thereto (including, without
limitation, such documents and instruments set forth on Schedule 1.01(a)).



          “Leases” shall mean any and all leases, subleases, tenancies, options, concession agreements,
rental agreements, occupancy agreements, franchise agreements, access agreements and any other
agreements (including all amendments, extensions, replacements, renewals, modifications and/or
guarantees thereof), whether or not of record and whether now in existence or hereafter entered
into, affecting the use or occupancy of all or any portion of any Real Property.



          “Lenders” shall mean (a) the financial institutions listed as Lenders on the signature pages
hereto, (b) any financial institution that has become a party hereto pursuant to an Assignment and
Assumption, and (c) any financial institution that becomes party hereto pursuant to Section
2.18, other than, in each case, any such financial institution that has ceased to be a party
hereto pursuant to an Assignment and Assumption.



          “LIBOR Rate” shall mean, with respect to any Eurodollar Borrowing for any Interest Period, the
rate per annum determined by the Administrative Agent to be the arithmetic mean (rounded upward, if
necessary, to the nearest 1/100th of 1%) of the offered rates for deposits in dollars with a term
comparable to such Interest Period that appears on the Telerate British Bankers Assoc. Interest
Settlement Rates Page (as defined below) at approximately 11:00 a.m., London, England time, on the
second full Business Day preceding the first day of such Interest Period; provided, however, that
(i) if no comparable



21









 




term for an Interest Period is available, the LIBOR Rate shall be determined using the
weighted average of the offered rates for the two terms most nearly corresponding to such Interest
Period and (ii) if there shall at any time no longer exist a Telerate British Bankers Assoc.
Interest Settlement Rates Page, “LIBOR Rate” shall mean, with respect to each day during each
Interest Period pertaining to Eurodollar Borrowings comprising part of the same Borrowing, the rate
per annum equal to the rate at which the Administrative Agent is offered deposits in dollars at
approximately 11:00 a.m., London, England time, two Business Days prior to the first day of such
Interest Period in the London interbank market for delivery on the first day of such Interest
Period for the number of days comprised therein and in an amount comparable to its portion of the
amount of such Eurodollar Borrowing to be outstanding during such Interest Period. “Telerate
British Bankers Assoc. Interest Settlement Rates Page” shall mean the display designated as Page
3750 on the Telerate System Incorporated Service (or such other page as may replace such page on
such service for the purpose of displaying the rates at which dollar deposits are offered by
leading banks in the London interbank deposit market).




          “Lien” shall mean, with respect to any property, (a) any mortgage, deed of trust, lien,
pledge, encumbrance, claim, charge, assignment, hypothecation, security interest or encumbrance of
any kind or any arrangement to provide priority or preference or any filing of any financing
statement under the UCC or any other similar notice of lien under any similar notice or recording
statute of any Governmental Authority, including any easement, right-of-way or other encumbrance on
title to Real Property, in each of the foregoing cases whether voluntary or imposed by law, and any
agreement to give any of the foregoing; (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating to such property;
and (c) in the case of securities, any purchase option, call or similar right of a third party with
respect to such securities.



          “Liquidity Requirement” shall have the meaning assigned to such term in Section 6.10.



          “Loan Documents” shall mean this Agreement, the Notes (if any), the Security Documents, the
Collateral Trust Documents, and the Korean Opco Loan Documents.



          “Loan Parties” shall mean Holdings, Borrowers and the Subsidiary Guarantors.



          “Loans” shall mean, as the context may require, a Term Loan or an Incremental Loan.



          “Lux Borrower” shall mean MagnaChip Semiconductor S.A., a Luxembourg corporation.



          “MagnaChip SA Holdings” shall mean MagnaChip Semiconductor SA Holdings LLC, a Delaware limited
liability company.



          “Margin Stock” shall have the meaning assigned to such term in Regulation U.



          “Material Adverse Effect” shall mean (a) a material adverse effect on the business, property,
results of operations, prospects or condition, financial or otherwise, of Borrowers and their
Subsidiaries, taken as a whole, or Holdings and its Subsidiaries taken as a whole; (b) material
impairment of the ability of the Loan Parties to perform any of their obligations under any Loan
Document; (c) material impairment of the rights of or benefits or remedies available to the Lenders
or the Collateral Agent under any Loan Document; or (d) a material adverse effect on the Collateral
or the Liens in favor of the Collateral Agent (for its benefit and for the benefit of the other
Secured Parties) on the Collateral or



22









 




the priority of such Liens; provided that, neither the Chapter 11 Case nor the events leading
thereto shall constitute a Material Adverse Effect.




          “Material Indebtedness” shall mean any Indebtedness (other than the Loans) or Hedging
Obligations of Holdings or any of its Subsidiaries in an aggregate outstanding principal amount
exceeding $3.0 million. For purposes of determining Material Indebtedness, the “principal amount”
in respect of any Hedging Obligations of any Loan Party at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that such Loan Party would be required to pay if
the related Hedging Agreement were terminated at such time.



          “Maturity Date” shall mean November 6, 2013.



          “Maximum Rate” shall have the meaning assigned to such term in Section 10.15.



          “Mortgage” shall mean an agreement, including, but not limited to, a mortgage, deed of trust
or any other document, creating and evidencing a Lien on a Mortgaged Property, which shall be
reasonably satisfactory to the Collateral Agent and include such provisions as shall be necessary
to conform such document to applicable local or foreign law or as shall be customary under
applicable local or foreign law.



          “Mortgaged Property” shall mean (a) all Real Property securing all or any portion of the
Secured Obligations or any obligations of Korean Opco under the Korean Opco Loan Documents and (b)
each Real Property, if any, which shall be subject to a Mortgage delivered after the Closing Date
pursuant to Section 5.10(c).



          “Multiemployer Plan” shall mean a multiemployer plan within the meaning of Section 4001(a)(3)
or Section 3(37) of ERISA (a) to which any Company or any ERISA Affiliate is then making or
accruing an obligation to make contributions; (b) to which any Company or any ERISA Affiliate has
within the preceding five plan years made contributions; or (c) with respect to which any Company
could incur liability.



          “Net Cash Proceeds” shall mean:




     (a) with respect to any Asset Sale (other than any issuance or sale of Equity
Interests), the cash proceeds received by Holdings or any of its Subsidiaries (including
cash proceeds subsequently received (as and when received by Holdings or any of its
Subsidiaries) in respect of non-cash consideration initially received) net of (i) selling
expenses (including reasonable brokers’ fees or commissions, legal, accounting and other
professional and transactional fees, transfer and similar taxes and Borrowers’ good faith
estimate of income taxes paid or payable in connection with such sale); (ii) amounts
provided as a reserve, in accordance with GAAP, against (x) any liabilities under any
indemnification obligations associated with such Asset Sale or (y) any other liabilities
retained by Holdings or any of its Subsidiaries associated with the properties sold in such
Asset Sale (provided that, to the extent and at the time any such amounts are released from
such reserve, such amounts shall constitute Net Cash Proceeds); (iii) Borrowers’ good faith
estimate of payments required to be made with respect to unassumed liabilities relating to
the properties sold within 90 days of such Asset Sale (provided that, to the extent such
cash proceeds are not used to make payments in respect of such unassumed liabilities within
90 days of such Asset Sale, such cash proceeds shall constitute Net Cash Proceeds); and (iv)
the principal amount, premium or penalty, if any, interest and other amounts on any



23









 







Indebtedness for borrowed money which is secured by a Lien on the properties sold in
such Asset Sale (so long as such Lien was permitted to encumber such properties under the
Loan Documents at the time of such sale) and which is repaid with such proceeds (other than
any such Indebtedness assumed by the purchaser of such properties);




     (b) with respect to any Debt Issuance, any Equity Issuance or any other issuance or
sale of Equity Interests by Holdings or any of its Subsidiaries, the cash proceeds thereof,
net of customary fees, commissions, costs and other expenses incurred in connection
therewith; and




     (c) with respect to any Casualty Event, the cash insurance proceeds, condemnation
awards and other compensation received in respect thereof, net of all reasonable costs and
expenses incurred in connection with the collection of such proceeds, awards or other
compensation in respect of such Casualty Event.



          “Non Guarantor Subsidiaries” means each Subsidiary of Holdings that is not a Subsidiary
Guarantor.



          “Non-Reinvested Asset Sale Proceeds” shall have the meaning assigned to such term in
Section 2.09(c).



          “Non-Reinvested Casualty Proceeds” shall have the meaning assigned to such term in Section
2.09(f).



          “Non-Reinvested Proceeds” shall mean, collectively, the Non-Reinvested Asset Sale Proceeds and
the Non-Reinvested Casualty Proceeds.



          “Notes” shall mean any notes evidencing the Loans issued pursuant to this Agreement, if any,
substantially in the form of Exhibit G.



          “Obligation Currency” shall have the meaning assigned to such term in Section
10.18(a).



          “Obligations” shall mean (a) obligations of Borrowers and the other Loan Parties from time to
time arising under or in respect of the due and punctual payment of (i) the principal of and
premium, if any, and interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in
such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise and (ii) all other monetary obligations, including fees,
costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or allowable in such
proceeding), of Borrowers and the other Loan Parties under this Agreement and the other Loan
Documents; (b) the due and punctual performance of all covenants, agreements, obligations and
liabilities of Borrowers and the other Loan Parties under or pursuant to this Agreement and the
other Loan Documents; and (c) the due and punctual payment and performance of all obligations in
respect of overdrafts and related liabilities owed to any Lender, any Affiliate of a Lender, the
Administrative Agent or the Collateral Agent arising from treasury, depositary and cash management
services or in connection with any automated clearinghouse transfer of funds.



          “OFAC” shall have the meaning assigned to such term in Section 3.21.



24









 





          “Officers’ Certificate” shall mean a certificate executed by the chairman of the Board of
Directors (if an officer), the chief executive officer or the president and one of the Financial
Officers, each in his or her official (and not individual) capacity.



          “Organizational Documents” shall mean, with respect to any person, (i) in the case of any
corporation, the certificate of incorporation and by-laws (or similar documents) of such person;
(ii) in the case of any limited liability company, the certificate of formation and operating
agreement (or similar documents) of such person; (iii) in the case of any limited partnership, the
certificate of formation and limited partnership agreement (or similar documents) of such person;
(iv) in the case of any general partnership, the partnership agreement (or similar document) of
such person; and (v) in any other case, the functional equivalent of the foregoing.



          “Other Taxes” shall mean all present or future stamp or documentary taxes or any other excise
or property taxes, charges or similar levies arising from any payment made hereunder or under any
other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect
to, this Agreement or any other Loan Document.



          “Participant” shall have the meaning assigned to such term in Section 10.04(d).



          “PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA.



          “Pension Protection Act” shall mean the Pension Protection Act of 2006 (PL 109-280), as
amended.



          “Perfection Certificate” shall have the meaning set forth in the Security Agreement.



          “Permitted Acquisition” shall mean any transaction or series of related transactions for the
direct or indirect (a) acquisition of all or substantially all of the property of any person, or of
any business or division of any person; (b) acquisition of in excess of 50% of the Equity Interests
of any person, and otherwise causing such person to become a Subsidiary of such person; or (c)
merger or consolidation or any other combination with any person, if each of the following
conditions is met:




     (i) no Default then exists or would result therefrom;




     (ii) after giving effect to such transaction on a Pro Forma Basis, the Total Leverage
Ratio shall be no more than 3.0 to 1.0,




     (iii) no Company shall, in connection with any such transaction, assume or remain
liable with respect to any Indebtedness or other liability (including any material tax or
ERISA liability) of the related seller or the business, person or properties acquired,
except (A) to the extent permitted under Section 6.01 and (B) obligations not
constituting Indebtedness incurred in the ordinary course of business and necessary or
desirable to the continued operation of the underlying properties, and any other such
liabilities or obligations not permitted to be assumed or otherwise supported by any Company
hereunder shall be paid in full or released as to the business, persons or properties being
so acquired on or before the consummation of such acquisition;




     (iv) the person or business to be acquired shall be, or shall be engaged in, a business
of the type that Borrowers and their Subsidiaries are permitted to be engaged in under



25









 







Section 6.15 and the property acquired in connection with any such transaction shall be
made subject to the Lien of the Security Documents (to the extent permitted by applicable
law) and shall be free and clear of any Liens, other than Permitted Collateral Liens;




     (v) the Board of Directors of the person to be acquired shall not have indicated
publicly its opposition to the consummation of such acquisition (which opposition has not
been publicly withdrawn);




     (vi) all transactions in connection therewith shall be consummated in accordance with
all applicable Requirements of Law;




     (vii) with respect to any transaction involving Acquisition Consideration of more than
$25.0 million, unless the Administrative Agent shall otherwise agree, Borrowers shall have
provided the Administrative Agent and the Lenders with (A) historical financial statements
for the last three fiscal years (or, if less, the number of years since formation) of the
person or business to be acquired (audited if available without undue cost or delay) and
unaudited financial statements thereof for the most recent interim period which are
available; (B) reasonably detailed projections for the succeeding five years pertaining to
the person or business to be acquired and updated projections for Borrowers after giving
effect to such transaction; (C) a reasonably detailed description of all material
information relating thereto and copies of all material documentation pertaining to such
transaction; and (D) all such other information and data relating to such transaction or the
person or business to be acquired as may be reasonably requested by the Administrative Agent
or the Required Lenders;




     (viii) Borrowers shall have delivered to the Agents and the Lenders an Officers’
Certificate certifying that (A) such transaction complies with this definition (which shall
have attached thereto reasonably detailed backup data and calculations showing such
compliance), and (B) such transaction could not reasonably be expected to result in a
Material Adverse Effect; and




     (ix) the Acquisition Consideration for such acquisition shall not exceed $50.0 million
of which up to $25.0 million may be cash, and the aggregate amount of the Acquisition
Consideration for all Permitted Acquisitions since the Effective Date shall not exceed
$100.0 million; provided that any Equity Interests constituting all or a portion of such
Acquisition Consideration shall not have a cash dividend requirement on or prior to the
Maturity Date.



          “Permitted Collateral Liens” means (i) Contested Liens (as defined in the Security Agreement);
(ii) the Liens described in clauses (a), (b), (c), (d), (e), (f), (g), (h), (j), (k), (l), (m) and
(n) of Section 6.02; and (iii) in the case of Mortgaged Property, “Permitted Collateral
Liens” shall mean the Liens described in clauses (a), (b), (c), (d), (e), (g) and (l) of
Section 6.02.



          “Permitted Holders” shall mean Avenue Investments, LP and its Controlled Investment
Affiliates.



          “Permitted Liens” shall have the meaning assigned to such term in Section 6.02.



          “Permitted Tax Distributions” means, with respect to any periods during which MagnaChip
Semiconductor LLC is treated as a partnership for U.S. federal income tax purposes, payments in
respect of tax liabilities of MagnaChip Semiconductor LLC’s members arising from direct or
indirect ownership of MagnaChip Semiconductor LLC’s equity interests. Permitted Tax
Distributions



26









 







shall be calculated by reference to the amount of MagnaChip Semiconductor LLC’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 Holdings shall
determine the amount of Permitted Tax Distributions.



          “person” shall mean any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or other entity.



          “Petition Date” shall have the meaning set forth in the recitals hereto.



          “Plan” shall mean any employee pension benefit plan (other than a Multiemployer Plan) subject
to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA which is
maintained or contributed to by any Company or its ERISA Affiliate or with respect to which any
Company could incur liability (including under Section 4069 of ERISA).



          “Preferred Stock” shall mean, with respect to any person, any and all preferred or preference
Equity Interests (however designated) of such person whether now outstanding or issued after the
Effective Date.



          “Premises” shall have the meaning assigned thereto in the applicable Mortgage.



          “Pre-Petition Credit Agreement” shall have the meanings set forth in the recitals hereto.



          “Pro Forma Basis” shall mean on a basis in accordance with GAAP and Regulation S-X and
otherwise reasonably satisfactory to the Administrative Agent.



          “property” shall mean any right, title or interest in or to property, undertaking or assets of
any kind whatsoever, wherever situate, whether real, personal or mixed and whether tangible or
intangible and including Equity Interests or other ownership interests of any person and whether
now in existence or owned or hereafter entered into or acquired, including all Real Property.



          “Proposed Assignment” shall have the meaning set forth in Section 10.04(b)(iv).



          “Purchase Money Obligation” shall mean, for any person, the obligations of such person in
respect of Indebtedness (including Capital Lease Obligations) incurred for the purpose of financing
all or any part of the purchase price of any property (including Equity Interests of any person) or
the cost of installation, construction or improvement of any property and any refinancing thereof;
provided, however, that (i) such Indebtedness is incurred within one year after such acquisition of
such property by such person and (ii) the amount of such Indebtedness does not exceed 100% of the
cost of such acquisition, installation, construction or improvement, as the case may be.



          “Qualified Capital Stock” of any person shall mean any Equity Interests of such person that
are not Disqualified Capital Stock.



          “Real Property” shall mean, collectively, all right, title and interest (including any
leasehold, mineral or other estate) in and to any and all parcels of or interests in real property
owned, leased or operated by any person, whether by lease, license or other means, together with,
in each case, all easements, hereditaments and appurtenances relating thereto, all improvements and
appurtenant fixtures



27









 




and equipment, all general intangibles and contract rights and other property and rights
incidental to the ownership, lease or operation thereof.




          “Register” shall have the meaning assigned to such term in Section 10.04(c).



          “Regulation D” shall mean Regulation D of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.



          “Regulation S-X” shall mean Regulation S-X promulgated under the Securities Act.



          “Regulation T” shall mean Regulation T of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.



          “Regulation U” shall mean Regulation U of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.



          “Regulation X” shall mean Regulation X of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.



          “Related Parties” shall mean, with respect to any person, such person’s Affiliates and the
partners, directors, officers, employees, agents and advisors of such person and of such person’s
Affiliates.



          “Release” shall mean any spilling, leaking, seepage, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, emanating
or migrating of any Hazardous Material in, into, onto or through the Environment.



          “Required Lenders” shall mean Lenders holding more than 50% of the sum of all Loans
outstanding and unused Commitments.



          “Requirements of Law” shall mean, collectively, any and all requirements of any Governmental
Authority including any and all laws, judgments, orders, decrees, ordinances, rules, regulations,
statutes or case law in any jurisdiction.



          “Response” shall mean (a) “response” as such term is defined in CERCLA, 42 U.S.C. § 9601(24),
and (b) all other actions required by any Governmental Authority or voluntarily undertaken to (i)
clean up, remove, treat, abate or in any other way address any Hazardous Material in the
Environment; (ii) prevent the Release or threat of Release, or minimize the further Release, of any
Hazardous Material; or (iii) perform studies and investigations in connection with, or as a
precondition to, or to determine the necessity of the activities described in, clause (i) or (ii)
above.



          “Responsible Officer” of any person shall mean any executive officer or Financial Officer of
such person and any other officer or similar official thereof with responsibility for the
administration of the obligations of such person in respect of this Agreement.



          “Sale and Leaseback Transaction” has the meaning assigned to such term in Section
6.03.



          “Sales Subsidiaries” shall mean, collectively, (i) MagnaChip Semiconductor, Inc., a California
corporation; (ii) MagnaChip Semiconductor Limited, a company incorporated in England and



28









 




Wales with registered number 05232381; (iii) MagnaChip Semiconductor, Inc., a Japan company;
(iv) MagnaChip Semiconductor Ltd. a Hong Kong company; and (v) MagnaChip Semiconductor Limited, a
Taiwan company.




          “Sarbanes-Oxley Act” shall mean the United States Sarbanes-Oxley Act of 2002, as amended, and
all rules and regulations promulgated thereunder.



          “Secured Obligations” shall mean the Obligations and the due and punctual payment and
performance of all obligations of Borrowers and the other Loan Parties under each Hedging Agreement
entered into with any counterparty that is a Secured Party.



          “Secured Parties” shall mean, collectively, the Administrative Agent, the Collateral Agent,
the Collateral Trustee, the Lenders and each party to a Hedging Agreement relating to the Loans if
at the date of entering into such Hedging Agreement such person was a Lender or an Affiliate of a
Lender and such person executes and delivers to the Administrative Agent a letter agreement in form
and substance reasonably acceptable to the Administrative Agent pursuant to which such person (i)
appoints the Collateral Agent as its agent under the applicable Loan Documents and (ii) agrees to
be bound by the provisions of Sections 10.03 and 10.09.



          “Securities Act” shall mean the Securities Act of 1933.



          “Securities Collateral” shall have the meaning assigned to such term in the Security
Agreement, together with all other certificated Equity Interests, note or other instruments pledged
pursuant to any of the Security Documents.



          “Security Agreement” shall mean a Security Agreement substantially in the form of Exhibit
H among certain of the Loan Parties and Collateral Agent for the benefit of the Secured
Parties.



          “Security Agreement Collateral” shall mean all property pledged or granted as collateral
pursuant to the Security Agreement delivered (a) on the Closing Date or (b) thereafter pursuant to
Section 5.11.



          “Security Documents” shall mean the Security Agreement, the Mortgages, the Korean Opco
Security Documents and each other security document or pledge agreement delivered in accordance
with applicable local or foreign law to grant a valid, perfected security interest in any property
as collateral for the Secured Obligations and/or Guaranteed Obligations, and all UCC or other
financing statements or instruments of perfection required by this Agreement, the Security
Agreement, any Mortgage, the Korean Opco Security Documents or any other such security document or
pledge agreement to be filed with respect to the security interests in property and fixtures
created pursuant to the Security Agreement, any Mortgage or the Korean Opco Security Documents and
any other document or instrument utilized to pledge, assign, charge or grant or purport to pledge,
assign, charge or grant a security interest or lien under the laws of any jurisdiction on any
property as collateral for the Secured Obligations.



          “Specified Lender” shall mean Avenue Investments, LP, its Controlled Investment Affiliates and
Related Parties as long as they collectively hold more than 50% of the outstanding Loans and unused
Commitments.



          “Statutory Reserves” shall mean for any Interest Period for any Eurodollar Borrowing, the
average maximum rate at which reserves (including any marginal, supplemental or emergency



29









 




reserves) are required to be maintained during such Interest Period under Regulation D by
member banks of the United States Federal Reserve System in New York City with deposits exceeding
one billion dollars against “Eurocurrency liabilities” (as such term is used in Regulation D).




          “Subordinated Indebtedness” shall mean Indebtedness of any Borrower or any Guarantor that is
by its terms subordinated in right of payment to the Obligations of such Borrower and such
Guarantor, as applicable.



          “Subordinated Indebtedness Payment” shall have the meaning assigned to such term in
Section 6.11(a).



          “Subsidiary” shall mean, with respect to any person (the “parent”) at any date, (i) any person
the accounts of which would be consolidated with those of the parent in the parent’s consolidated
financial statements if such financial statements were prepared in accordance with GAAP as of such
date; (ii) any other corporation, limited liability company, association or other business entity
of which securities or other ownership interests representing more than 50% of the voting power of
all Equity Interests entitled (without regard to the occurrence of any contingency) to vote in the
election of the Board of Directors thereof are, as of such date, owned, controlled or held by the
parent and/or one or more subsidiaries of the parent; (iii) any partnership (a) the sole general
partner or the managing general partner of which is the parent and/or one or more subsidiaries of
the parent or (b) the only general partners of which are the parent and/or one or more subsidiaries
of the parent; and (iv) any other person that is otherwise Controlled by the parent and/or one or
more subsidiaries of the parent. Unless the context requires otherwise, “Subsidiary” refers to a
Subsidiary of any Borrower or Holdings.



          “Subsidiary Guarantor” shall mean each Subsidiary listed on Schedule 1.01(d), Korean
Opco and each other Subsidiary that is or becomes a party to this Agreement pursuant to Section
5.10.



          “Supermajority Lenders” shall mean at least two Lenders (provided that one of the Lenders
shall not be a Specified Lender), who hold in the aggregate at least 70% of the sum of all Loans
outstanding and unused Commitments.



          “Survey” shall mean a survey of any Mortgaged Property (and all improvements thereon) which is
(a) (i) prepared by a surveyor or engineer licensed to perform surveys in the jurisdiction where
such Mortgaged Property is located, (ii) dated (or redated) not earlier than six months prior to
the date of delivery thereof and (b) otherwise in form and substance substantially satisfactory to
the Collateral Agent.



          “Tax Return” shall mean all returns, statements, filings, attachments and other documents or
certifications required to be filed in respect of Taxes.



          “Taxes” shall mean all present or future taxes, levies, imposts, duties, registration or stamp
duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable thereto.



          “Term Loan” shall mean a Term Loan deemed to be outstanding on the Effective Date pursuant to
Section 2.01.



          “Test Period” shall mean, at any time, the four consecutive fiscal quarters of Borrowers (or
its predecessor) then last ended for which financial statements have been delivered pursuant to
Section 5.01.



30









 





          “Total Assets” shall mean the total amount of all assets of a person, determined on a
consolidated basis in accordance with GAAP as shown on such person’s most recent balance sheet.



          “Total Leverage Ratio” shall mean, at any date of determination, the ratio of (x) Consolidated
Indebtedness on such date to (y) Consolidated EBITDA for the Test Period then most recently ended.



          “Transaction Documents” shall mean the Loan Documents, Collateral Trust Documents and the Plan
of Reorganization.



          “Transactions” shall mean, collectively, the transactions to occur on or prior to the
Effective Date pursuant to the Transaction Documents, including (a) the execution, delivery and
performance of the Loan Documents and the initial borrowing hereunder; (b) the transactions
contemplated by the Plan of Reorganization; and (c) the payment of all fees and expenses to be paid
on or prior to the Effective Date and owing in connection with the foregoing.



          “Transferred Guarantor” shall have the meaning assigned to such term in Section 7.09.



          “Type,” when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the
Adjusted LIBOR Rate or the Alternate Base Rate.



          “UCC” shall mean the Uniform Commercial Code as in effect from time to time (except as
otherwise specified) in any applicable state or jurisdiction.



          “UK Sales Subsidiary” shall mean MagnaChip Semiconductor Limited, a company incorporated in
England and Wales with registered number 05232381.



          “United States” shall mean the United States of America.



          “USA Patriot Act” shall have the meaning assigned to such term in Section 3.21.



          “U.S. Sales Subsidiary” shall mean MagnaChip Semiconductor, Inc., a California corporation.



          “Voting Stock” shall mean, with respect to any person, any class or classes of Equity
Interests pursuant to which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the Board of Directors of such person.



          “Wholly Owned Subsidiary” shall mean, as to any person, (a) any corporation 100% of whose
capital stock (other than directors’ qualifying shares) is at the time owned by such person and/or
one or more Wholly Owned Subsidiaries of such person and (b) any partnership, association, joint
venture, limited liability company or other entity in which such person and/or one or more Wholly
Owned Subsidiaries of such person have a 100% equity interest at such time.



          “Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete
or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle
E of Title IV of ERISA.



31









 





          “Working Capital” shall mean, with respect to Holdings and its Subsidiaries on a consolidated
basis at any date of determination, Current Assets at such date of determination minus Current
Liabilities at such date of determination; provided that, for purposes of calculating Excess Cash
Flow, increases or decreases in Working Capital shall be calculated without regard to any changes
in Current Assets or Current Liabilities as a result of (a) any reclassification in accordance with
GAAP of assets or liabilities, as applicable, between current and noncurrent or (b) the effects of
purchase accounting.



          SECTION 1.02 Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a
“Term Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type. Borrowings also may be
classified and referred to by Type (e.g., a “Eurodollar Borrowing”).



          SECTION 1.03 Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be
deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to
have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a)
any definition of or reference to any Loan Document, agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document as from time to
time amended, supplemented or otherwise modified (subject to any restrictions on such amendments,
supplements or modifications set forth herein), (b) any reference herein to any person shall be
construed to include such person’s successors and assigns, (c) the words “herein,” “hereof” and
“hereunder,” and words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, this Agreement, (e) any reference to any law or regulation herein shall
refer to such law or regulation as amended, modified or supplemented from time to time, (f) the
words “asset” and “property” shall be construed to have the same meaning and effect and to refer to
any and all tangible and intangible assets and properties, including cash, securities, accounts and
contract rights and (g) “on,” when used with respect to the Mortgaged Property or any property
adjacent to the Mortgaged Property, means “on, in, under, above or about.”



          SECTION 1.04 Accounting Terms; GAAP. Except as otherwise expressly provided herein, all financial statements to be delivered
pursuant to this Agreement shall be prepared in accordance with GAAP as in effect from time to time
and all terms of an accounting or financial nature shall be construed and interpreted in accordance
with GAAP, as in effect on the date hereof unless otherwise agreed to by Borrowers and the
Supermajority Lenders.



          SECTION 1.05 Resolution of Drafting Ambiguities. Each Loan Party acknowledges and agrees that it was represented by counsel in connection
with the execution and delivery of the Loan Documents to which it is a party, that it and its
counsel reviewed and participated in the preparation and negotiation hereof and thereof and that
any rule of construction to the effect that ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation hereof or thereof.



32









 





ARTICLE II




THE CREDITS



          SECTION
2.01  Commitments.



          
On the Effective Date, subject to the terms and conditions and relying upon the
representations and warranties set forth herein, (i) any unused Revolving Commitment, Swingline
Commitment and LC Commitment (in each case, as defined in the Pre-Petition Credit Agreement) under
the Pre-Petition Credit Agreement is terminated and (ii) the outstanding principal amount of
outstanding loans under the Pre-Petition Credit Agreement is reduced to $61,750,000 and are
redenominated as Term Loans. As of the Effective Date, the outstanding principal amount of Term
Loans owed to each Lender is set forth on Annex I hereto. Amounts repaid in respect of Term Loans
may not be reborrowed.



          SECTION
2.02  Loans.



          
(a) Each Loan shall be made as part of a Borrowing consisting of Loans made by the Lenders
ratably in accordance with their applicable Commitments; provided that the failure of any Lender to
make its Loan shall not in itself relieve any other Lender of its obligation to lend hereunder (it
being understood, however, that no Lender shall be responsible for the failure of any other Lender
to make any Loan required to be made by such other Lender).



          (b) Subject to Sections 2.11 and 2.12, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as any Borrower may request pursuant to Section
2.03. Each Lender may at its option make any Eurodollar Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such
option shall not affect the obligation of Borrowers to repay such Loan in accordance with the terms
of this Agreement. Borrowings of more than one Type may be outstanding at the same time; provided
that Borrowers shall not be entitled to request any Borrowing that, if made, would result in more
than five Eurodollar Borrowings outstanding hereunder at any one time. For purposes of the
foregoing, Borrowings having different Interest Periods, regardless of whether they commence on the
same date, shall be considered separate Borrowings.



          (c) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof
by wire transfer of immediately available funds to such account in New York City as the
Administrative Agent may designate not later than 11:00 a.m., New York City time, and the
Administrative Agent shall promptly credit the amounts so received to an account as directed by any
Borrower in the applicable Borrowing Request maintained with the Administrative Agent or, if a
Borrowing shall not occur on such date because any condition precedent herein specified shall not
have been met, return the amounts so received to the respective Lenders.



          (d) Unless the Administrative Agent shall have received notice from a Lender prior to the date
of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s
portion of such Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in accordance with
paragraph (c) above, and the Administrative Agent may, in reliance upon such assumption, make
available to Borrowers on such date a corresponding amount. If the Administrative Agent shall have
so made funds available, then, to the extent that such Lender shall not have made such portion
available to the Administrative Agent, each of such Lender and Borrowers severally agrees to repay
to the Administrative Agent forthwith on demand such corresponding amount together with interest
thereon, for



33









 







each day from the date such amount is made available to Borrowers until the date such
amount is repaid to the Administrative Agent at (i) in the case of Borrowers, the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in the case of such Lender,
the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation. If such Lender shall repay to
the Administrative Agent such corresponding amount, such amount shall constitute such Lender’s Loan
as part of such Borrowing for purposes of this Agreement, and Borrowers’ obligation to repay the
Administrative Agent such corresponding amount pursuant to this Section 2.02(d) shall
cease.



          (e) Notwithstanding any other provision of this Agreement, none of the Borrowers shall be
entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period
requested with respect thereto would end after the Maturity Date.



          SECTION 2.03 Borrowing Procedure. To request a Borrowing, a Borrower shall deliver, by hand delivery or telecopier, a duly
completed and executed Borrowing Request to the Administrative Agent (i) in the case of a
Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the
date of the proposed Borrowing or (ii) in the case of an ABR Borrowing, not later than 9:00 a.m.,
New York City time, on the date of the proposed Borrowing. Each Borrowing Request shall be
irrevocable and shall specify the following information in compliance with Section 2.02:



          (a) the aggregate amount of such Borrowing;



          (b) the date of such Borrowing, which shall be a Business Day;



          (c) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;



          (d) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable
thereto, which shall be a period contemplated by the definition of the term “Interest Period”;



          (e) the location and number of such Borrower’s account to which funds are to be disbursed,
which shall comply with the requirements of Section 2.02(c); and



          (f) that the conditions set forth in Sections 4.02(b)-(d) have been satisfied
as of the date of the notice.



          If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be
an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar
Borrowing, then such Borrower shall be deemed to have selected an Interest Period of one month’s
duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the amount of such
Lender’s Loan to be made as part of the requested Borrowing.



          SECTION 2.04 Evidence of Debt; Repayment of Loans.



          (a) Promise to Repay. Each Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender, the then unpaid principal amount of each Loan
of such Lender on the Maturity Date.



          (b) Subject to the other paragraphs of this Section:



34









 






     (i) the Borrowers shall repay Term Loans on each date set forth below in the aggregate
principal amount (as adjusted from time to time pursuant to Section 2.09(h)) set forth
opposite such date (each such date being referred to as a “Term Loan Installment
Date”):



	 	 	 	 	 
	Date	 	Amount of Term Loans to Be Repaid
	March 31, 2010
	 	$	154,375	 
	June 30, 2010
	 	$	154,375	 
	September 30, 2010
	 	$	154,375	 
	December 31, 2010
	 	$	154,375	 
	March 31, 2011
	 	$	154,375	 
	June 30, 2011
	 	$	154,375	 
	September 30, 2011
	 	$	154,375	 
	December 31, 2011
	 	$	154,375	 
	March 31, 2012
	 	$	154,375	 
	June 30, 2012
	 	$	154,375	 
	September 30, 2012
	 	$	154,375	 
	December 31, 2012
	 	$	154,375	 
	March 31, 2013
	 	$	154,375	 
	June 30, 2013
	 	$	154,375	 
	September 30, 2013
	 	$	154,375	 







     (ii) in the event that any Incremental Loans that constitute term loans are made
pursuant to Section 2.18, the Borrowers shall repay such Incremental Loans on the
dates and in the amounts set forth in the Increase Joinder.



          (c) Lender and Administrative Agent Records. Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of Borrowers to such
Lender resulting from each Loan made by such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time under this Agreement. The
Administrative Agent shall maintain accounts in which it will record (i) the amount of each Loan
made hereunder, the Type and Class thereof and the Interest Period applicable thereto; (ii) the
amount of any principal or interest due and payable or to become due and payable from Borrowers to
each Lender hereunder; and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender’s share thereof. The entries made in the
accounts maintained pursuant to this paragraph shall be prima facie evidence of the existence and
amounts of the obligations therein recorded; provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in any manner affect
the obligations of Borrowers to repay the Loans in accordance with their terms.



          (d) Promissory Notes. Any Lender by written notice to Borrowers (with a copy to the
Administrative Agent) may request that Loans of any Class made by it be evidenced by a promissory
note. In such event, Borrowers shall prepare, execute and deliver to such Lender a promissory note
payable to the order of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) in the form of Exhibit G, as the case may be. Thereafter, the Loans
evidenced by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 10.04) be represented by one or more promissory notes in
such form payable to the order of the payee named therein (or, if such promissory note is a
registered note, to such payee and its registered assigns).



35









 





          SECTION 2.05 Fees.



          (a) Administrative Agent Fees. Borrowers agree to pay to the Administrative Agent,
for its own account, the administrative fees set forth in the Fee Letter or such other fees payable
in the amounts and at the times separately agreed upon between Borrowers and the Administrative
Agent (the “Administrative Agent Fees”).



          (b) All fees shall be paid on the dates due, in immediately available funds, to the
Administrative Agent for distribution, if and as appropriate, among the Lenders. Once paid, none
of the fees shall be refundable under any circumstances.



          SECTION 2.06 Interest on Loans.



          (a) ABR Loans. Subject to the provisions of Section 2.06(c), the Loans
comprising each ABR Borrowing shall bear interest at a rate per annum equal to the Alternate Base
Rate plus the Applicable Margin.



          (b) Eurodollar Loans. Subject to the provisions of Section 2.06(c), the Loans
comprising each Eurodollar Borrowing shall bear interest at a rate per annum equal to the Adjusted
LIBOR Rate for the Interest Period in effect for such Borrowing plus the Applicable Margin.



          (c) Default Rate. Notwithstanding the foregoing, during the continuance of an Event
of Default, all Obligations shall, to the extent permitted by applicable law, bear interest, after
as well as before judgment, at a per annum rate equal to 2% plus the Alternate Base Rate plus the
Applicable Margin (the “Default Rate”).



          (d) Interest Payment Dates. Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan; provided that (i) interest accrued pursuant to
Section 2.06(c) shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR Loan), accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in
the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period
therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.



          (e) Interest Calculation. All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate Base Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be
payable for the actual number of days elapsed (including the first day but excluding the last day).
The applicable Alternate Base Rate or Adjusted LIBOR Rate shall be determined by the
Administrative Agent in accordance with the provisions of this Agreement and such determination shall be conclusive
absent manifest error.



          SECTION 2.07 [Intentionally Omitted].



          SECTION 2.08 Interest Elections.



          (a) Generally. Each Borrowing initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request. Thereafter, any Borrower may elect to
convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing,



36









 







may elect Interest Periods therefor, all as provided in this Section. Any Borrower may elect different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing. Notwithstanding anything to the contrary, none of the Borrowers shall be
entitled to request any conversion or continuation that, if made, would result in more than five
Eurodollar Borrowings outstanding hereunder at any one time.



          (b) Interest Election Notice. To make an election pursuant to this Section, a
Borrower shall deliver, by hand delivery or telecopier, a duly completed and executed Interest
Election Request to the Administrative Agent not later than the time that a Borrowing Request would
be required under Section 2.03 if such Borrower were requesting a Borrowing of the Type
resulting from such election to be made on the effective date of such election. Each Interest
Election Request shall be irrevocable. Each Interest Election Request shall specify the following
information in compliance with Section 2.03:




          (i) the Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, or if outstanding
Borrowings are being combined, allocation to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) below shall be specified for
each resulting Borrowing);




          (ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;




          (iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and




          (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term “Interest Period.”



          If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an
Interest Period, then such Borrower shall be deemed to have selected an Interest Period of one
month’s duration.



          Promptly following receipt of an Interest Election Request, the Administrative Agent shall
advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.



          (c) Automatic Conversion to ABR Borrowing. If an Interest Election Request with
respect to a Eurodollar Borrowing is not timely delivered prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such
Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any
contrary provision hereof, if an Event of Default has occurred and is continuing, the
Administrative Agent or the Required Lenders may require, by notice to Borrowers, that (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless
repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.



37









 





          SECTION 2.09 Optional and Mandatory Prepayments of Loans.



          (a) Optional Prepayments. Borrowers shall have the right at any time and from time to
time to prepay any Borrowing, in whole or in part, subject to the requirements of this Section
2.09; provided that each partial prepayment shall be in an amount that is an integral multiple
of $250,000 and not less than $5.0 million.



          (b) Excess Cash Flow Prepayments. Not later than 90 days after the end of each fiscal
year (commencing with the fiscal year ending on December 31, 2010), the Borrower shall calculate
Excess Cash Flow for such fiscal year and an amount equal to the amount by which (A) 50% of such
Excess Cash Flow exceeds (B)(x) the aggregate principal amount of voluntary prepayments of Loans
pursuant to Section 2.09(a) during such fiscal year, plus (y) in the case of the fiscal
year ending on December 31, 2010, the aggregate principal amount of any Early Excess Cash Flow
Prepayments made pursuant to Section 2.09(d) on or prior to 90 days after the end of such
fiscal year, shall be applied to prepay Loans in accordance with Section 2.09(h) (each such
payment, an “Excess Cash Flow Prepayment”); provided, that if the amount in clause (B) exceeds the
amount in clause (A), no such prepayment of Loans shall be required.



          (c) Asset Sales. Not later than three (3) Business Day following the receipt of any
Net Cash Proceeds of any Asset Sale by Holdings or any of its Subsidiaries, Borrowers shall make
prepayments in accordance with Sections 2.09(h) and (i) in an aggregate amount
equal to 100% of such Net Cash Proceeds; provided that:




          (i) no such prepayment shall be required under this Section 2.09(c)(i) with
respect to (A) any Asset Sale permitted by Section 6.06(a), (c),
(d), (e) and (f), (B) the disposition of property which constitutes
a Casualty Event or (C) Asset Sales for fair market value resulting in less than $3.0
million in Net Cash Proceeds in any fiscal year; provided that clause (C) shall not apply in
the case of any Asset Sale described in clause (b) of the definition thereof; and




          (ii) so long as no Default shall then exist or would arise therefrom, such proceeds
shall not be required to be so applied on such date to the extent that Borrowers shall have
delivered an Officers’ Certificate to the Administrative Agent on or prior to such date
stating that such Net Cash Proceeds are expected to be reinvested in fixed or capital assets
within 360 days following the date of such Asset Sale (which Officers’ Certificate shall set
forth the estimates of the proceeds to be so expended); provided that if all or any portion
of such Net Cash Proceeds is not so reinvested within such 360-day period, such unused
portion ( the “Non-Reinvested Asset Sale Proceeds”) shall be applied on the last day of such
period as a mandatory prepayment as provided in this Section 2.09(c); provided,
further, that if the property subject to such Asset Sale constituted Collateral, then all
property purchased with the Net Cash Proceeds thereof pursuant to this subsection shall be
made subject to the Lien of the applicable Security Documents in favor of the Collateral Agent, for its benefit and for the benefit of the
other Secured Parties in accordance with Sections 5.11 and 5.12.



          (d) Concurrently with the making of any Dividend pursuant to Section 6.08(d) and any
Subordinated Indebtedness Payment pursuant to Section 6.11(a), in each case from any Cumulative
Credit prior to the date that the first Excess Cash Flow Prepayment is required to be made pursuant
to Section 2.09(b), Borrowers shall make prepayments of the outstanding Loans in accordance with
Section 2.09(h) in an amount equal to the amount of such Dividend or Subordinated Indebtedness
Payment, as the case may be.



