exv10w5






Exhibit 10.5




Execution Copy




GENERAL SERVICE SUPPLY AGREEMENT




between



Hynix Semiconductor Inc.



and



MagnaChip Semiconductor, Ltd.



October 6, 2004





 




[*****] = Portions of this exhibit are subject to a request for confidential treatment and
have been redacted and filed separately with the Securities and Exchange Commission.




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE 1. DEFINITIONS

	 	 	1	 
	 
	 	 	 	 
	ARTICLE 2. TERM OF AGREEMENT; DURATION OF SERVICES

	 	 	7	 
	 
	 	 	 	 
	ARTICLE 3. SERVICES AND FEES

	 	 	8	 
	 
	 	 	 	 
	ARTICLE 4. SUPPLY OF THE SERVICES; RIGHT OF FIRST REFUSAL

	 	 	13	 
	 
	 	 	 	 
	ARTICLE 5. MAINTENANCE OF THE SERVICES

	 	 	14	 
	 
	 	 	 	 
	ARTICLE 6. COORDINATING COMMITTEE

	 	 	15	 
	 
	 	 	 	 
	ARTICLE 7. PAYMENTS FOR THE SERVICES

	 	 	15	 
	 
	 	 	 	 
	ARTICLE 8. REPRESENTATIONS, WARRANTIES AND COVENANTS

	 	 	17	 
	 
	 	 	 	 
	ARTICLE 9. FORCE MAJEURE

	 	 	18	 
	 
	 	 	 	 
	ARTICLE 10. TERMINATION; EFFECT OF TERMINATION

	 	 	20	 
	 
	 	 	 	 
	ARTICLE 11. INDEMNIFICATION

	 	 	20	 
	 
	 	 	 	 
	ARTICLE 12. LIMITATION ON LIABILITY

	 	 	21	 
	 
	 	 	 	 
	ARTICLE 13. ASSIGNMENT

	 	 	21	 
	 
	 	 	 	 
	ARTICLE 14. GOVERNING LAW; DISPUTE RESOLUTION

	 	 	22	 
	 
	 	 	 	 
	ARTICLE 15. CONFIDENTIALITY

	 	 	23	 
	 
	 	 	 	 
	ARTICLE 16. MISCELLANEOUS

	 	 	24	 
	 
	 	 	 	 
	EXHIBIT A  SHORT TERM SERVICES
	 	 	 	 
	 
	 	 	 	 
	EXHIBIT B  ENVIRONMENTAL SAFETY & FACILITY MONITORING SERVICES FEES
	 	 	 	 
	 
	 	 	 	 
	EXHIBIT C  UTILITIES AND INFRASTRUCTURE SUPPORT SERVICES FEES
	 	 	 	 
	 
	 	 	 	 
	EXHIBIT D  VIVENDI SERVICES FEES & CERTAIN VIVENDI ASSETS
	 	 	 	 
	 
	 	 	 	 
	EXHIBIT E  WELFARE FACILITY SERVICES FEES
	 	 	 	 
	 
	 	 	 	 
	EXHIBIT F  CHEMICAL PROCUREMENT SERVICES FEES
	 	 	 	 
	 
	 	 	 	 
	EXHIBIT G  PARKING LOT, SPORTS FIELDS AND TENNIS COURT NEAR THE
WOMEN’S DORMITORIES
	 	 	 	 
	 
	 	 	 	 
	APPENDIX I  SAMPLE CALCULATION OF FEES
	 	 	 	 






-i-





 









 








GENERAL SERVICE SUPPLY AGREEMENT



This GENERAL SERVICE SUPPLY AGREEMENT (this “Agreement”), dated as of October 6, 2004 (the
“Effective Date”), is entered into by and between:





	(1)	 	Hynix Semiconductor Inc., a company organized and existing under
the laws of the Republic of Korea (“Korea”) with its registered
office at San-136-1, Ami-Ri, Bubal-Eub, Ichon-Si, Kyoungki-Do,
Korea (“Hynix”); and






	(2)	 	MagnaChip Semiconductor, Ltd., a company organized and existing
under the laws of Korea with its registered office at 1,
Hyangjeong-Dong, Heungduk-Gu, Cheongju-Si, Chungcheongbuk-Do,
Korea (“NewCo”) (each a “Party” and collectively the “Parties”).





RECITALS



WHEREAS, the Parties have entered into a certain business transfer agreement dated June 12,
2004, as amended (the “BTA”) pursuant to which, among other things, NewCo has agreed to acquire the
Acquired Assets (as defined in the BTA) from Hynix subject to the terms and conditions set forth in
the BTA;



WHEREAS, the Parties desire to enter into an agreement as contemplated by the BTA whereby
Hynix and NewCo will provide to each other certain services related to goods, utilities and
facilities in accordance with the terms and conditions of this Agreement which are required or
desirable for the transition, setting-up or continuing operation of the applicable Party’s
business; and



WHEREAS, the execution and delivery of this Agreement is a condition to the Closing under the
BTA.



NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements
hereinafter set forth, and intending to be legally bound hereby, the Parties agree as follows:




Article 1. Definitions





	1.1.	 	Unless otherwise defined herein, all capitalized terms shall have the meanings set forth below:






	 	 	“Affiliate” shall have the meaning ascribed to such term in the BTA.






	 	 	“AUP” shall mean the agreed-upon-procedures which Samil PricewaterhouseCoopers (formerly
Samil Accounting Corporation) has performed in connection with the financial statements
attached in Schedule 2.4 of the BTA.






	 	 	“BTA” shall have the meaning ascribed to such term in the Recitals.






	 	 	“Business” shall have the meaning ascribed to such term in the BTA. Any reference to the
“conduct of the Business” or the “operation of the Business” shall refer to the conduct or
operation of the Business as conducted as of the execution date of the BTA.




 









 












	 	 	“Business Day” shall mean any day other than a Saturday, Sunday or a day on which banks in
Seoul are authorized or obligated by relevant law to close.






	 	 	“CAO Operation Support Services” shall mean on-the-job training of personnel so that such
personnel can provide services related to accounting, finance, administration and control of
human resources (but excluding planning and decision functions of human resources), which have
been historically provided to the Business.






	 	 	“Chemical Procurement Services” shall mean the sale by Hynix to NewCo of such quantities
of CPD-18 in a state of Developer 2.38% CPD2000 (Developer 20%) and produced by mixing with
de-ionized water (the “Chemical”) as are requested by NewCo from time to time to meet the
requirements of NewCo’s business, and the services related to such sale in which every morning
Hynix will pick up from such locations within the Hynix Complex in Cheongju, Korea as may be
designated by NewCo from time to time such drums which NewCo has deposited there for these
Services and the following morning Hynix will deliver to the same locations each such drum
refilled with the Chemical.






	 	 	“Closing” shall have the meaning ascribed to such term in the BTA.






	 	 	“Closing Date” shall have the meaning ascribed to such term in the BTA.






	 	 	“Confidential Information” shall have the meaning ascribed to such term in Section 15.1.






	 	 	“Coordinating Committee” shall have the meaning ascribed to such term in Section 6.1.






	 	 	“Daesung” shall mean Daesung Industrial Gas Co., Ltd., a company organized and existing
under the laws of Korea and a party to the Daesung Agreements.






	 	 	“Daesung Agreements” shall mean all agreements entered into between Hynix and Daesung
under which Daesung supplies gas to Hynix by constructing and operating, at Daesung’s own cost
and responsibility, on-site gas plants within the Hynix Complex in Cheongju, Korea.






	 	 	“Damages” shall mean any and all losses, settlements, expenses, liabilities, obligations,
claims, damages (including any governmental penalty or costs of investigation, clean-up and
remediation), deficiencies, royalties, interest, costs and expenses (including reasonable
attorneys’ fees and all other expenses reasonably incurred in investigating, preparing or
defending any litigation or proceeding, commenced or threatened incident to the successful
enforcement of this Agreement), the extent of which are recoverable under Korean law. For the
purposes of Articles 11 and 12, Damages also shall include any and all increases in insurance
premiums that are reasonably demonstrably attributable to the breach by NewCo or Hynix, as the
case may be, of its representations, warranties, agreements and covenants expressly contained
in this Agreement, or negligence, gross negligence, intentional breach or willful misconduct
of NewCo or Hynix, as the case may be, for the two following annual policy periods.





2









 









	 	 	“Environmental Safety & Facility Monitoring Services” shall mean the services related to
wastewater treatment, sewage management (to the extent it is not supplied as a part of the
Vivendi Services), fire
emergency service and drills/training, facility monitoring service, radiation and in-house
clinic, which have been historically provided to the Business.






	 	 	“Event of Force Majeure” shall have the meaning ascribed to such term in Section 9.1.






	 	 	“Governmental Authorization” shall mean any approval, consent, license, permit, waiver or
other authorization issued, granted, given or otherwise made available by or under the
authority of any Governmental Entity or otherwise pursuant to any applicable laws, or any
registration with, or report or notice to, any Governmental Entity pursuant to any applicable
laws.






	 	 	“Governmental Entity” shall mean a court, arbitral tribunal, administrative agency or
commission or other governmental or other regulatory authority or agency.






	 	 	“Hynix Complex” shall mean the Hynix and/or NewCo manufacturing, testing, packaging,
research and development and other facilities located at Ichon, Cheongju, Gumi, and Seoul,
Korea.






	 	 	“Hynix Utilities and Infrastructure Support Services” shall mean the services related to
electricity (154kV substation and substation of the Korea Electric Power Corporation), water,
fuel (city gas and light oil), bulk gasses (of the type historically provided under the
Daesung Agreements) and de-ionized water (to the extent it is not supplied by Vivendi as a
part of the Vivendi Services), which have been historically provided to the Business in
Cheongju, Korea.






	 	 	“Indemnified Party” shall have the meaning ascribed to such term in Section 11.1.






	 	 	“Indemnifying Party” shall have the meaning ascribed to such term in Section 11.1.






	 	 	“Joint Purchasing Services” shall mean, to the extent permitted by applicable law, such
cooperation and coordination between the Parties, including by means of information sharing
and joint purchasing from the same vendors, as is necessary or advisable to achieve such
benefits including volume discounts, cost reductions and efficiency in gathering market
information in the purchase of equipment, silicon wafers, photo chemicals and other raw
materials and spare parts, which have been historically provided to the Business.






	 	 	“Leased Premises” shall have the meaning ascribed to such term in Section 3.14(a).