38









 





          (e) [Intentionally Omitted].



          (f) Casualty Events. Not later than three (3) Business Day following the receipt of
any Net Cash Proceeds from a Casualty Event by Holdings or any of its Subsidiaries in excess of
$3.0 million, Borrowers shall do one or more of the following with the full amount of such Net Cash
Proceeds: (i) make prepayments of the outstanding Loans or (ii) so long as no Default shall have
occurred and be continuing, deliver an Officers’ Certificate to the Administrative Agent stating
that such proceeds are expected to be used to repair, replace or restore the property in respect of
which such Net Cash Proceeds were paid or to reinvest in other fixed or capital assets no later
than 360 days following the date of receipt thereof. To the extent any property subject to a
Casualty Event generating Net Cash Proceeds in excess of $250,000 constituted Collateral under the
Security Documents, the property so purchased with such Net Cash Proceeds shall be made subject to
the Lien of the applicable Security Documents in accordance with Sections 5.11 and
5.12. Any portion of the Net Cash Proceeds that is not used to so repair, replace or
restore the property in respect of which such Net Cash Proceeds were paid within 360 days after
receipt of such Net Cash Proceeds (the “Non-Reinvested Casualty Proceeds”) shall be applied as a
repayment of the outstanding Loans pursuant to Section 2.09(h).



          (g) [Intentionally Omitted].



          (h) Application of Prepayments.




          (i) Prepayment of the Loans: (x) from all Net Cash Proceeds pursuant to Section
2.09(c) and (f), to be applied to prepay Loans of any Class shall be applied to
reduce on a pro rata basis (based on the amount of such amortization payments) the remaining
scheduled amortization payments in respect of the Loans of such Class; and (y) any optional
prepayments of the Loans pursuant to Section 2.09(a) shall be applied to the
remaining installments thereof as directed by the Borrowers.




          (ii) Prepayment of the Loans from Excess Cash Flow pursuant to Section 2.09(b) and in
connection with the making of certain Dividends and Subordinated Indebtedness Payments
pursuant to Section 2.09(d), to be applied to prepay Loans of any Class shall be applied (A)
to reduce in order of maturity the next four unpaid quarterly scheduled amortization
payments under Section 2.04(b) above in respect of the Loans of such Class, and (B)
thereafter, to reduce on a pro rata basis (based on the amount of such amortization
payments) the remaining scheduled amortization payments in respect of the Loans of such
Class.




          (iii) Prior to any repayment of any Loan or Loans hereunder, the Borrowers shall select
the Borrowing or Borrowings constituting such Loan or Loans to be repaid or reduced and
shall notify the Administrative Agent by telephone (confirmed by telecopy) of such selection (i) in the case of an ABR Borrowing, not later than 12:00 p.m., Local Time, one
Business Day before the scheduled date of such repayment and (ii) in the case of a
Eurocurrency Borrowing, not later than 12:00 p.m., Local Time, three Business Days before
the scheduled date of such repayment or reduction. Any mandatory prepayment of Loans shall
be applied so that the aggregate amount of such prepayment is allocated among the Term Loans
and Incremental Loans, which are term loans, of each Class, if any, pro rata based on the
aggregate principal amount of outstanding Loans of each such Class. In the case of
prepayments under Section 2.09(a), the Borrowers may in their sole discretion select
the Borrowing or Borrowings to be prepaid. Each repayment of a Borrowing within any Class
shall be applied ratably to the Loans in such Class included in the repaid Borrowing.
Notwithstanding anything to the contrary in the immediately



39









 







preceding sentence, the Borrowers shall select the Borrowing or Borrowings to be repaid and
shall notify the Administrative Agent by telephone (confirmed by telecopy) of such selection
not later than 12:00 p.m., Local Time, on the scheduled date of such repayment. Repayments
of Borrowings shall be accompanied by accrued interest on the amount repaid.



          SECTION 2.10 Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurodollar Borrowing:




     (a) the Administrative Agent determines (which determination shall be final and
conclusive absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBOR Rate for such Interest Period; or




     (b) the Administrative Agent is advised in writing by the Required Lenders that the
Adjusted LIBOR Rate for such Interest Period will not adequately and fairly reflect the cost
to such Lenders of making or maintaining their Loans included in such Borrowing for such
Interest Period;


then the Administrative Agent shall give written notice thereof to Borrowers and the Lenders as
promptly as practicable thereafter and, until the Administrative Agent notifies Borrowers and the
Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing
as, a Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request requests a
Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.




          SECTION 2.11 Yield Protection.



          (a) Increased Costs Generally. If any Change in Law shall:




          (i) impose, modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for the account
of, or credit extended or participated in, by any Lender (except any reserve requirement
reflected in the Adjusted LIBOR Rate);




          (ii) subject any Lender to any tax of any kind whatsoever with respect to this
Agreement, or any Eurodollar Loan made by it, or change the basis of taxation of payments to
such Lender in respect thereof (except for Indemnified Taxes or Other Taxes covered by
Section 2.14 and the imposition of, or any change in the rate of, any Excluded Tax
payable by such Lender); or




          (iii) impose on any Lender or the London interbank market any other condition, cost or
expense affecting this Agreement or Eurodollar Loans made by such Lender;


and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan), or to
reduce the amount of any sum received or receivable by such Lender (whether of principal, interest
or any other amount), then, upon request of such Lender, Borrowers will pay to such Lender, such
additional amount or amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.




          (b) Capital Requirements. If any Lender determines (in good faith, but in its sole
absolute discretion) that any Change in Law affecting such Lender or any lending office of such
Lender



40









 







or such Lender’s holding company, if any, regarding capital requirements has or would have
the effect of reducing the rate of return on such Lender’s capital or on the capital of such
Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such
Lender or the Loans made by such Lender, to a level below that which such Lender or such Lender’s
holding company could have achieved but for such Change in Law (taking into consideration such
Lender’s policies and the policies of such Lender’s holding company with respect to capital
adequacy), then from time to time Borrowers will pay to such Lender, as the case may be, such
additional amount or amounts as will compensate such Lender or such Lender’s holding company for
any such reduction suffered.



          (c) Certificates for Reimbursement. A certificate of a Lender setting forth the
amount or amounts necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section 2.11 and delivered to Borrowers shall
be conclusive absent manifest error. Borrowers shall pay such Lender, as the case may be, the
amount shown as due on any such certificate within 10 days after receipt thereof.



          (d) Delay in Requests. Failure or delay on the part of any Lender to demand
compensation pursuant to this Section 2.11 shall not constitute a waiver of such Lender’s
right to demand such compensation; provided that Borrowers shall not be required to compensate a
Lender pursuant to this Section for any increased costs incurred or reductions suffered more than
six months prior to the date that such Lender, as the case may be, notifies Borrowers of the Change
in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim
compensation therefor (except that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the six-month period referred to above shall be extended to include
the period of retroactive effect thereof) .



          SECTION 2.12 Breakage Payments. In the event of (a) the payment or prepayment, whether optional or mandatory, of any
principal of any Eurodollar Loan earlier than the last day of an Interest Period applicable thereto
(including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan earlier
than the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Loan on the date specified in any notice delivered pursuant hereto or (d)
the assignment of any Eurodollar Loan earlier than the last day of the Interest Period applicable
thereto as a result of a request by any Borrower pursuant to Section 2.15(b), then, in any
such event, Borrowers shall compensate each Lender for the loss, cost and expense attributable to
such event. In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be
deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount
of interest which would have accrued on the principal amount of such Loan had such event not
occurred, at the Adjusted LIBOR Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period therefor (or, in
the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such principal amount for such
period at the interest rate which such Lender would bid were it to bid, at the commencement of such
period, for dollar deposits of a comparable amount and period from other banks in the Eurodollar
market. A certificate of any Lender setting forth in reasonable detail any amount or amounts that
such Lender is entitled to receive pursuant to this Section 2.12 shall be delivered to
Borrowers (with a copy to the Administrative Agent) and shall be conclusive and binding absent
manifest error. Borrowers shall pay such Lender the amount shown as due on any such certificate
within 5 days after receipt thereof.



41









 





          SECTION 2.13 Payments Generally; Pro Rata Treatment; Sharing of Setoffs.



          (a) Payments Generally. Borrowers shall make each payment required to be made by them
hereunder or under any other Loan Document (whether of principal, interest, fees or Reimbursement
Obligations, or of amounts payable under Section 2.11, 2.12, 2.14 or
10.03, or otherwise) on or before the time expressly required hereunder or under such other
Loan Document for such payment (or, if no such time is expressly required, prior to 2:00 p.m., New
York City time), on the date when due, in immediately available funds, without setoff, deduction or
counterclaim. Any amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall be made to the Administrative
Agent at its offices at 301 West 11th Street, Wilmington, DE 19801, except those
payments pursuant to Sections 2.11, 2.12, 2.14 and 10.03 shall be
made directly to the persons entitled thereto and payments pursuant to other Loan Documents shall
be made to the persons specified therein. The Administrative Agent shall distribute any such
payments received by it for the account of any other person to the appropriate recipient promptly
following receipt thereof. If any payment under any Loan Document shall be due on a day that is
not a Business Day, unless specified otherwise, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall
be payable for the period of such extension. All payments under each Loan Document shall be made
in dollars, except as expressly specified otherwise.



          (b) Insufficient Funds. If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal, interest and fees then
due hereunder, such funds shall be applied (i) first, toward payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties; and (ii) second, toward payment of principal then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of principal then due to
such parties.



          (c) Sharing of Set-Off. If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its
Loans or other Obligations resulting in such Lender’s receiving payment of a proportion of the
aggregate amount of its Loans and accrued interest thereon or other Obligations greater than its
pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall
(a) notify the Administrative Agent of such fact; and (b) purchase (for cash at face value)
participations in the Loans and such other obligations of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them, provided that:




          (i) if any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest; and




          (ii) the provisions of this paragraph shall not be construed to apply to (x) any
payment made by any Borrower pursuant to and in accordance with the express terms of this
Agreement or (y) any payment obtained by a Lender as consideration for the assignment of or
sale of a participation in any of its Loans to any assignee or participant.


Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under
applicable Requirements of Law, that any Lender acquiring a participation pursuant to the foregoing


42









 






arrangements may exercise against such Loan Party rights of setoff and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of such Loan Party in the
amount of such participation. If under applicable bankruptcy, insolvency or any similar law any
Secured Party receives a secured claim in lieu of a setoff or counterclaim to which this
Section 2.13(c) applies, such Secured Party shall to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights to which the Secured
Party is entitled under this Section 2.13(c) to share in the benefits of the recovery of
such secured claim.




          (d) Borrowers Default. Unless the Administrative Agent shall have received notice
from any Borrower prior to the date on which any payment is due to the Administrative Agent for the
account of the Lenders hereunder that such Borrower will not make such payment, the Administrative
Agent may assume that such Borrower has made such payment on such date in accordance herewith and
may, in reliance upon such assumption, distribute to the Lenders, the amount due. In such event,
if such Borrower has not in fact made such payment, then each of the Lenders severally agrees to
repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with
interest thereon, for each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.



          (e) Lender Default. If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.02(c), 2.13(d), 2.16(d), 2.17(d),
2.17(e) or 10.03(c), then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such
Sections until all such unsatisfied obligations are fully paid.



          SECTION 2.14 Taxes.



          (a) Payments Free of Taxes. Any and all payments by or on account of any obligation
of any Loan Party hereunder or under any other Loan Document shall be made free and clear of and
without reduction or withholding for any Indemnified Taxes or Other Taxes; provided that if such
Loan Party shall be required by applicable Requirements of Law to deduct any Indemnified Taxes
(including any Other Taxes) from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or Lender, as the case may be,
receives an amount equal to the sum it would have received had no such deductions been made, (ii)
such Loan Party shall make such deductions and (iii) such Loan Party shall timely pay the full
amount deducted to the relevant Governmental Authority in accordance with applicable Requirements
of Law.



          (b) Payment of Other Taxes by the Loan Parties. Without limiting the provisions of
paragraph (a) above, the Loan Parties shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable Requirements of Law.



          (c) Indemnification by the Loan Parties. The Loan Parties shall, jointly and
severally, indemnify the Administrative Agent and each Lender, within 10 days after demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid
by the Administrative Agent or such Lender, as the case may be, and any penalties, interest and
reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified
Taxes or Other Taxes were correctly



43









 







or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Loan
Parties by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on
its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.



          (d) Evidence of Payments. As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by any Loan Party to a Governmental Authority, such Loan Party shall deliver
to the Administrative Agent the original or a certified copy of a receipt issued by such
Governmental Authority evidencing such payment, a copy of the return reporting such payment or
other evidence of such payment reasonably satisfactory to the Administrative Agent.



          (e) Status of Lenders. Any Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which any Borrower is resident for tax
purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder
or under any other Loan Document shall, to the extent it may lawfully do so, deliver to such
Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable
Requirements of Law or reasonably requested by such Borrower or the Administrative Agent, such
properly completed and executed documentation prescribed by applicable Requirements of Law as will
permit such payments to be made without withholding or at a reduced rate of withholding. In
addition, any Lender, if requested by any Borrower or the Administrative Agent, shall deliver such
other documentation prescribed by applicable Requirements of Law or reasonably requested by such
Borrower or the Administrative Agent as will enable such Borrower or the Administrative Agent to
determine whether or not such Lender is subject to backup withholding or information reporting
requirements. Notwithstanding anything to the contrary in the above two sentences, in the case of
non U.S. withholding taxes the completion, execution and submission of non-U.S. forms shall not be
required if in the Lender’s reasonable judgment such completion, execution or submission would be
disadvantageous to such Lender in any material respect. Borrowers shall reimburse the Lender for
any cost or expense incurred by such Lender in connection with complying with this Section 2.14(e).



          (f) For any period during which, upon a written request provided by the Borrowers to a Lender
reasonably in advance of the date compliance is due and describing the documentation requested by
the Borrowers, such Lender has failed to provide the Borrowers with the appropriate documentation
requested by Borrowers and required by Section 2.14(e), the Borrowers shall not be obligated to
pay, and such Lender shall not be entitled to secure additional amounts under this Section 2.14
with respect to Indemnified Taxes imposed by a Governmental Authority to the extent that such
additional amounts would not have arisen but for such failure of such Lender; provided that, no
Lender shall be required to provide documentation unless legally permitted to do so.



          (g) Treatment of Certain Refunds. If the Administrative Agent or a Lender determines,
in its reasonable discretion, that it has received a refund of any Indemnified Taxes or Other Taxes
as to which it has been indemnified by any Borrower or with respect to which any Borrower has paid
additional amounts pursuant to this Section, it shall pay to such Borrower an amount equal to such
refund (but only to the extent of indemnity payments made, or additional amounts paid, by such
Borrower under this Section with respect to the Indemnified Taxes or Other Taxes giving rise to
such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender, as the
case may be, and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided that such Borrower, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to such Borrower (plus
any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent or such Lender in
the event the



44









 







Administrative Agent or such Lender in the event the Administrative Agent or such Lender is
required to repay such refund to such Governmental Authority. This paragraph shall not be
construed to require the Administrative Agent or any Lender to make available its tax returns (or
any other information relating to its taxes that it deems confidential) to any Borrower or any
other person. Notwithstanding anything to the contrary, in no event will any Lender be required to
pay any amount to any Borrower the payment of which would place such Lender in a less favorable net
after-tax position than such Lender would have been in if the additional amounts giving rise to
such refund of any Indemnified Taxes or Other Taxes had never been paid.



          SECTION 2.15 Mitigation Obligations; Replacement of Lenders.



          (a) Designation of a Different Lending Office. If any Lender requests compensation
under Section 2.11, or requires any Borrower to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section 2.14, then
such Lender shall use reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.11 or 2.14, as
the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. Each Borrower hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment. A certificate setting forth such costs and expenses submitted by such
Lender to Borrowers shall be conclusive absent manifest error.



          (b) Replacement of Lenders. If any Lender requests compensation under Section
2.12, or if any Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.14, or if any
Lender defaults in its obligation to fund Loans hereunder, or if any Borrower exercises its
replacement rights under Section 10.02(d), then such Borrower may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 10.04), all of its interests, rights and obligations under
this Agreement and the other Loan Documents to an assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment); provided that:




          (i) such Borrower shall have paid to the Administrative Agent the processing and
recordation fee specified in Section 10.04(b);




          (ii) such Lender shall have received payment of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under
Section 2.12), from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or such Borrower (in the case of all other amounts);




          (iii) in the case of any such assignment resulting from a claim for compensation under
Section 2.12 or payments required to be made pursuant to Section 2.14, such
assignment will result in a reduction in such compensation or payments thereafter; and




          (iv) such assignment does not conflict with applicable Requirements of Law.



45









 




A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling such Borrower to
require such assignment and delegation cease to apply.




          SECTION 2.16 [Intentionally Omitted].



          SECTION 2.17 [Intentionally Omitted].



          SECTION 2.18 Increase in Commitments.




     (a) Borrower Request. Borrower may by written notice to the Administrative Agent
elect to request the establishment of one or more new term loan or revolving loan commitments (the
"Incremental Loan Commitments”) by an amount not in excess of $23,250,000 in the aggregate less any
Indebtedness incurred pursuant to Section 6.01(k). Each such notice shall specify (i) the
date (each, an “Increase Effective Date”) on which Borrower proposes that the new Commitments shall
be effective, which shall be a date not less than 10 Business Days after the date on which such
notice is delivered to the Administrative Agent and (ii) the identity of each Eligible Assignee to
whom Borrower proposes any portion of such new Commitments be allocated and the amounts of such
allocations; provided that any existing Lender approached to provide all or a portion of the new
Commitments may elect or decline, in its sole discretion, to provide such new Commitment.




     (b) Conditions. The new Commitments shall become effective, as of such Increase
Effective Date; provided that:




          (i) each of the conditions set forth in Section 4.02 shall be satisfied;




          (ii) no Default shall have occurred and be continuing or would result from the
borrowings to be made on the Increase Effective Date; and




          (iii) Borrower shall deliver or cause to be delivered any legal opinions or other
documents reasonably requested by the Administrative Agent in connection with any such
transaction.




     (c) Terms of New Loans and Commitments. The terms and provisions of Loans made
pursuant to the new Commitments shall be as follows:




          (i) the maturity date of the new loans made pursuant to the new Commitments (each an
“Incremental Loan”) shall not be earlier than the Maturity Date and the weighted average
life to maturity of any Incremental Loans that are term loans shall be no shorter than the
weighted average life to maturity of the Term Loans;




          (ii) the interest rate for the Incremental Loans shall be determined by Borrower and
the applicable new Lenders; provided that if the interest rate (which shall be deemed to
include all upfront or similar fees or original issue discount (with OID being equated to
interest rates in a manner reasonably determined by the Administrative Agent on an assumed
four-year life to maturity) and any other component of interest rate) in respect of any
Incremental Loans exceeds the interest rate with respect to the Term Loans and/or previously
incurred Incremental Loans, the interest rate with respect to the Term Loans and previously
incurred Incremental Loans shall be automatically increased on the date of incurrence of
such new



46









 







Incremental Loans so that it is equal to the interest rate with respect to the new Incremental Loans.




          (iii) subject to clauses (i) and (ii) above, any Incremental Loans consisting of term
loans shall have the same terms as the Term Loans (other than as to pricing, maturity and
amortization); and




          (iv) subject to clauses (i) and (ii) above, any Incremental Loan consisting of
revolving loans shall have the same terms as the Term Loans (other than as to pricing,
maturity, amortization and mechanical differences due to the revolving nature of such
loans); provided that any such revolving loans shall require no scheduled amortization or
mandatory commitment reductions prior to the Maturity Date.


The new Commitments shall be effected by a joinder agreement (the “Increase Joinder”) executed by
Borrower, the Administrative Agent and each Lender making such new Commitment, in form and
substance satisfactory to each of them. The Increase Joinder may, without the consent of any other
Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary
or appropriate, in the opinion of the Administrative Agent, to effect the provision of this
Section 2.18 (including, without limitation, amending and restating this Agreement or any
other Loan Document and mechanical changes to implement an Incremental Loan Commitment with respect
to revolving loans).




          (d) Making of Incremental Loans. On any Increase Effective Date on which new
Commitments for Incremental Loans are effective or any day thereafter during the effectiveness of
such Commitment, in the case of revolving Incremental Loan Commitments, subject to the satisfaction
of the foregoing terms and conditions, if requested by the Borrowers, each Lender of such
Commitment shall make an Incremental Loan to the Borrowers in an amount up to the available amount
of its new Commitment.



          (e) Equal and Ratable Benefit. The Loans and Commitments established pursuant to this
paragraph shall constitute Loans and Commitments under, and shall be entitled to all the benefits
afforded by, this Agreement and the other Loan Documents, and shall, without limiting the
foregoing, benefit equally and ratably from the Guarantees and security interests created by the
Security Documents. The Loan Parties shall take any actions reasonably required by the
Administrative Agent to ensure and/or demonstrate that the Lien and security interests granted by
the Security Documents continue to be perfected under the UCC or otherwise after giving effect to
the establishment of any such Class of Incremental Loans or any such new Commitments.



ARTICLE III




REPRESENTATIONS AND WARRANTIES



          Each Loan Party represents and warrants to the Administrative Agent, the Collateral Agent and
each of the Lenders (with references to the Companies being references thereto after giving effect
to the Transactions unless otherwise expressly stated) that:



          SECTION 3.01 Organization; Powers. Each Company (a) is duly organized and validly existing under the laws of the jurisdiction
of its organization, (b) has all requisite power, capacity and authority to carry on its business
as now conducted and to own and lease its property and (c) is qualified and in good standing (to
the extent such concept is applicable in the applicable jurisdiction) to do



47









 







business in every jurisdiction where such qualification is required, except in such jurisdictions where the failure
to so qualify or be in good standing, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. There is no existing default under any
Organizational Document of any Company or any event which, with the giving of notice or passage of
time or both, would constitute a default by any party thereunder.



          SECTION 3.02 Authorization; Enforceability. The Transactions to be entered into by each Loan Party are within such Loan Party’s powers
and have been duly authorized by all necessary action on the part of such Loan Party. This
Agreement has been duly executed and delivered by each Loan Party and constitutes, and each other
Loan Document to which any Loan Party is to be a party, when executed and delivered by such Loan
Party, will constitute, a legal, valid and binding obligation of such Loan Party, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.



          SECTION 3.03 No Conflicts. Except as set forth on Schedule 3.03, the Transactions (a) do not require any
consent or approval of, registration or filing with, or any other action by, any Governmental
Authority, except (i) such as have been obtained or made and are in full force and effect, (ii)
filings necessary to perfect Liens created by the Loan Documents and (iii) consents, approvals,
registrations, filings, permits or actions the failure to obtain or perform which could not
reasonably be expected to result in a Material Adverse Effect, (b) will not violate the
Organizational Documents of any Company, (c) will not violate any Requirement of Law, (d) will not
violate or result in a default or require any consent or approval under any indenture, agreement or
other instrument binding upon any Company or its property, or give rise to a right thereunder to
require any payment to be made by any Company, except for violations, defaults or the creation of
such rights that could not reasonably be expected to result in a Material Adverse Effect and (e)
will not result in the creation or imposition of any Lien on any property of any Company, except
Liens created by the Loan Documents and Permitted Liens.



          SECTION 3.04 Financial Statements; Projections.



          (a) Historical Financial Statements. Borrowers have heretofore delivered to the
Lenders the consolidated balance sheets and related statements of income, stockholders’ equity and
cash flows of Holdings and its Subsidiaries (i) as of and for the fiscal years ended December 31,
2006 and 2007, audited by and accompanied by the unqualified opinion of Samil Pricewaterhouse
Coopers, independent public accountants, (ii) as of and for the fiscal year ended December 31, 2008
and (iii) as of and for the six-month period ended June 30, 2009 and for the comparable period of
the preceding fiscal year. Such financial statements and all financial statements delivered
pursuant to Sections 5.01(a) and (b) have been prepared in accordance with GAAP
(subject in the case of the interim statements to normal year-end adjustments and the absence of
footnotes) and present fairly and accurately the financial condition and results of operations and
cash flows of Borrowers as of the dates and for the periods to which they relate.



          (b) No Liabilities. Except as set forth in the financial statements referred to in
Section 3.04(a), there are no liabilities of any Company of any kind, whether accrued,
contingent, absolute, determined, determinable or otherwise, which could reasonably be expected to
result in a Material Adverse Effect, and there is no existing condition, situation or set of
circumstances which could reasonably be expected to result in such a liability, other than
liabilities under the Loan Documents. Since the Effective Date, there has been no event, change,
circumstance or occurrence that, individually or in the aggregate, has had or could reasonably be
expected to result in a Material Adverse Effect.



48









 





          (c) [Intentionally Omitted].



          (d) Forecasts. The forecasts of financial performance of Holdings and its
subsidiaries furnished to the Lenders have been prepared in good faith by Borrowers and based on
assumptions believed by Borrowers to be reasonable.



          SECTION 3.05 Properties.



          (a) Generally. Each Company has good title to, or valid leasehold interests in, all
its property material to its business, free and clear of all Liens except for, in the case of
Collateral, Permitted Collateral Liens and, in the case of all other material property, Permitted
Liens and minor irregularities or deficiencies in title that, individually or in the aggregate, do
not interfere with its ability to conduct its business as currently conducted or to utilize such
property for its intended purpose. The property of the Companies, taken as a whole, (i) is in good
operating order, condition and repair (ordinary wear and tear excepted) and (ii) constitutes all
the property which is required for the business and operations of the Companies as presently
conducted.



          (b) Real Property. Schedule 3.05(b) hereto contains as of the Effective Date
a true and complete list of each interest in Real Property (i) owned by any Company as of the date
hereof and describes the type of interest therein held by such Company and whether such owned Real
Property is leased and if leased whether the underlying Lease contains any option to purchase all
or any portion of such Real Property or any interest therein or contains any right of first refusal
relating to any sale of such Real Property or any portion thereof or interest therein and (ii)
leased, subleased or otherwise occupied or utilized by any Company, as lessee, sublessee,
franchisee or licensee, as of the date hereof and describes the type of interest therein held by
such Company and, in each of the cases described in clauses (i) and (ii) of this Section
3.05(b), whether any Lease requires the consent of the landlord or tenant thereunder, or other
party thereto, to the Transactions.



          (c) No Casualty Event. No Company has received any notice of, nor has any knowledge
of, the occurrence or pendency or contemplation of any Casualty Event affecting all or any material
portion of its property or any material portion of the Collateral.



          (d) Collateral. Each Company owns or has rights to use all of the Collateral and all
rights with respect thereto used in, necessary for or material to each Company’s business as
currently conducted. The use by each Company of such Collateral and all such rights with respect
to the foregoing do not infringe on the rights of any person other than such infringement which
could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse
Effect. No claim has been made and remains outstanding that any Company’s use of any Collateral
does or may violate the rights of any third party that could, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.



          SECTION 3.06 Intellectual Property.



          (a) Ownership/No Claims. Each Loan Party owns, or is licensed to use, all
Intellectual Property, except for those the failure to own or license which, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse Effect. No claim has
been asserted and is pending by any person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor does
any Loan Party know of any valid basis for any such claim which could reasonably be expected to
have a Material Adverse Effect. The use



49









 







of such Intellectual Property by each Loan Party does not infringe the rights of any person, except for such claims and infringements that, individually or
in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.



          (b) Registrations. Except pursuant to licenses and other user agreements entered into
by each Loan Party in the ordinary course of business, on and as of the date hereof (i) each Loan
Party owns and possesses the right to use, and has done nothing to authorize or enable any other
person to use, any of its Intellectual Property that is material to its business and (ii) all
registrations with respect to such Intellectual Property are valid and in full force and effect.



          (c) No Violations or Proceedings. To each Loan Party’s knowledge, on and as of the
date hereof, there is no material violation by others of any right of such Loan Party with respect
to any of its Intellectual Property pledged by it under the name of such Loan Party except as may
be set forth on Schedule 3.06(c).



          SECTION 3.07 Equity Interests and Subsidiaries.



          (a) Equity Interests. Schedule 3.07(a) sets forth a list as of the Effective
Date of (i) all the Subsidiaries of Holdings and their jurisdictions of organization and (ii) the
number of each class of its Equity Interests authorized, and the number thereof outstanding, and
the number of shares covered by all outstanding options, warrants, rights of conversion or purchase
and similar rights. All Equity Interests of each Company are duly and validly issued and are fully
paid and non-assessable, and, other than Holdings, are owned by Holdings, directly or indirectly
through Wholly Owned Subsidiaries. All Equity Interests of Borrowers are owned directly or
indirectly by Holdings through Wholly Owned Subsidiaries. Each Loan Party is the record and
beneficial owner of, and has good and marketable title to, the Equity Interests pledged by it under
the Security Documents, free of any and all Liens, rights or claims of other persons, except the
security interest created by the Security Documents, and there are no outstanding warrants, options
or other rights to purchase, or shareholder, voting trust or similar agreements outstanding with respect to, or property that is convertible into, or that requires the
issuance or sale of, any such Equity Interests.



          (b) No Consent of Third Parties Required. No consent of any person including any
other general or limited partner, any other member of a limited liability company, any other
shareholder or any other trust beneficiary is necessary or reasonably desirable (from the
perspective of a secured party) in connection with the creation, perfection or first priority
status of the security interest of the Collateral Agent in any Equity Interests pledged to the
Collateral Agent for the benefit of the Secured Parties under the Security Agreement or the
exercise by the Collateral Agent of the voting or other rights provided for in the Security
Agreement or the exercise of remedies in respect thereof.



          (c) Organizational Chart. An accurate organizational chart, showing the ownership
structure of Holdings, Borrowers and each Subsidiary on the Effective Date, and after giving effect
to the Transactions, is set forth on Schedule 3.07(c).



          SECTION 3.08 Litigation; Compliance with Laws. There are no actions, suits, investigations or proceedings at law or in equity by or before
any Governmental Authority now pending or, to the knowledge of any Company, threatened against or
affecting any Company or any business, property or rights of any Company (i) that involve any Loan
Document or any of the Transactions or (ii) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, could reasonably be expected, individually
or in the aggregate, to result in a Material Adverse Effect. Except for



50









 







matters covered by Section 3.18, no Company or any of its property is in violation of, nor will the continued
operation of its property as currently conducted violate, any Requirements of Law (including any
zoning or building ordinance, code or approval or any building permits) or any restrictions of
record or agreements affecting any Company’s Real Property or is in default with respect to any
Requirement of Law, where such violation or default, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.



          SECTION 3.09 Agreements. No Company is a party to any agreement or instrument or subject to any corporate or other
constitutional restriction that has resulted or could reasonably be expected to result in a
Material Adverse Effect. No Company is in default in any manner under any provision of any
indenture or other agreement or instrument evidencing Indebtedness, or any other agreement or
instrument to which it is a party or by which it or any of its property is or may be bound, where
such default could reasonably be expected to result in a Material Adverse Effect, and no condition
exists which, with the giving of notice or the lapse of time or both, would constitute such a
default.



          SECTION 3.10 Federal Reserve Regulations. No Company is engaged principally, or as one of its important activities, in the business
of extending credit for the purpose of buying or carrying Margin Stock. No part of the proceeds of
any Loan will be used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent with, the
provisions of the regulations of the Board, including Regulation T, U or X. The pledge of the
Securities Collateral pursuant to the Security Agreement does not violate such regulations.



          SECTION 3.11 Investment Company Act; Public Utility Holding Company Act. No Company is (a) an “investment company” or a company “controlled” by an “investment
company,” as defined in, or subject to regulation under, the Investment Company Act of 1940, as
amended, or (b) a “holding company,” an “affiliate” of a “holding company” or a “subsidiary
company” of a “holding company,” as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935, as amended.



          SECTION 3.12 Use of Proceeds. Borrowers shall use the proceeds of the Loans for general corporate purposes.



          SECTION 3.13 Taxes. Each Company has (a) timely filed or caused to be timely filed all federal Tax Returns and
all material state, local and foreign Tax Returns or materials required to have been filed by it
and all such Tax Returns are true and correct in all material respects and (b) duly and timely
paid, collected or remitted or caused to be duly and timely paid, collected or remitted all Taxes
(whether or not shown on any Tax Return) due and payable, collectible or remittable by it and all
assessments received by it, except Taxes (i) that are being contested in good faith by appropriate
proceedings and for which such Company has set aside on its books adequate reserves in accordance
with GAAP (and any locally applicable generally accepted accounting principles) and (ii) which
could not, individually or in the aggregate, have a Material Adverse Effect. Each Company has made
adequate provision in accordance with GAAP for all Taxes not yet due and payable. Each Company is
unaware of any proposed or pending tax assessments, deficiencies or audits that could be reasonably
expected to, individually or in the aggregate, result in a Material Adverse Effect. No Company has
ever been a party to any understanding or arrangement constituting a “tax shelter” within the
meaning of Section 6111(c), Section 6111(d) or Section 6662(d)(2)(C)(iii) of the Code, except as
could not be reasonably expected to, individually or in the aggregate, result in a Material Adverse
Effect.



51









 





          SECTION 3.14 No Material Misstatements. No information, report, financial statement, certificate, Borrowing Request, exhibit or
schedule furnished by or on behalf of any Company to the Administrative Agent or any Lender in
connection with the negotiation of any Loan Document or included therein or delivered pursuant
thereto, taken as a whole, contained or contains any material misstatement of fact or omitted or
omits to state any material fact necessary to make the statements therein, in the light of the
circumstances under which they were or are made, not misleading as of the date such information is
dated or certified; provided that to the extent any such information, report, financial statement,
exhibit or schedule was based upon or constitutes a forecast or projection, each Company represents
only that it acted in good faith and utilized reasonable assumptions and due care in the
preparation of such information, report, financial statement, exhibit or schedule.



          SECTION 3.15 Labor Matters. As of the Effective Date, there are no strikes, lockouts or slowdowns against any Company
pending or, to the knowledge of any Company, threatened. The hours worked by and payments made to
employees of any Company subject thereto have not been in violation of the Fair Labor Standards Act
of 1938, as amended, or any other applicable federal, state, local or foreign law dealing with such matters in any manner which could reasonably be expected to result in a Material Adverse
Effect. All payments due from any Company, or for which any claim may be made against any Company,
on account of wages and employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of such Company except where the failure to do so could not
reasonably be expected to result in a Material Adverse Effect. The consummation of the
Transactions will not give rise to any right of termination or right of renegotiation on the part
of any union under any collective bargaining agreement to which any Company is bound.



          SECTION 3.16 Solvency. Immediately after the consummation of the Transactions to occur on the Effective Date and
immediately following the making of each Loan and after giving effect to the application of the
proceeds of each Loan, (a) the fair value of the properties of each Loan Party (individually and on
a consolidated basis with its Subsidiaries) will exceed its debts and liabilities, subordinated,
contingent or otherwise; (b) the present fair saleable value of the property of each Loan Party
(individually and on a consolidated basis with its Subsidiaries) will be greater than the amount
that will be required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities become absolute and
matured; (c) each Loan Party (individually and on a consolidated basis with its Subsidiaries) will
be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; (d) each Loan Party (individually and on a consolidated
basis with its Subsidiaries) will not have unreasonably small capital with which to conduct its
business in which it is engaged as such business is now conducted and is proposed to be conducted
following the Effective Date and (e) with respect to the UK Sales Subsidiary only, it is not
“unable to pay its debts”; provided, that in this context, “unable to pay its debts” means that
there are no grounds on which the UK Sales Subsidiary could be deemed unable to pay its debts (as
defined in Section 123(1) of the United Kingdom Insolvency Act 1986) or on which a court could be
satisfied that the value of its assets is less than the amount of its liabilities, taking into
account its contingent and prospective liabilities (as such term would be construed for the
purposes of Section 123(2) of the United Kingdom Insolvency Act 1986).



          SECTION 3.17 Employee Benefit Plans. Each Company which is subject to ERISA and its ERISA Affiliates is in compliance in all
material respects with the applicable provisions of ERISA and the Code and the regulations and
published interpretations thereunder. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events, could reasonably be expected to
result in material liability of any Company which is subject to ERISA or any of its ERISA
Affiliates or the imposition of a Lien on any of the property of any Company which is



52









 







subject to ERISA. The present value of all accumulated benefit obligations of all underfunded Plans (based on
the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not,
as of the date of the most recent financial statements reflecting such amounts, exceed by more than
$1,000,000 the fair market value of the property of all such underfunded Plans. Using actuarial
assumptions and computation methods consistent with subpart I of subtitle E of Title IV of ERISA,
the aggregate liabilities of each Company which is subject to ERISA or its ERISA Affiliates to all
Multiemployer Plans in the event of a complete withdrawal therefrom, as of the close of the most
recent fiscal year of each such Multiemployer Plan, could not reasonably be expected to result in a
Material Adverse Effect.



          To the extent applicable, each Foreign Plan has been maintained in compliance in all material
respects with its terms and with the requirements of any and all applicable Requirements of Law and
has been maintained, where required, in good standing with applicable regulatory authorities. No
Company has incurred any material obligation in connection with the termination of or
withdrawal from any Foreign Plan. The present value of the accrued benefit liabilities (whether or
not vested) under each Foreign Plan which is required to be funded under applicable law, determined
as of the end of the most recently ended fiscal year of the respective Company on the basis of
actuarial assumptions, each of which is reasonable, did not exceed the current value of the
property of such Foreign Plan by an amount in excess of $1,000,000, and for each Foreign Plan which
is not funded, the obligations of such Foreign Plan are properly accrued.



          SECTION 3.18 Environmental Matters.



          (a) Except as, individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect:




          (i) The Companies and their businesses, operations and Real Property are and have
always been in compliance with, and the Companies have no liability under, any applicable
Environmental Law;




          (ii) The Companies have obtained all Environmental Permits required for the conduct of
their businesses and operations, and the ownership, operation and use of their property,
under Environmental Law, all such Environmental Permits are valid and in good standing, the
Companies and their businesses are in compliance with all, and have not violated any,
Environmental Permits and, under the currently effective business plan of the Companies, no
expenditures or operational adjustments will be required in order to renew or modify such
Environmental Permits during the next ten years;




          (iii) There has been no Release or threatened Release of Hazardous Material on, at,
under or from any Real Property or facility presently or formerly owned, leased or operated
by the Companies or their predecessors in interest that could result in liability by the
Companies under Environmental Law;




          (iv) There is no Environmental Claim pending or, to the knowledge of the Companies,
threatened against the Companies, or relating to the Real Property currently or formerly
owned, leased or operated by the Companies or relating to the operations of the Companies or
their predecessors in interest (including, without limitation, the transportation, treatment
or disposal of any Hazardous Material at any location), and there are no actions,
activities, circumstances, conditions, events or incidents (including, without limitation,
any



53









 







written request for information under CERCLA or any similar Environmental Law) that could form the basis of such an Environmental Claim; and




          (v) No person with an indemnity or contribution obligation to the Companies relating to
compliance with or liability under Environmental Law is in default with respect to such
obligation.



          (b) Except as, individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect:




          (i) No Company is obligated to perform any action or otherwise incur any expense under
Environmental Law pursuant to any order, decree, judgment or agreement by which it is bound
or has assumed by contract, agreement or operation of law, and no Company is conducting or financing any Response pursuant to any Environmental Law with respect to
any Real Property or any other location;




          (ii) No Real Property or facility owned, operated or leased by the Companies and, to
the knowledge of the Companies, no Real Property or facility formerly owned, operated or
leased by the Companies or any of their predecessors in interest is (i) listed or proposed
for listing on the National Priorities List promulgated pursuant to CERCLA or (ii) listed on
the Comprehensive Environmental Response, Compensation and Liability Information System
promulgated pursuant to CERCLA or (iii) included on any similar list maintained by any
Governmental Authority including any such list relating to petroleum;




          (iii) No Lien has been recorded or, to the knowledge of any Company, threatened under
any Environmental Law with respect to any Real Property or property of the Companies;




          (iv) The execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby will not require any notification, registration,
filing, reporting, disclosure, investigation, remediation or cleanup pursuant to any
Governmental Real Property Disclosure Requirements or any other applicable Environmental
Law; and




          (v) The Companies have made available to the Lenders all material records and files in
the possession, custody or control of, or otherwise reasonably available to, the Companies
concerning compliance with or liability under Environmental Law, including those concerning
the actual or suspected existence of Hazardous Material at Real Property or facilities
currently or formerly owned, operated, leased or used by the Companies.



          SECTION 3.19 Insurance. Except as could not reasonably be expected to result in a Material Adverse Effect, all
insurance maintained by the Companies is in full force and effect, all premiums have been duly
paid, no Company has received notice of violation or cancellation thereof, the Premises, and the
use, occupancy and operation thereof, comply in all material respects with all Insurance
Requirements, and there exists no default under any Insurance Requirement. Each Company has
insurance in such amounts and covering such risks and liabilities as are customary for companies of
a similar size engaged in similar businesses in similar locations.



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          SECTION 3.20 Security Documents.



          (a) Security Agreement. The Security Agreement is effective to create in favor of the
Collateral Agent for the benefit of the Secured Parties, legal, valid and enforceable Liens on, and
security interests in, the Security Agreement Collateral and, when (i) financing statements and
other filings in appropriate form are filed in the offices specified on Schedule 3.20 and
(ii) upon the taking of possession or control by the Collateral Agent of the Security Agreement
Collateral with respect to which a security interest may be perfected only by possession or control
(which possession or control shall be given to the Collateral Agent to the extent possession or
control by the Collateral Agent is required by each Security Agreement), the Liens created by the
Security Agreement shall constitute fully perfected Liens on, and security interests in, all right,
title and interest of the grantors thereunder in the Security Agreement Collateral (other than such
security Agreement Collateral in which a security interest cannot be perfected under the UCC as in effect at the relevant time in the relevant jurisdiction), in
each case subject to no Liens other than Permitted Collateral Liens.



          (b) Copyright Office Filing. When the Security Agreement or a short form thereof is
filed in the United States Copyright Office, the Liens created by such Security Agreement shall
constitute fully perfected Liens on, and security interests in, all right, title and interest of
the grantors thereunder in the Registered Copyrights and Registered Copyright Licenses (each as
defined in such Security Agreement), in each case subject to no Liens other than Permitted
Collateral Liens.