	 	 	“Long-Term Service” shall mean each of the Vivendi Services and each of the services
related to (a) electricity (154kV substation), electricity (substation of the Korea Electric
Power Corporation), bulk gasses and de-ionized water (to the extent it is not supplied as a
part of the Vivendi Services), which are part of the Hynix Utilities and Infrastructure
Support Services; (b) use of and services related to dormitory (including sewage and waste
management and disposal services), Hynix culture center, security cameras,






3









 









	 	 	security guard house, commuting bus, cafeteria, communication systems including leased lines,
company broadcasting system (other than content), company house (Poolen Apartments, Sawon
Apartments and sa-rang-bang) and leased apartments (Woojung apartments), sports field, tennis
courts and parking lot (near women’s dormitories) and reserve troops in Cheongju, Korea, and
use of and services relating to Highla Condominiums, Korea Condominiums and, subject to then
applicable union contracts and restrictions, other condominiums existing as of the date
hereof, which are part of the Welfare Facility Services; and (c) wastewater treatment and
sewage management (to the extent they are not supplied as a part of the Vivendi Services),
fire emergency service and drills/training and in-house clinic, which are part of the
Environmental Safety & Facility Monitoring Services.






	 	 	“Maintenance Activities” shall have the meaning ascribed to such term in Section 5.1.






	 	 	“Mask Services” shall mean certain services relating to the Products as defined in the
Mask Production and Supply Agreement between the Parties, dated the date hereof, including
defect inspection, repair and cleaning of such Products.






	 	 	“NewCo Utilities and Infrastructure Support Services” shall mean the services related to
management of water tank, supply of assembly utility and waste management, which have been
historically used or received by Hynix (other than in connection with the Business) in
connection with Hynix’s use of the R, C1, C2, C3 and Assembly buildings in Cheongju, Korea.






	 	 	“Notice of Sale” shall have the meaning ascribed to such term in Section 4.5.






	 	 	“Notice Period” shall have the meaning ascribed to such term in Section 4.5.






	 	 	“Offered Assets” shall have the meaning ascribed to such term in Section 4.5.






	 	 	“Permitted Business” shall mean the Business or any other semiconductor, information
technology or other technology related business.






	 	 	“Service Facilities” shall mean those facilities at the Hynix Complex and those assets
that are used for or relate to the provision of the Services.






	 	 	“Services” shall mean such services related to goods, facilities and utilities which are
required or desirable for transition, setting-up or continuing operation of the applicable
Party’s business and consisting of each of the services constituting the Vivendi Services,
Hynix Utilities and Infrastructure Support Services, NewCo Utilities and Infrastructure
Support Services, Welfare Facility Services, Environmental Safety & Facility Monitoring
Services, Mask Services, CAO Operation Support Services, Chemical Procurement Services, Joint
Purchasing Services and the other services described herein.






	 	 	“Subsidiaries” shall have the meaning ascribed to such term in the BTA.






	 	 	“Term” shall have the meaning ascribed to such term in Article 2.






4









 









	 	 	“Third Party Supplier(s)” shall mean Daesung and/or Vivendi, as applicable, which provide
certain services to Hynix for Hynix’s provision of such Services hereunder.






	 	 	“Third Party Supplier Agreement(s)” shall mean the Daesung Agreement and/or the Vivendi
Water and Wastewater Services Agreement, as applicable, and any replacements or modifications
thereof from time to time.






	 	 	“Unprotected Long-Term Services” shall mean each of the services related to (a) security
cameras, security guard house, commuting bus, cafeteria, communication systems including
leased lines, company broadcasting system, company house (Poolen Apartments, Sawon Apartments
and sa-rang-bang) and leased apartments (Woojung apartments), sports field, tennis courts and
parking lot (near the women’s dormitories) and reserve troops in Cheongju, Korea, and Highla
Condominiums, Korea Condominiums and, subject to then applicable union contracts and
restrictions, other condominiums existing as of the date hereof, which are part of the Welfare
Facility Services; and (b) fire emergency
service and drills/training and in-house clinic, which are part of the Environmental Safety &
Facility Monitoring Services.






	 	 	“Vivendi” shall mean Veolia Water Industrial Development Co., Ltd. (formerly known as
“Vivendi Water Industrial Development Co., Ltd.”), organized and existing under the laws of
Korea and a party to the Vivendi Water and Wastewater Services Agreement.






	 	 	“Vivendi Services” shall mean the services related to de-ionized water supply and
wastewater disposal in the Hynix Complex located in Cheongju, Korea and in Gumi, Korea, and
all such other services provided by Vivendi to Hynix under the Vivendi Water and Wastewater
Service Agreement.






	 	 	“Vivendi Water and Wastewater Services Agreement” shall mean the Water and Wastewater
Services Agreement dated March 29, 2001 entered into by and between Hynix (then named Hyundai
Electronics Industries Co., Ltd.) and Vivendi, as the same may be amended from time to time.






	 	 	“Warrant Issuer” shall have the meaning ascribed to such term in the BTA.






	 	 	“Welfare Facility Services” shall mean such welfare and facility services, including the
use of and services related to (a) dormitories (including sewage and waste management and
disposal services), Hynix culture center, security cameras, security guard house, commuting
bus, cafeteria, communication systems, company broadcasting system (other than content),
company house (Poolen Apartments, Sawon Apartments and sa-rang-bang) and leased apartments
(Woojong apartments), sports fields, tennis courts and parking lot (near women’s dormitories),
and reserve troops in the Hynix Complex located in Cheongju, Korea; (b) leased apartments,
dormitory (including sewage and waste management and disposal services), cafeteria, gymnasium,
parking lot, communication systems, pavilion/PR center/audience room, kindergarten, reserve
troops, security and sports field in the Hynix Complex located in Ichon, Korea; (c) reserve
troops, postal and package delivery (among Cheongju, Ichon and Youngdong), security card key
system and communication systems in the Hynix Complex located in Youngdong Building,






5









 









	 	 	Seoul, Korea, which have been historically provided to the Business; and (d) Highla
Condominiums, Korea Condominiums and, subject to then applicable union contracts and
restrictions, other condominiums existing as of the date hereof owned by Hynix.






	1.2.	 	Rules of Interpretation.






	 	(a)	 	When a reference is made in this Agreement to a
section or article, such reference shall be to a
section or article of this Agreement unless
otherwise clearly indicated to the contrary.
	 
	 	(b)	 	Whenever the words “include”, “includes” or
“including” are used in this Agreement they shall be
deemed to be followed by the words “without
limitation.”
	 
	 	(c)	 	The words “hereof”, “hereto”, “herein” and
“herewith” and words of similar import shall, unless
otherwise stated, be construed to refer to this
Agreement as a whole and not to any particular
provision of this Agreement, and article, section,
paragraph, exhibit and schedule references are to
the articles, sections, paragraphs, exhibits and
schedules of this Agreement unless otherwise
specified.
	 
	 	(d)	 	The meaning assigned to each term defined herein
shall be equally applicable to both the singular and
the plural forms of such term, and words denoting
any gender shall include all genders. Where a word
or phrase is defined herein, each of its other
grammatical forms shall have a corresponding
meaning.
	 
	 	(e)	 	A reference to any party to this Agreement or any
other agreement or document shall include such
party’s successors and permitted assigns.
	 
	 	(f)	 	A reference to any legislation or to any provision
of any legislation shall include any amendment to,
and any modification or re-enactment thereof, any
legislative provision substituted therefor and all
regulations and statutory instruments issued
thereunder or pursuant thereto.
	 
	 	(g)	 	The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or
interpretation arises, this Agreement shall be
construed as if drafted jointly by the Parties, and
no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of the
authorship of any provisions of this Agreement.
	 
	 	(h)	 	Headings are for convenience only and do not affect
the interpretation of the provisions of this
Agreement.
	 
	 	(i)	 	Any Exhibits attached hereto are incorporated herein
by reference and shall be considered as a part of
this Agreement.





6









 








Article 2. Term of Agreement; Duration of Services




	2.1.	 	This Agreement shall become effective on the Effective Date and
continue in full force and effect for so long as any Service is
being provided hereunder, unless earlier terminated in
accordance with Article 10 (the “Term”).






	2.2.	 	Unless specified otherwise in this Article 2, each of the
Services shall be provided from the Effective Date until the
date that is one (1) year after the Effective Date (the “Initial
Service Period”), unless otherwise earlier terminated pursuant
to this Agreement. Unless specified otherwise in this Article 2,
after the Initial Service Period for a Service, such Service
shall be provided for one additional one (1) year period NewCo
notifies Hynix in writing of its desire not to renew the
provision of such Service at least sixty (60) days prior to the
expiration of the Initial Service Period or the Service is
earlier terminated pursuant to this Agreement.






	2.3.	 	The provision of Services in the Hynix Complex located in
Youngdong Building, Seoul, and Ichon, Korea, respectively, will
terminate after the applicable lease for the Hynix Complex
located in Youngdong Building, Seoul, and Ichon, Korea,
respectively, terminates, provided, however, that with respect
to the leased apartments in Ichon, Korea, NewCo or the NewCo
employee (as applicable) shall have the right to early
termination of such leased apartment without penalty and shall,
subject to the regulations of Hynix concerning the leased
apartments, have the option to renew a leased apartment for one
additional term.






	2.4.	 	Each Long-Term Service shall be provided for the Initial Service
Period and for successive additional one (1) year periods,
unless NewCo notifies Hynix in writing of its desire not to
renew the provision of such Long-Term Service at least sixty
(60) days prior to the expiration of the Initial Service Period
or any annual anniversary thereof or the Long-Term Service is
earlier terminated pursuant to this Agreement.






	2.5.	 	NewCo and Hynix shall, for a period of one year from the date
hereof, cooperate with each other and negotiate in good faith
with Vivendi regarding, and use commercially reasonable efforts
to enter into, separate water and wastewater services agreements
with Vivendi under which Vivendi shall directly provide NewCo
and Hynix with services that are identical to the services
provided by Vivendi to Hynix under the Vivendi Water and
Wastewater Services Agreement, with terms at least as favorable
as those on which the services are currently provided to Hynix.
To the extent that NewCo is able to enter into such an
agreement, Hynix will no longer be obligated to provide such
services as are provided directly from Vivendi to NewCo under
such agreement. To the extent that NewCo is unable to receive
the applicable services directly from Vivendi, Hynix shall
remain obligated to provide Vivendi Services to NewCo in
accordance with the terms and conditions of this Agreement.
NewCo and Hynix shall, for a period of one year from the date
hereof, cooperate with each other and negotiate in good faith
with Daesung regarding, and use commercially reasonable efforts
to enter into, separate gas agreements with Daesung under which
Daesung shall directly provide NewCo and Hynix with services
that are identical to the services provided by Daesung to Hynix
under the Daesung Agreements, with terms at least as favorable
as those on which the services currently are





7









 









	 	 	provided to Hynix. To the extent that NewCo is able to enter into such an agreement, Hynix
will no longer be obligated to provide such services as are provided directly from Daesung to
NewCo under such agreement. To the extent that NewCo is unable to receive the applicable
services directly from Daesung, Hynix shall remain obligated to provide such services to NewCo
in accordance with the terms and conditions of this Agreement.