          (c) Mortgages. Each Mortgage is effective to create, in favor of the Collateral
Agent, for its benefit and the benefit of the Secured Parties, or with respect to each Mortgage
executed by Korean Opco, is effective to create in favor of the Collateral Trustee, legal, valid
and enforceable first priority Liens on, and security interests in, all of the Loan Parties’ right,
title and interest in and to the Mortgaged Properties thereunder and the proceeds thereof, subject
only to Permitted Collateral Liens or other Liens acceptable to the Collateral Agent, and when the
Mortgages are filed in the appropriate offices for the recording thereof, the Mortgages shall
constitute fully perfected Liens on, and security interests in, all right, title and interest of
the Loan Parties in the Mortgaged Properties and the proceeds thereof, in each case prior and
superior in right to any other person, other than Liens permitted by such Mortgage.



          (d) Valid Liens. Each Security Document delivered on or prior to the Effective Date
is, and, when delivered pursuant to Sections 5.11, 5.12 or 5.13 or any
other requirement of this Agreement or any Loan Document, each other Security Document will upon
execution and delivery thereof be, effective to create in favor of the Collateral Agent, for the
benefit of the Secured Parties, or the Collateral Trustee, as applicable, legal, valid and
enforceable Liens on, and security interests in, all of the Loan Parties’ right, title and interest
in and to the Collateral thereunder, and when all appropriate filings or recordings are made in the
appropriate offices as may be required under applicable law, or other notices given as may be
required pursuant to applicable law, such Security Document will constitute fully perfected, first
ranking Liens on, and security interests in, all right, title and interest of the Loan Parties in
such Collateral, in each case subject to no Liens other than the applicable Permitted Collateral
Liens.



          SECTION 3.21 Anti-Terrorism Law.



          (a) No Loan Party and, to the knowledge of the Loan Parties, none of its Affiliates is in
violation of any Requirement of Law related to terrorism financing or money laundering
(“Anti-Terrorism Laws”) including the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act (“USA PATRIOT Act”) of 2001 (Title III of
Pub. L.



55









 







107-56), The Currency and Foreign Transactions Reporting Act (also known as the “Bank
Secrecy Act”, 31 U.S.C. §§ 5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959), the Trading
With the Enemy Act (50 U.S.C. § 1 et seq., as amended) and Executive Order 13224 (effective
September 24, 2001) (“Executive Order”).



          (b) No Loan Party and to the knowledge of the Loan Parties, no Affiliate or broker or other
agent of any Loan Party acting or benefiting in any capacity in connection with the Loans is any of
the following:




          (i) a person that is listed in the annex to, or is otherwise subject to the provisions
of, the Executive Order;




          (ii) a person owned or controlled by, or acting for or on behalf of, any person that is
listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;




          (iii) a person with which any Lender is prohibited from dealing or otherwise engaging
in any transaction by any Anti-Terrorism Law;




          (iv) a person that commits, threatens or conspires to commit or supports “terrorism” as
defined in the Executive Order; or




          (v) a person that is named as a “specially designated national and blocked person” on
the most current list published by the U.S. Treasury Department Office of Foreign Assets
Control (“OFAC”) at its official website or any replacement website or other replacement
official publication of such list.



          (c) No Loan Party and, to the knowledge of the Loan Parties, no broker or other agent of any
Loan Party acting in any capacity in connection with the Loans (i) conducts any business or engages
in making or receiving any contribution of funds, goods or services to or for the benefit of any
person described in paragraph (b) above, (ii) deals in, or otherwise engages in any transaction
relating to, any property or interests in property blocked pursuant to the Executive Order, or
(iii) engages in or conspires to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law.



          SECTION 3.22 [Intentionally Omitted].



          SECTION 3.23 UK Financial Assistance. Neither the execution, delivery or performance of any of the Loan Documents nor the
incurrence of any of the Obligations by any Loan Party constitutes or will constitute unlawful
financial assistance for the purposes of sections 151 to 154 (inclusive) of the United Kingdom
Companies Act 1985 (as re-enacted or amended from time to time).



ARTICLE IV




CONDITIONS PRECEDENT



          SECTION 4.01 Conditions to Effective Date. Subject to Section 5.13, the amendment and restatement of the Pre-Petition Credit
Agreement set forth herein shall be subject to the prior or concurrent satisfaction of each of the
conditions precedent set forth in this Section 4.01.



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          (a) Loan Documents. All legal matters incident to this Agreement, the Credit
Extensions hereunder and the other Loan Documents shall be satisfactory to the Lenders and to the
Administrative Agent and there shall have been delivered to the Administrative Agent an executed
counterpart of each of the Loan Documents.



          (b) Corporate Documents. The Administrative Agent shall have received:




          (i) a certificate of the secretary or assistant secretary (or other authorized officer
or member acceptable to the Administrative Agent) of each Loan Party dated the Effective
Date, certifying (A) that attached thereto is a true and complete copy of each
Organizational Document of such Loan Party certified (to the extent applicable) as of a
recent date by the Secretary of State of the state of its organization (or other applicable
Governmental Authority); (B) that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors of such Loan Party authorizing the
execution, delivery and performance of the Loan Documents to which such person is a party
and, in the case of Borrowers, the borrowings hereunder, and that such resolutions have not
been modified, rescinded or amended and are in full force and effect; and (C) as to the
incumbency and specimen signature of each officer executing any Loan Document or any other
document delivered in connection herewith on behalf of such Loan Party (together with a
certificate of another officer as to the incumbency and specimen signature of the secretary
or assistant secretary executing the certificate in this clause (i));




          (ii) a certificate as to the good standing of each Loan Party (in so-called “long-form”
if available) as of a recent date, from such Secretary of State (or other applicable
Governmental Authority); and




          (iii) such other documents as the Lenders or the Administrative Agent may reasonably
request.



          (c) Officers’ Certificate. The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the chief executive officer or the chief
financial officer of Borrowers, confirming compliance with the conditions precedent set forth in
this Section 4.01 and Sections 4.02(b), (c) and (d).



          (d) Financings and Other Transactions, Etc.




          (i) The Transactions shall have been consummated or shall be consummated simultaneously
on the Effective Date, in each case in all material respects in accordance with the terms
hereof and the terms of the Transaction Documents, without the waiver or amendment of any
such terms not approved by the Lenders other than any waiver or amendment thereof that is
not materially adverse to the interests of the Lenders.




          (ii) The Lenders shall be satisfied with the capitalization, the terms and conditions
of any equity arrangements and the corporate or other organizational structure of the
Companies.




          (iii) The Administrative Agent shall have received evidence in form and substance
reasonably satisfactory to the Administrative Agent that all debt set forth on Schedule
4.01(d) has been extinguished or cancelled; and the Administrative Agent shall have
received from any person holding any Lien securing any such debt, such UCC termination
statements,



57









 







mortgage releases, releases of assignments of leases and rents, releases of security interests in Intellectual Property and other instruments, in each case, in any
jurisdiction, in proper form for recording, as the Administrative Agent shall have
reasonably requested to release and terminate of record the Liens securing such debt.



          (e) Financial Statements; Projections. The Lenders shall have received and shall be
satisfied with the form and substance of the financial statements described in Section 3.04
and with the forecasts of the financial performance of Holdings, Borrowers and their respective
Subsidiaries.



          (f) Indebtedness and Minority Interests. After giving effect to the Transactions and
the other transactions contemplated hereby, no Company shall have outstanding any Indebtedness or
Preferred Stock other than (i) the Loans and Credit Extensions hereunder; (ii) Indebtedness
permitted pursuant to Section 6.01; and (iii) Indebtedness owed to any Borrower or any
Guarantor.



          (g) Opinions of Counsel. The Administrative Agent shall have received, on behalf of
itself, the Collateral Agent, the Collateral Trustee and the Lenders a favorable written opinion of
(i) DLA Piper, special counsel for the Loan Parties, in form and substance satisfactory to the
Lenders, and (ii) each local and foreign counsel listed on Schedule 4.01(g), in form and
substance satisfactory to the Lenders, in each case (A) dated the Effective Date; (B) addressed to
Administrative Agent, the Collateral Agent, the Collateral Trustee and the Lenders; and (C)
covering such other matters relating to the Loan Documents and the Transactions as the Lenders
shall reasonably request.



          (h) Solvency Certificate. The Lenders shall have received a solvency certificate in
the form of Exhibit I, dated the Effective Date and signed by the chief financial officer
of Borrowers.



          (i) Requirements of Law. The Lenders shall be satisfied that Holdings, its
Subsidiaries and the Transactions shall be in full compliance with all material Requirements of
Law, including Regulations T, U and X of the Board, and shall have received satisfactory evidence
of such compliance reasonably requested by them.



          (j) Consents. The Lenders shall be satisfied that all requisite Governmental
Authorities and third parties shall have approved or consented to the Transactions, and there shall
be no governmental or judicial action, actual or threatened, that has or would have, singly or in
the aggregate, a reasonable likelihood of restraining, preventing or imposing burdensome conditions
on the Transactions or the other transactions contemplated hereby.



          (k) Litigation. There shall be no litigation, public or private, or administrative
proceedings, governmental investigation or other legal or regulatory developments, actual or
threatened, that, singly or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect, or could materially and adversely affect the ability of Holdings, Borrowers and
their respective Subsidiaries to fully and timely perform their respective obligations under the
Transaction Documents, or the ability of the parties to consummate the financings contemplated
hereby or the other Transactions.



          (l) [Intentionally Omitted].



          (m) Fees. The Administrative Agent shall have received all fees and other amounts due
and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or
payment of all reasonable out-of-pocket expenses (including the legal fees and expenses of Latham &
Watkins LLP and Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Administrative



58









 







Agent, the legal fees and expenses of Akin Gump Strauss Hauer & Feld LLP, counsel to the Specified
Lender, Latham & Watkins LLP, special counsel to certain of the Lenders, and the reasonable fees
and expenses of any local counsel, foreign counsel, appraisers, consultants and other advisors)
required to be reimbursed or paid by Borrowers hereunder or under any other Loan Document.



          (n) Personal Property Requirements. The Collateral Agent shall have received:




          (i) all certificates, agreements or instruments representing or evidencing the
Securities Collateral accompanied by instruments of transfer and stock powers undated and
endorsed in blank;




          (ii) Intercompany Loan Documents existing as of the Effective Date accompanied by
instruments of transfer, undated and endorsed in blank;




          (iii) all other certificates, agreements, or instruments (excluding control agreements)
necessary to perfect the Collateral Agent’s and the Collateral Trustee’s (as applicable)
security interest in all Chattel Paper, all Instruments, all Deposit Accounts and all
Investment Property of each Loan Party (as each such term is defined in the Security
Agreement and to the extent required by the Security Agreement);




          (iv) UCC financing statements in appropriate form for filing under the UCC, filings
with the United States Patent and Trademark Office and United States Copyright Office and
such other documents under applicable Requirements of Law in each jurisdiction as may be
necessary or appropriate or, in the opinion of the Collateral Agent, desirable to perfect
the Liens created, or purported to be created, by the Security Documents; and




          (v) evidence acceptable to the Collateral Agent of payment or arrangements for payment
by the Loan Parties of all applicable recording taxes, fees, charges, costs and expenses
required for the recording of the Security Documents.



          (o) Insurance. The Administrative Agent shall have received a copy of, or a
certificate as to coverage under, the insurance policies required by Section 5.04 and the
applicable provisions of the Security Documents, each of which shall be endorsed or otherwise
amended to include a “standard” or “New York” lender’s loss payable or mortgagee endorsement (as
applicable) and shall name the Collateral Agent, on behalf of the Secured Parties, and the
Collateral Trustee as additional insured, in form and substance satisfactory to the Administrative
Agent.



          (p) Patriot Act. Each Borrower, each Subsidiary Guarantor and Korean Opco shall have
provided to each Lender the information required by Section 10.14 and such additional
information as may be reasonably requested by any Lender in order to satisfy its “know your
customer” and anti-money-laundering rules and regulations.



          (q) Korean Law Requirements. Administrative Agent shall have received:




          (i) a fully executed guarantee in form and substance satisfactory to the Administrative
Agent (the “Korean Opco Bank Guarantee”) by and between Korean Opco and the Collateral
Trustee;




          (ii) duly executed originals of the Korean Opco Security Documents, each in full force
and effect together with all authorizations, approvals, consents and licenses necessary in




59









 







connection therewith and evidence that the same are in full force and effect (including,
without limitations, such documents set forth on Schedule 1.01(a));




          (iii) any and all notices, consents, letters of undertaking, certificates and other
documents annexed, exhibited, appended or related to the Korean Opco Loan Documents;




          (iv) a certified copy of the Articles of Incorporation of Korean Opco, as amended,
modified or supplemented to the Closing Date, certified to be true, correct and complete by
an authorized officer of Korean Opco;




          (v) a certified copy of the resolutions of the board of directors of Korean Opco
approving and authorizing the execution, delivery and performance of the Korean Opco Loan
Documents to which it is a party and any other documents to be executed and delivered by
Korean Opco in relation thereto;




          (vi) a certificate of the representative director of Korean Opco dated the Effective
Date certifying the name(s) and signature(s) of the officer(s) of Korean Opco authorized to
sign the Korean Opco Loan Documents to which it is a party and the power of attorney for the
execution of the Korean Opco Loan Documents;




          (vii) a certified copy of the shareholders registry of Korean Opco;




          (viii) the seal impression certificate of the representative director of Korean Opco
executing the Korean Opco Loan Documents and all other certificates hereunder;




          (ix) a certificate of the representative director of Korean Opco dated the Closing Date
certifying the following: (i) the representations and warranties of Korean Opco set forth
herein and in each other Loan Document to which it is a party are true and correct; (ii) no
Default shall have occurred and be continuing; and (iii) the seal impressions or signatures
set out beside the names of each director listed in the resolutions of the board of
directors referred to in paragraph 1(b) above are the respective genuine seal impressions or
signatures of such director;




          (x) copies of the relevant reports and/or Approvals required under the Foreign Exchange
Transaction Law of Korea or other similar laws and regulations; and




          (xi) certified copies of all material approvals, consents, filings and authorizations
of the Korean government authority necessary for the valid execution, delivery and
performance of the Korean Opco Loan Documents, if any.



          (r) Collateral Trustee Requirements. The terms and conditions of the Collateral Trust
Documents shall be in form and substance satisfactory to the Administrative Agent in its sole and
absolute discretion.



          (s) UK Sales Subsidiary Requirements. The Administrative Agent shall have received in
form and substance satisfactory to it:




          (i) evidence of the appointment of an agent for service of process in the United
Kingdom by the shareholder of the UK Sales Subsidiary;



60









 






          (ii) a shareholder resolution of the UK Sales Subsidiary authorising the entry into of
the applicable Loan Documents by the UK Sales Subsidiary; and




          (iii) original signed, stamped but undated stock transfer forms and original share
certificates with respect to the shares in the UK Sales Subsidiary charged pursuant to the
applicable Security Document.



          (t) The Administrative Agent and the Lenders shall have received the Confirmation Order.



          (u) The terms and provisions of the Plan of Reorganization shall be reasonably satisfactory to
the Administrative Agent and Lenders (it being acknowledged by the Administrative Agent and the
Lenders that the terms and provisions of the Plan of Reorganization, dated September 24, 2009, and
filed with the Bankruptcy Court on September 25, 2009, are satisfactory), and the Confirmation
Order shall include such provisions with respect to the Loans as are reasonably satisfactory to the
Administrative Agent and the Lenders and, providing, among other things, that the Borrowers,
Holdings and the Subsidiary Guarantors shall be authorized to (i) enter into the Loan Documents,
(ii) grant the Liens and security interests and incur or guarantee the Obligations under the Loan
Documents and (iii) issue, execute and deliver all documents, agreements and instruments necessary
or appropriate to implement and effectuate all obligations under the Loan Documents and to take all
other actions necessary to implement and effectuate Borrowings under the Loan Documents. Except as
consented to by the Administrative Agent and the Lenders, the Bankruptcy Court’s retention of
jurisdiction under the Confirmation Order shall not govern the enforcement of the Loan Documents or
any rights or remedies related thereto.



          (v) The Administrative Agent and the Lenders shall have received evidence, reasonably
satisfactory to the Administrative Agent and the Lenders, that (i) the effective date under the
Plan of Reorganization shall have occurred, the Confirmation Order shall be valid, subsisting and
continuing as a Final Order and all conditions precedent to the effectiveness of the Plan of
Reorganization shall have been fulfilled, or validly waived with the consent of the Lenders,
including, without limitation, the execution, delivery and performance of all of the conditions
thereof other than conditions that have been validly waived with the consent of the Lenders (but
not including conditions consisting of the effectiveness of the Loan Documents) and (ii) no motion,
action or proceeding by any creditor or other party-in-interest to the Chapter 11 Case which would
adversely affect the Plan of Reorganization, the consummation of the Plan of Reorganization, the
business or operations of the Borrowers, Holdings or the Subsidiary Guarantors or the transactions
contemplated by the Loan Documents, as determined by the Lenders in good faith, shall be pending.



          SECTION 4.02 Conditions to All Credit Extensions. The obligation of each Lender to make any Credit Extension shall be subject to, and to the
satisfaction of, each of the conditions precedent set forth below.



          (a) Notice. The Administrative Agent shall have received a Borrowing Request as
required by Section 2.03 (or such notice shall have been deemed given in accordance with
Section 2.03).



          (b) No Default. Borrowers and each other Loan Party shall be in compliance in all
material respects with all the terms and provisions set forth herein and in each other Loan
Document on its part to be observed or performed, and, at the time of and immediately after giving
effect to such Credit



61









 







Extension and the application of the proceeds thereof, no Default or Event of Default shall have occurred and be continuing on such date.



          (c) Representations and Warranties. Each of the representations and warranties made
by any Loan Party set forth in Article III hereof or in any other Loan Document shall be
true and correct in all material respects (except that any representation and warranty that is
qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all
respects) on and as of the date of such Credit Extension with the same effect as though made on and as of such date, except to
the extent such representations and warranties expressly relate to an earlier date.



          (d) No Legal Bar. No order, judgment or decree of any Governmental Authority shall
purport to restrain any Lender from making any Loans to be made by it. No injunction or other
restraining order shall have been issued, shall be pending or noticed with respect to any action,
suit or proceeding seeking to enjoin or otherwise prevent the consummation of, or to recover any
damages or obtain relief as a result of, the transactions contemplated by this Agreement or the
making of Loans hereunder.



          Each delivery of a Borrowing Request and the acceptance by Borrowers of the proceeds of such
Credit Extension shall constitute a representation and warranty by Borrowers and each other Loan
Party that on the date of such Credit Extension (both immediately before and after giving effect to
such Credit Extension and the application of the proceeds thereof) the conditions contained in
Sections 4.02(b)-(d) have been satisfied. Borrowers shall provide such
information as the Administrative Agent may reasonably request to confirm that the conditions in
Sections 4.02(b)-(d) have been satisfied.



ARTICLE V




AFFIRMATIVE COVENANTS



          Each Loan Party warrants, covenants and agrees with each Lender that so long as this Agreement
shall remain in effect and until the Commitments have been terminated and the principal of and
interest on each Loan, all fees and all other expenses or amounts payable under any Loan Document
shall have been paid in full, unless the Required Lenders shall otherwise consent in writing, each
Loan Party will, and will cause each of its Subsidiaries to:



          SECTION 5.01 Financial Statements, Reports, etc. Furnish to the Administrative Agent and each Lender:



          (a) Annual Reports. As soon as available and in any event within 90 days (or such
earlier date on which Holdings is required to file a Form 10-K under the Exchange Act) after the
end of each fiscal year, (i) the consolidated balance sheet of Holdings as of the end of such
fiscal year and related consolidated statements of income, cash flows and stockholders’ equity for
such fiscal year, in comparative form with such financial statements as of the end of, and for, the
preceding fiscal year, and notes thereto (including, with respect to any Subsidiary of Holdings
that is not a Subsidiary Guarantor, and each other Subsidiary of Holdings for which such note is
required to be prepared pursuant to the requirements of applicable law or GAAP, a note with a
consolidating balance sheet and financial statement of income and cash flows separating out each of
such Subsidiary), all prepared in accordance with Regulation S-X if required by the Securities Act,
and accompanied by an opinion of Samil Pricewaterhouse Coopers or other independent public
accountants of recognized international standing satisfactory to the Administrative Agent (which
opinion shall not be qualified as to scope or contain any



62









 







going concern or other qualification),stating that such financial statements fairly present, in all material respects, the consolidated
financial condition, results of operations and cash flows of Holdings as of the dates and for the
periods specified in accordance with GAAP; (ii) a management report in a form reasonably
satisfactory to the Administrative Agent setting forth (A) statement of income items and
Consolidated EBITDA of Holdings for such fiscal year, showing variance, by dollar amount and
percentage, from amounts for the previous fiscal year and budgeted amounts and (B) key operational information and statistics for such fiscal year consistent with internal and industry-wide
reporting standards; and (iii) a narrative report and management’s discussion and analysis, in a
form reasonably satisfactory to the Administrative Agent, of the financial condition and results of
operations of Holdings for such fiscal year, as compared to amounts for the previous fiscal year
and budgeted amounts (it being understood that the information required by clause (i) may be
furnished in the form of a Form 10-K);



          (b) Quarterly Reports. As soon as available and in any event within 45 days (or such
earlier date on which Holdings is required to file a form 10-Q under the Exchange Act) after the
end of each of the first three fiscal quarters of each fiscal year, (i) the consolidated balance
sheet of Holdings as of the end of such fiscal quarter and related consolidated statements of
income and cash flows for such fiscal quarter and for the then elapsed portion of the fiscal year,
in comparative form with the consolidated statements of income and cash flows for the comparable
periods in the previous fiscal year, and notes thereto (including, with respect to any Subsidiary
of Holdings that is not a Subsidiary Guarantor, and each other Subsidiary of Holdings for which
such note is required to be prepared pursuant to the requirements of applicable law or GAAP, a note
with a consolidating balance sheet and financial statement of income and cash flows separating out
each of such Subsidiary), all prepared in accordance with Regulation S-X under the Securities Act
if required by the Securities Act and accompanied by a certificate of a Financial Officer stating
that such financial statements fairly present, in all material respects, the consolidated financial
condition, results of operations and cash flows of Holdings as of the date and for the periods
specified in accordance with GAAP consistently applied, and on a basis consistent with audited
financial statements referred to in clause (a) of this Section, subject to normal year-end audit
adjustments, (ii) a management report in a form reasonably satisfactory to the Administrative Agent
setting forth (A) statement of income items and Consolidated EBITDA of Holdings for such fiscal
quarter and for the then elapsed portion of the fiscal year, showing variance, by dollar amount and
percentage, from amounts for the comparable periods in the previous fiscal year and budgeted
amounts and (B) key operational information and statistics for such fiscal quarter and for the then
elapsed portion of the fiscal year consistent with internal and industry wide reporting standards
and (iii) a narrative report and management’s discussion and analysis, in a form reasonably
satisfactory to the Administrative Agent, of the financial condition and results of operations for
such fiscal quarter and the then elapsed portion of the fiscal year, as compared to the comparable
periods in the previous fiscal year and budgeted amounts (it being understood that the information
required by clause (i) may be furnished in the form of a Form 10-Q);



          (c) Financial Officer’s Certificate. (i) Concurrently with any delivery of financial
statements under Section 5.01(a) or (b), a Compliance Certificate certifying that
no Default has occurred or, if such a Default has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with respect thereto and (ii)
concurrently with any delivery of financial statements under Section 5.01(a) above, a
report of the accounting firm opining on or certifying such financial statements stating that in
the course of its regular audit of the financial statements of Holdings and its Subsidiaries, which
audit was conducted in accordance with generally accepted auditing standards, such accounting firm
obtained no knowledge that any Default insofar as it relates to financial or accounting matters has
occurred or, if in the opinion of such accounting firm such a Default has occurred, specifying the
nature and extent thereof;



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          (d) Public Reports. Promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by any Company with the
Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or distributed to holders
of its Indebtedness pursuant to the terms of the documentation governing such Indebtedness (or any trustee, agent
or other representative therefor), as the case may be;



          (e) Management Letters. Promptly after the receipt thereof by any Company, a copy of
any “management letter” received by any such person from its certified public accountants and the
management’s responses thereto;



          (f) Budgets. Within 60 days after the beginning of Holdings fiscal year, a budget for
Holdings in form reasonably satisfactory to the Required Lenders, but to include balance sheets,
statements of income and sources and uses of cash, for each month of such fiscal year prepared in
detail, with appropriate presentation and discussion of the principal assumptions upon which such
budgets are based, accompanied by the statement of a Financial Officer of Borrowers to the effect
that the budget of Holdings is a reasonable estimate for the periods covered thereby and, promptly
when available, any significant revisions of such budget;



          (g) Notification to Account Debtors. Within ten (10) Business Days after the end of
each month commencing with the first full month ending after the Effective Date, a certification
from an authorized officer of each of (i) Korean Opco and (ii) any Sales Subsidiary having
accounts owing from Japanese customers totaling in excess of $500,000, certifying that (x) all
notices to Hynix Related Account Debtors that are required to be given under applicable law in
order to perfect the Collateral Trustee’s or the Collateral Agent’s lien on any Hynix Related
Receivables shall have been given to such Hynix Related Account Debtors and that each such notice
contained an accurate “fixed date stamp” under applicable law indicating the date of such notice,
(y) notices have been given to all other account debtors of Korean Opco or such Sales Subsidiary
that (except for the affixing of a fixed date stamp thereon) are required to be given under
applicable law in order to perfect the Collateral Trustee’s lien on the accounts receivable of
Korean Opco or the Collateral Agent’s lien on accounts receivable of such Sales Subsidiary (to the
extent that such accounts arise under contracts or invoices that do not prohibit the granting of
such liens) shall have been given to such account debtors, and (z) confirming that Korean Opco and
any such Sales Subsidiary have used their commercially reasonable efforts to ensure that no new
contracts, agreements or invoices have been entered into since the Effective Date by Korean Opco or
any such Sales Subsidiary prohibiting the granting of such liens. With respect to any existing
contracts or invoices prohibiting the granting of liens in favor of the Collateral Trustee or the
Collateral Agent on accounts receivable arising thereunder, the Borrowers shall use, and shall
cause Korean Opco and/or such Sales Subsidiaries to use, commercially reasonable efforts to obtain
the consent of the parties thereto to the granting of liens in favor of the Collateral Trustee or
the Collateral Agent, as applicable, on such accounts receivable.



          (h) Perfection Certificate Supplements. At all times prior to the continuation of a
Default, upon the reasonable request of the Enforcement Lenders (but in no event, more than one
time per fiscal year), and after the occurrence and during the continuation of a Default,
concurrently with any delivery of financial statements under Section 5.01(b), a certificate of a
Financial Officer that supplements the information set forth in the Perfection Certificate or
confirming that there has been no change in such information since the date of the Perfection
Certificate (after giving effect to all amendments, supplements and other modifications thereto).



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          (i) Other Information. Promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of any Company, or compliance with the
terms of any Loan Document, as the Administrative Agent or any Lender may reasonably request.



          SECTION 5.02 Litigation and Other Notices. Furnish to the Administrative Agent and each Lender written notice of the following
promptly (and, in any event, within three Business Days of the occurrence thereof):




     (a) any Default, specifying the nature and extent thereof and the corrective action (if
any) taken or proposed to be taken with respect thereto;




     (b) the filing or commencement of, or any threat or notice of intention of any person
to file or commence, any action, suit, litigation or proceeding, whether at law or in equity
by or before any Governmental Authority, (i) against any Company or any Affiliate thereof
that could reasonably be expected to result in a Material Adverse Effect or (ii) with
respect to any Loan Document;




     (c) any development that has resulted in, or could reasonably be expected to result in
a Material Adverse Effect;




     (d) the occurrence of a Casualty Event with respect to property having a value
individually or in the aggregate in excess of $1 million; and




     (e) (i) the incurrence of any material Lien (other than Permitted Collateral Liens) on,
or claim asserted against any of the Collateral or (ii) the occurrence of any other event
which could materially affect the value of the Collateral.



          SECTION 5.03 Existence; Businesses and Properties.



          (a) Do or cause to be done all things necessary to preserve, renew and maintain in full force
and effect its legal existence, except as otherwise expressly permitted under Section 6.05
or Section 6.06 or, in the case of any Subsidiary, where the failure to perform such
obligations, individually or in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect.



          (b) Do or cause to be done all things necessary to obtain, preserve, renew, extend and keep in
full force and effect the rights, licenses, permits, privileges, franchises, authorizations and
Intellectual Property material to the conduct of its business; maintain and operate such business
in substantially the manner in which it is presently conducted and operated; comply with all
material contractual obligations and all applicable Requirements of Law (including taxation, ERISA,
any and all zoning, building, Environmental Law, ordinance, code or approval or any building
permits or any restrictions of record or agreements affecting the Real Property) and decrees and
orders of any Governmental Authority, whether now in effect or hereafter enacted, except with
respect to any of the foregoing where the failure to comply, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect; pay and perform its
obligations under all Transaction Documents; and at all times maintain, preserve and protect all
property material to the conduct of such business and keep such property in good repair, working
order and condition (other than wear and tear occurring in the ordinary course of business) and
from time to time make, or cause to be made, all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business carried on in connection
therewith may be properly conducted at all times; provided that nothing in this



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Section 5.03(b) shall prevent (i) sales of property, consolidations or mergers by or involving any
Company in accordance with Section 6.05 or Section 6.06; (ii) the withdrawal by any
Company of its qualification as a foreign corporation in any jurisdiction where such withdrawal,
individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect; or (iii)
the abandonment by any Company of any rights, franchises, licenses or Intellectual Property that
such person reasonably determines are not useful to its business or no longer commercially
desirable.



          SECTION 5.04 Insurance.



          (a) Generally. Keep its insurable property adequately insured at all times by
financially sound and reputable insurers; maintain such other insurance, to such extent and against
such risks as is customary with companies in the same or similar businesses operating in the same
or similar locations, including insurance with respect to Mortgaged Properties and other properties
material to the business of the Companies against such casualties and contingencies and of such
types and in such amounts with such deductibles as is customary in the case of similar businesses
operating in the same or similar locations, including (i) physical hazard insurance on an “all
risk” basis; (ii) commercial general liability against claims for bodily injury, death or property
damage covering any and all insurable claims; (iii) explosion insurance in respect of any boilers,
machinery or similar apparatus constituting Collateral; (iv) business interruption insurance; (v)
worker’s compensation insurance and such other insurance as may be required by any Requirement of
Law; and (vi) such other insurance against risks as the Administrative Agent may from time to time
require (such policies to be in such form and amounts and having such coverage as may be reasonably
satisfactory to the Administrative Agent and the Collateral Agent); provided that with respect to
physical hazard insurance, neither the Collateral Agent nor the applicable Company shall agree to
the adjustment of any claim thereunder without the consent of the other (such consent not to be
unreasonably withheld or delayed); provided, further, that no consent of any Company shall be
required during an Event of Default.



          (b) Requirements of Insurance. All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage thereof shall be
effective until at least 30 days after receipt by the Collateral Agent or the Collateral Trustee,
as applicable, of written notice thereof; (ii) name the Collateral Agent or the Collateral Trustee,
as applicable, as mortgagee (in the case of property insurance) or additional insured on behalf of
the Secured Parties (in the case of liability insurance) or loss payee (in the case of property
insurance), as applicable; (iii) if reasonably requested by the Collateral Agent or the Collateral
Trustee, as applicable, include a breach of warranty clause and (iv) be reasonably satisfactory in
all other respects to the Collateral Agent and the Collateral Trustee.



          (c) Notice to Agents. Notify the Administrative Agent and the Collateral Agent
immediately whenever any separate insurance concurrent in form or contributing in the event of loss
with that required to be maintained under this Section 5.04 is taken out by any Company;
and, upon request, promptly deliver to the Administrative Agent and the Collateral Agent a
duplicate original copy of such policy or policies.



          (d) Flood Insurance. With respect to each Mortgaged Property, to the extent the
applicable property is located in a flood zone or on a flood plain and such insurance is available
at reasonable commercial rates, obtain flood insurance in such total amount as the Administrative
Agent or the Required Lenders may from time to time reasonably require.



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          (e) Broker’s Report. Deliver to the Administrative Agent and the Collateral Agent and
the Lenders a report of a reputable insurance broker with respect to such insurance and such
supplemental reports with respect thereto as the Administrative Agent or the Collateral Agent may
from time to time reasonably request.



          (f) Mortgaged Properties. No Loan Party that is an owner of Mortgaged Property shall
take any action that is reasonably likely to be the basis for termination, revocation or denial of
any insurance coverage required to be maintained under such Loan Party’s respective Mortgage or
that could be the basis for a defense to any claim under any Insurance Policy maintained in respect
of the Premises, and each Loan Party shall otherwise comply in all material respects with all
Insurance Requirements in respect of the Premises; provided, however, that each Loan Party may, at
its own expense and after written notice to the Administrative Agent, (i) contest the applicability
or enforceability of any such Insurance Requirements by appropriate legal proceedings, the
prosecution of which does not constitute a basis for cancellation or revocation of any insurance
coverage required under this Section 5.04 or (ii) cause the Insurance Policy containing any
such Insurance Requirement to be replaced by a new policy complying with the provisions of this
Section 5.04.



          SECTION 5.05 Obligations and Taxes.



          (a) Payment of Obligations. Pay its Indebtedness and other obligations promptly and
in accordance with their terms and pay and discharge promptly when due all Taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits or in respect of its
property, before the same shall become delinquent or in default, as well as all lawful claims for
labor, services, materials and supplies or otherwise that, if unpaid, might give rise to a Lien
other than a Permitted Lien upon such properties or any part thereof; provided that such payment
and discharge shall not be required with respect to any such Indebtedness, obligation, Tax,
assessment, charge, levy or claim so long as (x)(i) the validity or amount thereof shall be
contested in good faith by appropriate proceedings timely instituted and diligently conducted and
the applicable Company shall have set aside on its books adequate reserves or other appropriate
provisions with respect thereto in accordance with GAAP and (ii) such contest operates to suspend
collection of the contested Indebtedness, obligation, Tax, assessment or charge and enforcement of
a Lien other than a Permitted Lien and (y) the failure to pay could not reasonably be expected to
result in a Material Adverse Effect.



          (b) Filing of Returns. Timely and correctly file all material Tax Returns required to
be filed by it. Withhold, collect and remit all material Taxes that it is required to collect,
withhold or remit.



          (c) Tax Shelter Reporting. Borrowers do not intend to treat the Loans as being a
“reportable transaction” within the meaning of Treasury Regulation Section 1.6011-4. In the event
Borrowers determine to take any action inconsistent with such intention, it will promptly notify
the Administrative Agent thereof.



          SECTION 5.06 Employee Benefits. (a) Comply in all material respects with the applicable provisions of ERISA (to the extent
applicable to any Company) and the Code and (b) furnish to the Administrative Agent (x) as soon as
possible after, and in any event within 5 days after any Responsible Officer of any Company or any
ERISA Affiliates of any Company knows or has reason to know that, any ERISA Event has occurred
that, alone or together with any other ERISA Event could reasonably be expected to result in
liability of the Companies or any of their ERISA Affiliates in an aggregate amount exceeding
$500,000 or the imposition of a Lien, a statement of a Financial Officer of Borrowers setting



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forth details as to such ERISA Event and the action, if any, that the Companies propose to take with
respect thereto, and (y) upon request by the Administrative Agent, copies of (i) each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) filed by any Company or any ERISA
Affiliate with the Internal Revenue Service with respect to each Plan; (ii) the most recent actuarial valuation report for each Plan; (iii) all notices received by any
Company or any ERISA Affiliate from a Multiemployer Plan sponsor or any governmental agency
concerning an ERISA Event; and (iv) such other documents or governmental reports or filings
relating to any Plan (or employee benefit plan sponsored or contributed to by any Company) as the
Administrative Agent shall reasonably request. With respect to Korean Opco, Korean Opco shall
ensure that all pension plans or schemes operated by or maintained for the benefit of any of its
employees are, to the extent required by applicable law, fully funded based on reasonable actuarial
assumptions and recommendations and otherwise are operated or maintained in all material respects
as required by Korean law.



          SECTION 5.07 Maintaining Records; Access to Properties and Inspections; Annual
Meetings.



          (a) Keep proper books of record and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law are made of all dealings and transactions in
relation to its business and activities. Each Company will permit any representatives designated
by the Administrative Agent or any Lender to visit such Company’s offices and facilities to inspect
the financial records and the property of such Company at reasonable times and as often as
reasonably requested and to make extracts from and copies of such financial records, and permit any
representatives designated by the Administrative Agent or any Lender to discuss the affairs,
finances, accounts and condition of any Company with the officers and employees thereof and
advisors therefor (including independent accountants).



          (b) Within 150 days after the end of each fiscal year of the Companies, at the request of the
Administrative Agent or Supermajority Lenders, hold a meeting (at a mutually agreeable location,
venue and time or, at the option of the Administrative Agent, by conference call, the costs of such
venue or call to be paid by Borrowers) with all Lenders who choose to attend such meeting, at which
meeting shall be reviewed the financial results of the previous fiscal year and the financial
condition of the Companies and the budgets presented for the current fiscal year of the Companies.



          SECTION 5.08 Use of Proceeds. Use the proceeds of the Loans only for the purposes set forth in Section 3.12.



          SECTION 5.09 Compliance with Environmental Laws; Environmental Reports.



          (a) Comply, and cause all lessees and other persons occupying Real Property owned, operated or
leased by any Company to comply, in all material respects with all Environmental Laws and
Environmental Permits applicable to its operations and Real Property; obtain and renew all material
Environmental Permits applicable to its operations and Real Property; and conduct all Responses
required by, and in accordance with, Environmental Laws; provided that no Company shall be required
to undertake any Response to the extent that its obligation to do so is being contested in good
faith and by proper proceedings and appropriate reserves are being maintained with respect to such
circumstances in accordance with GAAP.



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          (b) If a Default caused by reason of a breach of Section 3.18 or Section
5.09(a) shall have occurred and be continuing for more than 20 days without the Companies
commencing activities reasonably likely to cure such Default, at the written request of the
Administrative Agent or the Supermajority Lenders through the Administrative Agent, provide to the
Lenders within 45 days after such request, at the expense of Borrowers, an environmental assessment report regarding the
matters which are the subject of such Default, including, where appropriate, any soil and/or
groundwater sampling, prepared by an environmental consulting firm and, in the form and substance,
reasonably acceptable to the Administrative Agent and indicating the presence or absence of
Hazardous Materials and the estimated cost of any compliance or Response to address them.



          (c) Each Loan Party that is an owner of Mortgaged Property shall not install nor permit to be
installed in the Mortgaged Property any Hazardous Materials, other than in compliance with
applicable Environmental Laws.



          SECTION 5.10 Additional Collateral; Additional Guarantors.



          (a) Subject to this Section 5.10, with respect to any property acquired, created or
developed (including, without limitation, the filing of any application or registration or issuance
of any Intellectual Property) after the Effective Date by any Loan Party with a value in excess of
$250,000 (individually or in the aggregate for all such property) that is intended to be subject to
the Lien created by any of the Security Documents but is not so subject, promptly (and in any event
within 30 days after the acquisition thereof) (i) execute and deliver to the Administrative Agent
and the Collateral Agent (or the Collateral Trustee, as the case may be) such amendments or
supplements to the relevant Security Documents or such other documents as the Administrative Agent
or the Collateral Agent (or the Collateral Trustee, as the case may be) shall deem necessary or
advisable to grant to the Collateral Agent (or the Collateral Trustee, as the case may be), for its
benefit and for the benefit of the other Secured Parties, a Lien on such property subject to no
Liens other than Permitted Collateral Liens and (ii) take all actions necessary to cause such Lien
to be duly perfected to the extent required by such Security Document in accordance with all
applicable Requirements of Law, including the filing of financing statements in such jurisdictions
as may be reasonably requested by the Administrative Agent. Borrowers shall otherwise take such
actions and execute and/or deliver to the Collateral Agent (or the Collateral Trustee, as the case
may be) such documents as the Administrative Agent or the Collateral Agent (or the Collateral
Trustee, as the case may be) shall require to confirm the validity, perfection and priority of the
Lien of the Security Documents against such after-acquired properties. The Loan Parties shall not
be required to take any actions pursuant to this Section 5.10 if the Administrative Agent
shall determine in the exercise of its reasonable discretion that the costs of obtaining Liens on
any property as otherwise required by this Section 5.10 are excessive in relation to the
value of such property. In addition, neither Korean Opco nor any Subsidiary described in
Section 5.01(g) shall be required to affix a “fixed date stamp” to any notification sent to
any account debtor (other than as contemplated by Section 5.01(g)).



          (b) With respect to any person that is or becomes a Subsidiary of either Borrower or Holdings
after the Effective Date, promptly (and in any event within 30 days after such person becomes a
Subsidiary of either Borrower or Holdings) (i) deliver to the Collateral Agent (or the Collateral
Trustee, as the case may be) the certificates, if any, representing all of the Equity Interests of
such Subsidiary, together with undated stock powers or other appropriate instruments of transfer
executed and delivered in blank by a duly authorized officer of the holder(s) of such Equity
Interests, and all intercompany notes owing from such Subsidiary to any Loan Party together with
instruments of transfer executed and delivered in blank by a duly authorized officer of such Loan
Party and (ii) cause such new Subsidiary (A) to execute a Joinder Agreement or such comparable
documentation to become a Subsidiary Guarantor



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(to the extent permitted under applicable law) and a joinder agreement to the applicable Security Agreement, substantially in the form annexed thereto
or, in the case of a Foreign Subsidiary, execute (to the extent permitted by applicable law) a
security agreement compatible with the laws of such Foreign Subsidiary’s jurisdiction in form and
substance reasonably satisfactory to the Administrative Agent, and (B) to take all actions necessary or advisable in the opinion of the Administrative Agent or the Collateral
Agent to cause the Lien created by the applicable Security Agreement to be duly perfected to the
extent required by such agreement in accordance with all applicable Requirements of Law, including
the filing of financing statements in such jurisdictions as may be reasonably requested by the
Administrative Agent or the Collateral Agent.