	2.6.	 	NewCo Utilities and Infrastructure Support Services shall be
provided for the Initial Service Period and for successive one
(1)-year periods, unless Hynix notifies NewCo in writing of its
desire not to renew the provision of the NewCo Utilities and
Infrastructure Support Services at least sixty (60) days prior
to the expiration of the Initial Service Period or any annual
anniversary thereof or the NewCo Utilities and Infrastructure
Support Services are earlier terminated pursuant to this
Agreement.






	2.7.	 	Notwithstanding any other provision of this Agreement to the
contrary, each Party may terminate the provision of any Service,
in whole or in part, by providing the other Party with sixty
(60) days prior notice of such termination (or such shorter time
period of notice as is specified for such Service in Exhibit A).
The terminating Party shall not be obligated to pay the other
Party the service fees attributable to such cancelled
Service(s), or part thereof, to the extent such fees are for
services provided for any period beginning on or after the
effective date of such termination.






	2.8.	 	Chemical Procurement Services shall be provided from the
Effective Date until the date that is five (5) years after the
Effective Date, and thereafter for so long as Hynix has the
capacity to provide such Service, unless otherwise earlier
terminated pursuant to this Agreement.






	2.9.	 	With respect to the Services related to the company broadcasting
system under the Welfare Facility Services relating to
production and development of content, such services shall be
provided from the Effective Date until the date that is five (5)
years after the Effective Date, unless otherwise earlier
terminated pursuant to this Agreement.






	2.10.	 	The Mask Services shall be provided from the Effective Date
until the date that is five (5) years after the Effective Date,
unless otherwise earlier terminated pursuant to this Agreement.





Article 3. Services and Fees





	3.1.	 	Hynix shall provide, or cause the applicable Third Party
Supplier to provide, NewCo with the Vivendi Services, Hynix
Utilities and Infrastructure Support Services, Welfare Facility
Services, Environmental Safety & Facility Monitoring Services,
Mask Services, CAO Operation Support Services and Chemical
Procurement Services, and NewCo shall receive such Services from
Hynix, for the periods determined in accordance with Article 2.
NewCo shall provide Hynix with the NewCo Utilities and
Infrastructure Support Services, and Hynix shall receive such
Services from NewCo, for the periods determined in accordance
with Article 2.






	3.2.	 	The Parties shall each provide the Joint Purchasing Services to
the other at no cost to the other and, to the extent permitted
by applicable law, shall jointly purchase equipment,





8









 









	 	 	silicon wafers, photo chemicals and other materials or spare parts if such joint purchasing
would reduce the cost of any such item. For such purpose, Hynix and NewCo shall form a joint
purchasing steering committee composed of an equal number of representatives designated by
each Party to, to the extent permitted by applicable laws, coordinate information sharing and
the joint purchasing of equipment, silicon wafers, photo chemicals and other raw materials and
spare parts.






	3.3.	 	The fees for the Environmental Safety & Facility Monitoring
Services, Hynix Utilities and Infrastructure Support Services,
NewCo Utilities and Infrastructure Support Services, Welfare
Facility Services and Chemical Procurement Services shall be
determined in accordance with Exhibits B, C.1, C.2, E and F,
respectively. Until the expiration and/or termination of the
Vivendi Water and Wastewater Service Agreement, the fees for the
Vivendi Services shall be determined in accordance with Exhibit
D.






	3.4.	 	Hynix shall provide NewCo with the CAO Operation Support
Services, at no additional cost, for the period set forth in
Article 2. Hynix shall provide NewCo with the Mask Services at
actual cost incurred for the period set forth in Article 2.






	3.5.	 	Upon the expiration of the Vivendi Water and Wastewater Service
Agreement, Hynix will be entitled to receive certain assets (the
“Vivendi Assets”) from Vivendi used in connection with the
provision of services under such agreement. In such case, upon
NewCo’s request, Hynix shall promptly transfer, assign and
convey to NewCo, at no additional cost, those Vivendi Assets
which are listed on Exhibit D hereto. Upon the early termination
of the Vivendi Water and Wastewater Service Agreement, Hynix
also will be entitled to receive the Vivendi Assets from Vivendi
used in connection with the provision of services under such
agreement. In such case, upon NewCo’s request, Hynix shall
promptly transfer, assign and convey to NewCo those Vivendi
Assets which are listed on Exhibit D hereto at the same price
paid by Hynix to Vivendi for such Vivendi Assets under the
Vivendi Water and Wastewater Services Agreement. To the extent
that there are any benefits provided to either Party under the
Vivendi Water and Wastewater Service Agreement, both Parties
shall work in good faith to divide such benefits between them in
an equitable manner.






	3.6.	 	With respect to the Welfare Facility Services related to the
dormitories, NewCo shall provide Hynix with the names and
identities of NewCo’s employees who intend to use such Welfare
Facility Services as soon as reasonably practical in advance of
the first day of such use.






	3.7.	 	NewCo agrees that it shall, and shall cause NewCo’s directors,
officers, employees, agents, representatives or any other
permitted users of the Welfare Facility Services to, abide by
all reasonable safety and administrative rules and regulations
of Hynix related to the Welfare Facility Services, if any.






	3.8.	 	Subject to Section 3.14, Hynix and NewCo shall have equal rights
for the use of all relevant facilities for the Welfare Facility
Services. NewCo and its directors, officers and employees shall,
at all times, receive the benefits of the Welfare Facility
Services on terms and conditions that are as favorable as those
enjoyed by Hynix, and its directors, officers and employees at
such time without any additional incremental cost to NewCo or
its directors, officers or employees.





9









 









	3.9.	 	Hynix shall provide, at no additional cost, NewCo and NewCo’s
representatives with access at all reasonable times to any historical
data relating to the Business that NewCo may request. In furtherance
of the forgoing, at the reasonable request of NewCo, Hynix shall
provide NewCo and NewCo’s representatives with access to, or shall
otherwise provide to NewCo and NewCo’s representatives, electronic
data in electronic form relating to the Business. NewCo shall
provide, at no additional cost, Hynix and Hynix’s representatives
with access at all reasonable times to any historical data relating
to Hynix’s business, except for information relating to the Business,
that Hynix may request. Neither Party shall, for a period of six
years after the date hereof, destroy any such data without giving the
other Party at least 30 days prior written notice, during which time
the other Party shall have the right (subject to Article 15) to
examine, remove, to the extent not prohibited by operation of
applicable law, or make and retain a copy of, any such data prior to
destruction. Nothing herein shall limit or modify or be deemed to
limit or modify the Parties’ rights and obligations under Section 6.2
of the BTA.






	3.10.	 	If either Party receives any payment after the Closing Date to
which the other Party is entitled pursuant to the BTA, such
Party shall promptly (and in no event later than ten (10)
Business Days after receipt of such payment) remit such payment
to the other Party.






	3.11.	 	In addition to the Services set forth herein, Hynix and NewCo
acknowledge and agree that there may be additional services
which have not been identified but which historically have been
provided by Hynix to the Business and which shall continue to
be required or desired by NewCo. If, within one year of the
Closing Date, any such additional services are identified and
requested reasonably in advance by NewCo, Hynix shall provide
such additional services to NewCo in a manner consistent with
the other Services, at a price no greater than actual cost,
and, to the extent applicable, calculated by taking into
account the AUP. Any such additional services which are
consistent with the type and subject matter of other Long-Term
Services under this Agreement shall be deemed to be Long-Term
Services for the purposes of Article 2 and any other such
additional services shall be provided until the second
anniversary of the date hereof, subject to Section 2.7. With
respect to additional services which historically have not been
provided by Hynix with respect to the Business (“New Service”),
at the request of NewCo, the Parties will discuss in good faith
the provision of any such New Service by Hynix to NewCo.






	3.12.	 	Any fees for the Services to be provided hereunder are set
forth on the applicable Exhibit and there are no other fees for
the Services except as set forth thereon. To the extent
applicable, calculations hereunder shall be made by taking into
account the AUP.






	3.13.	 	Notwithstanding anything herein to the contrary, but subject to
the last sentence of Section 3.11, the Parties acknowledge and
agree that it is their mutual intent that the fees for the
Services provided hereunder shall be no greater than the actual
cost reasonably incurred to provide such Services. The Parties
agree to cooperate in good faith in furtherance of the
foregoing, including by adjusting the fees from time to time if





10









 









	 	 	necessary in order to effectuate this intent and by conducting, at the request of either
Party, an audit of the fees in each calendar year during which services are provided (at a
time within the first six months of the succeeding calendar year mutually agreed to in good
faith) to compare the costs actually incurred to provide the Services hereunder during such
period with the fees paid for such Services. The audited Party may dispute the results of any
such audit, provided that the audited Party shall notify the requesting Party in writing of
such disputed results within 30 days of the audited Party’s receipt of the results of the
audit. In the event of any such dispute, Hynix and NewCo shall attempt to reconcile their
differences and any resolution by them as to any disputed amounts shall be final, binding and
conclusive on Hynix and NewCo. If Hynix and NewCo are unable to reach a resolution to such
effect of all disputed amounts within 30 days of receipt of the audited Party’s written notice
of dispute to the requesting Party, NewCo and Hynix shall submit the amounts remaining in
dispute for resolution to the Independent Accounting Firm, which shall, within 30 days after
such submission, determine and report to Hynix and NewCo with respect to the amounts
disputed. The findings of the Independent Accounting Firm shall be final, binding and
conclusive on Hynix and NewCo. If the results of any such audit as finally determined indicate
that the requesting Party has, in the aggregate with respect to all costs audited, paid more
than the amount otherwise required to have been paid pursuant to this Agreement, the audited
Party shall promptly (and in no event later than 30 days from the date of such determination)
refund the amount of such overpayment to the requesting Party. If the results of any such
audit as finally determined indicate that the requesting Party has, in the aggregate with
respect to all costs audited, paid less than the amount otherwise required to have been paid
pursuant to this Agreement, the requesting Party shall promptly (and in no event later than 30
days from the date of such determination) pay the amount of such underpayment to the audited
Party. For any individual deficiency or overpayment indicated by the results of any such audit
as finally determined, the Party owing the payment shall pay to the other Party, in addition
to such payment due, interest thereon at a rate of eight (8%) percent per annum of such
deficiency or overpayment for the period from the date of such deficiency or overpayment until
the date finally paid or reimbursed, as the case may be. The total costs involved in any such
audit shall be paid by: (i) the requesting Party, in the case that the audit demonstrates a
deviation in the aggregate with respect to all audited costs of less than 5% from the amount
otherwise required to have been paid pursuant to this Agreement, (ii) both Parties equally, in
the case that the audit demonstrates a deviation from 5% to 10% and (iii) the audited Party,
in the event that the audit demonstrates a deviation greater than 10%. Each Party shall use
its commercially reasonable efforts to minimize the costs incurred to provide the Services.
The Parties agree that the audit contemplated hereunder shall be conducted only once in each
calendar year for all of the following agreements entered into by and between the Parties
and/or their Affiliates as of the date hereof: General Service Supply Agreement, R&D Equipment
Utilization Agreement, IT & FA Service Agreement, Taiwan Overseas Sales Services Agreement,
U.S. Overseas Sales Services Agreement, Japan Overseas Sales Services Agreement, U.K. Overseas
Sales Services Agreement and Hong Kong Overseas Sales Services Agreement.