          (c) Promptly grant to the Collateral Agent (or the Collateral Trustee, as the case may be), in
each case to the extent permitted by applicable law, within 60 days of the acquisition thereof, a
security interest in and Mortgage on (i) each Real Property owned in fee by such Loan Party as is
acquired by such Loan Party after the Effective Date and that, together with any improvements
thereon, individually has a fair market value of at least $1.0 million, and (ii) unless the
Collateral Agent otherwise consents or such Mortgage cannot be obtained after the use of
commercially reasonable efforts, each leased Real Property of such Loan Party, which lease
individually has a fair market value of at least $1.0 million, in each case, as additional security
for the Secured Obligations (unless the subject property is already mortgaged to a third party to
the extent permitted by Section 6.02). Such Mortgages shall be granted pursuant to
documentation reasonably satisfactory in form and substance to the Administrative Agent and the
Collateral Agent (and, if applicable, the Collateral Trustee) and shall constitute valid and
enforceable perfected Liens subject only to Permitted Collateral Liens or other Liens acceptable to
the Collateral Agent. The Mortgages or instruments related thereto shall be duly recorded or filed
in such manner and in such places as are required by law to establish, perfect, preserve and
protect the Liens in favor of the Collateral Agent (or the Collateral Trustee, as the case may be)
required to be granted pursuant to the Mortgages and all taxes, fees and other charges payable in
connection therewith shall be paid in full. Such Loan Party shall otherwise take such actions and
execute and/or deliver to the Collateral Agent (or the Collateral Trustee, as the case may be) such
documents as the Administrative Agent or the Collateral Agent (or the Collateral Trustee, as the
case may be) shall require to confirm the validity, perfection and priority of the Lien of any
existing Mortgage or new Mortgage against such after-acquired Real Property (including a title
policy, if available in the opinion of the Administrative Agent on commercially reasonable terms, a
Survey, if customarily obtained in the jurisdiction where such Real Property is located and
available in the opinion of the Administrative Agent on commercially reasonable terms, and local
counsel opinion (in form and substance reasonably satisfactory to the Administrative Agent) in
respect of such Mortgage).



          (d) Notwithstanding anything to the contrary set forth in this Section 5.10,
Subsidiaries of Holdings that have assets having a fair value of less than $500,000 individually
(but not to exceed $5,000,000 for all such Subsidiaries covered by this clause (d)) shall not be
required to become a Subsidiary Guarantor pursuant to the requirements of, or grant the liens and
security interest contemplated by, this Section 5.10.



          (e) Notwithstanding anything to the contrary herein or in any Loan Document, no Loan Party
shall be required to deliver control agreements over deposit accounts or securities accounts.



          SECTION 5.11 Security Interests; Further Assurances. Promptly, upon the reasonable request of the Administrative Agent, the Collateral Agent,
the Collateral Trustee or any Lender, at Borrowers’ expense, execute, acknowledge and deliver, or
cause the execution, acknowledgment and delivery of, and thereafter register, file or record, or
cause to be registered, filed or recorded, in an



70









 







appropriate governmental office, any document or instrument supplemental to or confirmatory of the Security Documents or otherwise deemed by the
Administrative Agent, the Collateral Agent or the Collateral Trustee reasonably necessary or
desirable for the continued validity, perfection and priority of the Liens on the Collateral covered thereby subject to no
other Liens except as permitted hereby or by the applicable Security Document, or use commercially
reasonable efforts to obtain any consents or waivers as may be necessary or appropriate in
connection therewith. Deliver or cause to be delivered to the Administrative Agent, the Collateral
Agent and the Collateral Trustee from time to time such other documentation, consents,
authorizations, approvals and orders in form and substance reasonably satisfactory to the
Administrative Agent, the Collateral Trustee and the Collateral Agent as the Administrative Agent,
the Collateral Trustee and the Collateral Agent shall reasonably deem necessary to perfect or
maintain the Liens on the Collateral pursuant to the Security Documents (and, in the case of any
security governed by the laws of England and Wales, preserve, establish or otherwise evidence the
fixed nature of such security). Upon the exercise by the Administrative Agent, the Collateral
Agent, the Collateral Trustee or any Lender of any power, right, privilege or remedy pursuant to
any Loan Document which requires any consent, approval, registration, qualification or
authorization of any Governmental Authority execute and deliver all applications, certifications,
instruments and other documents and papers that the Administrative Agent, the Collateral Agent, the
Collateral Trustee or such Lender may reasonably require. If the Administrative Agent, the
Collateral Agent, the Collateral Trustee or the Required Lenders determine that they are required
by a Requirement of Law to have appraisals prepared in respect of the Real Property of any Loan
Party constituting Collateral, Borrowers shall provide to the Administrative Agent appraisals that
satisfy the applicable requirements of the Real Estate Appraisal Reform Amendments of FIRREA and
are otherwise in form and substance reasonably satisfactory to the Administrative Agent, the
Collateral Agent and the Collateral Trustee. Each Loan Party also agrees to promptly notify the
Collateral Agent and the Collateral Trustee (if applicable) of any change in the location of any
office in which it maintains books or records relating to Collateral owned by it or any office or
facility at which Collateral having a value in excess of $250,000 is located (including the
establishment of any such new office or facility), other than changes in location to a Mortgaged
Property or a leased property subject to a landlord access agreement, in form and substance
reasonably satisfactory to the Supermajority Lenders.



          SECTION 5.12 Information Regarding Collateral.



          Not effect any change (i) in any Loan Party’s legal name; (ii) in the location of any Loan
Party’s chief executive office; (iii) in any Loan Party’s identity or organizational structure,
(iv) in any Loan Party’s Federal Taxpayer Identification Number or organizational identification
number, if any; or (v) in any Loan Party’s jurisdiction of organization (in each case, including by
merging with or into any other entity, reorganizing, dissolving, liquidating, reorganizing or
organizing in any other jurisdiction), until (A) it shall have given the Collateral Agent, the
Collateral Trustee and the Administrative Agent and the Collateral Trustee not less than 30 days’
prior written notice (in the form of an Officers’ Certificate), or such lesser notice period agreed
to by the Collateral Agent or the Collateral Trustee (as applicable), of its intention so to do,
clearly describing such change and providing such other information in connection therewith as the
Collateral Agent, the Administrative Agent or the Collateral Trustee (as applicable) may reasonably
request and (B) it shall have taken all action reasonably satisfactory to the Collateral Agent or
the Collateral Trustee (as applicable) to maintain the perfection and priority of the security
interest of the Collateral Agent for the benefit of the Secured Parties or the Collateral Trustee
in the Collateral, if applicable. Each Loan Party agrees to promptly provide the Collateral Agent
and the Collateral Trustee, if applicable, with certified Organizational Documents reflecting any
of the changes described in the preceding sentence.




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          SECTION 5.13 Post-Closing Collateral Matters. Execute and deliver the documents and complete
the tasks set forth on Schedule 5.13, in each case within the time limits specified on such
schedule.



          SECTION 5.14 Affirmative Covenants with Respect to Leases. With respect to each Lease, the
respective Loan Party shall perform all the obligations imposed upon the landlord under such Lease
and enforce all of the tenant’s obligations thereunder, except where the failure to so perform or
enforce could not reasonably be expected to result in a Material Adverse Effect.



ARTICLE VI




NEGATIVE COVENANTS



          Each Loan Party warrants, covenants and agrees with each Lender that, so long as this
Agreement shall remain in effect and until the Commitments have been terminated and the principal
of and interest on each Loan, all fees and all other expenses or amounts payable under any Loan
Document have been paid in full, unless the Required Lenders shall otherwise consent in writing, no
Loan Party will, nor will it cause or permit any Subsidiaries to:



          SECTION 6.01 Indebtedness. Incur, create, assume or permit to exist, directly or indirectly, any
Indebtedness, except:




     (a) Indebtedness incurred under this Agreement and the other Loan Documents;




     (b) (i) Indebtedness outstanding on the Effective Date and (ii) refinancings or
renewals thereof; provided that (A) any such refinancing Indebtedness is in an aggregate
principal amount not greater than the aggregate principal amount of the Indebtedness being
renewed or refinanced, plus the amount of any premiums required to be paid thereon and
reasonable fees and expenses associated therewith, (B) such refinancing Indebtedness has a
later or equal final maturity and longer or equal weighted average life than the
Indebtedness being renewed or refinanced and (C) the covenants, events of default,
subordination and other provisions thereof (including any guarantees thereof) shall be, in
the aggregate, no less favorable to the Lenders than those contained in the Indebtedness
being renewed or refinanced;




     (c) Indebtedness under Hedging Obligations with respect to interest rates, foreign
currency exchange rates or commodity prices, in each case not entered into for speculative
purposes; provided that if such Hedging Obligations relate to interest rates, (i) such
Hedging Obligations relate to payment obligations on Indebtedness otherwise permitted to be
incurred by the Loan Documents and (ii) the notional principal amount of such Hedging
Obligations at the time incurred does not exceed the principal amount of the Indebtedness to
which such Hedging Obligations relate;




     (d) Indebtedness permitted by Section 6.04(f);




     (e) Indebtedness in respect of Purchase Money Obligations and Capital Lease
Obligations, and refinancings or renewals thereof, in an aggregate amount not to exceed
$25.0 million at any time outstanding;




     (f) Indebtedness in respect of bid, performance or surety bonds, workers’ compensation
claims, self-insurance obligations and bankers acceptances issued for the account



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of any
Company in the ordinary course of business, including guarantees or obligations of any
Company with respect to letters of credit supporting such bid, performance or surety bonds,
workers’ compensation claims, self-insurance obligations and bankers acceptances (in each
case other than for an obligation for money borrowed);




     (g) Contingent Obligations of any Loan Party in respect of Indebtedness otherwise
permitted under this Section 6.01;




     (h) Indebtedness arising from the honoring by a bank or other financial institution of
a check, draft or similar instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary course of business; provided,
however, that such Indebtedness is extinguished within five Business Days of incurrence;




     (i) Indebtedness arising in connection with endorsement of instruments for deposit in
the ordinary course of business;




     (j) unsecured Indebtedness of any Company in an aggregate amount not to exceed $30.0
million at any time outstanding;




     (k) secured or unsecured Indebtedness of any Company up to an amount equal to
$23,250,000 less any Incremental Loans incurred after the Effective Date; provided that if
such Indebtedness is secured by Collateral, it may be secured either on a junior basis or on
an equal and ratable basis with the Secured Obligations, in each case, subject to
intercreditor arrangements reasonably satisfactory to the Supermajority Lenders; provided
further that if the interest rate (which shall be deemed to include all upfront or similar
fees or original issue discount (with OID being equated to interest rates in a manner
reasonably determined by the Administrative Agent on an assumed four-year life to maturity)
and any other component of interest rate) in respect of any such Indebtedness that is
secured by Collateral on an equal and ratable basis with the Secured Obligations exceeds the
interest rate with respect to the Term Loans and/or previously incurred Incremental Loans,
the interest rate with respect to the Term Loans and previously incurred Incremental Loans
shall be increased so that it is equal to the interest rate with respect to such
Indebtedness; and




     (l) other Indebtedness of any Company; provided that, if such Indebtedness is secured
by Collateral, it may be secured on a junior basis with the Secured Obligations subject to
intercreditor arrangements reasonably satisfactory to the Supermajority Lenders; provided
further that, after giving effect to such Indebtedness, on a Pro Forma Basis, the Total
Leverage Ratio shall be no more than 3.0 to 1.0.



          SECTION 6.02 Liens. Create, incur, assume or permit to exist, directly or indirectly, any Lien on
any property now owned or hereafter acquired by it or on any income or revenues or rights in
respect of any thereof, except the following (collectively, the “Permitted Liens”):




     (a) inchoate Liens for taxes, assessments or governmental charges or levies not yet due
and payable or delinquent and Liens for taxes, assessments or governmental charges or
levies, which are being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP, which proceedings (or
orders entered in connection with such proceedings) have the effect of preventing the
forfeiture or sale of the property subject to any such Lien;



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     (b) Liens in respect of property of any Company imposed by Requirements of Law, which
were incurred in the ordinary course of business and do not secure Indebtedness for borrowed
money, such as carriers’, warehousemen’s, materialmen’s, landlords’, workmen’s, suppliers’,
repairmen’s and mechanics’ Liens and other similar Liens arising in the ordinary course of
business, and (i) which do not in the aggregate materially detract from the value of the
property of the Companies, taken as a whole, and do not materially impair the use thereof in
the operation of the business of the Companies, taken as a whole and (ii) which, if they
secure obligations that are then due and unpaid, are being contested in good faith by
appropriate proceedings for which adequate reserves have been established in accordance with
GAAP, which proceedings (or orders entered in connection with such proceedings) have the
effect of preventing the forfeiture or sale of the property subject to any such Lien;




     (c) any Lien in existence on the Effective Date and any Lien granted as a replacement
or substitute therefor; provided that any such replacement or substitute Lien (i) except as
permitted by Section 6.01(b)(ii)(A), does not secure an aggregate amount of
Indebtedness, if any, greater than that secured on the Effective Date and (ii) does not
encumber any property other than the property subject thereto on the Effective Date (any
such Lien, an “Existing Lien”);




     (d) easements, rights-of-way, restrictions (including zoning restrictions), covenants,
licenses, encroachments, protrusions and other similar charges or encumbrances, and minor
title deficiencies on or with respect to any Real Property, in each case whether now or
hereafter in existence, not (i) securing Indebtedness; (ii) individually or in the aggregate
materially impairing the value or marketability of such Real Property; or (iii) individually
or in the aggregate materially interfering with the ordinary conduct of the business of the
Companies at such Real Property;




     (e) Liens arising out of judgments, attachments or awards not resulting in a Default
and in respect of which such Company shall in good faith be prosecuting an appeal or
proceedings for review in respect of which there shall be secured a subsisting stay of
execution pending such appeal or proceedings;




     (f) Liens (other than any Lien imposed by ERISA) (x) imposed by Requirements of Law or
deposits made in connection therewith in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social security
legislation, (y) incurred in the ordinary course of business to secure the performance of
tenders, statutory obligations (other than excise taxes), surety, stay, customs and appeal
bonds, statutory bonds, bids, leases, government contracts, trade contracts, performance and
return of money bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money) or (z) arising by virtue of deposits made in the ordinary course
of business to secure liability for premiums to insurance carriers; provided that (i) with
respect to clauses (x), (y) and (z) of this paragraph (f), such Liens are for amounts not
yet due and payable or delinquent or, to
the extent such amounts are so due and payable, such amounts are being contested in
good faith by appropriate proceedings for which adequate reserves have been established in
accordance with GAAP, which proceedings for orders entered in connection with such
proceedings have the effect of preventing the forfeiture or sale of the property subject to
any such Lien and (ii) to the extent such Liens are not imposed by Requirements of Law, such
Liens shall in no event encumber any property other than cash and Cash Equivalents;



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     (g) Leases of the properties of any Company, in each case entered into in the ordinary
course of such Company’s business so long as such Leases are subordinate in all respects to
the Liens granted and evidenced by the Security Documents and do not, individually or in the
aggregate, (i) interfere in any material respect with the ordinary conduct of the business
of any Company or (ii) materially impair the use (for its intended purposes) or the value of
the property subject thereto;




     (h) Liens arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by any Company in the ordinary course of
business in accordance with the past practices of such Company;




     (i) Liens securing Indebtedness incurred pursuant to Section 6.01(e); provided
that any such Liens attach only to the property being financed pursuant to such Indebtedness
and do not encumber any other property of any Company;




     (j) bankers’ Liens, rights of setoff and other similar Liens existing solely with
respect to cash and Cash Equivalents on deposit in one or more accounts maintained by any
Company, in each case granted in the ordinary course of business in favor of the bank or
banks with which such accounts are maintained, securing amounts owing to such bank with
respect to cash management and operating account arrangements, including those involving
pooled accounts and netting arrangements; provided that, unless such Liens are
non-consensual and arise by operation of law, in no case shall any such Liens secure (either
directly or indirectly) the repayment of any Indebtedness;




     (k) Liens on property of a person existing at the time such person is acquired or
merged with or into or consolidated with any Company to the extent permitted hereunder (and
not created in anticipation or contemplation thereof); provided that such Liens do not
extend to property not subject to such Liens at the time of acquisition (other than
improvements thereon) and are no more favorable to the lienholders than such existing Lien;




     (l) (x) Liens granted pursuant to the Security Documents to secure the Secured
Obligations, (y) Liens securing Indebtedness permitted to be incurred pursuant to
Section 6.01(k), which may extend to Collateral on either a junior basis or an equal
and ratable basis with the Secured Obligations, in each case, subject to intercreditor
arrangements reasonably satisfactory to the Supermajority Lenders, and (z) Liens securing
Indebtedness permitted to be incurred pursuant to Section 6.01(l), so long as such
Liens, to the extent covering Collateral, are junior to the liens granted pursuant to the
Security Documents, subject to intercreditor arrangements reasonably satisfactory to the
Supermajority Lenders;




     (m) licenses of Intellectual Property granted by any Company in the ordinary course of
business and not interfering in any material respect with the ordinary conduct of business
of the Companies;




     (n) the filing of UCC financing statements solely as a precautionary measure in
connection with operating leases or consignment of goods; and




     (o) Liens with respect to obligations that do not in the aggregate exceed $5.0 million
at any time outstanding, so long as, other than any such Liens securing obligations of up to
$1.0



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million, such Liens to the extent covering any Collateral are junior to the Liens
granted pursuant to the Security Documents.



          SECTION 6.03 Sale and Leaseback Transactions. Enter into any arrangement, directly or indirectly,
with any person whereby it shall sell or transfer any property, real or personal, used or useful in
its business, whether now owned or hereafter acquired, and thereafter rent or lease such property
or other property which it intends to use for substantially the same purpose or purposes as the
property being sold or transferred (a “Sale and Leaseback Transaction”) unless (i) the sale of such
property is permitted by Section 6.06 and (ii) any Liens arising in connection with its use
of such property are permitted by Section 6.02.



          SECTION 6.04 Investment, Loan and Advances. Directly or indirectly, lend money or credit (by way
of guarantee or otherwise) or make advances to any person, or purchase or acquire any stock, bonds,
notes, debentures or other obligations or securities of, or any other interest in, or make any
capital contribution to, any other person, or purchase or own a futures contract or otherwise
become liable for the purchase or sale of currency or other commodities at a future date in the
nature of a futures contract (all of the foregoing, collectively, “Investments”), except that the
following shall be permitted:




     (a) the Companies may consummate the Transactions in accordance with the provisions of
the Transaction Documents;




     (b) Investments outstanding on the Effective Date;




     (c) the Companies may (i) acquire and hold accounts receivables owing to any of them if
created or acquired in the ordinary course of business and payable or dischargeable in
accordance with customary terms, (ii) invest in, acquire and hold cash and Cash Equivalents,
(iii) endorse negotiable instruments held for collection in the ordinary course of business
or (iv) make lease, utility and other similar deposits in the ordinary course of business;




     (d) Hedging Obligations incurred pursuant to Section 6.01(c);




     (e) loans and advances to directors, employees and officers of any Borrower and any of
its Subsidiaries for bona fide business purposes and to purchase Equity Interests of
Holdings, in aggregate amount not to exceed $1.0 million at any time outstanding;




     (f) Investments by any Company in any other Company; provided that (i) any Investment
in the form of a loan or advance to any such Company (whether or not a Subsidiary Guarantor)
shall be pledged as Collateral pursuant to the Security Documents, (ii) to the extent any
such loans or advances in an amount exceeding $500,000 (individually or in the aggregate) is
evidenced by an Intercompany Loan Document, such Intercompany Loan Document shall be
delivered to the Collateral Agent, accompanied by instruments of transfer, undated and
endorsed in blank, and (iii) the equity interests of any Subsidiary of Holdings into which
any such Investment is made shall be pledged as additional security for the Secured
Obligations pursuant to the Security Documents;




     (g) Investments in securities of trade creditors or customers in the ordinary course of
business received upon foreclosure or pursuant to any plan of reorganization or liquidation
or similar arrangement upon the bankruptcy or insolvency of such trade creditors or
customers;



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     (h) Investments made by any Borrower or any Subsidiary as a result of consideration
received in connection with an Asset Sale made in compliance with Section 6.06;




     (i) Investments constituting Contingent Obligations permitted by Section 6.01;




     (j) Investments constituting Permitted Acquisitions; and




     (k) other investments in an aggregate amount not to exceed $10.0 million at any time
outstanding.



     Notwithstanding anything to the contrary set forth in this Section 6.04, Investments
in Non-Guarantor Subsidiaries will not be deemed permitted under this Section 6.04 if the
aggregate value of (i) all Investments in such Non-Guarantor Subsidiaries (the value of which is
measured at the time of such Investment) and (ii) all transfers of assets to such Non-Guarantor
Subsidiaries (the value of which is measured at the time of such transfers of assets) exceeds an
amount equal to 20% of the Total Assets of Holdings and its Subsidiaries that are Subsidiary
Guarantors.



          SECTION 6.05 Mergers and Consolidations. Wind up, liquidate or dissolve its affairs or enter into
any transaction of merger or consolidation (or agree to do any of the foregoing at any future
time), except that the following shall be permitted:




     (a) the Transactions as contemplated by the Transaction Documents;




     (b) Asset Sales in compliance with Section 6.06;




     (c) acquisitions in compliance with Section 6.07;




     (d) (i) any Company may merge or consolidate with or into any Borrower or any
Subsidiary Guarantor (as long as such Borrower is the surviving person in the case of any
merger or consolidation involving such Borrower and a Subsidiary Guarantor is the surviving
person and remains a Wholly Owned Subsidiary of Holdings in any other case); (ii) any
Non-Subsidiary Guarantor may merge or consolidate with any other Non-Subsidiary Guarantor;
and (iii) any Subsidiary of Holdings organized under the laws of the United States or any
political subdivision thereof may merge with Holdings (so long as Holdings is the surviving
person) or any other such Subsidiary organized under such laws (so long as the surviving
person is a Subsidiary Guarantor); provided that in the case of each of clauses (i), (ii)
and (iii), the Lien on and security interest in such property granted or to be granted in
favor of the Collateral Agent under the Security Documents shall be maintained or created in
accordance with the provisions of Section 5.10 or Section 5.11, as
applicable; and




     (e) any Subsidiary may dissolve, liquidate or wind up its affairs at any time; provided
that such dissolution, liquidation or winding up, as applicable, could not reasonably be
expected to have a Material Adverse Effect.



          To the extent the Required Lenders waive the provisions of this Section 6.05 with
respect to the sale of any Collateral, or any Collateral is sold as permitted by this Section
6.05, such Collateral
(unless sold to a Company) shall be sold free and clear of the Liens created by the Security
Documents, and the Agents shall take all actions they deem appropriate in order to effect the
foregoing.



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          SECTION 6.06 Asset Sales. Effect any Asset Sale, or agree to effect any Asset Sale, except that
the following shall be permitted:




     (a) disposition of used, worn out, obsolete or surplus property by any Company in the
ordinary course of business and the abandonment or other disposition of Intellectual
Property that is, in the reasonable judgment of Borrowers, no longer economically
practicable to maintain or useful in the conduct of the business of the Companies taken as a
whole;




     (b) Asset Sales; provided that the aggregate consideration received in respect of all
Asset Sales pursuant to this clause (b) shall not exceed $10.0 million in any four
consecutive fiscal quarters of Borrowers;




     (c) leases of real or personal property in the ordinary course of business and in
accordance with the applicable Security Documents;




     (d) the Transactions as contemplated by the Transaction Documents;




     (e) mergers and consolidations in compliance with Section 6.05; and




     (f) Investments in compliance with Section 6.04.



          To the extent the Required Lenders waive the provisions of this Section 6.06 with
respect to the sale of any Collateral, or any Collateral is sold as permitted by this Section
6.06, such Collateral (unless sold to a Company) shall be sold free and clear of the Liens
created by the Security Documents, and the Agents shall take all actions they deem appropriate in
order to effect the foregoing.



          SECTION 6.07 Acquisitions. Purchase or otherwise acquire (in one or a series of related
transactions) any part of the property (whether tangible or intangible) of any person (or agree to
do any of the foregoing at any future time), except that the following shall be permitted:




     (a) Capital Expenditures by Borrowers and their Subsidiaries shall be permitted;




     (b) purchases and other acquisitions of inventory, materials, equipment and intangible
property in the ordinary course of business and licenses of Intellectual Property in the
ordinary course of business;




     (c) Investments in compliance with Section 6.04;




     (d) leases of real or personal property in the ordinary course of business and in
accordance with the applicable Security Documents;




     (e) the Transactions as contemplated by the Transaction Documents;




     (f) Permitted Acquisitions; and




     (g) mergers and consolidations in compliance with Section 6.05;


provided that the Lien on and security interest in such property granted or to be granted in favor
of the Collateral Agent under the Security Documents shall be maintained or created in accordance
with the provisions of Section 5.10 or Section 5.11, as applicable.




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          SECTION 6.08 Dividends. Authorize, declare or pay, directly or indirectly, any Dividends with
respect to any Company, except that the following shall be permitted:




     (a) Dividends by any Company or any Subsidiary of any Company to Holdings, any Borrower
or any Guarantor that is a Wholly Owned Subsidiary of Holdings;




     (b) payments to Holdings to permit Holdings, and the subsequent use of such payments by
Holdings, to repurchase or redeem Qualified Capital Stock of Holdings held by officers,
directors or employees or former officers, directors or employees (or their transferees,
estates or beneficiaries under their estates) of any Company, upon their death, disability,
retirement, severance or termination of employment or service; provided that the aggregate
cash consideration paid for all such redemptions and payments shall not exceed, in any
fiscal year, $2.0 million; provided further that this amount may be increased by an amount
not to exceed the sum of (i) the cash proceeds from the sale of Equity Interests of Holdings
and (ii) to the extent contributed to Holdings, cash proceeds from the sale of Equity
Interests of any of Holdings’ direct or indirect parent corporations, in each case to
current or former members of management, directors, managers or consultants of Holdings and
any of its Subsidiaries or any of its direct or indirect parent corporations that occurs
after the Effective Date and during the year of any such Dividend permitted by this
clause (b);




     (c) Permitted Tax Distributions by Holdings to its investors and dividends and payments
to Holdings in an amount not to exceed such Permitted Tax Distributions for the purpose of
enabling Holding to make such Permitted Tax Distributions; and




     (d) Dividends by Holdings equal to the portion of the Cumulative Credit on such date
that Holdings elects to apply pursuant to this Section 6.08(d); provided that no
Default or Event of Default has occurred and is continuing or result therefrom and after
giving effect thereto, the Total Leverage Ratio, on a Pro Forma Basis, is no greater than
3.0 to 1.0; provided, further that if any such Dividend is made from the Cumulative Credit
prior to the first Excess Cash Flow Prepayment required to be made pursuant to Section
2.09(b), the Borrowers shall concurrently prepay the Loans pursuant to Section
2.09(d) in an amount equal to such Dividend.



          SECTION 6.09 Transactions with Affiliates. Enter into, directly or indirectly, any transaction or
series of related transactions, whether or not in the ordinary course of business, with any
Affiliate of any Company (other than between or among one or more Loan Parties), other than on
terms and conditions at least as favorable to such Company as would reasonably be obtained by such
Company at that time in a comparable arm’s-length transaction with a person other than an
Affiliate, except that the following shall be permitted:




     (a) Dividends permitted by Section 6.08;




     (b) Investments permitted by Sections 6.04(e) and (f);




     (c) reasonable and customary director, officer and employee compensation (including
bonuses) and other benefits (including retirement, health, stock option and other
benefit plans) and indemnification arrangements, in each case approved by the Board of
Directors of the applicable Borrower;



79









 






     (d) transactions with customers, clients, suppliers, joint venture partners or
purchasers or sellers of goods and services, in each case in the ordinary course of business
and otherwise not prohibited by the Loan Documents;




     (e) So long as no Default exists and the Total Leverage Ratio, on a Pro Forma Basis, is
no greater than 3.0 to 1.0, the payment of management fees in an amount not to exceed $2.0
million in any fiscal year;




     (f) the existence of, and the performance by any Loan Party of its obligations under
the terms of, any limited liability company, limited partnership or other Organizational
Document or securityholders agreement (including any registration rights agreement or
purchase agreement related thereto) to which it is a party on the Effective Date, as in
effect on the Effective Date, and similar agreements that it may enter into thereafter;
provided, however, that the existence of, or the performance by any Loan Party of
obligations under, any amendment to any such existing agreement or any such similar
agreement entered into after the Effective Date shall only be permitted by this Section
6.09(f) to the extent not more adverse to the interest of the Lenders in any material
respect, when taken as a whole, than any of such documents and agreements as in effect on
the Effective Date;




     (g) sales of Qualified Capital Stock of Holdings to Affiliates of any Borrower not
otherwise prohibited by the Loan Documents and the granting of registration and other
customary rights in connection therewith;




     (h) any transaction with an Affiliate where the only consideration paid by any Loan
Party is Qualified Capital Stock of Holdings; and




     (i) the Transactions as contemplated by the Transaction Documents.



          SECTION 6.10 Minimum Liquidity.



          Permit, on the last day of each fiscal quarter, the sum of qualified and unrestricted cash and
Cash Equivalents held by Loan Parties to be less than $12,500,000 (the “Liquidity Requirement”).



          SECTION 6.11 Prepayments of Other Indebtedness; Modifications of Organizational Documents and Other
Documents, etc. Directly or indirectly:




     (a) make (or give any notice in respect thereof) any voluntary or optional payment or
prepayment on or redemption or acquisition for value of, or any prepayment or redemption as
a result of any asset sale, change of control or similar event of any Subordinated
Indebtedness (the “Subordinated Indebtedness Payment”), unless, if after giving effect
thereto, the Total Leverage Ratio, on a Pro Forma Basis, is no greater than 3.0 to 1.0, then
any Subordinated Indebtedness Payment may be made up to an aggregate amount equal to the
Cumulative Credit; provided that if any such Subordinated Indebtedness Payment is made from
the Cumulative Credit prior to the date of the first Excess Cash Flow Prepayment required to
be made pursuant to Section 2.09(b), the Borrowers shall concurrently prepay the
Loans pursuant to Section 2.09(d) in an amount equal to such Subordinated Indebtedness
Payment.




     (b) amend or modify, or permit the amendment or modification of, any provision of any
Transaction Document in any manner that is adverse in any material respect to the interests
of the Lenders; and



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     (c) terminate, amend, modify (including electing to treat any Pledged Interests (as
defined in the Security Agreement) as a “security” under Section 8-103 of the UCC) or change
any of its Organizational Documents (including by the filing or modification of any
certificate of designation) or any agreement to which it is a party with respect to its
Equity Interests (including any stockholders’ agreement), or enter into any new agreement
with respect to its Equity Interests, other than any such amendments, modifications or
changes or such new agreements which are not adverse in any material respect to the
interests of the Lenders; provided that Holdings may issue such Equity Interests, so long as
such issuance is not prohibited by Section 6.13 or any other provision of this
Agreement, and may amend its Organizational Documents to authorize any such Equity
Interests.



          SECTION 6.12 Limitation on Certain Restrictions on Subsidiaries. Directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary to (a) pay dividends or make any other distributions on its capital stock
or any other interest or participation in its profits owned by any Borrower or any Subsidiary, or
pay any Indebtedness owed to a Borrower or a Subsidiary, (b) make loans or advances to any Borrower
or any Subsidiary or (c) transfer any of its properties to any Borrower or any Subsidiary, except
for such encumbrances or restrictions existing under or by reason of (i) applicable Requirements of
Law; (ii) this Agreement and the other Loan Documents; (iii) customary provisions restricting
subletting or assignment of any lease governing a leasehold interest of a Subsidiary; (iv)
customary provisions restricting assignment of any agreement entered into by a Subsidiary in the
ordinary course of business; (v) any holder of a Lien permitted by Section 6.02 restricting
the transfer of the property subject thereto; (vi) customary restrictions and conditions contained
in any agreement relating to the sale of any property permitted under Section 6.06 pending
the consummation of such sale; (vii) any agreement in effect at the time such Subsidiary becomes a
Subsidiary of a Borrower, so long as such agreement was not entered into in connection with or in
contemplation of such person becoming a Subsidiary of a Borrower; (viii) without affecting the Loan
Parties’ obligations under Section 5.10, customary provisions in partnership agreements,
limited liability company organizational governance documents, asset sale and stock sale agreements
and other similar agreements entered into in the ordinary course of business that restrict the
transfer of ownership interests in such partnership, limited liability company or similar person;
(ix) restrictions on cash or other deposits or net worth imposed by suppliers or landlords under
contracts entered into in the ordinary course of business; (x) any instrument governing
Indebtedness assumed in connection with any Permitted 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 properties or assets of the person so acquired; (xi) in the case of any joint venture which
is not a Loan Party in respect of any matters referred to in clauses (b) and (c) above,
restrictions in such person’s Organizational Documents or pursuant to any joint venture agreement
or stockholders agreements solely to the extent of the Equity Interests of or property held in the
subject joint venture or other entity; or (xii) any encumbrances or restrictions imposed by any
amendments or refinancings that are otherwise permitted by the Loan Documents of the contracts,
instruments or obligations referred to in clauses (iii) or (viii) above; provided that such
amendments or refinancings are no more materially restrictive with respect to such encumbrances and
restrictions than those prior to such amendment or refinancing.



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          SECTION 6.13 Limitation on Issuance of Capital Stock.




     (a) With respect to Holdings, issue any Equity Interest that is not Qualified Capital Stock.




     (b) With respect to any Borrower or any Subsidiary, issue any Equity Interest (including by
way of sales of treasury stock) or any options or warrants to purchase, or securities convertible
into, any Equity Interest, except (i) for stock splits, stock dividends and additional issuances of
Equity Interests which do not decrease the percentage ownership of any Borrower or any Subsidiaries
in any class of the Equity Interest of such Subsidiary; (ii) Subsidiaries of any Borrower formed
after the Effective Date in accordance with Section 6.14 may issue Equity Interests to such
Borrower or the Subsidiary of such Borrower which is to own such Equity Interests; and (iii) any
Borrower may issue common stock that is Qualified Capital Stock to Holdings. All Equity Interests
issued in accordance with this Section 6.13(b) shall, to the extent required by
Sections 5.10 and 5.11 or any Security Agreement, be delivered to the Collateral
Agent for pledge pursuant to the applicable Security Agreement to the extent permitted by
applicable law.



          SECTION 6.14 Limitation on Creation of Subsidiaries. Establish, create or acquire any additional
Subsidiaries without the prior written consent of the Required Lenders; provided that, without such
consent (i) any Borrower may establish or create one or more Wholly Owned Subsidiaries of such
Borrower; (ii) any Borrower may establish, create or acquire one or more Subsidiaries in connection
with an Investment made pursuant to Section 6.04(f); (iii) any Borrower may acquire one or
more Subsidiaries in connection with a Permitted Acquisition; or (iv) Holdings may acquire or form
one or more Subsidiaries in connection with a Permitted Acquisition, so long as, in each case,
Section 5.10(b) shall be complied with.



          SECTION 6.15 Business.




     (a) With respect to Holdings, engage in any business activities or have any properties or
liabilities, other than (i) the direct or indirect ownership of the Equity Interests of its
Subsidiaries in existence as of the Effective Date and any other Subsidiary acquired or formed by
Holdings in connection with a Permitted Acquisition, (ii) obligations under the Loan Documents and
(iii) activities and properties incidental to the foregoing clauses (i) and (ii).




     (b) With respect to Borrowers and their Subsidiaries, engage (directly or indirectly) in any
business other than those businesses in which Borrowers and its Subsidiaries are engaged on the
Effective Date and activities incidental or related thereto.



          SECTION 6.16 Limitation on Accounting Changes. Make or permit any change in accounting policies or
reporting practices, without the consent of the Required Lenders, which consent shall not be
unreasonably withheld, except changes that are required by GAAP.



          SECTION 6.17 Fiscal Year. Change its fiscal year-end to a date other than December 31.



          SECTION 6.18 [Intentionally Omitted].



          SECTION 6.19 No Further Negative Pledge. Enter into any agreement, instrument, deed or lease which
prohibits or limits the ability of any Loan Party to create, incur, assume or suffer to exist any
Lien upon any of their respective properties or revenues, whether now owned or hereafter



82









 




acquired, or which requires the grant of any security for an obligation if security is granted
for another obligation, except the following: (1) this Agreement and the other Loan Documents; (2)
covenants in documents creating Liens permitted by Section 6.02 prohibiting further Liens
on the properties encumbered thereby; (3) any other agreement that does not restrict in any manner
(directly or indirectly) Liens created pursuant to the Loan Documents on any Collateral securing
the Secured Obligations and does not require the direct or indirect granting of any Lien securing
any Indebtedness or other obligation by virtue of the granting of Liens on or pledge of property of
any Loan Party to secure the Secured Obligations; and (4) any prohibition or limitation that (a)
exists pursuant to applicable Requirements of Law; (b) consists of customary restrictions and
conditions contained in any agreement relating to the sale of any property permitted under
Section 6.06 pending the consummation of such sale; (c) restricts subletting or assignment
of any lease governing a leasehold interest of a Borrower or a Subsidiary; (d) exists in any
agreement in effect at the time such Subsidiary becomes a Subsidiary of a Borrower, so long as such
agreement was not entered into in contemplation of such person becoming a Subsidiary; or (e) is
imposed by any amendments or refinancings that are otherwise permitted by the Loan Documents of the
contracts, instruments or obligations referred to in clause (3) or (5)(d); provided that such
amendments and refinancings are no more materially restrictive with respect to such prohibitions
and limitations than those prior to such amendment or refinancing.




          SECTION 6.20 Anti-Terrorism Law; Anti-Money Laundering.




     (a) Directly or indirectly, (i) knowingly conduct any business or engage in making or
receiving any contribution of funds, goods or services to or for the benefit of any person
described in Section 3.21; (ii) knowingly deal in, or otherwise engage in any transaction
relating to, any property or interests in property blocked pursuant to the Executive Order or any
other Anti-Terrorism Law; or (iii) knowingly engage in or conspire to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of
the prohibitions set forth in any Anti-Terrorism Law (and the Loan Parties shall deliver to the
Lenders any certification or other evidence requested from time to time by any Lender in its
reasonable discretion, confirming the Loan Parties’ compliance with this Section 6.20).




     (b) Cause or permit any of the funds of such Loan Party that are used to repay the Loans to be
derived from any unlawful activity with the result that the making of the Loans would be in
violation of any Requirement of Law.



          SECTION 6.21 Embargoed Person. Cause or permit (a) any of the funds or properties of the Loan
Parties that are used to repay the Loans to constitute property of, or be beneficially owned
directly or indirectly by, any person subject to sanctions or trade restrictions under United
States law (“Embargoed Person” or “Embargoed Persons”) that is identified on (1) the “List of
Specially Designated Nationals and Blocked Persons” maintained by OFAC and/or on any other similar
list maintained by OFAC pursuant to any authorizing statute including, but not limited to, the
International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with the Enemy
Act, 50 U.S.C. App. 1 et seq., and any Executive Order or Requirement of Law promulgated
thereunder, with the result that the investment in the Loan Parties (whether directly or
indirectly) is prohibited by a Requirement of Law, or the Loans made by the Lenders would be in
violation of a Requirement of Law, or (2) the Executive Order, any related enabling legislation or
any other similar Executive Orders; or (b) any Embargoed Person to have any direct or indirect
interest, of any nature whatsoever in the Loan Parties, with the result that the investment in the
Loan Parties (whether directly or indirectly) is prohibited by a Requirement of Law or the Loans
are in violation of a Requirement of Law.



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          SECTION 6.22 Limitation on Finance Subsidiary. Finance Subsidiary may not hold any material
properties, become liable for any material obligations, engage in any trade or business, or conduct
any business activity, other than (1) the issuance of its Equity Interests to Lux Borrower or any
Wholly Owned Subsidiary of Lux Borrower; (2) the incurrence of Indebtedness as a co-obligor or
guarantor, as the case may be, of any Indebtedness that is permitted to be incurred by Borrowers
under the Loan Documents; provided that the net proceeds of such Indebtedness are retained by Lux
Borrower or loaned to or contributed as capital to one or more Subsidiaries other than Finance
Subsidiary; and (3) activities incidental thereto. Neither Lux Borrower nor any Subsidiary thereof
shall engage in any transactions with Finance Subsidiary in violation of the immediately preceding
sentence.



          SECTION 6.23 Preservation of Claims Under the Korean Opco Bank Guarantees. Make any payment or
take any other action that would reduce the obligations of Korean Opco under the Korean Opco Bank
Guarantee below an amount equal to the outstanding balance of the Secured Obligations at such time.



ARTICLE VII




GUARANTEE



          SECTION 7.01 The Guarantee. The Guarantors (other than Korean Opco which has separately executed
the Korean Opco Bank Guarantee) hereby jointly and severally guarantee, as a primary obligor and
not as a surety to each Secured Party and their respective successors and assigns, the prompt
payment in full when due (whether at stated maturity, by required prepayment, declaration, demand,
by acceleration or otherwise) of the principal of and interest (including any interest, fees, costs
or charges that would accrue but for the provisions of the Title 11 of the United States Code after
any bankruptcy or insolvency petition under Title 11 of the United States Code) on the Loans made
by the Lenders to, and the Notes held by each Lender of, Borrowers, and all other Secured
Obligations from time to time owing to the Secured Parties by any Loan Party under any Loan
Document or any Hedging Agreement entered into with a counterparty that is a Secured Party, in each
case strictly in accordance with the terms thereof (such obligations being herein collectively
called the “Guaranteed Obligations”). The Guarantors hereby jointly and severally agree that if
Borrowers or other Guarantor(s) shall fail to pay in full when due (whether at stated maturity, by
acceleration or otherwise) any of the Guaranteed Obligations, the Guarantors will promptly pay the
same in cash, without any demand or notice whatsoever, and that in the case of any extension of
time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in
full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the
terms of such extension or renewal.



          SECTION 7.02 Obligations Unconditional. The obligations of the Guarantors under Section
7.01 shall constitute a guaranty of payment and to the fullest extent permitted by applicable
Requirements of Law, are absolute, irrevocable and unconditional, joint and several, irrespective
of the value, genuineness, validity, regularity or enforceability of the Guaranteed Obligations of
Borrowers under this Agreement, the Notes, if any, or any other agreement or instrument referred to
herein or therein, or any substitution, release or exchange of any other guarantee of or security
for any of the Guaranteed Obligations, and, irrespective of any other circumstance whatsoever that
might otherwise constitute a legal or equitable discharge or defense of a surety or Guarantor
(except for payment in full). Without limiting the generality of the foregoing, it is agreed that
the occurrence of any one or more of the following shall not alter or impair the liability of the
Guarantors hereunder which shall remain absolute, irrevocable and unconditional under any and all
circumstances as described above:



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          (i) at any time or from time to time, without notice to the Guarantors, the time for
any performance of or compliance with any of the Guaranteed Obligations shall be extended,
or such performance or compliance shall be waived;




          (ii) any of the acts mentioned in any of the provisions of this Agreement or the Notes,
if any, or any other agreement or instrument referred to herein or therein shall be done or
omitted;




          (iii) the maturity of any of the Guaranteed Obligations shall be accelerated, or any of
the Guaranteed Obligations shall be amended in any respect, or any right under the Loan
Documents or any other agreement or instrument referred to herein or therein shall be
amended or waived in any respect or any other guarantee of any of the Guaranteed Obligations
or any security therefor shall be released or exchanged in whole or in part or otherwise
dealt with;




          (iv) any Lien or security interest granted to, or in favor of, any Lender, the
Collateral Trustee, the Collateral Agent or the Administrative Agent as security for any of
the Guaranteed Obligations shall fail to be perfected; or




          (v) the release of any other Guarantor pursuant to Section 7.09.



          The Guarantors hereby expressly waive diligence, presentment, demand of payment, protest and
all notices whatsoever, and any requirement that any Secured Party exhaust any right, power or
remedy or proceed against any Borrower under this Agreement or the Notes, if any, or any other
agreement or instrument referred to herein or therein, or against any other person under any other
guarantee of, or security for, any of the Guaranteed Obligations. The Guarantors waive any and all
notice of the creation, renewal, extension, waiver, termination or accrual of any of the Guaranteed
Obligations and notice of or proof of reliance by any Secured Party upon this Guarantee or
acceptance of this Guarantee, and the Guaranteed Obligations, and any of them, shall conclusively
be deemed to have been created, contracted or incurred in reliance upon this Guarantee, and all
dealings among Borrowers and the Secured Parties shall likewise be conclusively presumed to have
been had or consummated in reliance upon this Guarantee. This Guarantee shall be construed as a
continuing, absolute, irrevocable and unconditional guarantee of payment without regard to any
right of offset with respect to the Guaranteed Obligations at any time or from time to time held by
Secured Parties, and the obligations and liabilities of the Guarantors hereunder shall not be
conditioned or contingent upon the pursuit by the Secured Parties or any other person at any time
of any right or remedy against Borrowers or against any other person which may be or become liable
in respect of all or any part of the Guaranteed Obligations or against any collateral security or
guarantee therefor or right of offset with respect thereto. This Guarantee shall remain in full
force and effect and be binding in accordance with and to the extent of its terms upon the
Guarantors and the successors and assigns thereof, and shall inure to the benefit of the Lenders,
and their respective successors and assigns, notwithstanding that from time to time during the term
of this Agreement there may be no Guaranteed Obligations outstanding.



          SECTION 7.03 Reinstatement. The obligations of the Guarantors under this Article VII shall
be automatically reinstated if and to the extent that for any reason any payment by or on behalf of
Borrowers or other Loan Party in respect of the Guaranteed Obligations is rescinded or must be
otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise.



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          SECTION 7.04 Subrogation. Each Guarantor hereby agrees that until the indefeasible payment and
satisfaction in full in cash of all Guaranteed Obligations and the expiration and termination of
the Commitments of the Lenders under this Agreement it shall waive any claim and shall not exercise
any right or remedy, direct or indirect, arising by reason of any performance by it of its
guarantee in Section 7.01, whether by subrogation or otherwise, against Borrowers or any
other Guarantor of any of the Guaranteed Obligations or any security for any of the Guaranteed
Obligations.



          SECTION 7.05 Remedies. The Guarantors jointly and severally agree that, as between the Guarantors
and the Lenders, the obligations of Borrowers under this Agreement and the Notes, if any, may be
declared to be forthwith due and payable as provided in Section 8.01 (and shall be deemed
to have become automatically due and payable in the circumstances provided in Section 8.01)
for purposes of Section 7.01, notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming automatically due and payable) as
against Borrowers and that, in the event of such declaration (or such obligations being deemed to
have become automatically due and payable), such obligations (whether or not due and payable by
Borrowers) shall forthwith become due and payable by the Guarantors for purposes of Section
7.01.



          SECTION 7.06 Instrument for the Payment of Money. Each Guarantor hereby acknowledges that the
guarantee in this Article VII constitutes an instrument for the payment of money, and
consents and agrees that any Lender or Agent, at its sole option, in the event of a dispute by such
Guarantor in the payment of any moneys due hereunder, shall have the right to bring a motion-action
under New York CRPL Section 3213.



          SECTION 7.07 Continuing Guarantee. The guarantee in this Article VII is a continuing
guarantee of payment, and shall apply to all Guaranteed Obligations whenever arising.



          SECTION 7.08 General Limitation on Guarantee Obligations. In any action or proceeding involving
any state corporate limited partnership or limited liability company law, or any applicable state,
federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Guarantor under Section 7.01 would otherwise
be held or determined to be void, voidable, invalid or unenforceable, or subordinated to the claims
of any other creditors, on account of the amount of its liability under Section 7.01, then,
notwithstanding any other provision to the contrary, the amount of such liability shall, without
any further action by such Guarantor, any Loan Party or any other person, be automatically limited
and reduced to the highest amount that is valid and enforceable and not subordinated to the claims
of other creditors as determined in such action or proceeding.



          SECTION 7.09 Release of Guarantors. If, in compliance with the terms and provisions of the Loan
Documents, all or substantially all of the Equity Interests or property of any Guarantor are sold
or otherwise transferred (a “Transferred Guarantor”) to a person or persons, none of which is a
Borrower or a Subsidiary, such Transferred Guarantor shall, upon the consummation of such sale or
transfer, be released from its obligations under this Agreement (including under Section
10.03 hereof) and its obligations to pledge and grant any Collateral owned by it pursuant to
any Security Document and, in the case of a sale of all or substantially all of the Equity
Interests of the Transferred Guarantor, the pledge of such Equity Interests to the Collateral Agent
pursuant to the Security Agreements shall be released, and the Collateral Agent shall take such
actions as are necessary to effect each release described in this Section 7.09 in
accordance with the relevant provisions of the Security Documents



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          SECTION 7.10 Provisions Applicable to Certain Guarantees. Notwithstanding any of the provisions of
Article VII, the Guaranteed Obligations of any Subsidiary Guarantor shall under no circumstances
whatsoever extend to include any monies, liabilities or obligations (including the Obligations)
which, if so included, would cause the infringement by any Subsidiary Guarantor of any of sections
151 to 154 (inclusive) of the United Kingdom Companies Act 1985 (as re-enacted or amended from time
to time).



ARTICLE VIII




EVENTS OF DEFAULT



          SECTION 8.01 Events of Default. Upon the occurrence and during the continuance of the following
events (“Events of Default”):




     (a) default shall be made in the payment of any principal of any Loan when and as the
same shall become due and payable, whether at the due date thereof or at a date fixed for
prepayment (whether voluntary or mandatory) thereof or by acceleration thereof or otherwise;




     (b) default shall be made in the payment of any interest on any Loan or any fee or any
other amount (other than an amount referred to in paragraph (a) above) due under any Loan
Document, when and as the same shall become due and payable, and such default shall continue
unremedied for a period of three Business Days;




     (c) any representation or warranty made or deemed made in or in connection with any
Loan Document or the borrowings hereunder, or any representation, warranty, statement or
information contained in any report, certificate, financial statement or other instrument
furnished in connection with or pursuant to any Loan Document, shall prove to have been
false or misleading in any material respect when so made, deemed made or furnished;




     (d) default shall be made in the due observance or performance by any Company of any
covenant, condition or agreement contained in Section 5.02, 5.03(a) or
5.08 or in Article VI;




     (e) default shall be made in the due observance or performance by any Company of any
covenant, condition or agreement contained in any Loan Document (other than those specified
in paragraphs (a), (b) or (d) immediately above) and such default shall continue unremedied
or shall not be waived for a period of thirty (30) days after written notice thereof from
the Administrative Agent or any Lender to Borrowers;




     (f) any Company shall (i) fail to pay any principal or interest, regardless of amount,
due in respect of any Indebtedness (other than the Obligations), when and as the same shall
become due and payable beyond any applicable grace period, or (ii) fail to observe or
perform any other term, covenant, condition or agreement contained in any agreement or
instrument evidencing or governing any such Indebtedness if the effect of any failure
referred to in this clause (ii) is to cause, or to permit the holder or holders of such
Indebtedness or a trustee or other representative on its or their behalf (with or without
the giving of notice, the lapse of time or both) to cause, such Indebtedness to become due
prior to its stated maturity or become subject to a mandatory offer purchase by the obligor;
provided that it shall not constitute an Event of Default pursuant to this paragraph (f)
unless the aggregate amount of all such Indebtedness referred to in clauses (i) and (ii)
exceeds $3.0 million at any one time (provided that, in the case



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of Hedging Obligations, the amount counted for this purpose shall be the amount payable
by all Companies if such Hedging Obligations were terminated at such time);




     (g) an involuntary proceeding shall be commenced or an involuntary petition shall be
filed or any application shall be made in a court of competent jurisdiction seeking (i)
relief in respect of any Company, or of a substantial part of the property of any Company,
under Title 11 of the Code, as now constituted or hereafter amended, or any other federal,
state or foreign bankruptcy, insolvency, receivership or similar law in any jurisdiction;
(ii) the appointment of a receiver, administrator, administrative receiver, liquidator,
trustee, custodian, sequestrator, conservator or similar official for any Company or for a
substantial part of the property of any Company; or (iii) the suspension of payments, a
moratorium of any indebtedness, bankruptcy, dissolution, administration, examination,
reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise), the
winding-up or liquidation of any Company; and (other than with respect to the UK Sales
Subsidiary) such proceeding or petition shall continue undismissed for 60 days or an order
or decree approving or ordering any of the foregoing shall be entered;




     (h) any Company shall (i) voluntarily commence any proceeding or file any petition
seeking relief under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other federal, state or foreign bankruptcy, insolvency, receivership or
similar law in any jurisdiction; (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or the filing of any petition described in
clause (g) above; (iii) apply for or consent to the appointment of a receiver,
administrator, administrative receiver, liquidator, trustee, custodian, sequestrator,
conservator or similar official for any Company or for a substantial part of the property of
any Company; (iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding; (v) make a general assignment for the benefit of
creditors; (vi) become unable, admit in writing its inability or fail generally to pay its
debts as they become due including, in the case of the UK Sales Subsidiary, within the
meaning of subsections 123(1)(a), (b), (c) or (d) of the United Kingdom Insolvency Act of
1986; (vii) take any action for the purpose of effecting any of the foregoing; (viii) wind
up or liquidate; (ix) suspend making payments on any of its debts or, by reason of actual or
anticipated financial difficulties, commence negotiations with one or more of its creditors
with a view to rescheduling any of its indebtedness, (x) declare or institute a moratorium
in respect of any of its indebtedness; (xi) enter into a composition, compromise, assignment
or arrangement with any creditor of any Loan Party; or (xii) the value of the assets of the
UK Sales Subsidiary is less than its liabilities (taking into account contingent and
prospective liabilities);




     (i) one or more judgments, orders or decrees for the payment of money in an aggregate
amount in excess of $1,000,000 shall be rendered against any Company or any combination
thereof and the same shall remain undischarged, unvacated or unbonded for a period of 30
consecutive days during which execution shall not be effectively stayed, or any action shall
be legally taken by a judgment creditor to levy upon properties of any Company to enforce
any such judgment;




     (j) one or more ERISA Events or noncompliance with respect to Foreign Plans shall have
occurred that, in the opinion of the Required Lenders, when taken together with all other
such ERISA Events and noncompliance with respect to Foreign Plans that have occurred, could
reasonably be expected to result in liability of any Company and its ERISA Affiliates in an



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aggregate amount exceeding $1,000,000 or in the imposition of a Lien on any properties
of a Company;




     (k) any security interest and Lien purported to be created by any Security Document
with respect to property in excess of $500,000 in value shall cease to be in full force and
effect, or shall cease to give the Collateral Agent, for the benefit of the Secured Parties,
or the Collateral Trustee, as applicable, the Liens, rights, powers and privileges purported
to be created and granted under such Security Document (including a perfected first priority
security interest in and Lien on all of the Collateral thereunder (except as otherwise
expressly provided in such Security Document)) in favor of the Collateral Agent or the
Collateral Trustee, as applicable, or shall be asserted by any Borrower or any other Loan
Party not to be a valid, perfected, first priority (except as otherwise expressly provided
in this Agreement or such Security Document) security interest in or Lien on the Collateral
covered thereby;




     (l) any Loan Document or any material provisions thereof shall at any time and for any
reason be declared by a court of competent jurisdiction to be null and void, or a proceeding
shall be commenced by any Loan Party or any other person, or by any Governmental Authority,
seeking to establish the invalidity or unenforceability thereof (exclusive of questions of
interpretation of any provision thereof), or any Loan Party shall repudiate or deny any
portion of its liability or obligation for the Obligations;




     (m) there shall have occurred a Change in Control;




     (n) any Company shall be prohibited or otherwise restrained from conducting the
business theretofore conducted by it in any manner that has or could reasonably be expected
to result in a Material Adverse Effect by virtue of any determination, ruling, decision,
decree or order of any court or Governmental Authority of competent jurisdiction;




     (o) Korean Opco is designated as a “failing company” under the CRPL; or




     (p) the Clearing House suspends any current transactions of Korean Opco;


then, and in every such event (other than an event with respect to Holdings or any Borrower
described in paragraph (g), (h), (o) or (p) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of the Enforcement
Lenders shall, by notice to Borrowers, take either or both of the following actions, at the same or
different times: (i) terminate forthwith the Commitments and (ii) declare the Loans then
outstanding to be forthwith due and payable in whole or in part, whereupon the principal of the
Loans so declared to be due and payable, together with accrued interest thereon and any unpaid
accrued fees and all other Obligations of Borrowers accrued hereunder and under any other Loan
Document, shall become forthwith due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived by Borrowers and the Guarantors,
anything contained herein or in any other Loan Document to the contrary notwithstanding; and in any
event, with respect to Holdings or any Borrower described in paragraph (g), (h), (o) or (p) above,
the Commitments shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and any unpaid accrued fees and all other Obligations of
Borrowers accrued hereunder and under any other Loan Document, shall automatically become due and
payable, without presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived by Borrowers and the Guarantors, anything contained herein or in any other
Loan Document to the contrary notwithstanding.




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          SECTION 8.02 Application of Proceeds. The proceeds received by the Collateral Agent in respect of
any sale of, collection from or other realization upon all or any part of the Collateral pursuant
to the exercise by the Collateral Agent of its remedies shall be applied, in full or in part,
together with any other sums then held by the Collateral Agent pursuant to this Agreement, promptly
by the Collateral Agent as follows:




     (a) First, to the payment of all reasonable costs and expenses, fees, commissions and
taxes of such sale, collection or other realization including compensation to the Collateral
Agent and its agents and counsel, and all expenses, liabilities and advances made or
incurred by the Collateral Agent in connection therewith and all amounts for which the
Collateral Agent is entitled to indemnification pursuant to the provisions of any Loan
Document, together with interest on each such amount at the highest rate then in effect
under this Agreement from and after the date such amount is due, owing or unpaid until paid
in full;




     (b) Second, to the payment of all other reasonable costs and expenses of such sale,
collection or other realization including compensation to the other Secured Parties and
their agents and counsel and all costs, liabilities and advances made or incurred by the
other Secured Parties in connection therewith, together with interest on each such amount at
the highest rate then in effect under this Agreement from and after the date such amount is
due, owing or unpaid until paid in full;




     (c) Third, without duplication of amounts applied pursuant to clauses (a) and (b)
above, to the indefeasible payment in full in cash, pro rata, of interest and other amounts
constituting Obligations (other than principal) and any fees, premiums and scheduled
periodic payments due under Hedging Agreements constituting Secured Obligations and any
interest accrued thereon, in each case equally and ratably in accordance with the respective
amounts thereof then due and owing;




     (d) Fourth, to the indefeasible payment in full in cash, pro rata, of principal amount
of the Obligations and any breakage, termination or other payments under Hedging Agreements
constituting Secured Obligations and any interest accrued thereon; and




     (e) Fifth, the balance, if any, to the person lawfully entitled thereto (including the
applicable Loan Party or its successors or assigns) or as a court of competent jurisdiction
may direct.



          In the event that any such proceeds are insufficient to pay in full the items described in
clauses (a) through (e) of this Section 8.02, the Loan Parties shall remain liable, jointly
and severally, for any deficiency.



          SECTION 8.03 Right to Cure. Notwithstanding anything to the contrary contained in Section
8.01, in the event that the Loan Parties fail (or, but for the operation of this Section
8.03, would fail) to comply with the Liquidity Requirement, until the expiration of the 30th
day subsequent to the fiscal quarter for which such failure to comply occurs, Holdings shall have
the right to issue Qualified Capital Stock (which does not provide for the making of mandatory
Dividends prior to the first anniversary of the Maturity Date) for cash or otherwise receive cash
contributions to the capital of Holdings, (collectively, the “Cure Right”), and upon the receipt by
Holdings of such cash (the “Cure Amount”) pursuant to the exercise by Holdings of such Cure Right
the covenant in Section 6.10 shall be recalculated giving effect to the Cure Amount and,
if, after giving effect to such adjustment, the Loan Parties shall then



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be in compliance with the requirements of the Liquidity Requirement, the Loan Parties shall be
deemed to have satisfied the Liquidity Requirement as of the relevant date of determination with
the same effect as though there had been no failure to comply therewith at such date, and the
applicable breach or default of the Liquidity Requirement that had occurred shall be deemed cured
for the purposes of the Agreement; provided that in any four consecutive fiscal quarter period
there shall be at least two fiscal quarters in which no Cure Right has been exercised.




ARTICLE IX




THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT



          SECTION 9.01 Appointment and Authority. Each of the Lenders hereby irrevocably appoints Wilmington
Trust FSB, to act on its behalf as the Administrative Agent and the Collateral Agent hereunder and
under the other Loan Documents and authorizes such Agents to take such actions on its behalf and to
exercise such powers as are delegated to such Agents by the terms hereof or thereof, together with
such actions and powers as are reasonably incidental thereto. The provisions of this Article are
solely for the benefit of the Administrative Agent, the Collateral Agent and the Lenders, and
neither any Borrower nor any other Loan Party shall have rights as a third party beneficiary of any
of such provisions.



          SECTION 9.02 Rights as a Lender. Each person serving as an Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may exercise the same as
though it were not an Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly
indicated or unless the context otherwise requires, include each person serving as an Agent
hereunder in its individual capacity. Such person and its Affiliates may accept deposits from,
lend money to, act as the financial advisor or in any other advisory capacity for and generally
engage in any kind of business with any Borrower or any Subsidiary or other Affiliate thereof as if
such person were not an Agent hereunder and without any duty to account therefor to the Lenders.



          SECTION 9.03 Exculpatory Provisions. Agents and any of their respective officers, partners,
directors, employees or agents (each an “Indemnified Party”) shall not be liable to Lenders for any
action taken or omitted to be taken by any Agent (including the Prior Agent) under or in connection
with any of the Loan Documents except to the extent caused by such Agent’s gross negligence or
willful misconduct, as determined by a final, non-appealable judgment of a court of competent
jurisdiction. No such Agent shall have any duties or obligations except those expressly set forth
herein and in the other Loan Documents. Each Agent shall be entitled to refrain from any act or
the taking of any action (including the failure to take an action) in connection herewith or any of
the other Loan Documents or from the exercise of any power, discretion or authority vested in it
hereunder or thereunder unless and until such Agent shall have received instructions in respect
thereof from Required Lenders or Supermajority Lenders (or such other Lenders as may be required,
or as such Agent shall believe in good faith shall be necessary, to give such instructions under
Section 10.02) and, upon receipt of such instructions from Required Lenders or Supermajority
Lenders (or such other Lenders, as the case may be), such Agent shall be entitled to act or (where
so instructed) refrain from acting, or to exercise such power, discretion or authority, in
accordance with such instructions. Agents may distribute documents, deliverables or other
materials to the Lenders for acceptance or rejection, and may, upon appropriate notice, rely on the
lack of an objection by Lenders as deemed approval of the action presented. Without prejudice to
the generality of the foregoing, (i) each Indemnified Party shall be entitled to rely, and shall be
fully protected in relying, upon any communication, instrument or document believed by it to be
genuine and correct and to have been signed or sent by the proper Person or Persons and shall be
entitled to rely, and shall be fully protected in



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relying, on opinions and judgments of attorneys (who may be attorneys for Borrower and its
Subsidiaries), accountants, experts and other professional advisors selected by it; and (ii) no
Lender or Loan Party shall have any right of action whatsoever against any Indemnified Party as a
result of such Agent acting or (where so instructed) refraining from acting hereunder or under any
of the other Loan Documents in accordance with the instructions of Required Lenders, Supermajority
Lenders (or such other Lenders as may be required, or as such Agent shall believe in good faith
shall be necessary, to give such instructions under Section 10.02). Without limiting the
generality of the foregoing, no Agent:





          (i) shall be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing;




          (ii) shall have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or by the other
Loan Documents that such Agent is required to exercise as directed in writing by the
Required Lenders or the Supermajority Lenders (or such other number or percentage of the
Lenders as shall be expressly provided for herein or in the other Loan Documents); provided
that such Agent shall not be required to take any action that, in its judgment or the
judgment of its counsel, may expose such Agent to liability or that is contrary to any Loan
Document or applicable Requirements of Law; and




          (iii) shall, except as expressly set forth herein and in the other Loan Documents, have
any duty to disclose, and shall not be liable for the failure to disclose, any information
relating to any Borrower or any of its Affiliates that is communicated to or obtained by the
person serving as such Agent or any of its Affiliates in any capacity.


No Agent shall be liable for any action taken or not taken by it (x) with the consent or at the
request of the Required Lenders, other than with respect to any items that are subject to the
consent of the Supermajority Lenders or another vote of Lenders as provided in this Agreement, in
which case such Agent shall obtain the consent of the Supermajority Lenders, (or such other Lenders
as shall be necessary, or as such Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Section 10.02) or (y) in the absence of its own gross
negligence or willful misconduct. No Agent shall be deemed to have knowledge of any Default unless
and until notice describing such Default is given to such Agent by Borrowers or a Lender.




          No Agent shall be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with this Agreement or any other
Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder
or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to such Agent. Without limiting the
generality of the foregoing, the use of the term “agent” in this Agreement with reference to the
Administrative Agent or the Collateral Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any applicable law. Instead,
such term us used merely as a matter of market custom and is intended to create or reflect only an
administrative relationship between independent contracting parties.



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          SECTION 9.04 Reliance by Agent. Each Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing (including any electronic message, Internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed, sent or otherwise
authenticated by the proper person. Each Agent also may rely upon any statement made to it orally
or by telephone and believed by it to have been made by the proper person, and shall not incur any
liability for relying thereon. In determining compliance with any condition hereunder to the
making of a Loan, that by its terms must be fulfilled to the satisfaction of a Lender, the
Administrative Agent may presume that such condition is satisfactory to such Lender unless the
Administrative Agent shall have received notice to the contrary from such Lender prior to the
making of such Loan. Each Agent may consult with legal counsel (who may be counsel for Borrowers),
independent accountants and other experts selected by it, and shall not be liable for any action
taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.



          SECTION 9.05 Delegation of Duties. Each Agent may perform any and all of its duties and exercise
its rights and powers hereunder or under any other Loan Document by or through any one or more
sub-agents appointed by such Agent. Each Agent and any such sub-agent may perform any and all of
its duties and exercise its rights and powers by or through their respective Related Parties. The
exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties
of each Agent and any such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as activities as Agent.
Notwithstanding anything herein to the contrary, with respect to each Indemnified Party (other than
an Agent), including any sub-agent appointed by an Agent, (i) such sub-agent or other Indemnified
Party shall be a third party beneficiary under this Agreement with respect to all such rights,
benefits and privileges (including exculpatory rights and rights to indemnification) and shall have
all of the rights and benefits of a third party beneficiary, including an independent right of
action to enforce such rights, benefits and privileges (including exculpatory rights and rights to
indemnification) directly, without the consent or joinder of any other Person, against any or all
of the Loan Parties and the Lenders, (ii) no waiver, amendment or modification of such rights,
benefits and privileges (including exculpatory rights and rights to indemnification) shall be
effective with respect to any such sub-agent or other Indemnified Party without the consent of such
Person, and (iii) such sub-agent or other Indemnified Party shall only have obligations to such
Agent, and not to any Loan Party, Lender or any other Person and no Loan Party, Lender or any other
Person shall have any rights, directly or indirectly, as a third party beneficiary or otherwise,
against such sub-agent or other Indemnified Person.



          SECTION 9.06 Resignation of Agent. Each Agent may at any time give notice of its resignation to
the Lenders and Borrowers. Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, in consultation with Borrowers, to appoint a successor, which shall be a bank
with an office in the United States, or an Affiliate of any such bank with an office in the United
States. If no such successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Agent gives notice of its resignation,
then the retiring Agent may on behalf of the Lenders, appoint a successor Agent meeting the
qualifications set forth above provided that if the Agent shall notify Borrowers and the Lenders
that no qualifying person has accepted such appointment, then such resignation shall nonetheless
become effective in accordance with such notice and (1) the retiring Agent shall be discharged from
its duties and obligations hereunder and under the other Loan Documents (except that in the case of
any collateral security held by the Collateral Agent on behalf of the Lenders under any of the Loan
Documents, the retiring Collateral Agent shall continue to hold such collateral security as nominee
until such time as a successor Collateral Agent is appointed) and (2) all payments, communications
and determinations provided to be made by, to or through an Agent shall instead



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be made by or to each Lender directly, until such time as the Required Lenders appoint a
successor Agent as provided for above in this paragraph. Upon the acceptance of a successor’s
appointment as Agent hereunder, such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring (or retired) Agent, and the retiring Agent
shall be discharged from all of its duties and obligations hereunder or under the other Loan
Documents (if not already discharged therefrom as provided above in this paragraph). The fees
payable by any Borrower to a successor Agent shall be the same as those payable to its predecessor
unless otherwise agreed between such Borrower and such successor. After the retiring Agent’s
resignation hereunder and under the other Loan Documents, the provisions of this Article IX
and Section 10.03 shall continue in effect for the benefit of such retiring Agent, its
sub-agents and their respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Agent was acting as Agent.




          SECTION 9.07 Non-Reliance on Agent and Other Lenders. Each Lender acknowledges that it has,
independently and without reliance upon any Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon any Agent or any other Lender and based on such documents and information as it shall
from time to time deem appropriate, continue to make its own decisions in taking or not taking
action under or based upon this Agreement, any other Loan Document or any related agreement or any
document furnished hereunder or thereunder.



          SECTION 9.08 Agents Not Required to Advance Funds. Without limiting the foregoing, none of the
Agents shall be required to act hereunder or to advance its own funds or otherwise incur any
financial liability in the performance of its duties or the exercise of its rights hereunder and
under any other agreements or documents to which it is a party, and shall in all cases be fully
justified in failing or refusing to act hereunder unless it shall receive further assurances to its
satisfaction from the Secured Parties (other than the Agents) of their indemnification obligations
under and in accordance with the provisions of Section 10.03 against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take or refraining from
taking any such action.



ARTICLE X




MISCELLANEOUS



          SECTION 10.01 Notices.



          (a) Generally. Except in the case of notices and other communications expressly
permitted to be given by telephone (and except as provided in paragraph (b) below), all notices and
other communications provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by telecopier as follows:




	 	(i)	 	if to any Loan Party, to Borrowers at: 

	 
	 	 	 	c/o MagnaChip Semiconductor, Ltd.
	 
	 	891	 	Daechi-dong, Gangnam-gu
	 
	 	 	 	Seoul 135-738 Korea
	 
	 	 	 	Attention: General Counsel
	 
	 	 	 	Telecopier No.: +82-2-6903-3898




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	 	(ii)	 	if to the Administrative Agent or the Collateral Agent, to it at: 

	 
	 	 	 	Wilmington Trust FSB
	 	 	 	50 South Sixth Street, Suite 1290
	 	 	 	Minneapolis, MN 55402
	 	 	 	Attention: Renee Kuhl
	 	 	 	Telecopier No.: 612-217-5651






          (iii)      if to a Lender, to it at its address (or telecopier number) set forth in its
Administrative Questionnaire.


Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall
be deemed to have been given when received; notices sent by telecopier shall be deemed to have been
given when sent (except that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next business day for the recipient).
Notices delivered through electronic communications to the extent provided in paragraph (b) below,
shall be effective as provided in said paragraph (b).




          (b) Electronic Communications. Notices and other communications to the Lenders
hereunder may (subject to Section 10.01(d)) be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to procedures approved
by the Administrative Agent; provided that the foregoing shall not apply to notices to any Lender
pursuant to Article II if such Lender has notified the Administrative Agent that it is
incapable of receiving notices under such Article by electronic communication. The Administrative
Agent, the Collateral Agent or any Borrower may, in its discretion, agree to accept notices and
other communications to it hereunder by electronic communications pursuant to procedures approved
by it (including as set forth in Section 10.01(d)); provided that approval of such
procedures may be limited to particular notices or communications.



          Unless the Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement); provided that if such notice or other
communication is not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on the next business day
for the recipient, and (ii) notices or communications posted to an Internet or intranet website
shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as
described in the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.



          (c) Change of Address, Etc. Any party hereto may change its address or telecopier
number for notices and other communications hereunder by notice to the other parties hereto.



          (d) Posting. Each Loan Party hereby agrees that it will provide to the Administrative
Agent all information, documents and other materials that it is obligated to furnish to the
Administrative Agent pursuant to this Agreement and any other Loan Document, including all notices,
requests, financial statements, financial and other reports, certificates and other information
materials, but excluding any such communication that (i) relates to a request for a new, or a
conversion of an existing, Borrowing or other extension of credit (including any election of an
interest rate or interest period relating thereto);



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(ii)relates to the payment of any principal or other amount due under this Agreement prior to the
scheduled date therefor; (iii) provides notice of any Default under this Agreement; or (iv) is
required to be delivered to satisfy any condition precedent to the effectiveness of this Agreement
and/or any borrowing or other extension of credit hereunder (all such non-excluded communications,
collectively, the “Communications”), by transmitting the Communications in an electronic/soft
medium in a format reasonably acceptable to the Administrative Agent at rkuhl@wilmingtontrust.com
or at such other e-mail address(es) provided to Borrowers from time to time or in such other form,
including hard copy delivery thereof, as the Administrative Agent shall require. In addition, each
Loan Party agrees to continue to provide the Communications to the Administrative Agent in the
manner specified in this Agreement or any other Loan Document or in such other form, including hard
copy delivery thereof, as the Administrative Agent shall require. Nothing in this Section
10.01 shall prejudice the right of the Agents, any Lender or any Loan Party to give any notice
or other communication pursuant to this Agreement or any other Loan Document in any other manner
specified in this Agreement or any other Loan Document or as any such Agent shall require.




          To the extent consented to by the Administrative Agent in writing from time to time,
Administrative Agent agrees that receipt of the Communications by the Administrative Agent at its
e-mail address(es) set forth above shall constitute effective delivery of the Communications to the
Administrative Agent for purposes of the Loan Documents; provided that Borrowers shall also deliver
to the Administrative Agent an executed original of each Compliance Certificate required to be
delivered hereunder.



          Each Loan Party further agrees that Administrative Agent may make the Communications available
to the Lenders by posting the Communications on Intralinks or a substantially similar electronic
transmission system (the “Platform”). The Platform is provided “as is” and “as available.” The
Agents do not warrant the accuracy or completeness of the Communications, or the adequacy of the
Platform and expressly disclaim liability for errors or omissions in the communications. No
warranty of any kind, express, implied or statutory, including, without limitation, any warranty of
merchantability, fitness for a particular purpose, non-infringement of third party rights or
freedom from viruses or other code defects, is made by any Agent in connection with the
Communications or the Platform. In no event shall the Administrative Agent or any of its Related
Parties have any liability to the Loan Parties, any Lender or any other person for damages of any
kind, including direct or indirect, special, incidental or consequential damages, losses or
expenses (whether in tort, contract or otherwise) arising out of any Loan Party’s or the
Administrative Agent’s transmission of communications through the Internet, except to the extent
the liability of such person is found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from such person’s gross negligence or willful misconduct.



          SECTION 10.02 Waivers; Amendment.



          (a) Generally. No failure or delay by any Agent or any Lender in exercising any right
or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of each Agent and the Lenders
hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan Document or
consent to any departure by any Loan Party therefrom shall in any event be effective unless the
same shall be permitted by this Section 10.02, and then such waiver or consent shall be
effective only in the specific instance and for the purpose



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for which given. Without limiting the generality of the foregoing, the making of a Loan shall
not be construed as a waiver of any Default, regardless of whether any Agent or any Lender may have
had notice or knowledge of such Default at the time. No notice or demand on any Borrower in any
case shall entitle such Borrower to any other or further notice or demand in similar or other
circumstances.




          (b) Required Consents. Subject to Section 10.02(c), and (d), neither
this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived,
amended, supplemented or modified except, in the case of this Agreement, pursuant to an agreement
or agreements in writing entered into by Borrowers and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered into by the
Administrative Agent, the Collateral Agent (in the case of any Security Document) and the Loan
Party or Loan Parties that are party thereto, in each case with the written consent of the Required
Lenders; provided that no such agreement shall be effective if the effect thereof would:




          (i) increase the Commitment of any Lender without the written consent of such Lender
(it being understood that no amendment, modification, termination, waiver or consent with
respect to any condition precedent, covenant or Default shall constitute an increase in the
Commitment of any Lender);




          (ii) reduce the principal amount of any Loan or reduce the rate of interest thereon
(other than interest pursuant to Section 2.06(c)), or reduce any fees payable
hereunder, or change the form or currency of payment of any Obligation, without the written
consent of each Lender directly affected thereby (it being understood that any amendment or
modification to the financial definitions in this Agreement shall not constitute a reduction
in the rate of interest for purposes of this clause (ii));




          (iii) (A) change the scheduled final maturity of any Loan, (B) postpone the date for
payment of any interest or fees payable hereunder, (C) change the amount of, waive or excuse
any such payment (other than waiver of any increase in the interest rate pursuant to
Section 2.06(c)), or (D) postpone the scheduled date of expiration of any Commitment
beyond the Maturity Date, in any case, without the written consent of each Lender directly
affected thereby;




          (iv) increase the maximum duration of Interest Periods hereunder, without the written
consent of each Lender directly affected thereby;




          (v) permit the assignment or delegation by any Borrower of any of its rights or
obligations under any Loan Document, without the written consent of each Lender;




          (vi) release Holdings, Korean Opco or all or substantially all of the Subsidiary
Guarantors from their Guarantee (except as expressly provided in Article VII), or
limit their liability in respect of such Guarantee, without the written consent of each
Lender;




          (vii) release all or a substantial portion of the Collateral from the Liens of the
Security Documents or subordinate the priorities of the Liens of the Security Documents or
the Secured Obligations entitled to the Liens of the Security Documents, in each case
without the written consent of each Lender (it being understood that additional Classes of
Loans pursuant to Section 2.18 and Indebtedness incurred pursuant to Section
6.01(k) may be equally and ratably secured by the Collateral with the then existing
Secured Obligations under the Security Documents);



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          (viii) change Section 2.13(b) or (c) or Section 2.09(h) in a
manner that would alter the pro rata sharing of payments or setoffs required thereby or any
other provision in a manner that would alter the pro rata allocation among the Lenders of
Loan disbursements, including the requirements of Sections 2.02(a), 2.16(d),
2.17(d) and 8.02, without the written consent of each Lender directly
affected thereby;




          (ix) change any provision of this Section 10.02(b) or Section 10.02(c)
or (d), without the written consent of each Lender directly affected thereby (except
for additional restrictions on amendments or waivers for the benefit of Lenders of
additional Classes of Loans pursuant to Section 2.18);




          (x) change the percentage set forth in the definition of “Required Lenders,”
“Supermajority Lenders” or any other provision of any Loan Document (including this Section)
specifying the number or percentage of Lenders (or Lenders of any Class) required to waive,
amend or modify any rights thereunder or make any determination or grant any consent
thereunder, without the written consent of each Lender (or each Lender of such Class, as the
case may be);




          (xi) change or waive any provision of Article X as the same applies to any
Agent, or any other provision hereof as the same applies to the rights or obligations of any
Agent, in each case without the written consent of such Agent;




          (xii) expressly change or waive any condition precedent in Section 4.02 to any
Borrowing without the written consent of the Supermajority Lenders;


provided further that, to the extent that any Lender (together with any other Lender that is
a Controlled Investment Affiliate or a Related Party of such Lender) holds more than 50% of
the sum of all the Loans outstanding and unused Commitments, any amendments, supplements or
other modifications of any provision of any Loan Document (including any series of related
waivers, amendments, supplements or modifications) which are materially adverse to the
interests of the Lenders shall not be effective without the written consent of Supermajority
Lenders, it being understood that any of the following will be materially adverse to the
interests of the Lenders:





          (i) changes to and waivers of Section 2.06(c), 2.08(c), 2.18,
6.07(f), 6.08, 6.09, 6.10, 6.11(a), 6.15,
8.03, 10.04(b)(iv), the definition of “Cumulative Credit” and the definition
of “Permitted Acquisition”, in each case, as in effect immediately prior to such change or
waiver;




          (ii) changes to and waivers of Section 6.01, as in effect immediately prior to
such change or waiver, that permit the incurrence of additional Indebtedness or removes or
modifies the requirement that intercreditor arrangements are reasonably satisfactory to the
Supermajority Lenders;




          (iii) changes to and waivers of Sections 6.02, 6.22 and 6.23,
in each case, as in effect immediately prior to such change or waiver, that adversely
affects the grant of and/or priority of the Liens on Collateral securing the Secured
Obligations;



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          (iv) changes to and waivers of Sections 6.04 or 6.06, in each case, as
in effect immediately prior to such change or waiver, that would permit additional cash or
other assets to be distributed, disposed of or otherwise transferred to the Permitted
Holders; and




          (v) changes to and waivers of Section 5.10 that increase the dollar thresholds above
those set forth therein on the Effective Date.



          (c) Collateral. Without the consent of any other person, the applicable Loan Party or
Parties and the Administrative Agent and/or Collateral Agent may (in its or their respective sole
discretion, or shall, to the extent required by any Loan Document) enter into any amendment or
waiver of any Loan Document, or enter into any new agreement or instrument, to effect the granting,
perfection, protection, expansion or enhancement of any security interest in any Collateral or
additional property to become Collateral for the benefit of the Secured Parties, or as required by
local law to give effect to, or protect any security interest for the benefit of the Secured
Parties, in any property or so that the security interests therein comply with applicable
Requirements of Law.



          (d) Dissenting Lenders. If, in connection with any proposed change, waiver, discharge
or termination of the provisions of this Agreement as contemplated by Section 10.02(b), the
consent of the Required Lenders is obtained but the consent of one or more of such other Lenders
whose consent is required is not obtained, then Borrowers shall have the right to replace all, but
not less than all, of such non-consenting Lender or Lenders (so long as all non-consenting Lenders
are so replaced) with one or more persons pursuant to Section 2.15 so long as at the time
of such replacement each such new Lender consents to the proposed change, waiver, discharge or
termination.



          SECTION 10.03 Expenses; Indemnity; Damage Waiver.



          (a) Costs and Expenses. Borrowers shall pay (i) all reasonable out-of-pocket expenses
incurred by the Administrative Agent, the Collateral Agent, the Collateral Trustee, the Specified
Lender and their respective Affiliates (including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent, the Collateral Agent, the Collateral Trustee and the
Specified Lender) in connection with the syndication of the credit facilities provided for herein
(including the obtaining and maintaining of CUSIP numbers for the Loans), the preparation,
negotiation, execution, delivery and administration of this Agreement and the other Loan Documents
or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses (including the reasonable fees, charges and disbursements of a single
counsel) incurred by the Lenders (other than the Specified Lender) in connection with the
preparation, negotiation, execution, delivery and administration of the Loan Documents incurred on
or prior to the Effective Date; provided that, such expenses specified in clause (ii) shall in no
event exceed $70,000, (iii) all out-of-pocket expenses incurred by the Administrative Agent, the
Collateral Agent, the Collateral Trustee or any Lender (including the fees, charges and
disbursements of any counsel for the Administrative Agent, the Collateral Agent, the Collateral
Trustee or any Lender), in connection with the enforcement or protection of its rights (A) in
connection with this Agreement and/or the other Loan Documents, including its rights under this
Section 10.03, or (B) in connection with the Loans made hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of
such Loans and (iv) all documentary and similar taxes and charges in respect of the Loan Documents.



     (b) Indemnification by Borrowers. Borrowers shall, jointly and severally, indemnify
the Administrative Agent (and any sub-agent thereof), the Collateral Agent (and any sub-agent
thereof),



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the Collateral Trustee, each Lender, and each Related Party of any of the foregoing persons
(each such person being called an “Indemnitee”) against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses (including the fees, charges
and disbursements of any counsel for any Indemnitee) incurred by any Indemnitee or asserted against
any Indemnitee by any third party or by any Borrower or any other Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder or the consummation of the
transactions contemplated hereby or thereby; (ii) any Loan or the use or proposed use of the
proceeds therefrom; (iii) any actual or alleged presence or Release or threatened Release of
Hazardous Materials on, at, under or from any property owned, leased or operated by any Company at
any time, any violation of, noncompliance with, or liability or obligation under, any Environmental
Laws, any orders, requirements or demands of any Governmental Authority relating to any
Environmental Laws or Environmental Permits, or any Environmental Claim related in any way to any
Company; or (iv) any actual or prospective claim, litigation, investigation or proceeding relating
to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a
third party or by any Borrower or any other Loan Party, and regardless of whether any Indemnitee is
a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the
extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a
court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by any
Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Loan Document, if such Borrower or such Loan Party has
obtained a final and nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction.