	3.14.	 	(a) Hynix and
NewCo shall have
the right to use up
to 54.7% and 45.3%,
respectively, of
the units in each
dormitory and
apartment in
Cheongju, Korea




11









 






	 	 	 	which is a part of the Welfare Facility Services. Each Party shall have the right to use
such additional amount of the units in each such dormitory or apartment as the Parties
may agree from time to time. In order to secure NewCo’s right described in the first
sentence of this Section 3.14 (a), on or after the Effective Date, NewCo shall have the
right to register lease rights (the “Lease Rights”) over 45.3% of the total floor area
of each dormitory in the Hynix Complex in Cheongju, Korea (the “Leased Premises”) with
the relevant real property registry offices for the Term, such Lease Right registration
having priority over any lien or encumbrance established on such dormitories other than
statutory liens and liens established thereon as of one (1) day prior to the Closing
Date by Hynix’s financing creditors; provided, however, that with respect to the women’s
dormitory, Hynix shall conduct the registration to preserve ownership with respect to
the women’s dormitory within one (1) year from the Effective Date and shall thereafter
register the Lease Rights over 45.3% of the total floor area of the women’s dormitory
having priority over any lien or encumbrance established on the women’s dormitory other
than statutory liens and liens to be established thereon by Hynix’s financing creditors.
Hynix shall take any action necessary to maintain or cause to be maintained the priority
of the Lease Right, subordinate only to such Hynix’s senior financing and statutory
liens, with respect to the Leased Premises during the Term. Hynix shall provide to NewCo
all necessary documents normally required of a lessor for the registration of the Lease
Right on the Leased Premises on the Effective Date. For the avoidance of doubt, the
Parties agree and acknowledge that notwithstanding the registration of the Lease Rights
pursuant to this Section 3.14(a), NewCo shall not have the right to exclusively use the
Leased
Premises and the Parties shall have the right to use all dormitories in existence as of
the date hereof on a pro rata shared basis as indicated in the first sentence of this
Section 3.14(a).
	 
	 	(b)	 	With respect to the leased apartments in Ichon,
Korea which are a part of the Welfare Facility
Services, only the employees of NewCo who reside in
such apartments on the date hereof or who apply to
Hynix for occupancy within one day prior to the
Closing Date shall be eligible to occupy such
apartments.






	3.15.	 	Hynix shall provide e-mail forwarding services for NewCo
employees for up to six (6) months from the Closing Date at no
additional cost so that any e-mail addressed to the former
Hynix e-mail account of a NewCo employee shall automatically
forward to the NewCo e-mail account of such NewCo employee.
Each NewCo employee shall be entitled to use the same telephone
numbers and fax numbers as it used prior to the Closing Date
and NewCo shall also be entitled to use the same telephone
numbers and fax numbers as were used by the Business prior to
the Closing Date.






	3.16.	 	With respect to the sports field and the parking lot near the
women’s dormitories as set forth on Exhibit G, Hynix may cease
to provide these facilities to NewCo on three months prior
written notice in the event Hynix determines to put such space
to a different use or sells such facilities, but if such
facilities are replaced with a substitute recreational facility
or parking lot, respectively, such facilities shall be made
available to NewCo and its employees as part of the Welfare
Facilities Services to the extent such substitute





12









 









	 	 	facilities are available to Hynix or its employees. If Hynix makes any other sports field or
parking lot available to Hynix employees in lieu of the removed facilities, such other sports
field and parking lot shall be made available to NewCo and its employees as part of the
Welfare Facilities Services.






	3.17.	 	Hynix may, on three months prior written notice to NewCo,
remove the tennis courts set forth in Exhibit G in Cheongju,
Korea, but only in the event that such tennis courts are
replaced with a substitute recreational facility, such facility
to be made available to NewCo and its employees as part of the
Welfare Facilities Services.