          (c) Reimbursement by Lenders. To the extent that any Borrower for any reason fails to
indefeasibly pay any amount required under paragraph (a) or (b) of this Section 10.03 to be
paid by it to the Administrative Agent (or any sub-agent thereof), the Collateral Agent, the
Collateral Trustee or any Related Party of any of the foregoing, each Lender severally agrees to
pay to the Administrative Agent (or any such sub-agent), the Collateral Agent (or any sub-agent
thereof), the Collateral Trustee or such Related Party, as the case may be, such Lender’s pro rata
share (determined as of the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent), the Collateral Trustee, the Collateral Agent (or any
sub-agent thereof) or against any Related Party of any of the foregoing acting for the
Administrative Agent (or any such sub-agent), the Collateral Agent (or any sub-agent thereof) or
the Collateral Trustee in connection with such capacity. For purposes hereof, a Lender’s “pro rata
share” shall be determined based upon its share of the sum of the total Loans Outstanding and
unused Commitments at the time.



          (d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable Requirements of Law, no Loan Party shall assert, and each Loan Party hereby waives, any
claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as
a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds
thereof. No Indemnitee referred to in paragraph (b) above shall be liable for any damages arising
from the use by unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission systems in connection with
this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.



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          (e) Payments. All amounts due under this Section shall be payable not later than 3
Business Days after demand therefore accompanied by appropriate invoices or other evidence of
amounts owed.



          (f) Collateral Trustee as Third Party Beneficiary. The Collateral Trustee is hereby
made an express third party beneficiary of this Section 10.03.



          SECTION 10.04 Successors and Assigns.



          (a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that none of the Borrowers may assign or otherwise transfer any of
its rights or obligations hereunder without the prior written consent of the Administrative Agent,
the Collateral Agent and each Lender and no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of paragraph (b) of this Section 10.04, (ii) by way of participation in
accordance with the provisions of paragraph (d) of this Section 10.04 or (iii) by way of
pledge or assignment of a security interest subject to the restrictions of paragraph (f) of this
Section (and any other attempted assignment or transfer by any Borrower or any Lender shall be null
and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any
person (other than the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly
contemplated hereby, the other Indemnitees) any legal or equitable right, remedy or claim under or
by reason of this Agreement.



          (b) Assignments by Lenders. Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that:




          (i) except in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to
a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the
aggregate amount of the Commitment (which for this purpose includes Loans outstanding
thereunder) or, if the applicable Commitment is not then in effect, the principal
outstanding balance of the Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date) shall not be less than $5.0 million, unless the
Administrative Agent and, so long as no Default has occurred and is continuing, Borrowers
otherwise consent (each such consent not to be unreasonably withheld or delayed);




          (ii) each partial assignment shall be made as an assignment of a proportionate part of
all the assigning Lender’s rights and obligations under this Agreement with respect to the
Loan or the Commitment assigned, except that this clause (ii) shall not prohibit any Lender
from assigning all or a portion of its rights and obligations among separate tranches on a
non-pro rata basis;




          (iii) the parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with a processing and recordation fee of
$3,500, and the Eligible Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and



101









 






          (iv) in the case of an assignment to Borrowers, Holdings or any Subsidiary Guarantor,
(A) such assigned Loans or Commitments may not be further assigned to any person other than
to a Borrower, Holdings or any Subsidiary Guarantor, (B) the Borrowers, Holdings or any
Subsidiary Guarantor shall not be entitled to participate as a Lender in any Lender
meetings, (C) the Borrowers, Holdings or any Subsidiary Guarantor shall not be permitted to
vote in connection with any amendment, modification, waiver, consent or other action with
respect to the terms of any Loan Document, other than with respect to any such amendment,
modification, waiver, consent or other action described in clauses (i) through (xiv) of
Section 10.02(b); provided that no amendment, modification, waiver, consent or other
action to any Loan Document shall deprive the Borrowers, Holdings or any Subsidiary
Guarantor of its pro rata share of any payments to which it is entitled to share in its
capacity as a Lender under the Loan Documents; provided, further that the Administrative
Agent is authorized to automatically deem any Loans or unused Commitments held by any
Borrower, Holdings or any Subsidiary Guarantor to be voted (and, at the request of the
Supermajority Lenders, is authorized to appoint an independent third party reasonably
acceptable to such Supermajority Lenders as attorney in fact for any such Borrower, Holdings
or any such Subsidiary Guarantor with respect to such Loans and/or unused Commitments then
held by any such Borrower, Holdings or any such Subsidiary Guarantor to be voted) pro rata
according to the Loans and unused Commitments of all other Lenders in the aggregate (other
than any Borrower, Holdings or Subsidiary Guarantor that is a Lender) in connection with any
such amendment, modification, waiver, consent or other action (including, without
limitation, all voting and consent rights arising out of any bankruptcy or other insolvency
proceedings, including voting on any plan of reorganization), and (D) prior to consummating
any proposed assignment of the Loans and/or Commitments to Borrowers, Holdings or any
Subsidiary Guarantor (a “Proposed Assignment”), Borrowers, Holdings or such Subsidiary
Guarantor, as applicable, shall notify each Lender of the principal amount and purchase
price (specified as a percentage of par) of such Proposed Assignment and shall offer each
Lender the right to participate on a pro rata basis in such Proposed Assignment, which offer
shall remain open for at least five Business Days.


Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c)
of this Section 10.04, from and after the effective date specified in each Assignment and
Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent
of the interest assigned by such Assignment and Assumption, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but
shall continue to be entitled to the benefits of Sections 2.11, 2.13, 2.15
and 10.03 with respect to facts and circumstances occurring prior to the effective date of
such assignment. Any assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations in accordance with
paragraph (d) of this Section 10.04.




          (c) Register. The Administrative Agent, acting solely for this purpose as an agent of
Borrowers, shall maintain at one of its offices a copy of each Assignment and Assumption delivered
to it and a register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and
Borrowers, the Administrative Agent, and the Lenders may treat each person whose name is recorded
in the Register pursuant to the



102









 




terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by any Borrower, the Collateral
Agent and any Lender (with respect to its own interest only), at any reasonable time and from time
to time upon reasonable prior notice.




          (d) Participations. Any Lender may at any time, without the consent of, or notice to,
any Borrower or the Administrative Agent sell participations to any person (other than a natural
person or any Borrower or any Affiliates of a Borrower or Subsidiaries) (each, a “Participant”) in
all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or
a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged; (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations; and (iii) such
Borrower, the Administrative Agent and the Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this Agreement.



          Any agreement or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce the Loan Documents and to approve
any amendment, modification or waiver of any provision of the Loan Documents; provided that such
agreement or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in clause (i), (ii) or (iii)
of the first proviso to Section 10.02(b) that affects such Participant. Subject to
paragraph (e) of this Section, Borrowers agree that each Participant shall be entitled to the
benefits of Sections 2.11, 2.12 and 2.14 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To
the extent permitted by law, each Participant also shall be entitled to the benefits of Section
10.08 as though it were a Lender, provided such Participant agrees to be subject to Section
2.14 as though it were a Lender.



          (e) Limitations on Participant Rights. A Participant shall not be entitled to receive
any greater payment under Sections 2.11, 2.12 and 2.14 than the applicable
Lender would have been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made with Borrowers’ prior
written consent. A Participant shall not be entitled to the benefits of Section 2.14
unless Borrowers are notified of the participation sold to such Participant and such Participant
agrees, for the benefit of Borrowers, to comply with Section 2.14(e) as though it were a
Lender.



          (f) Certain Pledges. Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that
no such pledge or assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto. In the case of any
Lender that is a fund that invests in bank loans, such Lender may, without the consent of Borrowers
or the Administrative Agent, collaterally assign or pledge all or any portion of its rights under
this Agreement, including the Loans and Notes or any other instrument evidencing its rights as a
Lender under this Agreement, to any holder of, trustee for, or any other representative of holders
of, obligations owed or securities issued, by such fund, as security for such obligations or
securities.



          SECTION 10.05 Survival of Agreement. All covenants, agreements, representations and warranties made
by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document



103









 




shall be considered to have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans, regardless of any
investigation made by any such other party or on its behalf and notwithstanding that the Agents or
any Lender may have had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force and effect as long
as the principal of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.11, 2.13, 2.14 and Article
X shall survive and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the
Commitments or the termination of this Agreement or any provision hereof.





          SECTION 10.06 Counterparts; Integration; Effectiveness; Electronic Execution.




          (a) Counterparts; Integration; Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract.
This Agreement and the other Loan Documents, and any separate letter agreements with respect to
fees payable to the Administrative Agent, constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and understandings, oral
or written, relating to the subject matter hereof. Except as provided in Section 4.01,
this Agreement shall become effective when it shall have been executed by the Administrative Agent
and when the Administrative Agent shall have received counterparts hereof that, when taken
together, bear the signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Agreement.




          (b) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be deemed to include
electronic signatures or the keeping of records in electronic form, each of which shall be of the
same legal effect, validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as provided for in any
applicable Requirement of Law, including the Federal Electronic Signatures in Global and National
Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state
laws based on the Uniform Electronic Transactions Act.



          SECTION 10.07 Severability. Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other jurisdiction.



          SECTION 10.08 Right of Setoff. If an Event of Default shall have occurred and be continuing, each
Lender and each of their respective Affiliates is hereby authorized at any time and from time to
time, to the fullest extent permitted by applicable Requirements of Law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final, in whatever currency)
at any time held and other obligations (in whatever currency) at any time owing by such Lender or
any such Affiliate to or for the credit or the account of any Borrower or any other Loan Party
against any and all of the obligations of such Borrower or such Loan Party now or hereafter
existing under this Agreement or any other Loan Document to such Lender, irrespective of whether or
not such Lender shall have made any demand under



104









 




this Agreement or any other Loan Document and although such obligations of such Borrower or
such Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender
different from the branch or office holding such deposit or obligated on such indebtedness. The
rights of each Lender and their respective Affiliates under this Section are in addition to other
rights and remedies (including other rights of setoff) that such Lender or its Affiliates may have.
Each Lender agrees to notify Borrowers and the Administrative Agent promptly after any such setoff
and application; provided that the failure to give such notice shall not affect the validity of
such setoff and application.





          SECTION 10.09 Governing Law; Jurisdiction; Consent to Service of Process.




          (a) Governing Law. This Agreement shall be construed in accordance with and governed
by the law of the State of New York, without regard to conflicts of law principles that would
require the application of the laws of another jurisdiction.




          (b) Submission to Jurisdiction. Each Loan Party hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate court from any thereof, in any action
or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of
any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined in such New York
State court or, to the fullest extent permitted by applicable law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any
right that the Administrative Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against any Loan Party or its
properties in the courts of any jurisdiction.




          (c) Waiver of Venue. Each Loan Party hereby irrevocably and unconditionally waives,
to the fullest extent permitted by applicable Requirements of Law, any objection which it may now
or hereafter have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any other Loan Document in any court referred to in Section
10.09(b). Each of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by applicable Requirements of Law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.




          (d) Service of Process. Each party hereto irrevocably consents to service of process
in any action or proceeding arising out of or relating to any Loan Document, in the manner provided
for notices (other than telecopier) in Section 10.01. Nothing in this Agreement or any
other Loan Document will affect the right of any party hereto to serve process in any other manner
permitted by applicable Requirements of Law.



          SECTION 10.10 Waiver of Jury Trial. Each Loan Party hereby waives, to the fullest extent permitted
by applicable Requirements of Law, any right it may have to a trial by jury in any legal proceeding
directly or indirectly arising out of or relating to this Agreement, any other Loan Document or the
transactions contemplated hereby (whether based on contract, tort or any other theory). Each party
hereto (a) certifies that no representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of litigation, seek to
enforce the



105









 




foregoing waiver and (b) acknowledges that it and the other parties hereto have been induced
to enter into this Agreement by, among other things, the mutual waivers and certifications in this
Section.




          SECTION 10.11 Obligations Joint and Several. The liability of the Borrowers for all amounts due to
any Agent, any Lender or any Indemnitees in respect of any of the Obligations shall be joint and
several regardless of which Borrower actually received Loans hereunder or the amount of such Loans
or the manner in which the Lenders or the Agents account for such Loans in their respective books
and records.



          SECTION 10.12 Headings. Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and shall not affect the construction
of, or be taken into consideration in interpreting, this Agreement.



          SECTION 10.13 Treatment of Certain Information; Confidentiality. Each of the Administrative Agent
and the Lenders agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its Affiliates and to its and its Affiliates’
respective partners, directors, officers, employees, agents, advisors and other representatives (it
being understood that the persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information confidential); (b)
to the extent requested by any regulatory authority purporting to have jurisdiction over it
(including any self-regulatory authority, such as the National Association of Insurance
Commissioners); (c) to the extent required by applicable Requirements of Law or by any subpoena or
similar legal process; (d) to any other party hereto; (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any action or proceeding relating to this
Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder; (f)
subject to an agreement containing provisions substantially the same as those of this Section
10.13, to (i) any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement, (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to any Borrower and
its obligations or (iii) any rating agency for the purpose of obtaining a credit rating applicable
to any Lender; (g) with the consent of Borrowers; or (h) to the extent such Information (x) becomes
publicly available other than as a result of a breach of this Section or (y) becomes available to
the Administrative Agent, any Lender or any of their respective Affiliates on a nonconfidential
basis from a source other than any Borrower. For purposes of this Section, “Information” means all
information received from any Borrower or any of its Subsidiaries relating to any Borrower or any
of its Subsidiaries or any of their respective businesses, other than any such information that is
available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure
by any Borrower or any of its Subsidiaries; provided that, in the case of information received from
any Borrower or any of its Subsidiaries after the date hereof, such information is clearly
identified at the time of delivery as confidential. Any person required to maintain the
confidentiality of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such person has exercised the same degree of care to maintain the
confidentiality of such Information as such person would accord to its own confidential
information.



          SECTION 10.14 USA PATRIOT Act Notice. Each Lender that is subject to the USA PATRIOT Act and the
Administrative Agent (for itself and not on behalf of any Lender) hereby notifies Borrowers that
pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record
information that identifies Borrowers, which information includes the name, address and tax
identification number of Borrowers and other information regarding Borrowers that will allow such
Lender or the Administrative Agent, as applicable, to identify Borrowers in accordance with the USA



106









 




PATRIOT Act. This notice is given in accordance with the requirements of the USA PATRIOT Act
and is effective as to the Lenders and the Administrative Agent.




          SECTION 10.15 Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any
time the interest rate applicable to any Loan, together with all fees, charges and other amounts
which are treated as interest on such Loan under applicable Requirements of Law (collectively, the
“Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable
Requirements of Law, the rate of interest payable in respect of such Loan hereunder, together with
all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent
lawful, the interest and Charges that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be increased (but not
above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.



          SECTION 10.16 [Intentionally Omitted].



          SECTION 10.17 Obligations Absolute. To the fullest extent permitted by applicable Requirements of
Law, all obligations of the Loan Parties hereunder shall be absolute and unconditional irrespective
of:




     (a) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition,
liquidation or the like of any Loan Party;




     (b) any lack of validity or enforceability of any Loan Document or any other agreement
or instrument relating thereto against any Loan Party;




     (c) any change in the time, manner or place of payment of, or in any other term of, all
or any of the Obligations, or any other amendment or waiver of or any consent to any
departure from any Loan Document or any other agreement or instrument relating thereto;




     (d) any exchange, release or non-perfection of any other Collateral, or any release or
amendment or waiver of or consent to any departure from any guarantee, for all or any
of the Obligations;




     (e) any exercise or non-exercise, or any waiver of any right, remedy, power or
privilege under or in respect hereof or any Loan Document; or




     (f) any other circumstances which might otherwise constitute a defense available to, or
a discharge of, the Loan Parties.



          SECTION 10.18 Judgment Currency.



          (a) Each Borrower’s obligations hereunder and under the other Loan Documents to make payments
in Dollars (the “Obligation Currency”) shall not be discharged or satisfied by any tender or
recovery pursuant to any judgment expressed in or converted into any currency other than the
Obligation Currency, except to the extent that such tender or recovery results in the effective
receipt by the Administrative Agent or the respective Lender of the full amount of the Obligation
Currency expressed to be payable to the Administrative Agent or such Lender or under this Agreement
or the other



107









 




Loan Documents. If, for the purpose of obtaining or enforcing judgment against Borrower in
any court or in any jurisdiction, it becomes necessary to convert into or from any currency other
than the Obligation Currency (such other currency being hereinafter referred to as the “Judgment
Currency”) an amount due in the Obligation Currency, the conversion shall be made at the rate of
exchange (as quoted by the Administrative Agent or if the Administrative Agent does not quote a
rate of exchange on such currency, by a known dealer in such currency designated by the
Administrative Agent) determined, in each case, as of the Business Day immediately preceding the
day on which the judgment is given (such Business Day being hereinafter referred to as the
“Judgment Currency Conversion Date”).




          (b) If there is a change in the rate of exchange prevailing between the Judgment Currency
Conversion Date and the date of actual payment of the amount due, each Borrower covenants and
agrees to pay, or cause to be paid, such additional amounts, if any (but in any event not a lesser
amount) as may be necessary to ensure that the amount paid in the Judgment Currency, when converted
at the rate of exchange prevailing on the date of payment, will produce the amount of the
Obligation Currency which could have been purchased with the amount of Judgment Currency stipulated
in the judgment or judicial award at the rate of exchange prevailing on the Judgment Currency
Conversion Date.



          (c) For purposes of determining the Relevant Currency Equivalent or any other rate of exchange
for this Section 10.18, such amounts shall include any premium and costs payable in
connection with the purchase of the Obligation Currency.



          SECTION 10.19 Restatement of Pre-Petition Credit Agreement.



          The parties hereto agree that on the Effective Date, the following transactions shall be
deemed to occur automatically, without further action by any party hereto:



          (a) the Pre-Petition Credit Agreement shall be deemed to be amended and restated in its
entirety in the form of this Agreement;



          (b) all existing “Obligations” (under and as defined in the Pre-Petition Credit Agreement)
under the Pre-Petition Credit Agreement (“Existing Obligations”) shall, to the extent not paid on
the Effective Date, be deemed to be Obligations outstanding hereunder;



          (c) the guaranties and Liens in favor of administrative agent, collateral agent or collateral
trustee under the Pre-Petition Credit Agreement for the benefit of the lenders under the
Pre-Petition Credit Agreement securing payment of the Existing Obligations, whether registered,
recorded or otherwise perfected, shall remain in full force and effect and shall be continuing with
respect to the Obligations; and



          (d) all references in the other Loan Documents to the Pre-Petition Credit Agreement shall be
deemed to refer without further amendment to this Agreement.



          The parties hereto acknowledge and agree that this Agreement and the other Loan Documents do
not constitute a novation, payment and reborrowing or termination of the Existing Obligations and
that all such Existing Obligations are in all respects continued and outstanding as Obligations
under this Agreement with only the terms being modified from and after the Effective Date as
provided in this Agreement and the other Loan Documents.



[Signature Pages Follow]






108









 





     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by
their respective authorized officers as of the day and year first above written.



	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR S.A., a 

     Luxembourg company

 	 
	 	By:  	/s/  John McFarland
 	 
	 	 	Name:  	John McFarland 	 
	 	 	Title:  	Director 	 
	 



	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR FINANCE 

     COMPANY, a Delaware
limited liability company

 	 
	 	By:  	/s/  Margaret Sakai
 	 
	 	 	Name:  	Margaret Sakai 	 
	 	 	Title:  	Chief Financial Officer 	 
	 



	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR LLC, a Delaware      limited
liability company

 	 
	 	By:  	/s/  Margaret Sakai
 	 
	 	 	Name:  	Margaret Sakai 	 
	 	 	Title:  	Senior Vice President and Chief Financial
Officer 	 
	 



Signature Page to Credit Agreement





 









 





	 	 	 	 	 
	 	SUBSIDIARY GUARANTORS



MAGNACHIP SEMICONDUCTOR, INC., a 

     California company

 	 
	 	By:  	/s/  Margaret Sakai
 	 
	 	 	Name:  	Margaret Sakai 	 
	 	 	Title:  	Chief Financial Officer and Treasurer 	 
	 



Signature Page to Credit Agreement





 









 





	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR SA HOLDINGS

      LLC, a Delaware
limited liability company

 	 
	 	By:  	/s/  Margaret Sakai
 	 
	 	 	Name:  	Margaret Sakai 	 
	 	 	Title:  	Chief Financial Officer 	 
	 



Signature Page to Credit Agreement





 









 





	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR LIMITED, a company
incorporated in England and Wales with
registered number 05232381

 
	 
	 	By:  	/s/  Brent Rowe
 	 
	 	 	Name:  	Brent Rowe 	 
	 	 	Title:  	Director 	 
	 



Signature Page to Credit Agreement





 









 





	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR HOLDING COMPANY LIMITED, a
company incorporated in 

the British Virgin
Islands

 
	 
	 	By:  	/s/  John McFarland
 	 
	 	 	Name:  	John McFarland 	 
	 	 	Title:  	Director 	 
	 



Signature Page to Credit Agreement





 









 





	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR, INC., a Japanese company

 
	 
	 	By:  	/s/  Margaret Sakai
 	 
	 	 	Name:  	Margaret Sakai 	 
	 	 	Title:  	Director 	 
	 



Signature Page to Credit Agreement





 









 





For execution as a deed:




	 	 	 	 

	SEALED WITH THE COMMON SEAL

	 	)	 
	OF MAGNACHIP SEMICONDUCTOR

	 	)	 
	LIMITED AND SIGNED

	 	)	 
	BY     
  /s/ Margaret Sakai     

	 	)	 
	in the presence of:

	 	)	 






	 	 	 	 	 	 	 	 	 	 	 

	Witness:

	 	/s/ John McFarland
	 	 	 	Witness:
	 	/s/ Misun Jung	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	Name:

	 	John McFarland
	 	 	 	Name:
	 	Misun Jung	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Address:

	 	Seoul, Korea
	 	 	 	Address:
	 	Seoul, Korea	 	 






Signature Page to Credit Agreement




 









 





	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR LIMITED, a 

Taiwan
company

 
	 
	 	By:  	/s/  Margaret Sakai
 	 
	 	 	Name:  	Margaret Sakai 	 
	 	 	Title:  	Director 	 
	 



Signature Page to Credit Agreement





 











 





	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR B.V.

 	 
	 	By:  	/s/  John McFarland
 	 
	 	 	Name:  	John McFarland 	 
	 	 	Title:  	Attorney-in-Fact 	 
	 



Signature Page to Credit Agreement





 









 








	 	 	 	 	 
	 	WILMINGTON TRUST FSB, as Administrative Agent and
Collateral Agent

 	 
	 	By:  	/s/  Renee Kuhl
 	 
	 	 	Name:  	Renee Kuhl 	 
	 	 	Title:  	Assistant Vice President 	 
	 
	 	 	 
	 	By:  	                       [Intentionally Blank]
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Signature Page to Credit Agreement




 









 






	 	 	 	 	 
	 	AVENUE INVESTMENTS, L.P.

 	 
	 	By:  	Avenue Partners, LLC, its General Partner
 	 
	 	 	 
	 	By:  	              /s/  Sonia E. Gardner
 	 
	 	 	Name:  	Sonia E. Gardner 	 
	 	 	Title:  	Member 	 
	 



Signature Page to Credit Agreement





 









 





	 	 	 	 	 
	 	GOLDMAN SACHS LENDING PARTNERS LLC

 	 
	 	By:  	/s/  Sandip Khosla
 	 
	 	 	Name:  	Sandip Khosla 	 
	 	 	Title:  	Assistant Secretary & Counsel 	 
	 



Signature Page to Credit Agreement





 









 






	 	 	 	 	 
	 	CITICORP NORTH AMERICA INC.

 	 
	 	By:  	/s/  David Mode
 	 
	 	 	Name:  	David Mode 	 
	 	 	Title:  	Managing Director 	 
	 







Signature
Page to Credit Agreement






 











 





Annex I




Outstanding Term Loans



	 	 	 	 	 
	Lender	 	Term Loans
	Avenue Investments, LP
	 	$	42,055,000.00	 
	 
	 	 	 	 
	Goldman Sachs Lending Partners LLC
	 	$	12,285,000.00	 
	 
	 	 	 	 
	Citicorp North America, Inc.
	 	$	7,410,000.00	 
	 
	 	 	 	 
	Total
	 	$	61,750,000.00	 






 









 





SCHEDULE 1.01(a)




Korean Opco Security Documents


Amended and Restated Factory Kun-Mortgage Agreement



Amended and Restated Intellectual Property Kun-Pledge Agreement



Amended and Restated Accounts Kun-Pledge Agreement



Amended and Restated Unit Kun-Pledge Agreement



Amended and Restated Accounts Receivable Assignment Agreement



Amended and Restated Security Assignment Agreement



Amended and Restated Insurance Assignment Agreement



Amended and Restated Yangdo-Dambo Agreement (Equipment)



Amended and Restated Yangdo-Dambo Agreement (Inventory)



Amended and Restated Share Kun-Pledge Agreement




 









 





SCHEDULE 1.01(d)




Subsidiary Guarantors


MagnaChip Semiconductor SA Holdings LLC (U.S.)



MagnaChip Semiconductor, Inc. (U.S.)



MagnaChip Semiconductor B.V. (The Netherlands)



MagnaChip Semiconductor Limited (U.K.)



MagnaChip Semiconductor Limited (Taiwan)



MagnaChip Semiconductor Limited. (Hong Kong)



MagnaChip Semiconductor Holding Company Limited (B.V.I.)



MagnaChip Semiconductor Inc. (Japan)




 









 





SCHEDULE 3.03




Governmental Approvals; Compliance with Laws



None



 









 





SCHEDULE 3.05(b)




REAL PROPERTY



[Omitted]




 









 





SCHEDULE 3.06(c)




Violations or Proceedings



None




 












 





SCHEDULE 3.07(a)




Equity Interests



Subsidiary Capital Ownership




	 	 	 	 	 	 	 
	 	 	 	 	Number of	 	 
	Subsidiary	 	Jurisdiction	 	Shares/Units	 	Holder
	MagnaChip Semiconductor SA 

Holdings LLC

	 	U.S.
	 	100% ownership
	 	MagnaChip
Semiconductor LLC
(U.S.)
	 
	 	 	 	 	 	 
	MagnaChip Semiconductor, Inc.

	 	U.S.
	 	 100.00
	 	MagnaChip
Semiconductor LLC
(U.S.)
	 
	 	 	 	 	 	 
	MagnaChip Semiconductor S.A.

	 	Luxembourg
	 	 36,717.00
	 	MagnaChip
Semiconductor LLC
(U.S.)
	 
	 	 	 	 	 	 
	 

	 	 	 	 1.00
	 	MagnaChip
Semiconductor SA
Holdings LLC (U.S.)
	 
	 	 	 	 	 	 
	MagnaChip Semiconductor 

Finance Company

	 	U.S.
	 	 1.00
	 	MagnaChip
Semiconductor S.A.
(Lux.)
	 
	 	 	 	 	 	 
	MagnaChip Semiconductor B.V.

	 	Netherlands
	 	 18,200.00
	 	MagnaChip
Semiconductor
S.A.(Lux.)
	 
	 	 	 	 	 	 
	MagnaChip Semiconductor 

Limited

	 	Hong Kong
	 	 2.00
	 	MagnaChip
Semiconductor S.A.
(Lux.)
	 
	 	 	 	 	 	 
	MagnaChip Semiconductor 

Limited

	 	Taiwan
	 	NTD 5,000,000 (100%

ownership)
	 	MagnaChip
Semiconductor S.A.
(Lux.)
	 
	 	 	 	 	 	 
	MagnaChip Semiconductor 

Limited

	 	U.K.
	 	 408,194.00
	 	MagnaChip
Semiconductor S.A.
(Lux.)
	 
	 	 	 	 	 	 
	MagnaChip Semiconductor 

Holding Company Limited

	 	British Virgin

Islands
	 	 500,000.00
	 	MagnaChip
Semiconductor S.A.
(Lux.)
	 
	 	 	 	 	 	 
	MagnaChip Semiconductor, Ltd.

	 	Korea
	 	 4,438,080.00
	 	MagnaChip
Semiconductor B.V.
(Net.)
	 
	 	 	 	 	 	 
	MagnaChip Semiconductor Inc.

	 	Japan
	 	 23,500.00
	 	MagnaChip
Semiconductor B.V.
(Net.)
	 
	 	 	 	 	 	 
	MagnaChip Semiconductor

(Shanghai) Company Limited

	 	China
	 	USD 160,000 (100%

ownership)
	 	MagnaChip
Semiconductor
Holding Company
Limited (B.V.I.)






 









 






SCHEDULE 3.07(c)




Corporate Organizational Chart








 









 





SCHEDULE 3.20

Financing Statements




	 	 	 	 	 
	Type of Filing	 	Entity	 	Jurisdictions
	UCC Financing Statement

	 	MagnaChip Semiconductor S.A.
	 	Washington D.C., New York and California
	 
	 	 	 	 
	UCC Financing Statement

	 	MagnaChip Semiconductor

Finance Company
	 	Delaware
	 
	 	 	 	 
	UCC Financing Statement

	 	MagnaChip Semiconductor LLC
	 	Delaware
	 
	 	 	 	 
	UCC Financing Statement

	 	MagnaChip Semiconductor SA

Holdings LLC
	 	Delaware
	 
	 	 	 	 
	UCC Financing Statement

	 	MagnaChip Semiconductor B.V.
	 	Washington D.C. and Delaware
	 
	 	 	 	 
	UCC Financing Statement

	 	MagnaChip Semiconductor Ltd.
	 	Washington D.C., New York and California
	 
	 	 	 	 
	UCC Financing Statement

	 	MagnaChip Semiconductor, Inc.
	 	Washington D.C., New York and California
	 
	 	 	 	 
	UCC Financing Statement

	 	MagnaChip Semiconductor Ltd.
	 	Washington D.C., New York and California
	 
	 	 	 	 
	UCC Financing Statement

	 	MagnaChip Semiconductor Ltd.
	 	Washington D.C., New York and California
	 
	 	 	 	 
	UCC Financing Statement

	 	MagnaChip Semiconductor Ltd.
	 	Washington D.C., New York and California
	 
	 	 	 	 
	UCC Financing Statement

	 	MagnaChip Semiconductor Ltd.
	 	Washington D.C., New York and California
	 
	 	 	 	 
	UCC Financing Statement

	 	MagnaChip Semiconductor

Holdings Company Limited
	 	Washington D.C., New York and California










 









 








SCHEDULE 4.01(d)




Extinguished Indebtedness



The
67/8% Second Priority Senior Secured Notes Due 2011, issued under the indenture, dated as of
December 23, 2004.





 









 








SCHEDULE 4.01(g)




Local and Foreign Counsel



	 	 	 
	Jurisdiction	 	Outside Counsel
	U.S.

	 	DLA Piper LLP (US)
	 
	 	 
	Korea

	 	Kim & Chang
	 
	 	 
	Luxembourg

	 	Dechert Luxembourg
	 
	 	 
	Netherlands

	 	NautaDutilh N.V.
	 
	 	 
	Hong Kong

	 	DLA Piper Hong Kong
	 
	 	 
	Taiwan

	 	Lee, Tsai & Partners
	 
	 	 
	U.K.

	 	DLA Piper UK LLP
	 
	 	 
	British Virgin Islands

	 	Harney Westwood & Riegels
	 
	 	 
	Japan

	 	DLA Piper Tokyo Partnership
	 
	 	 
	China

	 	DLA Piper Hong Kong










 









 








SCHEDULE 5.13




Post-Closing Matters



On or prior to the date that is 30 days after the Effective Date, deliver to the Administrative
Agent:



(1) a duly executed Reaffirmation of Guaranty, Waiver and Consent between MagnaChip Semiconductor
Limited (Taiwan) and a sub-agent pledgee that is reasonably satisfactory to the Administrative
Agent;



(2) a duly executed Capital Contribution Pledge Agreement between MagnaChip Semiconductor S.A. and
a sub-agent pledgee that is reasonably satisfactory to the Administrative Agent, and a Notice of
Pledge with respect thereto;



(3) Share certification issued by MagnaChip Semiconductor Limited (Taiwan) evidencing MagnaChip
Semiconductor S.A.’s capital contribution in MagnaChip Semiconductor Limited (Taiwan);



(4) Intercompany Loan Pledge Agreement between MagnaChip Semiconductor S.A. and a sub-agent
pledgee that is reasonably satisfactory to the Administrative Agent, and a Notice of Pledge with
respect thereto;



(5) Loan Agreement between MagnaChip Semiconductor Limited (Taiwan) and MagnaChip Semiconductor
S.A.



(6) an Update of the Register of Mortgages for MagnaChip Semiconductor Holding Company Limited
(BVI) replacing UBS AG, Stamford Branch with the Administrative Agent;



(7) an Update of the Register of Mortgages for MagnaChip Semiconductor Holding Company Limited
(BVI) for removal of the lien securing the Indebtedness set forth on Schedule 4.01(d);



(8) a filed copy of Form MG02 for MagnaChip Semiconductor Limited (UK);



(9) a Pledge Agreement with respect to 287,500 tracking preferred equity certificates and
7,983,924 tracking preferred equity certificates issued by MagnaChip Semiconductor S.A. to
MagnaChip Semiconductor LLC;



(10) a written opinion of Taiwan counsel to the Loan Parties, in form and substance reasonably
satisfactory to the Administrative Agent, covering such matters relating to the Taiwan Security
Documents, as the Administrative Agent shall reasonably request; and



(11) a written opinion of Luxembourg counsel to the Loan Parties, in form and substance reasonably
satisfactory to the Administrative Agent, covering such matters relating to the agreement set forth
in clause (9) above, as the Administrative Agent shall reasonably request.





 











 





EXHIBIT A




[Form of]

ADMINISTRATIVE QUESTIONNAIRE




MAGNACHIP SEMICONDUCTOR S.A. AND



MAGNACHIP SEMICONDUCTOR FINANCE COMPANY



 




	 	 	 	 	 

	Lending Institution:
	 	 	 	 
	 	 	 
	Name for Signature Pages:
	 	 	 	 
	 

	 	 	 	 




Will sign Credit Agreement:   o

Will come via Assignment:     o   Number of Days post-closing:                     




	 	 	 	 	 

	Name for Signature Blocks:
	 	 	 	 
	 	 	 
	Name for Publicity:
	 	 	 	 
	 	 	 
	Address:
	 	 	 	 
	 

	 	 
	Main Telephone:
	 	 	 	 
	 

	 	 	 	 
	Telex No./Answer back:
	 	 	 	 
	 

	 	 	 	 





	 	 	 	 	 	 	 

	CONTACT-Credit

	 	Name:	 	 	 	 
	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Telephone:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Fax:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	CONTACT-Operations

	 	Name:	 	 	 	 
	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Telephone:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Fax:	 	 	 	 
	 

	 	 	 	 	 	 





PAYMENT INSTRUCTIONS




	 	 	 

	Bank Name:
	 	 
	 

	 	 
	ABA/Routing No.
	 	 
	 

	 	 
	Account Name
	 	 
	 

	 	 
	Account No.
	 	 
	 

	 	 
	For further credit:
	 	 
	 

	 	 
	Account No.
	 	 
	 

	 	 
	Attention:
	 	 
	 

	 	 
	Reference:
	 	 
	 

	 	 





WILMINGTON TRUST FSB, ADMINISTRATIVE DETAILS




	 	 	 

	Wilmington Trust FSB

	 	Account Administrator
	50 South Sixth Street, Suite 1290

	 	Attn: Renee Kuhl
	Minneapolis, MN 55402

	 	Tel: (612) 217-5635
	 

	 	Fax: (612) 217-5651






A-1









 





EXHIBIT A





			
	Wire Instructions:	 	The Agent’s wire instructions will be disclosed at the time of closing






A-2











 





EXHIBIT B




[Form of]

ASSIGNMENT AND ACCEPTANCE


Reference is made to the Amended and Restated Credit Agreement, dated as of November 6, 2009 (as
amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among MAGNACHIP SEMICONDUCTOR S.A., a Luxembourg corporation, MAGNACHIP SEMICONDUCTOR
FINANCE COMPANY, a Delaware corporation (collectively, “Borrowers”), MAGNACHIP SEMICONDUCTOR LLC, a
Delaware limited liability company (“Holdings”), the Subsidiary Guarantors (such term and each
other capitalized term used but not defined herein having the meaning given it in Article I
of the Credit Agreement), the Lenders, and WILMINGTON TRUST FSB, as administrative agent (in such
capacity, “Administrative Agent”) for the Lenders and as collateral agent (in such capacity,
“Collateral Agent”) for the Secured Parties.




     The Assignor hereby sells and assigns, without recourse, to the Assignee, and the Assignee
hereby purchases and assumes, without recourse, from the Assignor, effective as of the Closing Date
set forth below (but not prior to the registration of the information contained herein in the
Register pursuant to Section 10.04(b) of the Credit Agreement), the interests set forth
below (the “Assigned Interest”) in the Assignor’s rights and obligations under the Credit Agreement
and the other Loan Documents, including, without limitation, the Term Loans which are outstanding
on the Closing Date. From and after the Closing Date (i) the Assignee shall be a party to and be
bound by the provisions of the Credit Agreement and, to the extent of the interests assigned by
this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and under
the Loan Documents and (ii) the Assignor shall, to the extent of the interests assigned by this
Assignment and Acceptance, relinquish its rights and be released from its obligations under the
Credit Agreement.



     The Assignor (i) warrants that it is the legal and beneficia1 owner of the interest being
assigned hereby free and clear of any adverse claim and that its Commitment, and the outstanding
balances of its Loans, without giving effect to assignments thereof which have not become
effective, are as set forth in such Assignment and Acceptance; (ii) except as set forth in (i)
above, the Assignor makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with the Credit
Agreement, or the execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, any other Loan Document or any other instrument or document furnished
pursuant thereto, or the financial condition of Holdings, Borrowers or any Subsidiary or the
performance or observance by Holdings, Borrowers or any Subsidiary of any of its obligations under
the Credit Agreement, any other Loan Document or any other instrument or document furnished
pursuant thereto.



B-1









 





     The Assignee (a) represents and warrants that it is legally authorized to enter into this
Assignment and Acceptance; (b) confirms that it has received a copy of the Credit Agreement, and
such other documents and information as it has deemed appropriate to make its own credit analysis
and decision to enter into this Assignment and Acceptance; (c) agrees that it will, independently
and without reliance upon the Assignor, the Administrative Agent, the Collateral Agent or any other
Lender and based on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under the Credit
Agreement, the other Loan Documents or any other instrument or document furnished pursuant hereto
or thereto; (d) appoints and authorizes the Administrative Agent and the Collateral Agent to take
such action as agent on its behalf and to exercise such powers and discretion under the Credit
Agreement, the other Loan Documents or any other instrument or document furnished pursuant hereto
or thereto as are delegated to the Administrative Agent and the Collateral Agent, respectively, by
the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will
be bound by the provisions of the Credit Agreement and will perform in accordance with its terms
all the obligations which by the terms of the Credit Agreement are required to be performed by it
as a Lender.



     This Assignment and Acceptance is being delivered to the Administrative Agent together with
(i) if the Assignee is a Foreign Lender (as defined in the Credit Agreement), the forms specified
in Section 2.14(e) of the Credit Agreement, duly completed and executed by such Assignee;
(ii) if the Assignee is not already a Lender under the Credit Agreement, an Administrative
Questionnaire in the form of Exhibit A to the Credit Agreement; and (iii) a processing and
recordation fee of $3,500.



     This Assignment and Acceptance shall be construed in accordance with and governed by the law
of the State of New York.



     Date of Assignment:



     Legal Name of Assignor:



     Legal Name of Assignee:



     Assignee’s Address for Notices:



     Closing Date of Assignment (may not be fewer than 5 Business Days after the Date of assignment
unless the Administrative Agent shall otherwise agree):



     Percentage Assigned of Applicable Loan/Commitment:



	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Percentage Assigned of
	 	 	 	 	 	 	Applicable Loan/Commitment
	 	 	 	 	 	 	(set forth, to at least 8 decimals,
	 	 	 	 	 	 	as a percentage of the Loan and
	 	 	 	 	 	 	the aggregate Commitments of
	Loan/Commitment	 	Principal Amount Assigned	 	Lenders thereunder)
	Term Loans
	 	$	 	 	 	 	%	 






[Signature Page Follows]




B-2









 





	 	 	 	 	 	 	 

	 	 	The terms set forth above are hereby agreed to:
	 
	 	 	 	 	 	 
	 	 	[                ],	 	 
	 
	 	 	 	 	 	 
	 	 	as Assignor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	[                ],	 	 
	 
	 	 	 	 	 	 
	 	 	as Assignee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 






B-3









 





Accepted:*




	 	 	 	 	 

	MAGNACHIP SEMICONDUCTOR S.A.,	 	 
	a Borrower	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	MAGNACHIP SEMICONDUCTOR FINANCE COMPANY,	 	 
	a Borrower	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 








 




			
	*	 	To be completed to the extent consent is
required under Section 10.04(b) of the Credit Agreement. Supermajority
Lender approval will be required if necessary pursuant to the terms of the
Credit Agreement.





B-4









 





	 	 	 	 	 

	WILMINGTON TRUST FSB,	 	 
	as Administrative Agent and	 	 
	and Collateral Agent	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 







B-5











 





EXHIBIT C




[Form of]

BORROWING REQUEST




Wilmington Trust FSB,

as Administrative Agent for

the Lenders referred to below,

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402

Attention: Renee Kuhl




          Re: MagnaChip Semiconductor S.A. and MagnaChip Semiconductor Finance Company




[Date]




Ladies and Gentlemen:





Reference is made to the Amended and Restated Credit Agreement dated as of November 6, 2009 (as
amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”) among MAGNACHIP SEMICONDUCTOR S.A., a Luxembourg corporation (“MagnaChip S.A.”),
MAGNACHIP SEMICONDUCTOR FINANCE COMPANY, a Delaware corporation (“MagnaChip Finance” and
together with MagnaChip S.A., the “Borrowers”), MAGNACHIP SEMICONDUCTOR LLC, a Delaware limited
liability company (“Holdings”), the Subsidiary Guarantors (such term and each other capitalized
term used but not defined herein having the meaning given it in Article I of the Credit
Agreement), the Lenders and WILMINGTON TRUST FSB, as administrative agent (in such capacity,
“Administrative Agent”) for the Lenders and as collateral agent (in such capacity, “Collateral
Agent”) for the Secured Parties. Borrowers hereby give you notice pursuant to Section
2.03 of the Credit Agreement that they request a Borrowing under the Credit Agreement, and
in that connection sets forth below the terms on which such Borrowing is requested to be made:



	 	 	 	 	 	 	 

	(A)

	 	Date of Borrowing (which is a Business Day)	 	 	 	 
	 

	 	 	 	 

	 	 
	(B)

	 	Principal amount of Borrowing	 	 	 	 
	 

	 	 	 	 

	 	 
	(C)

	 	Type of
Borrowinga
	 	[Eurodollar] [ABR]	 	 
	 
	 	 	 	 	 	 
	(D)

	 	Interest Period and the last day
thereofb	 	 	 	 
	 

	 	 	 	 

	 	 
	(E)	 	Funds are requested to be disbursed to MagnaChip S.A.’s account with:	 	 








 




			
	a	 	Specify Eurodollar Borrowing or ABR Borrowing.
	 
	b	 	Shall be subject to the definition of “Interest Period” in the Credit Agreement.




C-1









 











Borrowers hereby represent and warrant that the conditions to lending specified in Sections
4.01 and 4.02, as applicable, of the Credit Agreement have been satisfied.



[Signature Page Follows]








C-2









 








	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR S.A

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	[Responsible Officer] 	 
	 



	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR FINANCE COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	[Responsible Officer] 	 
	 




C-3









 





EXHIBIT D




[Form of]

COMPLIANCE CERTIFICATE





I, [          ], the [          ] of [          ] (in such capacity and
not in my individual capacity), hereby certify that, with respect to that certain Amended and
Restated Credit Agreement, dated as of November 6, 2009 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”) among MAGNACHIP
SEMICONDUCTOR S.A., a Luxembourg corporation, MAGNACHIP SEMICONDUCTOR FlNANCE COMPANY, a
Delaware corporation (collectively, “Borrowers”), MAGNACHIP SEMICONDUCTOR LLC, a Delaware
limited liability company (“Holdings”), the Subsidiary Guarantors (such term and each other
capitalized term used but not defined herein having the meaning given it in Article I of
the Credit Agreement), the Lenders, and WILMINGTON TRUST FSB, as administrative agent (in such
capacity, “Administrative Agent”) for the Lenders and as collateral agent (in such capacity,
“Collateral Agent”) for the Secured Parties:



               1. The Borrowers were in compliance with the covenant set forth in Section 6.10
of the Credit Agreement on the last day of the applicable fiscal quarter.



               2. No Default has occurred under the Credit Agreement which has not been previously disclosed,
in writing, to the Administrative Agent pursuant to a Compliance
Certificate.a





 




			
	a	 	If a Default shall have occurred, an
explanation specifying the nature and extent of such Default shall be provided
on a separate page together with an explanation of the corrective action taken
or proposed to be taken with respect thereto (include, as applicable,
information regarding actions, if any, taken since prior certificate).





D-1









 









Dated this [     ] day of [          ], 20[     ].



	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR S.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR FINANCE

COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




D-2









 





EXHIBIT E




[Form of]

INTEREST ELECTION REQUEST




Wilmington Trust, FSB,

as Administrative Agent

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402

Attention: Renee Kuhl




[Date]




     Re: MagnaChip Semiconductor S.A. and MagnaChip Semiconductor Finance Company



Ladies and Gentlemen:





This Interest Election Request is delivered to you pursuant to Section 2.08 of the
Amended and Restated Credit Agreement, dated as of November 6, 2009 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among
MAGNACHIP SEMICONDUCTOR S.A., a Luxembourg corporation, MAGNACHIP SEMICONDUCTOR FINANCE COMPANY,
a Delaware corporation (collectively, the “Borrowers”), MAGNACHIP SEMICONDUCTOR LLC, a Delaware
limited liability company (“Holdings”), the Subsidiary Guarantors (such term and each other
capitalized term used but not defined herein having the meaning given it in Article I of
the Credit Agreement), the Lenders, and WILMINGTON TRUST FSB, as administrative agent (in such
capacity, “Administrative Agent”) for the Lenders and as collateral agent (in such capacity,
“Collateral Agent”) for the Secured Parties.




Borrowers
hereby request that on [          ]a (the “Interest Election
Date”),




	 	1.	 	[                    ] of the presently outstanding principal amount of the
Loans originally made on
	 
	 	2.	 	and all presently being maintained as [ABR Loans] [Eurodollar Loans],
	 
	 	3.	 	be [converted into] [continued as],
	 
	 	4.	 	[Eurodollar Loans having an Interest Period of [one/two/three/six months] [ABR
Loans].







 




			
	a	 	Shall be a Business Day that is (a) at least
one Business Day prior to the date hereof in the case of an interest
election/continuation of ABR Revolving Loans to the extent this Interest
Election Request is delivered to the Administrative Agent prior to 10:00 a.m.
New York City time and (b) at least three Business Days prior to the date
hereof in the case of a conversion into/continuation of Eurodollar Revolving
Loans to the extent this Interest Election Request is delivered to the
Administrative Agent prior to 11:00 a.m. New York City time on such initial
Business Day.




E-1









 











The undersigned hereby certifies that the following statements are true on the date hereof,
and will be true on the proposed Interest Election Date, both before and after giving effect
thereto and to the application of the proceeds therefrom:




(a) the foregoing [interest election] [continuation] complies with the terms and conditions of
the Credit Agreement (including, without limitation, Section 2.08 of the Credit
Agreement); and




(b) no Default or Event of Default has occurred and is continuing, or would result from such
proposed [interest election] [continuation].



[Signature Page Follows]






E-2









 









Each Borrower has caused this Interest Election Request to be executed and delivered by its duly
authorized officer as of the date first written above.



	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR S.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	[Responsible Officer] 	 
	 
	 	MAGNACHIP SEMICONDUCTOR FINANCE COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	[Responsible Officer] 	 
	 




E-3









 





EXHIBIT F




[Form of]

JOINDER AGREEMENT





Reference is made to the Amended and Restated Credit Agreement, dated as of November 6, 2009 (as
amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”) among MAGNACHIP SEMICONDUCTOR S.A., a Luxembourg corporation, MAGNACHIP
SEMICONDUCTOR FINANCE COMPANY, a Delaware corporation (collectively, the “Borrowers”), MAGNACHIP
SEMICONDUCTOR LLC, a Delaware limited liability company (“Holdings”), the Subsidiary Guarantors
(such term and each other capitalized term used but not defined herein having the meaning given
it in Article I of the Credit Agreement), the Lenders, and WILMINGTON TRUST FSB, as
administrative agent (in such capacity, “Administrative Agent”) for the Lenders and as
collateral agent (in such capacity, “Collateral Agent”) for the Secured Parties.



W I T N E S S E T H:





WHEREAS, the Guarantors have entered into the Credit Agreement in order to induce the Lenders to
make the Loans to or for the benefit of Borrowers;




WHEREAS, pursuant to Section 5.10(b) of the Credit Agreement, the undersigned is
required to become a Guarantor under the Credit Agreement by executing a Joinder Agreement. The
undersigned Subsidiary (the “New Guarantor”) is executing this joinder agreement (“Joinder
Agreement”) to the Credit Agreement in order to induce the Lenders to make additional Loans and
as consideration for the Loans previously made.




NOW, THEREFORE, the Administrative Agent, Collateral Agent and the New Guarantor hereby agree as
follows:



          1. Guarantee. In accordance with Section 5.10(b) of the Credit Agreement, the New
Guarantor by its signature below becomes a Guarantor under the Credit Agreement with the same force
and effect as if originally named therein as a Guarantor.




          2. Representations and Warranties. The New Guarantor hereby (a) agrees to all the terms and
provisions of the Credit Agreement applicable to it as a Guarantor, respectively, thereunder and
(b) represents and warrants that the representations and warranties made by it as a Guarantor
thereunder are true and correct in all material respects (except that any representation and
warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and
correct in all respects) on and as of the date hereof. Each reference to a Guarantor in the Credit
Agreement shall be deemed to include the New Guarantor.




          3. Severability. Any provision of this Joinder Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.




          4. Counterparts. This Joinder Agreement may be executed in counterparts, each of which shall
constitute an original. Delivery of an executed signature page to this Joinder Agreement by
facsimile transmission shall be as effective as delivery of a manually executed counterpart of this
Joinder Agreement.







F-1









 








          5. No Waiver. Except as expressly supplemented hereby, the Credit Agreement and the Security
Documents shall remain in full force and effect.




          6. Notices. All notices, requests and demands to or upon the New Guarantor, any Agent or any
Lender shall be governed by the terms of Section 10.01 of the Credit Agreement.




          7. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.




[Signature Pages Follow]






F-2









 









IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly executed and
delivered by its duly authorized officer as of the day and year first above written.



	 	 	 	 	 
	 	[NEW GUARANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Address for Notices:





WILMINGTON TRUST FSB,

as Administrative Agent and Collateral Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




F-3









 





EXHIBIT G




[Form of]

NOTE




			
	 	 	 
	$                                        
	 	New York, New York

[Date]







FOR VALUE RECEIVED, the undersigned, MAGNACHIP SEMICONDUCTOR S.A., a Luxembourg corporation and
MAGNACHIP SEMICONDUCTOR FINANCE COMPANY, a Delaware corporation (collectively, the “Borrowers”),
hereby, jointly and severally, promise to pay to the order of WILMINGTON TRUST FSB, as
administrative agent (the “Agent”) for the Lenders (as defined in the Credit Agreement referred
to below) on the Maturity Date (as defined in the Credit Agreement referred to below), in lawful
money of the United States and in immediately available funds, the principal amount of the
lessor of (a)                                          DOLLARS ($                                        ) and (b) the aggregate unpaid principal
amount of all Loans of the Lenders outstanding under the Credit Agreement. Borrowers further
agree to pay interest in like money at such office on the unpaid principal amount hereof from
time to time from the date hereof at the rates, and on the dates, specified in Section
2.06 of such Credit Agreement.




This Note is one of the Notes referred to in the Credit Agreement, dated as of November 6, 2009
(as amended, amended and restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Borrowers, MagnaChip Semiconductor LLC, a Delaware limited liability
company (“Holdings”), the Subsidiary Guarantors, the Lenders, and Wilmington Trust FSB, as
Administrative Agent for the Lenders and Collateral Agent for the Secured Parties, and is
subject to the provisions thereof and is subject to optional and mandatory prepayment in whole
or in part as provided therein. Terms used herein which are defined in the Credit Agreement
shall have such defined meanings unless otherwise defined herein or unless the context otherwise
requires.




This Note is secured and guaranteed as provided in the Credit Agreement and the Security
Documents. Reference is hereby made to the Credit Agreement and the Security Documents for a
description of the properties and assets in which a security interest has been granted, the
nature and extent of the security and guarantees, the terms and conditions upon which the
security interest and each guarantee was granted and the rights of the holder of this Note in
respect thereof.




Upon the occurrence of any one or more of the Events of Default specified in the Credit
Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided therein.




All parties now and hereafter liable with respect to this Note, whether maker, principal,
surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all
other notices of any kind.




THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF THE CREDIT AGREEMENT.
TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT
PURSUANT TO THE TERMS OF THE CREDIT AGREEMENT.




THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK.



[Signature Page Follows]






G-1









 








	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR S.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	[Responsible Officer] 	 
	 
	 	MAGNACHIP SEMICONDUCTOR FINANCE      COMPANY

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	[Responsible Officer] 	 
	 




G-2









 





EXHIBIT H




[Form of]




SECURITY AGREEMENT




H-1











 





Execution Version




      




AMENDED AND RESTATED SECURITY AGREEMENT




By



MAGNACHIP SEMICONDUCTOR S.A.



as a Borrower



and



THE GUARANTORS PARTY HERETO



and



WILMINGTON TRUST FSB,



as Collateral Agent



Dated as of November 6, 2009



 














 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	ARTICLE I. DEFINITIONS AND INTERPRETATION
	 	 	2	 
	 
	Section 1.1 Definitions
	 	 	2	 
	Section 1.2 Interpretation
	 	 	8	 
	Section 1.3 Resolution of Drafting Ambiguities
	 	 	8	 
	 
	 	 	 	 
	ARTICLE II. GRANT OF SECURITY AND SECURED OBLIGATIONS
	 	 	8	 
	 
	Section 2.1 Pledge
	 	 	8	 
	Section 2.2 Secured Obligations
	 	 	9	 
	Section 2.3 Security Interest
	 	 	9	 
	Section 2.4 Conflicts with Foreign Pledge Agreement
	 	 	10	 
	 
	 	 	 	 
	ARTICLE III. REPRESENTATIONS, WARRANTIES AND COVENANTS
	 	 	10	 
	 
	Section 3.1 Title
	 	 	10	 
	Section 3.2 Chief Executive Office; Change of Name; Jurisdiction of Organization
	 	 	10	 
	 
	 	 	 	 
	ARTICLE IV. REMEDIES
	 	 	11	 
	 
	Section 4.1 Remedies
	 	 	11	 
	Section 4.2 Notice of Sale
	 	 	12	 
	Section 4.3 Waiver of Notice and Claims
	 	 	12	 
	Section 4.4 Certain Sales of Pledged Collateral
	 	 	13	 
	Section 4.5 No Waiver; Cumulative Remedies
	 	 	14	 
	Section 4.6 Certain Additional Actions Regarding Intellectual Property
	 	 	14	 
	 
	 	 	 	 
	ARTICLE V. PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS/APPLICATION OF PROCEEDS
	 	 	14	 
	 
	Section 5.1 Proceeds of Casualty Events and Collateral Dispositions
	 	 	14	 
	Section 5.2 Application of Proceeds
	 	 	14	 
	 
	 	 	 	 
	ARTICLE VI. MISCELLANEOUS
	 	 	15	 
	 
	Section 6.1 Concerning Collateral Agent
	 	 	15	 
	Section 6.2 Collateral Agent May Perform; Collateral Agent Appointed Attorney-in-Fact
	 	 	15	 
	Section 6.3 Expenses
	 	 	16	 
	Section 6.4 Continuing Security Interest; Assignment
	 	 	17	 
	Section 6.5 Termination; Release
	 	 	17	 
	Section 6.6 Modification in Writing
	 	 	17	 
	Section 6.7 Notices
	 	 	17	 
	Section 6.8 GOVERNING LAW
	 	 	17	 
	Section 6.9 CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY TRIAL
	 	 	17	 
	Section 6.10 Severability of Provisions
	 	 	18	 






i









 






	 	 	 	 	 
	 	 	Page	 
	Section 6.11 Execution in Counterparts
	 	 	18	 
	Section 6.12 Business Days
	 	 	18	 
	Section 6.13 Waiver of Stay
	 	 	18	 
	Section 6.14 No Credit for Payment of Taxes or Imposition
	 	 	18	 
	Section 6.15 No Claims Against Collateral Agent
	 	 	18	 
	Section 6.16 No Release
	 	 	19	 
	Section 6.17 Obligations Absolute
	 	 	19	 
	Section 6.18 [Intentionally Omitted].
	 	 	20	 
	Section 6.19 Joinder of Additional Guarantors
	 	 	20	 
	Section 6.20 Effect of Amendment and Restatement
	 	 	20	 
	 
	 	 	 	 
	SCHEDULE A            Commercial Tort Claims
	 	 	 	 
	SCHEDULE B            Chief Executive Office; Change of Name; Jurisdiction of Organization
	 	 	 	 
	 
	 	 	 	 
	EXHIBIT A            Form of Joinder Agreement
	 	 	 	 








ii









 








AMENDED AND RESTATED SECURITY AGREEMENT





This AMENDED AND RESTATED SECURITY AGREEMENT, dated as of November 6, 2009 (as amended, amended
and restated, supplemented or otherwise modified from time to time in accordance with the
provisions hereof, the “Agreement”), is made by MAGNACHIP SEMICONDUCTOR S.A., a société
anonyme, organized and existing under the laws of the Grand Duchy of Luxembourg, having its
registered office at 10, rue de Vianden, L-2680 Luxembourg, Grand Duchy of Luxembourg,
registered with the Luxembourg Register of commerce and companies under the number B 97,483 (the
“Borrower”) and THE GUARANTORS LISTED ON THE SIGNATURE PAGES HERETO (the “Non-U.S.
Guarantors”) OR FROM TIME TO TIME PARTY HERETO BY EXECUTION OF A JOINDER AGREEMENT (the
“Additional Guarantors,” and together with the “Non-U.S. Guarantors,” the
“Guarantors”), as pledgors, assignors and debtors (the Borrower, together with the
Guarantors, in such capacities and together with any successors in such capacities, the
“Pledgors” and each, a “Pledgor”), in favor of the WILMINGTON TRUST FSB, in its
capacity as collateral agent pursuant to the Credit Agreement (as hereinafter defined), as
pledgee, assignee and secured party (in such capacities and together with any successors in such
capacities, the “Collateral Agent”).



RECITALS:




               A. The Pledgors are party to that certain Credit Agreement, dated as of December 23, 2004, (as
amended, supplemented or otherwise modified prior to the date hereof, the “Pre-Petition Credit
Agreement”), among MagnaChip Semiconductor Finance Company, a Delaware corporation
(“MagnaChip Finance”), the Borrower, UBS AG, Stamford Branch, as administrative agent and
collateral agent (in such capacity, the “Pre-Petition Collateral Agent”), the other Persons
named therein as Loan Parties, and the Persons signatory thereto from time to time as Lenders.



               B. The Pledgors are entering into an Amended and Restated Credit Agreement (as amended,
amended and restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), dated as of the date hereof, among MagnaChip Finance, Borrower (and together with
the MagnaChip Finance, collectively, the “Borrowers”), Wilmington Trust FSB, as
Administrative Agent (in such capacity, the “Administrative Agent”) and Collateral Agent,
the other Persons named therein as Loan Parties and the Lenders, which amends and restates the
Pre-Petition Credit Agreement in its entirety.



               C. Pursuant to the Pre-Petition Credit Agreement, the Non-U.S. Guarantors have entered into
that certain Security Agreement, dated as of December 23, 2004 (as in effect immediately prior to
the date hereof, the “Pre-Petition Security Agreement”), pursuant to which the Pledgors
granted to UBS AG, Stamford Branch, as collateral agent under the Pre-Petition Credit Agreement
(the “Pre-Petition Collateral Agent”), on behalf of and for the ratable benefit of the
Secured Parties (as defined in the Pre-Petition Security Agreement), a security interest in the
Collateral (as defined in the Pre-Petition Security Agreement) as security for the prompt and
complete payment and performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations (as defined in the Pre-Petition Security Agreement).



               D. Each Non-U.S. Guarantor has, pursuant to the Credit Agreement and together with certain
other guarantors signatory to the Credit Agreement (the “U.S. Guarantors”), among other
things, unconditionally guaranteed the obligations of the Borrowers under the Credit Agreement and
the other Loan Documents (as hereinafter defined).



1









 





               E. The Borrower and each Non-U.S. Guarantor will receive substantial benefits from the
execution, delivery and performance of the obligations under the Credit Agreement and the other
Loan Documents and each is, therefore, willing to enter into this Agreement.



               F. It is contemplated that one or more of the Pledgors may enter (or may have entered) into
one or more Interest Rate Protection Agreements or other Hedging Agreements with one or more of the
Lenders or their respective Affiliates.



               G. Each Pledgor is or, as to Pledged Collateral (as hereinafter defined) acquired by such
Pledgor after the date hereof will be, the legal and/or beneficial owner of the Pledged Collateral
pledged by it hereunder.



               H. This Agreement is given by each Pledgor in favor of the Collateral Agent for the benefit
of the Secured Parties (as hereinafter defined) to reaffirm its agreement to secure, and to secure,
the payment and performance of all of the Secured Obligations (as hereinafter defined).



               I. It is a condition precedent to the amendment and restatement of the Pre-Petition Credit
Agreement, that the parties hereto shall have amended and restated the Pre-Petition Security
Agreement in the form hereof.



AGREEMENT:





NOW THEREFORE, in consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, each Pledgor and
the Collateral Agent hereby agree as follows:



ARTICLE I



DEFINITIONS AND INTERPRETATION



               SECTION 1.01 Definitions.



               (a) Unless otherwise defined herein, terms used herein that are defined in the UCC shall have
the meanings assigned to them in the UCC.



               (b) Capitalized terms used but not otherwise defined herein that are defined in the Credit
Agreement shall have the meanings given to them in the Credit Agreement.



               (c) The following terms shall have the following meanings:




“Additional Guarantors” shall have the meaning assigned to such term in the Preamble
hereof.




“Additional Pledged Interests” shall mean, collectively, with respect to each Pledgor,
(i) all options, warrants, rights, agreements, additional membership, partnership or other
equity interests of whatever class of any issuer of Initial Pledged Interests or any interest in
any such issuer, together with all rights, privileges, authority and powers of such Pledgor
relating to such interests in each issuer or under the Operative Agreement of any such issuer,
and the certificates, instruments and agreements representing such membership, partnership or
other interests and any and all interest of such Pledgor in the entries on the books of any
financial intermediary pertaining to such membership, partnership or other equity interests from
time to time acquired by such Pledgor in any manner and (ii) all
membership, partnership or other equity interests, as applicable, of each limited liability
company, partnership or other entity (other than a corporation) hereafter acquired or formed by
such Pledgor



2









 







and all options, warrants, rights, agreements, additional membership, partnership
or other equity interests of whatever class of such limited liability company, partnership or
other entity together with all rights, privileges, authority and powers of such Pledgor relating
to such interests or under the Operative Agreement of any such issuer, and the certificates,
instruments and agreements representing such membership, partnership or other equity interests
and any and all interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such membership, partnership or other interests, from time to time
acquired by such Pledgor in any manner.




“Additional Pledged Shares” shall mean, collectively, with respect to each Pledgor, (i)
all options, warrants, rights, agreements, additional shares of capital stock of whatever class
of any issuer of the Initial Pledged Shares or any other equity interest in any such issuer,
together with all rights, privileges, authority and powers of such Pledgor relating to such
interests issued by any such issuer under the Operative Agreement of any such issuer, and the
certificates, instruments and agreements representing such interests and any and all interest of
such Pledgor in the entries on the books of any financial intermediary pertaining to such
interests, from time to time acquired by such Pledgor in any manner and (ii) all the issued and
outstanding shares of capital stock of each corporation hereafter acquired or formed by such
Pledgor and all options, warrants, rights, agreements or additional shares of capital stock of
whatever class of such corporation together with all rights, privileges, authority and powers of
such Pledgor relating to such shares or under the Operative Agreement of such corporation and
the certificates, instruments and agreements representing such shares and any and all interest
of such Pledgor in the entries on the books of any financial intermediary pertaining to such
 shares, from time to time acquired by such Pledgor in any manner.




“Agreement” shall have the meaning assigned to such in the Preamble hereof.




“Bankruptcy Code” shall mean the United States Bankruptcy Code, being title 11 of the
United States Code (11 U.S.C. Sections 101-1330), as the same may be amended, modified,
recodified or supplemented, together with all official rules and regulations thereunder.




“Borrower” shall have the meaning assigned to such term in the Preamble hereof.




“Claims” shall mean any and all property taxes and other taxes, assessments and special
assessments, levies, fees and all governmental charges imposed upon or assessed against, and all
claims (including, without limitation, landlords’, carriers’, mechanics’, workmen’s,
repairmen’s, laborers’, materialmen’s, suppliers’ and warehousemen’s Liens and other claims
arising by operation of law) against, all or any portion of the Pledged Collateral.




“Collateral Agent” shall have the meaning assigned to such term in the Preamble hereof.




“Contracts” shall mean, collectively, with respect to each Pledgor, all sale, service,
performance, equipment or property lease contracts, agreements and grants and all other
contracts, agreements or grants (in each case, whether written or oral, or third party or
intercompany), between such Pledgor and third parties, and all assignments, amendments,
restatements, supplements, extensions, renewals, replacements or modifications thereof.




“Copyrights” shall mean, collectively, with respect to each Pledgor, all copyrights
(whether statutory or common law, whether established or registered in the United States or any
other country or any political subdivision thereof whether registered or unregistered and
whether published or unpublished) and all copyright registrations and applications made by such
Pledgor, in each case, whether now owned or hereafter created or acquired by or assigned to such
Pledgor, together with any and all (i) rights and privileges arising under applicable law with
respect to such Pledgor’s use of such copyrights, (ii) reissues, renewals, continuations and
extensions thereof, (iii) income, fees, royalties, damages, claims and payments now or hereafter
due and/or payable with respect thereto, including,
without limitation, damages and payments for past, present or future infringements thereof, (iv)
rights



3









 







corresponding thereto throughout the world and (v) rights to sue for past, present or
future infringements thereof.




“Credit Agreement” shall have the meaning assigned to such term in Recital B
hereof.




“Deposit Accounts” shall mean, collectively, with respect to each Pledgor, (i) all
“deposit accounts” as such term is defined in the UCC and in any event shall include, without
limitation all accounts and sub-accounts relating to any of the foregoing accounts and (ii) all
cash, funds, checks, notes and instruments from time to time on deposit in any of the accounts
or sub-accounts described in clause (i) of this definition.




“Distributions” shall mean, collectively, with respect to each Pledgor, all dividends,
cash, options, warrants, rights, instruments, distributions, returns of capital or principal,
income, interest, profits and other property, interests (debt or equity) or proceeds, including
as a result of a split, revision, reclassification or other like change of the Pledged
Securities, from time to time received, receivable or otherwise distributed to such Pledgor in
respect of or in exchange for any or all of the Pledged Securities or Intercompany Loan
Documents.




“Effective Date” shall mean November 6, 2009.




“Excluded Property” shall mean Special Property other than the following:




          (a) the right to receive any payment of money (including, without limitation, Accounts,
General Intangibles and Payment Intangibles) or any other rights referred to in Sections
9-406(f), 9-407(a) or 9-408(a) of the UCC; and




          (b) any Proceeds, substitutions or replacements of any Special Property (unless such
Proceeds, substitutions or replacements would constitute Special Property).




“Foreign Pledge Agreement” means a pledge agreement or debenture securing the Secured
Obligations or any of them that is governed by the law of a jurisdiction other than the United
States and reasonably satisfactory in form and substance to the Administrative Agent.




“General Intangibles” shall mean, collectively, with respect to each Pledgor, all
“general intangibles,” as such term is defined in the UCC, of such Pledgor and, in any event,
shall include, without limitation, (i) all of such Pledgor’s rights, title and interest in, to
and under all insurance policies and Contracts, (ii) all know-how and warranties relating to any
of the Pledged Collateral or the Mortgaged Property, (iii) any and all other rights, claims,
choses-in-action and causes of action of such Pledgor against any other Person and the benefits
of any and all collateral or other security given by any other Person in connection therewith,
(iv) all guarantees, endorsements and indemnifications on, or of, any of the Pledged Collateral
or any of the Mortgaged Property, (v) all lists, books, records, correspondence, ledgers,
print-outs, files (whether in printed form or stored electronically), tapes and other papers or
materials containing information relating to any of the Pledged Collateral or any of the
Mortgaged Property, including, without limitation, all customer or tenant lists, identification
of suppliers, data, plans, blueprints, specifications, designs, drawings, appraisals, recorded
knowledge, surveys, studies, engineering reports, test reports, manuals, standards, processing
standards, performance standards, catalogs, research data, computer and automatic machinery
software and programs and the like, field repair data, accounting information pertaining to such
Pledgor’s operations or any of the Pledged Collateral or any of the Mortgaged Property and all
media in which or on which any of the information or knowledge or data or records may be
recorded or stored and all computer programs used for the compilation or printout of such
information, knowledge, records or data, (vi) all licenses, consents, permits, variances,
certifications, authorizations and approvals, however characterized, of any Governmental
Authority (or any Person acting on behalf of a Governmental Authority) now or hereafter acquired
or held by such Pledgor pertaining to operations
now or hereafter conducted by such Pledgor or any of the Pledged Collateral or any of the
Mortgaged



4









 







Property including, without limitation, building permits, certificates of occupancy,
environmental certificates, industrial permits or licenses and certificates of operation and
(vii) all rights to reserves, deferred payments, deposits, refunds, indemnification of claims to
the extent the foregoing relate to any Pledged Collateral or Mortgaged Property and claims for
tax or other refunds against any Governmental Authority relating to any Pledged Collateral or
any of the Mortgaged Property.




“Goodwill” shall mean, collectively, with respect to each Pledgor, the goodwill
connected with such Pledgor’s business including, without limitation, (i) all goodwill connected
with the use of and symbolized by any of the Intellectual Property Collateral in which such
Pledgor has any interest, (ii) all know-how, trade secrets, customer and supplier lists,
proprietary information, inventions, methods, procedures, formulae, descriptions, compositions,
technical data, drawings, specifications, name plates, catalogs, confidential information and
the right to limit the use or disclosure thereof by any Person, pricing and cost information,
business and marketing plans and proposals, consulting agreements, engineering contracts and
such other assets which relate to such goodwill and (iii) all product lines of such Pledgor’s
business.




“Governmental Authority” shall mean any Federal, state, local, foreign or other
governmental, quasi-governmental or administrative (including self-regulatory) body,
instrumentality, department, agency, authority, board, bureau, commission, office of any nature
whatsoever or other subdivision thereof, or any court, tribunal, administrative hearing body,
arbitration panel or other similar dispute-resolving body, whether now or hereafter in
existence, or any officer or official thereof, having jurisdiction over any Pledgor or the
Pledged Collateral or the Mortgaged Property or any portion thereof.




“Guarantors” shall have the meaning assigned to such term in the Preamble hereof.




“Indemnitee” shall have the meaning assigned to such term in Section 6.3(b)
hereof.




“Instruments” shall mean, collectively, with respect to each Pledgor, all “instruments,”
as such term is defined in Article 9 of the UCC and shall include, without limitation, all
promissory notes, drafts, bills of exchange or acceptances.




“Intellectual Property Collateral” shall mean, collectively, the Patents, Trademarks,
Copyrights, Licenses and Goodwill.




“Initial Pledged Interests” shall mean, with respect to each Pledgor, all membership,
partnership or other equity interests (other than in a corporation), as applicable, of each
issuer, together with all rights, privileges, authority and powers of such Pledgor in and to
each such issuer or under the Operative Agreement of each such issuer, and the certificates,
instruments and agreements representing such membership, partnership or other interests and any
and all interest of such Pledgor in the entries on the books of any financial intermediary
pertaining to such membership, partnership or other interests.




“Initial Pledged Shares” shall mean, collectively, with respect to each Pledgor, the
issued and outstanding shares of capital stock of each issuer together with all rights,
privileges, authority and powers of such Pledgor relating to such interests in each such issuer
or under the Operative Agreement of each such issuer, and the certificates, instruments and
agreements representing such shares of capital stock and any and all interest of such Pledgor in
the entries on the books of any financial intermediary pertaining to the Initial Pledged Shares.




“Investment Property” shall mean a security, whether certificated or uncertificated,
security entitlement, securities account, commodity contract or commodity account, excluding,
however, the Securities Collateral.




“Licenses” shall mean, collectively, with respect to each Pledgor, all license and
distribution agreements with, and covenants not to sue, any other party with respect to any
Patent, Trademark or
Copyright or any other patent, trademark or copyright, whether such Pledgor is a licensor or
licensee,



5









 







distributor or distributee under any such license or distribution agreement, together
with any and all (i) renewals, extensions, supplements and continuations thereof, (ii) income,
fees, royalties, damages, claims and payments now and hereafter due and/or payable thereunder
and with respect thereto including, without limitation, damages and payments for past, present
or future infringements or violations thereof, (iii) rights to sue for past, present and future
infringements or violations thereof and (iv) other rights to use, exploit or practice any or all
of the Patents, Trademarks or Copyrights or any other patent, trademark or copyright.




“MagnaChip Finance” shall have the meaning assigned to such term in the Recital
A hereof.




“Mortgaged Property” shall mean property of any Pledgor subject to the lien of a
Mortgage.




“Mortgages” means any mortgage, deed of trust, deed to secured debt, leasehold mortgage,
leasehold deed of trust, collateral lease assignment or other instrument, agreement or document
executed by any of the Pledgors granting a lien on or security interest in any interest of a
Pledgor in any real property, whether owned or leased.




“Non-U.S. Guarantors” shall have the meaning assigned to such term in the Preamble
hereof.




“Operative Agreement” shall mean (i) in the case of any limited liability company or
partnership or other non-corporate entity, any membership or partnership agreement or other
organizational agreement or document thereof and (ii) in the case of any corporation, any
charter or certificate of incorporation and by-laws thereof.




“Patents” shall mean, collectively, with respect to each Pledgor, all patents
issued or assigned to and all patent applications and registrations made by such Pledgor
(whether established or registered or recorded in the United States or any other country or any
political subdivision thereof), together with any and all (i) rights and privileges arising
under applicable law with respect to such Pledgor’s use of any patents, (ii) inventions and
improvements described and claimed therein, (iii) reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof, (iv) income, fees, royalties, damages, claims and
payments now or hereafter due and/or payable thereunder and with respect thereto including,
without limitation, damages and payments for past, present or future infringements thereof, (v)
rights corresponding thereto throughout the world and (vi) rights to sue for past, present or
future infringements thereof.




“Pledged Collateral” shall have the meaning assigned to such term in Section 2.1
hereof.




“Pledged Interests” shall mean, collectively, the Initial Pledged Interests and the
Additional Pledged Interests.




“Pledged Securities” shall mean, collectively, the Pledged Interests, the Pledged Shares
and the Successor Interests.




“Pledged Shares” shall mean, collectively, the Initial Pledged Shares and the Additional
Pledged Shares.




“Pledgor” shall have the meaning assigned to such term in the Preamble hereof.




“Pre-Petition Collateral Agent” shall have the meaning assigned to such term in
Recital C hereof.




“Pre-Petition Credit Agreement” shall have the meaning assigned to such term in
Recital A hereof.




“Pre-Petition Security Agreement” shall have the meaning assigned to such term in
Recital C hereof.




“Requirements of Law” shall mean, collectively, any and all requirements of any
Governmental Authority including, without limitation, any and all laws, ordinances, rules,
regulations or similar statutes or case law.



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“Secured Obligations” shall mean all “Secured Obligations” as defined in the Credit
Agreement, including, without limitation, all obligations (whether or not constituting future
advances, obligatory or otherwise) of the Borrowers and any and all of the Pledgors from time to
time arising under or in respect of this Agreement, the Credit Agreement and the other Loan
Documents (including, without limitation, the obligations to pay principal, interest and all
other charges, fees, expenses, commissions, reimbursements, premiums, indemnities and other
payments related to or in respect of the obligations contained in this Agreement, the Credit
Agreement and the other Loan Documents), in each case whether (A) such obligations are direct or
indirect, secured or unsecured, joint or several, absolute or contingent, reduced to judgment or
not, liquidated or unliquidated, disputed or undisputed, legal or equitable, due or to become
due whether at stated maturity, by acceleration or otherwise, (B) arising in the regular course
of business or otherwise, (C) for payment or performance and/or (D) now existing or hereafter
arising (including, without limitation, interest and other obligations arising or accruing after
the commencement of any bankruptcy, insolvency, reorganization or similar proceeding with
respect to any Pledgor or any other Person, or which would have arisen or accrued but for the
commencement of such proceeding, even if such obligation or the claim therefor is not
enforceable or allowable in such proceeding), but excluding the obligations of any Pledgor under
a “Covenant to Pay” as defined in the respective Security Documents expressed to be governed by
Dutch law.




“Secured Parties” shall mean, collectively, the Administrative Agent, the Collateral
Agent, the Lenders and each party to a Hedging Agreement if such Person is a Lender or an
Affiliate of a Lender and, if an Affiliate, such Affiliate executes and delivers to the
Administrative Agent a letter agreement in form and substance reasonably acceptable to the
Administrative Agent pursuant to which such Person (i) appoints the Collateral Agent as its
agent under the applicable Loan Documents and (ii) agrees to be bound by the provisions of
Section 10.3 of the Credit Agreement.




“Securities Collateral” shall mean, collectively, the Pledged Securities, the
Intercompany Loan Documents and the Distributions.




“Special Property” shall mean:




          (a) any permit, lease, license, contract or other agreement held by any Pledgor that
validly prohibits the creation by such Pledgor of a security interest therein;




          (b) any permit, lease, license contract or other agreement held by any Pledgor to the
extent that any Requirement of Law applicable thereto prohibits the creation of a security
interest therein; and




          (c) Equipment owned by any Pledgor on the date hereof or hereafter acquired that is
subject to a Lien securing a Purchase Money Obligation or Capital Lease Obligation permitted
to be incurred pursuant to the provisions of the Credit Agreement if the contract or other
agreement in which such Lien is granted (or the documentation providing for such Purchase
Money Obligation or Capital Lease Obligation) validly prohibits the creation of any other
Lien on such Equipment;



provided, however, that in each case described in clauses (a), (b) and (c) of this
definition, such property shall constitute “Special Property” only to the extent and for so long as
such permit, lease, license, contract or other agreement or Requirement of Law applicable thereto,
validly prohibits the creation of a Lien on such property in favor of the Collateral Agent and,
upon the termination of such prohibition (howsoever occurring), such property shall cease to
constitute “Special Property.”





“Successor Interests” shall mean, collectively, with respect to each Pledgor, all shares
of each class of the capital stock of the successor corporation or interests or certificates of
the successor limited



7









 







liability company, partnership or other entity owned by such Pledgor (unless such successor is
such Pledgor itself) formed by or resulting from any consolidation or merger in which any Loan
Party is not the surviving entity.




“Trademarks” shall mean, collectively, with respect to each Pledgor, all trademarks
(including service marks), slogans, logos, certification marks, trade dress, uniform resource
locations (URL’s), domain names, corporate names and trade names, whether registered or
unregistered, owned by or assigned to such Pledgor and all registrations and applications for
the foregoing (whether statutory or common law and whether established or registered in the
United States or any other country or any political subdivision thereof), together with any and
all (i) rights and privileges arising under applicable law with respect to such Pledgor’s use of
any trademarks, (ii) reissues, continuations, extensions and renewals thereof, (iii) income,
fees, royalties, damages and payments now and hereafter due and/or payable thereunder and with
respect thereto, including, without limitation, damages, claims and payments for past, present
or future infringements thereof, (iv) rights corresponding thereto throughout the world and (v)
rights to sue for past, present and future infringements thereof.




“UCC” shall mean the Uniform Commercial Code as in effect on the date hereof in the
State of New York; provided, however, that if by reason of mandatory provisions
of law, any or all of the attachment, perfection or priority of the Collateral Agent’s and the
Secured Parties’ security interest in any item or portion of the Pledged Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York,
the term “UCC” shall mean the Uniform Commercial Code as in effect on the date hereof in such
other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection
or priority and for purposes of definitions relating to such provisions.




“U.S. Guarantors” shall have the meaning assigned to such term in Recital D hereof.



               SECTION 1.02 Interpretation. The rules of interpretation specified in the Credit Agreement shall be applicable to this
Agreement. If any conflict or inconsistency exists between this Agreement and the Credit
Agreement, the Credit Agreement shall govern.



               SECTION 1.03 Resolution of Drafting Ambiguities. Each Pledgor acknowledges and agrees that it was represented by counsel in connection with
the execution and delivery hereof, that it and its counsel reviewed and participated in the
preparation and negotiation hereof and that any rule of construction to the effect that ambiguities
are to be resolved against the drafting party (i.e., the Collateral Agent) shall not be
employed in the interpretation hereof.



ARTICLE II




GRANT OF SECURITY AND SECURED OBLIGATIONS



               SECTION 2.01 Pledge. As collateral security for the payment and performance in full of all the Secured
Obligations, each Pledgor hereby pledges and grants to the Collateral Agent for its benefit and for
the benefit of the Secured Parties, a lien on and security interest in and to all of the right,
title and interest of such Pledgor in, to and under all personal property and interests in
property, wherever located, whether now existing or hereafter arising or acquired from time to time
(collectively, the “Pledged Collateral”), including, without limitation:



                    (i) all Accounts;



                    (ii) all Equipment, Goods, Inventory and Fixtures;



                    (iii) all Documents, Instruments and Chattel Paper;



8









 





                    (iv) all Letters of Credit and Letter of Credit Rights;



                    (v) all Securities Collateral;



                    (vi) all Investment Property;



                    (vii) all Intellectual Property Collateral;



                    (viii) the Commercial Tort Claims described on Schedule A hereto;



                    (ix) all General Intangibles;



                    (x) all Deposit Accounts;



                    (xi) all Supporting Obligations;



                    (xii) all books and records relating to the Pledged Collateral; and



                    (xiii) to the extent not covered by clauses (i) through (xii) of this
sentence, all other personal property of such Pledgor, whether tangible or
intangible and all Proceeds and products of each of the foregoing and all
accessions to, substitutions and replacements for, and rents, profits and
products of, each of the foregoing, any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to such Pledgor from time to time
with respect to any of the foregoing.




Notwithstanding anything to the contrary contained in clauses (i) through (xiii) above, the
security interest created by this Agreement shall not extend to, and the term “Pledged
Collateral” shall not include, any Excluded Property and (i) the Pledgors shall from time to
time at the reasonable request of the Collateral Agent give written notice to the Collateral
Agent identifying in reasonable detail the Special Property (and stating in such notice that
such Special Property constitutes “Excluded Property”) and shall provide to the Collateral Agent
such other information regarding the Special Property as the Collateral Agent may reasonably
request and (ii) from and after the Loans, no Pledgor shall permit to become effective in any
document creating, governing or providing for any permit, lease or license, a provision that
would prohibit the creation of a Lien on such permit, lease or license in favor of the
Collateral Agent unless such Pledgor believes, in its reasonable judgment, that such prohibition
is usual and customary in transactions of such type.



               SECTION 2.02 Secured Obligations. This Agreement secures, and the Pledged Collateral is collateral security for, the payment
and performance in full when due of the Secured Obligations.



               SECTION 2.03 Security Interest. (a) Each Pledgor hereby irrevocably authorizes the Collateral Agent at any time and from
time to time to authenticate and file in any relevant jurisdiction any initial financing statements
(including fixture filings) and amendments thereto that contain the information required by Article
9 of the Uniform Commercial Code of each applicable jurisdiction for the filing of any financing
statement or amendment relating to the Pledged Collateral, including, without limitation, (i)
whether such Pledgor is an organization, the type of organization and any organizational
identification number issued to such Pledgor, (ii) any financing or continuation statements or
other documents without the signature of such Pledgor where permitted by law, including, without
limitation, the filing of a financing statement describing the Pledged Collateral as “all assets in
which the Pledgor now owns or hereafter acquires rights” and (iii) in the case of a financing
statement filed as a fixture filing or covering Pledged



9









 







Collateral constituting minerals or the
like to be extracted or timber to be cut, a sufficient description of the real property to which
such Pledged Collateral relates. Each Pledgor agrees to provide all information described in the
immediately preceding sentence to the Collateral Agent promptly upon request.




          (a) Each Pledgor hereby ratifies its authorization for the Collateral Agent to file in any
relevant jurisdiction any initial financing statements or amendments thereto relating to the
Pledged Collateral if filed prior to the date hereof.




          (b) Each Pledgor hereby further authorizes the Collateral Agent to file filings with the
United States Patent and Trademark Office and United States Copyright Office (or any successor
office or any similar office in any other country) or other documents for the purpose of
perfecting, confirming, continuing, enforcing or protecting the security interest granted by such
Pledgor hereunder, without the signature of such Pledgor, and naming such Pledgor, as debtor, and
the Collateral Agent, as secured party.



               SECTION 2.04 Conflicts with Foreign Pledge Agreement. To the extent that there is any overlap between, or conflict with, the provisions of this
Agreement and any Foreign Pledge Agreement, such Foreign Pledge Agreement shall prevail with
respect only to (i) any provision relating to the pledged collateral described in and covered under
such Foreign Pledge Agreement and (ii) any provision where adherence to the law governing such
Foreign Pledge Agreement is required for such Foreign Pledge Agreement to be enforceable in
accordance with its terms.



ARTICLE III




REPRESENTATIONS, WARRANTIES AND COVENANTS



     Each Pledgor represents, warrants and covenants as follows:



               SECTION 3.01 Title.



               (a) With respect to such Pledgor’s jurisdiction of organization, there is no centralized
filing office or system for registering liens with respect to the Pledged Collateral.



               (b) Pledgor’s chief executive office is not located in any State or other political
subdivision of the United States.



               (c) No financing statement or other public notice with respect to all or any part of the
Pledged Collateral is on file or of record in any public office, including any public office in the
jurisdiction of organization of such Pledgor, except such as have been filed in favor of the
Collateral Agent pursuant to this Agreement or as are permitted by the Credit Agreement. No Person
other than the Collateral Agent has control or possession of all or any part of the Pledged
Collateral, except as permitted by the Credit Agreement.



               SECTION 3.02 Chief Executive Office; Change of Name; Jurisdiction of Organization.



               (a) The exact legal name, type of organization, jurisdiction of organization, and chief
executive office of such Pledgor as of the date hereof is indicated next to its name in
Schedule B hereto. Such Pledgor shall not change (i) its corporate name, (ii) the location
of its chief executive office, its principal place of business, any office in which it maintains
books or records relating to Pledged Collateral owned by it or any office or facility at which
Pledged Collateral owned by it is located (including the establishment of any such new office or
facility), (iii) its identity or type of organization or corporate structure or (iv) its
jurisdiction of organization (in each case, including, without limitation, by



10









 







merging with or into
any other entity, reorganizing, dissolving, liquidating, reincorporating or incorporating in any
other jurisdiction) until (A) it shall have given the Collateral Agent not less than thirty (30)
days’ prior written notice (in the form of an Officers’ Certificate) of its intention so to do,
clearly describing such change and providing such other information in connection therewith as the
Collateral Agent may reasonably request and (B) with respect to such change, such Pledgor shall
have taken all action reasonably satisfactory to the Collateral Agent to maintain the perfection
and priority of the security interest of the Collateral Agent for the benefit of the Secured
Parties in the Pledged Collateral intended to be granted hereunder, including, without limitation,
using commercially reasonable efforts to obtain waivers of landlord’s or warehousemen’s liens with
respect to such new location, if applicable. Each Pledgor agrees to promptly provide the Collateral
Agent with certified organizational documents reflecting any of the changes described in the
preceding sentence.



ARTICLE IV




REMEDIES



               SECTION 4.01 Remedies. (a) Upon the occurrence and during the continuance of any Event of Default, the Collateral
Agent may from time to time exercise in respect of the Pledged Collateral, in addition to the other
rights and remedies provided for herein or otherwise available to it:




               (i) Personally, or by agents or attorneys, immediately take possession of the Pledged
Collateral or any part thereof, from any Pledgor or any other Person who then has possession of any
part thereof with or without notice or process of law, and for that purpose may enter upon any
Pledgor’s premises where any of the Pledged Collateral is located, remove such Pledged Collateral,
remain present at such premises to receive copies of all communications and remittances relating to
the Pledged Collateral and use in connection with such removal and possession any and all services,
supplies, aids and other facilities of any Pledgor;




               (ii) Demand, sue for, collect or receive any money or property at any time payable or
receivable in respect of the Pledged Collateral including, without limitation, instructing the
obligor or obligors on any agreement, instrument or other obligation constituting part of the
Pledged Collateral to make any payment required by the terms of such agreement, instrument or other
obligation directly to the Collateral Agent, and in connection with any of the foregoing,
compromise, settle, extend
the time for payment and make other modifications with respect thereto; provided,
however, that in the event that any such payments are made directly to any Pledgor, prior
to receipt by any such obligor of such instruction, such Pledgor shall segregate all amounts
received pursuant thereto in trust for the benefit of the Collateral Agent and shall promptly (but
in no event later than one (1) Business Day after receipt thereof) pay such amounts to the
Collateral Agent;




               (iii) Sell, assign or grant a license to use or otherwise liquidate, or direct any Pledgor to
sell, assign or grant a license to use or otherwise liquidate, any and all investments made in
whole or in part with the Pledged Collateral or any part thereof, and take possession of the
proceeds of any such sale, assignment, license or liquidation;




               (iv) Take possession of the Pledged Collateral or any part thereof, by directing any Pledgor
in writing to deliver the same to the Collateral Agent at any place or places so designated by the
Collateral Agent, in which event such Pledgor shall at its own expense: (A) forthwith cause the
same to be moved to the place or places designated by the Collateral Agent and there delivered to
the Collateral Agent, (B) store and keep any Pledged Collateral so delivered to the Collateral
Agent at such place or places pending further action by the Collateral Agent and (C) while the
Pledged Collateral shall be so stored and kept, provide such security and maintenance services as
shall be necessary to



11









 







protect the same and to preserve and maintain them in good condition. Each
Pledgor’s obligation to deliver the Pledged Collateral as contemplated in this Section
4.1(a)(iv) is of the essence hereof. Upon application to a court of equity having jurisdiction,
the Collateral Agent shall be entitled to a decree requiring specific performance by any Pledgor of
such obligation;




               (v) Withdraw all moneys, instruments, securities and other property in any bank, financial
securities, deposit or other account of any Pledgor constituting Pledged Collateral for application
to the Secured Obligations as provided in Article V hereof;




               (vi) Retain and apply the Distributions to the Secured Obligations as provided in Article
V hereof;




               (vii) Exercise any and all rights as beneficial and legal owner of the Pledged Collateral,
including, without limitation, perfecting assignment of and exercising any and all voting,
consensual and other rights and powers with respect to any Pledged Collateral; and




               (viii) Exercise all the rights and remedies of a secured party under the UCC, and the
Collateral Agent may also in its sole discretion, without notice except as specified in
Section 4.2 hereof, sell, assign or grant a license to use the Pledged Collateral or any
part thereof in one or more parcels at public or private sale, at any exchange, broker’s board or
at any of the Collateral Agent’s offices or elsewhere, for cash, on credit or for future delivery,
and at such price or prices and upon such other terms as the Collateral Agent may deem commercially
reasonable. The Collateral Agent or any other Secured Party or any of their respective Affiliates
may be the purchaser, licensee, assignee or recipient of any or all of the Pledged Collateral at
any such sale and shall be entitled, for the purpose of bidding and making settlement or payment of
the purchase price for all or any portion of the Pledged Collateral sold, assigned or licensed at
such sale, to use and apply any of the Secured Obligations owed to such Person as a credit on
account of the purchase price of any Pledged Collateral payable by such Person at such sale. Each
purchaser, assignee, licensee or recipient at any such sale shall acquire the property sold,
assigned or licensed absolutely free from any claim or right on the part of any Pledgor, and each
Pledgor hereby waives, to the fullest extent permitted by law, all rights of redemption, stay
and/or appraisal which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. The Collateral Agent shall not be obligated to make any
sale of Pledged Collateral regardless of notice of sale having been given. The Collateral Agent may
adjourn any public or
private sale from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was so adjourned. Each
Pledgor hereby waives, to the fullest extent permitted by law, any claims against the Collateral
Agent arising by reason of the fact that the price at which any Pledged Collateral may have been
sold, assigned or licensed at such a private sale was less than the price which might have been
obtained at a public sale, even if the Collateral Agent accepts the first offer received and does
not offer such Pledged Collateral to more than one offeree.



               SECTION 4.02 Notice of Sale. Each Pledgor acknowledges and agrees that, to the extent notice of sale or other
disposition of Pledged Collateral shall be required by law, ten (10) days’ prior notice to such
Pledgor of the time and place of any public sale or of the time after which any private sale or
other intended disposition is to take place shall be commercially reasonable notification of such
matters. No notification need be given to any Pledgor if it has signed, after the occurrence of an
Event of Default, a statement renouncing or modifying (as permitted under law) any right to
notification of sale or other intended disposition.



               SECTION 4.03 Waiver of Notice and Claims. Each Pledgor hereby waives, to the fullest extent permitted by applicable law, notice or
judicial hearing in connection with the Collateral Agent’s taking possession or the Collateral
Agent’s disposition of any of the Pledged Collateral, including, without



12









 







limitation, any and all
prior notice and hearing for any prejudgment remedy or remedies and any such right which such
Pledgor would otherwise have under law, and each Pledgor hereby further waives, to the fullest
extent permitted by applicable law: (a) all damages occasioned by such taking of possession, (b)
all other requirements as to the time, place and terms of sale or other requirements with respect
to the enforcement of the Collateral Agent’s rights hereunder and (c) all rights of redemption,
appraisal, valuation, stay, extension or moratorium now or hereafter in force under any applicable
law. The Collateral Agent shall not be liable for any incorrect or improper payment made pursuant
to this Article IV in the absence of gross negligence or willful misconduct. Any sale of,
or the grant of options to purchase, or any other realization upon, any Pledged Collateral shall
operate to divest all right, title, interest, claim and demand, either at law or in equity, of the
applicable Pledgor therein and thereto, and shall be a perpetual bar both at law and in equity
against such Pledgor and against any and all Persons claiming or attempting to claim the Pledged
Collateral so sold, optioned or realized upon, or any part thereof, from, through or under such
Pledgor.



               SECTION 4.04 Certain Sales of Pledged Collateral.




               (i) Each Pledgor recognizes that, by reason of certain prohibitions contained in law, rules,
regulations or orders of any Governmental Authority, the Collateral Agent may be compelled, with
respect to any sale of all or any part of the Pledged Collateral, to limit purchasers to those who
meet the requirements of such Governmental Authority. Each Pledgor acknowledges that any such sales
may be at prices and on terms less favorable to the Collateral Agent than those obtainable through
a public sale without such restrictions, and, notwithstanding such circumstances, agrees that any
such restricted sale shall be deemed to have been made in a commercially reasonable manner and
that, except as may be required by applicable law, the Collateral Agent shall have no obligation to
engage in public sales.




               (ii) Each Pledgor recognizes that, by reason of certain prohibitions contained in the
Securities Act, and applicable state securities laws, the Collateral Agent may be compelled, with
respect to any sale of all or any part of the Securities Collateral and Investment Property, to
limit
purchasers to Persons who will agree, among other things, to acquire such Securities
Collateral or Investment Property for their own account, for investment and not with a view to the
distribution or resale thereof. Each Pledgor acknowledges that any such private sales may be at
prices and on terms less favorable to the Collateral Agent than those obtainable through a public
sale without such restrictions (including, without limitation, a public offering made pursuant to a
registration statement under the Securities Act), and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially reasonable manner
and that the Collateral Agent shall have no obligation to engage in public sales and no obligation
to delay the sale of any Securities Collateral or Investment Property for the period of time
necessary to permit the issuer thereof to register it for a form of public sale requiring
registration under the Securities Act or under applicable state securities laws, even if such
issuer would agree to do so.




               (iii) If the Collateral Agent determines to exercise its right to sell any or all of the
Securities Collateral or Investment Property, upon written request, the applicable Pledgor shall
from time to time furnish to the Collateral Agent all such information as the Collateral Agent may
request in order to determine the number of securities included in the Securities Collateral or
Investment Property which may be sold by the Collateral Agent as exempt transactions under the
Securities Act and the rules of the Securities and Exchange Commission thereunder, as the same are
from time to time in effect.




               (iv) Each Pledgor further agrees that a breach of any of the covenants contained in this
Section 4.4 will cause irreparable injury to the Collateral Agent and other Secured
Parties, that the Collateral Agent and the other Secured Parties have no adequate remedy at law in
respect of such breach and, as a consequence, that each and every covenant contained in this
Section 4.4 shall be



13









 







specifically enforceable against such Pledgor, and such Pledgor hereby
waives and agrees not to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred and is continuing.



               SECTION 4.05 No Waiver; Cumulative Remedies.




               (i) No failure on the part of the Collateral Agent to exercise, no course of dealing with
respect to, and no delay on the part of the Collateral Agent in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any
such right, power or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy; nor shall the Collateral Agent be required to look
first to, enforce or exhaust any other security, collateral or guaranties. The remedies herein
provided are cumulative and are not exclusive of any remedies provided by law.




               (ii) In the event that the Collateral Agent shall have instituted any proceeding to enforce
any right, power or remedy under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall have been determined
adversely to the Collateral Agent, then and in every such case, the Pledgors, the Collateral Agent
and each other Secured Party shall be restored to their respective former positions and rights
hereunder with respect to the Pledged Collateral, and all rights, remedies and powers of the
Collateral Agent and the other Secured Parties shall continue as if no such proceeding had been
instituted.



               SECTION 4.06 Certain Additional Actions Regarding Intellectual Property. If any Event of Default shall have occurred and be continuing, upon the written demand of
Collateral Agent, each Pledgor shall execute and deliver to Collateral Agent an assignment or
assignments of the registered Patents, Trademarks and/or Copyrights and such other documents
as are necessary or appropriate to carry out the intent and purposes hereof. Within five (5)
Business Days of written notice thereafter from Collateral Agent, each Pledgor shall make available
to Collateral Agent, to the extent within such Pledgor’s power and authority, such personnel in
such Pledgor’s employ on the date of the Event of Default as Collateral Agent may reasonably
designate to permit such Pledgor to continue, directly or indirectly, to produce, advertise and
sell the products and services sold by such Pledgor under the registered Patents, Trademarks and/or
Copyrights, and such Persons shall be available to perform their prior functions on Collateral
Agent’s behalf.



ARTICLE V




PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS/APPLICATION OF PROCEEDS



               SECTION 5.01 Proceeds of Casualty Events and Collateral Dispositions. The Pledgors shall take all actions required by the Credit Agreement with respect to any
Net Cash Proceeds of any Casualty Event or from the sale or disposition of any Pledged Collateral.



               SECTION 5.02 Application of Proceeds. The proceeds received by the Collateral Agent in respect of any sale of, collection from or
other realization upon all or any part of the Collateral pursuant to the exercise by the Collateral
Agent of its remedies shall be applied, together with any other sums then held by the Collateral
Agent pursuant to this Agreement, in accordance with the terms of the Credit Agreement.



14









 





MISCELLANEOUS




               SECTION 5.03 Concerning Collateral Agent.




               (i) The Collateral Agent has been appointed as collateral agent pursuant to the Credit
Agreement. The actions of the Collateral Agent hereunder are subject to the provisions of the
Credit Agreement. The Collateral Agent shall have the right hereunder to make demands, to give
notices, to exercise or refrain from exercising any rights, and to take or refrain from taking
action (including, without limitation, the release or substitution of the Pledged Collateral), in
accordance with this Agreement and the Credit Agreement. The Collateral Agent may employ agents and
attorneys-in-fact in connection herewith and shall not be liable for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it in good faith. The Collateral Agent may
resign and a successor Collateral Agent may be appointed in the manner provided in the Credit
Agreement. Upon the acceptance of any appointment as the Collateral Agent by a successor Collateral
Agent, that successor Collateral Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent under this Agreement, and
the retiring Collateral Agent shall thereupon be discharged from its duties and obligations under
this Agreement. After any retiring Collateral Agent’s resignation, the provisions hereof shall
inure to its benefit as to any actions taken or omitted to be taken by it under this Agreement
while it was the Collateral Agent.




               (ii) The Collateral Agent shall be deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral in its possession if such Pledged Collateral is accorded
treatment substantially equivalent to that which the Collateral Agent, in its individual capacity,
accords its own property consisting of similar instruments or interests, it being understood that
neither the Collateral Agent nor any of the Secured Parties shall have responsibility for (i)
ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relating to any Securities Collateral, whether or not the Collateral Agent or any
other Secured Party has or is deemed to have knowledge of such matters or (ii) taking any necessary
steps to preserve rights against any Person with respect to any Pledged Collateral.




               (iii) The Collateral Agent shall be entitled to rely upon any written notice, statement,
certificate, order or other document or any telephone message believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person, and, with respect to all
matters pertaining to this Agreement and its duties hereunder, upon advice of counsel selected by
it.




               (iv) If any item of Pledged Collateral also constitutes collateral granted to Collateral Agent
under any other deed of trust, mortgage, security agreement, pledge or instrument of any type, in
the event of any conflict between the provisions hereof and the provisions of such other deed of
trust, mortgage, security agreement, pledge or instrument of any type in respect of such
collateral, Collateral Agent, in its sole discretion, shall select which provision or provisions
shall control.



               SECTION 5.04 Collateral Agent May Perform; Collateral Agent Appointed Attorney-in-Fact. If any Pledgor shall fail to perform any covenants contained in this Agreement or in the
Credit Agreement or if any warranty on the part of any Pledgor contained herein shall be breached,
the Collateral Agent may (but shall not be obligated to) do the same or cause it to be done or
remedy any such breach, and may expend funds for such purpose; provided, however,
that Collateral Agent shall in no event be bound to inquire into the validity of any tax, lien,
imposition or other obligation which such Pledgor fails to pay or perform as and when required
hereby and which such Pledgor does not contest in accordance with the provisions of the Credit
Agreement. Any and all amounts so expended by the Collateral Agent shall be paid



15









 







by the Pledgors in
accordance with the provisions of Section 6.3 hereof. Neither the provisions of this
Section 6.2 nor any action taken by Collateral Agent pursuant to the provisions of this
Section 6.2 shall prevent any such failure to observe any covenant contained in this
Agreement nor any breach of warranty form constituting an Event of Default. Each Pledgor hereby
appoints the Collateral Agent its attorney-in-fact, with full authority in the place and stead of
such Pledgor and in the name of such Pledgor, or otherwise, from time to time following an Event of
Default which is continuing in the Collateral Agent’s discretion to take any action and to execute
any instrument consistent with the terms of the Credit Agreement and the other Security Documents
which the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof. The
foregoing grant of authority is a power of attorney coupled with an interest and such appointment
shall be irrevocable for the term hereof. Each Pledgor hereby ratifies all that such attorney shall
lawfully do or cause to be done by virtue hereof.



               SECTION 5.05 Expenses.




               (a) Each Pledgor will upon demand pay to the Collateral Agent the amount of any and all
reasonable costs and expenses, including the reasonable fees and expenses of its counsel and the
reasonable fees and expenses of any experts and agents which the Collateral Agent may incur in
connection with (i) any action, suit or other proceeding affecting the Pledged Collateral or any
part
thereof commenced, in which action, suit or proceeding the Collateral Agent is made a party or
participates or in which the right to use the Pledged Collateral or any part thereof is threatened,
or in which it becomes necessary in the reasonable judgment of the Collateral Agent to defend or
uphold the Lien hereof (including, without limitation, any action, suit or proceeding to establish
or uphold the compliance of the Pledged Collateral with any requirements of any Governmental
Authority or law), (ii) the collection of the Secured Obligations, (iii) the enforcement and
administration hereof, (iv) the custody or preservation of, or the sale of, collection from, or
other realization upon, any of the Pledged Collateral, (v) the exercise or enforcement of any of
the rights of the Collateral Agent or any Secured Party hereunder or (vi) the failure by any
Pledgor to perform or observe any of the provisions hereof. All amounts expended by the Collateral
Agent and payable by any Pledgor under this Section 6.3 shall be due upon demand therefor
(together with interest thereon accruing at the highest rate then in effect under the Credit
Agreement during the period from and including the date on which such funds were so expended to the
date of repayment) and shall be part of the Secured Obligations.




               (b) The Pledgors agree, jointly and severally, to indemnify the Collateral Agent, the
Administrative Agent, each Lender, each Affiliate of any of the foregoing Persons and each of their
respective directors, officers, trustees, employees and agents (each such Person being called an
“Indemnitee”), against, and to hold each Indemnitee harmless from, all reasonable
out-of-pocket costs and any and all losses, claims, damages, liabilities and related expenses,
including reasonable counsel fees, charges, expenses and disbursements, incurred by or asserted
against any Indemnitee arising out of, in any way connected with, or as a result of this Agreement,
the Credit Agreement, any other Loan Document or any other document evidencing the Secured
Obligations (including, without limitation, any misrepresentation by any Pledgor in this Agreement,
the Credit Agreement, other Loan Document or any other document evidencing the Secured
Obligations); provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.




               (c) The provisions of this Section 6.3 shall remain operative and in full force and
effect regardless of the expiration of the term of this Agreement, the repayment of any of the
Loans, the expiration of the Commitments, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation made by or on behalf
of the Agents or any Lender. All amounts due under this Section 6.3 shall be payable
promptly (but in any event no more than



16









 







ten (10) days following) upon written demand therefor
accompanied by reasonable documentation with respect to any reimbursement, indemnification or other
amount requested.



               SECTION 5.06 Continuing Security Interest; Assignment. This Agreement shall create a continuing security interest in the Pledged Collateral and
shall (a) be binding upon the Pledgors, their respective successors and assigns and (b) inure,
together with the rights and remedies of the Collateral Agent hereunder, to the benefit of the
Collateral Agent and the other Secured Parties and each of their permitted respective successors,
transferees and assigns. No other Persons (including, without limitation, any other creditor of any
Pledgor) shall have any interest herein or any right or benefit with respect hereto. Without
limiting the generality of the foregoing clause (b), any Secured Party may assign or otherwise
transfer any indebtedness held by it secured by this Agreement to any other Person, and such other
Person shall thereupon become vested with all the benefits in respect thereof granted to such
Secured Party, herein or otherwise, subject however, to the provisions of the Credit Agreement and
any Hedging Agreement.



               SECTION 5.07 Termination; Release. The Pledged Collateral shall be released from the Lien of this Agreement in accordance with
the provisions of the Credit Agreement. Upon termination hereof or any release of Pledged
Collateral in accordance with the provisions of the Credit Agreement, the Collateral Agent shall,
upon the request and at the sole cost and expense of the Pledgors, assign, transfer and deliver to
Pledgor, against receipt and without recourse to or warranty by the Collateral Agent except as to
the fact that the Collateral Agent has not encumbered the released assets, such of the Pledged
Collateral to be released (in the case of a release) as may be in possession of the Collateral
Agent and as shall not have been sold or otherwise applied pursuant to the terms hereof, and, with
respect to any other Pledged Collateral, proper documents and instruments (including UCC-3
termination statements or releases) acknowledging the termination hereof or the release of such
Pledged Collateral, as the case may be.



               SECTION 5.08 Modification in Writing. No amendment, modification, supplement, termination or waiver of or to any provision
hereof, nor consent to any departure by any Pledgor therefrom, shall be effective unless the same
shall be made in accordance with the terms of the Credit Agreement and unless in writing and signed
by the Collateral Agent. Any amendment, modification or supplement of or to any provision hereof,
any waiver of any provision hereof and any consent to any departure by any Pledgor from the terms
of any provision hereof shall be effective only in the specific instance and for the specific
purpose for which made or given. Except where notice is specifically required by this Agreement or
any other document evidencing the Secured Obligations, no notice to or demand on any Pledgor in any
case shall entitle any Pledgor to any other or further notice or demand in similar or other
circumstances.



               SECTION 5.09 Notices. Unless otherwise provided herein or in the Credit Agreement, any notice or other
communication herein required or permitted to be given shall be given in the manner and become
effective as set forth in the Credit Agreement, as to any Pledgor, addressed to it at the address
designated with respect to the Loan Parties set forth in the Credit Agreement and as to the
Collateral Agent, addressed to it at the address set forth in the Credit Agreement, or in each case
at such other address as shall be designated by such party in a written notice to the other party
complying as to delivery with the terms of this Section 6.7.



               SECTION 5.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.



               SECTION 5.11 CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY TRIAL. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PLEDGOR OR SECURED PARTY WITH RESPECT TO THIS
AGREEMENT MAY BE BROUGHT IN THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY, THE



17









 







COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND APPELLATE
COURTS OF ANY THEREOF, AND BY EXECUTION AND DELIVERY HEREOF, EACH PLEDGOR ACCEPTS FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT. EACH PLEDGOR AGREES THAT SERVICE OF PROCESS IN ANY PROCEEDING MAY BE EFFECTED
BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM
OF MAIL), POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH IN THE CREDIT AGREEMENT OR AT
SUCH OTHER ADDRESS OF WHICH THE COLLATERAL AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO. IF ANY
AGENT APPOINTED BY ANY PLEDGOR REFUSES TO ACCEPT SERVICE, SUCH PLEDGOR HEREBY AGREES THAT SERVICE
UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE COLLATERAL AGENT TO
BRING PROCEEDINGS AGAINST ANY PLEDGOR IN THE COURTS OF ANY OTHER JURISDICTION. THE PLEDGORS HEREBY
IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.



               SECTION 5.12 Severability of Provisions. Any provision hereof which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.



               SECTION 5.13 Execution in Counterparts. This Agreement and any amendments, waivers, consents or supplements hereto may be executed
in any number of counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original, but all such counterparts
together shall constitute one and the same agreement.



               SECTION 5.14 Business Days. In the event any time period or any date provided in this Agreement ends or falls on a day
other than a Business Day, then such time period shall be deemed to end and such date shall be
deemed to fall on the next succeeding Business Day, and performance herein may be made on such
Business Day, with the same force and effect as if made on such other day.



               SECTION 5.15 Waiver of Stay. Each Pledgor agrees that in the event that such Pledgor or any property or assets of such
Pledgor shall hereafter become the subject of a voluntary or involuntary proceeding under the
Bankruptcy Code or such Pledgor shall otherwise be a party to any Federal or state bankruptcy,
insolvency, moratorium or similar proceeding to which the provisions relating to the automatic stay
under Section 362 of the Bankruptcy Code or any similar provision in any such law is applicable,
then, in any such case, whether or not the Collateral Agent has commenced foreclosure proceedings
under this Agreement, the Collateral Agent shall be entitled to relief from any such automatic stay
as it relates to the exercise of any of the rights and remedies (including, without limitation, any
foreclosure proceedings) available to the Collateral Agent as provided in this Agreement, in any
other Collateral Document or any other document evidencing the Secured Obligations.



               SECTION 5.16 No Credit for Payment of Taxes or Imposition. Such Pledgor shall not be entitled to any credit against the principal, premium, if any, or
interest payable under the Credit Agreement, and such Pledgor shall not be entitled to any credit
against any other sums which may become payable under the terms thereof or hereof, by reason
of the payment of any Tax on the Pledged Collateral or any part thereof.



18









 





               SECTION 5.17 No Claims Against Collateral Agent. Nothing contained in this Agreement shall constitute any consent or request by the
Collateral Agent, express or implied, for the performance of any labor or services or the
furnishing of any materials or other property in respect of the Pledged Collateral or any part
thereof, nor as giving any Pledgor any right, power or authority to contract for or permit the
performance of any labor or services or the furnishing of any materials or other property in such
fashion as would permit the making of any claim against the Collateral Agent in respect thereof or
any claim that any Lien based on the performance of such labor or services or the furnishing of any
such materials or other property is prior to the Lien hereof.



               SECTION 5.18 No Release. Nothing set forth in this Agreement shall relieve any Pledgor from the performance of any
term, covenant, condition or agreement on such Pledgor’s part to be performed or observed under or
in respect of any of the Pledged Collateral or from any liability to any Person under or in respect
of any of the Pledged Collateral or shall impose any obligation on the Collateral Agent or any
other Secured Party to perform or observe any such term, covenant, condition or agreement on such
Pledgor’s part to be so performed or observed or shall impose any liability on the Collateral Agent
or any other Secured Party for any act or omission on the part of such Pledgor relating thereto or
for any breach of any representation or warranty on the part of such Pledgor contained in this
Agreement, the Credit Agreement or the other Loan Documents, or under or in respect of the Pledged
Collateral or made in connection herewith or therewith. The obligations of each Pledgor contained
in this Section 6.16 shall survive the termination hereof and the discharge of such
Pledgor’s other obligations under this Agreement, the Credit Agreement and the other Loan
Documents.



               SECTION 5.19 Obligations Absolute. All obligations of each Pledgor hereunder shall be absolute and unconditional irrespective
of:




               (i) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition,
liquidation or the like of any Pledgor;




               (ii) any lack of validity or enforceability of the Credit Agreement, any Hedging
Agreement or any other Loan Document, or any other agreement or instrument relating thereto;




               (iii) any change in the time, manner or place of payment of, or in any other term of,
all or any of the Secured Obligations, or any other amendment or waiver of or any consent to
any departure from the Credit Agreement, any Hedging Agreement or any other Loan Document or
any other agreement or instrument relating thereto;




               (iv) any pledge, exchange, release or non-perfection of any other collateral, or any
release or amendment or waiver of or consent to any departure from any guarantee, for all or
any of the Secured Obligations;




               (v) any exercise, non-exercise or waiver of any right, remedy, power or privilege under
or in respect hereof, the Credit Agreement, any Hedging Agreement or any other
Loan Document except as specifically set forth in a waiver granted pursuant to the
provisions of Section 6.6 hereof; or




               (vi) any other circumstances which might otherwise constitute a defense available to,
or a discharge of, any Pledgor.



19









 





               SECTION 5.20 [Intentionally Omitted].



               SECTION 5.21 Joinder of Additional Guarantors. The Pledgors shall cause each Subsidiary of Holdings which is not organized under the laws
of the United States or any State or other political subdivision thereof, from time to time, after
the date hereof, to execute and deliver to the Collateral Agent a Joinder Agreement substantially
in the form of Exhibit A hereto within five (5) Business Days of the day on which it was acquired
or created and, upon such execution and delivery, such Subsidiary shall constitute a “Guarantor”
and a “Pledgor” for all purposes hereunder with the same force and effect as if originally named as
a Guarantor and Pledgor herein. The execution and delivery of such Joinder Agreement shall not
require the consent of any Pledgor hereunder. The rights and obligations of each Pledgor hereunder
shall remain in full force and effect notwithstanding the addition of any new Guarantor and Pledgor
as a party to this Agreement.



     SECTION 5.22 Effect of Amendment and Restatement.




          (a) The parties hereto agree that, on the Effective Date, the following transactions shall be
deemed to occur automatically, without further action by any party hereto:




          (i) the Pre-Petition Security Agreement shall be deemed to be amended and restated in
its entirety in the form of this Agreement;




          (ii) all existing obligations under the Pre-Petition Credit Agreement (the
“Existing Obligations”) shall, to the extent not paid on the Effective Date, be
deemed to be Obligations the payment and performance of which are secured by this Agreement;




          (iii) the guaranties and Liens in favor of the Collateral Agent under the Pre-Petition
Security Agreement for the benefit of the Secured Parties under the Pre-Petition Security
Agreement to secure the payment and performance of the Existing Obligations shall remain in
full force and effect and shall be continuing guaranties and Liens securing the payment and
performance of the Secured Obligations hereunder;




          (iv) all references in the other Loan Documents to the Pre-Petition Security Agreement
or the “Security Agreement” shall be deemed to be and include references to this Agreement,
as amended, restated, supplemented or otherwise modified from time to time; and




          (v) this Agreement shall not be deemed to evidence or result in a novation or repayment
of the Existing Obligations, and the Liens of Pledgors securing payment and performance
thereof in full when due are and shall in all respects be continuing as security for the
payment and performance in full when due of the Secured Obligations.




          (b) Each Pledgor hereby (i) ratifies and affirms the grant of security and Liens under the
Pre-Petition Security Agreement as security for the payment and performance in full when due of the
Secured Obligations and (ii) confirms and agrees that such security interests and Lien secure
all of the Secured Obligations under this Agreement and remain in full force and effect after
giving effect to this Agreement.




          (c) The execution, delivery and effectiveness of this Agreement shall not operate as a waiver
of any right, power or remedy of the Collateral Agent under the Pre-Petition Security Agreement or
constitute a waiver of any provision of the Pre-Petition Security Agreement, except as specifically
set forth therein.



[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]




20









 





     IN WITNESS WHEREOF, the Pledgors and the Collateral Agent have caused this Agreement to be duly
executed and delivered by their duly authorized officers as of the date first above written.



	 	 	 	 	 	 	 

	 	 	MAGNACHIP SEMICONDUCTOR S.A., a	 	 
	 	 	     Luxembourg corporation, as Pledgor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	Name:	 	 
	 
	 	 	 	 	 	 
	 	 	Title:	 	 






[Signature Page to Amended and Restated Foreign Security Agreement]




 









 





	 	 	 	 	 	 	 

	 	 	MAGNACHIP SEMICONDUCTOR, LTD., a United	 	 
	 	 	     Kingdom company, as Pledgor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	Name:	 	 
	 
	 	 	 	 	 	 
	 	 	Title:	 	 






[Signature Page to Amended and Restated Foreign Security Agreement]




 









 





	 	 	 	 	 	 	 

	 	 	MAGNACHIP SEMICONDUCTOR INC., a Japanese	 	 
	 	 	     company, as Pledgor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	Name:	 	 
	 
	 	 	 	 	 	 
	 	 	Title:	 	 






[Signature Page to Amended and Restated Foreign Security Agreement]




 









 





	 	 	 
	SEALED WITH THE COMMON

	 	) 
	SEAL OF MAGNACHIP

	 	) 
	SEMICONDUCTOR LIMITED AND

	 	) 
	SIGNED BY

	 	) 
	 

	 	) 
	in the presence of:

	 	) 






	 	 	 	 	 	 	 	 	 	 	 

	Witness:

	 	 	 	 	 	Witness:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Address:

	 	 	 	 	 	Address:	 	 	 	 






[Signature Page to Amended and Restated Foreign Security Agreement]




 









 





	 	 	 	 	 	 	 

	 	 	MAGNACHIP SEMICONDUCTOR B.V., a Dutch	 	 
	 	 	     company, as Pledgor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	Name:	 	 
	 
	 	 	 	 	 	 
	 	 	Title:	 	 






[Signature Page to Amended and Restated Foreign Security Agreement]




 









 





	 	 	 	 	 	 	 

	 	 	MAGNACHIP SEMICONDUCTOR HOLDING	 	 
	 	 	     COMPANY LTD., a British Virgin Islands	 	 
	 	 	     Company, as Pledgor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	Name:	 	 
	 
	 	 	 	 	 	 
	 	 	Title:	 	 






[Signature Page to Amended and Restated Foreign Security Agreement]




 









 





	 	 	 	 	 	 	 

	 	 	WILMINGTON TRUST FSB, as Collateral Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	Name:	 	 
	 
	 	 	 	 	 	 
	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	Name:	 	 
	 
	 	 	 	 	 	 
	 	 	Title:	 	 






[Signature Page to Amended and Restated Foreign Security Agreement]






 









 








SCHEDULE A




COMMERCIAL TORT CLAIMS

None.




 











 





SCHEDULE B




CHIEF EXECUTIVE OFFICE; CHANGE OF NAME; JURISDICTION OF ORGANIZATION



	 	 	 	 	 
	 	 	Type and	 	 
	Legal Name	 	Jurisdiction	 	Chief Executive Office
	MagnaChip Semiconductor S.A.

	 	Luxembourg
corporation
	 	74, rue de Merl

B.P. 709

L-2017 Luxembourg

Grand Duchy of Luxembourg
	 
	 	 	 	 
	MagnaChip Semiconductor B.V.

	 	Netherlands company
	 	1043 BW Amsterdam

Naritaweg 165

The Netherlands
	 
	 	 	 	 
	MagnaChip Semiconductor Limited

	 	Hong Kong company
	 	Suit 1024, 10th Floor,

Ocean Centre, 

Harbour
City, Tsimshatsui

Kowloon, Hong Kong
	 
	 	 	 	 
	MagnaChip Semiconductor Limited

	 	United Kingdom
company
	 	Knyvett House

The Causeway

Staines Middlesex

TW18 3BA

England
	 
	 	 	 	 
	MagnaChip Semiconductor 

Holding Company Limited

	 	British Virgin
Islands company
	 	Craigmuir Chambers

P.O. Box 71

Road Town, Tortola

British Virgin Islands
	 
	 	 	 	 
	MagnaChip Semiconductor Inc.

	 	Japanese company
	 	3F Shin-Osaka MT

Building, 3-5-36

Miyahara, Yodogawa-Ku

Osaka, Japan
	 
	 	 	 	 
	MagnaChip Semiconductor

(Shanghai) Company Limited

	 	China company
	 	E Room, No.8 Building,

No.1068, 

Wuzhong Road,
Minxing District

Shanghai, China








 









 








EXHIBIT A




FORM OF JOINDER AGREEMENT



[Name of New Pledgor]
[Address of New Pledgor]




[Date]




                                        

                                        

                                        




Ladies and Gentlemen:





Reference is made to that certain security agreement (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Security Agreement;”
capitalized terms used but not otherwise defined herein shall have the meanings assigned to such
terms in the Security Agreement), dated as of November 6, 2009, made by MagnaChip Semiconductor
S.A., a Luxembourg corporation (“Borrower”), and the guarantors party thereto
(“Guarantors”) in favor of [Wilmington Trust FSB], as collateral agent (in such capacity
and together with any successors in such capacity, the “Collateral Agent”).




This letter supplements the Security Agreement and is delivered by the undersigned, [      ] (the
“New Pledgor”), pursuant to Section 6.19 of the Security Agreement. The New
Pledgor hereby agrees to be bound as a Guarantor and as a Pledgor by all of the terms, covenants
and conditions set forth in the Security Agreement to the same extent that it would have been
bound if it had been a signatory to the Security Agreement on the execution date of the Security
Agreement. The New Pledgor also hereby agrees to be bound as a party by all of the terms,
covenants and conditions set forth in the Credit Agreement to the same extent that it would have
been bound if it had been a signatory to the Credit Agreement on the execution date of the
Credit Agreement. Without limiting the generality of the foregoing, the New Pledgor hereby
grants and pledges to the Collateral Agent, as collateral security for the full, prompt and
complete payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations, a Lien on and security interest in, all of its right,
title and interest in, to and under the Pledged Collateral and expressly assumes all obligations
and liabilities of a Guarantor and Pledgor thereunder. The New Pledgor hereby makes each of the
representations and warranties and agrees to each of the covenants applicable to the Pledgors
contained in the Security Agreement and Credit Agreement.




Annexed hereto are supplements to each of the schedules to the Security Agreement and the Credit
Agreement, as applicable, with respect to the New Pledgor. Such supplements shall be deemed to
be part of the Security Agreement or the Credit Agreement, as applicable.




This agreement and any amendments, waivers, consents or supplements hereto may be executed in
any number of counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original, but all such
counterparts together shall constitute one and the same agreement.




THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.



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IN WITNESS WHEREOF, the New Pledgor has caused this letter agreement to be executed and
delivered by its duly authorized officer as of the date first above written.



	 	 	 	 	 
	 	[NEW PLEDGOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



AGREED TO AND ACCEPTED:




[                                        ],

as Collateral Agent




	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	      Name:  	 	 
	 	 	      Title:  	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	      Name:  	 	 
	 	 	      Title:  	 	 
	 



[Schedules to be attached]





 









 





EXHIBIT I




[Form of]

SOLVENCY CERTIFICATE







I, undersigned, [chief financial officer] of MagnaChip Semiconductor S.A., a Luxembourg
corporation (“Luxco”) and MagnaChip Semiconductor Finance Company, a Delaware corporation
(“Finco”; and together with Luxco, the “Borrowers”), DO HEREBY CERTIFY on behalf of Borrowers
that:





1. This Certificate is furnished pursuant to Section 4.01(h) of the Amended and Restated
Credit Agreement dated as of November 6, 2009 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”) among the Borrowers, MAGNACHIP
SEMICONDUCTOR LLC, a Delaware limited liability company (“Holdings”), the Subsidiary Guarantors
(such term and each other capitalized term used but not defined herein having the meaning given
it in Article I of the Credit Agreement), the Lenders, and WILMINGTON TRUST FSB, as
administrative agent (in such capacity, “Administrative Agent”) for the Lenders and as
collateral agent (in such capacity, “Collateral Agent”) for the Secured Parties.





2. Immediately following the consummation of the Transactions, (a) the fair value of the assets
of each Loan Party (individually and on a consolidated basis with its Subsidiaries) exceeds its
debts and liabilities, subordinated, contingent or otherwise; (b) the present fair saleable
value of the property of each Loan Party is greater than the amount that will be required to pay
the probable liability of its debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured; and (c) each Loan
Party (individually and on a consolidated basis with its Subsidiaries) does not have
unreasonably small capital with which to conduct the business in which it is engaged as such
business is now conducted and is proposed to be conducted following the Closing Date.



[Signature Page Follows]




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     IN WITNESS WHEREOF, I have hereunto set my hand this [ ]th day of [     ].



	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR S.A.

 	 
	 	By:  	 	 
	 	 	     Name:  	 	 
	 	 	     Title:  	[Chief Financial Officer] 	 
	 
	 	MAGNACHIP SEMICONDUCTOR FINANCE COMPANY

 	 
	 	By:  	 	 
	 	 	     Name:  	 	 
	 	 	     Title:  	     [Chief Financial Officer] 	 
	 




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