	3.18.	 	With respect to the Highla Condominiums, Korea Condominiums
and, subject to then applicable union contracts and
restrictions, other condominiums existing as of the date hereof
under the Welfare Facilities Services, Hynix shall make such
condominiums available to NewCo employees on the same terms
applicable to Hynix employees. There shall be no additional
fees paid by NewCo’s employees with regard to such condominiums
except the usage fees paid by the employee using such
condominiums, which shall be consistent with fees paid by Hynix
employees.






	3.19.	 	With respect to fire emergency drills/training under the
Environmental Safety & Facility Monitoring Services, the
Parties shall cooperate in good faith in determining the
scheduling of such drills and training at mutually agreeable
times.






	3.20.	 	Beginning upon the expiration and/or early termination of the
Vivendi Water and Wastewater Service Agreement, each Party will
cooperate and coordinate with each other as is reasonably
necessary or advisable for the joint operation of the Vivendi
Assets, including entering into an agreement with a third party
service provider, in order that both Parties receive services
that are identical to the services provided by Vivendi as of
the expiration and/or early termination of the Vivendi Water
and Wastewater Service Agreement. Beginning upon the the
expiration and/or early termination of the Vivendi Water and
Wastewater Service Agreement, each Party shall provide back up
services to the other Party with respect to the Vivendi
Services, including use of de-ionized water systems, waste
water treatment facilities and other applicable facilities.





Article 4. Supply of the Services; Right of First Refusal





	4.1.	 	The obligations of Hynix to provide each of the Vivendi
Services, and the part of the Hynix Utilities and Infrastructure
Support Services provided by Daesung, set forth in this
Agreement shall be subject, to the extent applicable, to the
terms and conditions of the applicable Third Party Supplier
Agreements; provided that NewCo shall be entitled to participate
in any negotiations that Hynix may have with any third party
supplier regarding the provision of services by such third party
supplier, including any renewal, replacement, modification or
termination of any third party supplier agreement and Hynix
shall not agree to any renewal, replacement, modification or
termination of the Vivendi Water and Wastewater Service
Agreement or Daesung Agreements without NewCo’s prior written
consent (which consent shall not be unreasonably withheld).





13









 









	4.2.	 	Unless Hynix otherwise agrees and subject to Article 13, NewCo shall
use the Services for the sole purpose of operating and maintaining
NewCo’s business and may not sell, transfer, supply or grant access
to any of the Services to any third party without Hynix’s prior
written consent (which shall not be unreasonably withheld).






	4.3.	 	All Services under this Agreement shall be performed in
compliance with all applicable laws and regulations in all
material respects, in a manner, to the extent and at a time,
substantially consistent with past practice and in the manner,
extent and time in which the applicable Party performs similar
services for its own benefit (including with respect to using
employees with similar levels and experience). The Parties agree
to take timely and adequate action to correct any deficiency in
the performance of any Service.






	4.4.	 	The Parties shall cooperate in good faith to increase overall site safety and reduce insurance costs.






	4.5.	 	In the event that Hynix wishes to sell or otherwise dispose of
all or any part of its assets (“Offered Assets”) that are used
for or relate to the provision of the Services at any time
during the Term, Hynix shall first make an offer for the sale of
such Offered Assets to NewCo by giving NewCo a written notice
setting forth the price and other terms and conditions thereof
(“Notice of Sale”). NewCo shall notify Hynix in writing whether
NewCo accepts or rejects such offer made in the Notice of Sale
within thirty (30) days after the receipt thereof (such
thirty-day period, the “Notice Period”). Unless NewCo accepts in
writing such offer made in the Notice of Sale prior to the
expiration of the Notice Period, Hynix shall be free to sell or
otherwise dispose of such Offered Assets offered through the
Notice of Sale to a third party within thirty (30) days from the
date of expiration of the Notice Period; provided, however, that
such sale or disposal to a third party shall not be made under
terms and conditions more favorable than the offer made to NewCo
in the Notice of Sale. If Hynix sells or otherwise disposes of
any of such Offered Assets, it shall nonetheless continue to
provide NewCo with the Services in accordance with this
Agreement without any other change in the terms and conditions
thereof; provided, however, that Hynix shall not be obligated to
provide an Unprotected Long-Term Service following the fifth
anniversary of the date hereof if NewCo has rejected the offer
made in a Notice of Sale with respect to the assets used to
provide such Unprotected Long-Term Service.





Article 5. Maintenance of the Services





	5.1.	 	During the Term of this Agreement if Hynix or any third party
supplier (including Third Party Suppliers) has scheduled, or
otherwise has planned to undertake inspection, testing,
preventative maintenance, corrective maintenance, repairs,
replacement, improvement or other similar activities to all or
any portion of the Service Facilities (collectively, the
“Maintenance Activities”), Hynix or the relevant third party
supplier, as applicable, may, for the duration of such
Maintenance Activities, interrupt, suspend or curtail the
provision of relevant Services to the extent that the
Maintenance Activities for the affected parts of the Service
Facilities are necessary or advisable. In the event that Hynix
is required to perform corrective maintenance, repairs due to
malfunction or non-routine inspection due to a suspected
malfunction, Hynix shall give NewCo prior written notice of such





14









 









	 	 	activities to the extent reasonably possible. In the event that Hynix proposes to conduct any
other Maintenance Activities, Hynix shall give NewCo as much prior written notice as
reasonably possible of such activities, which in any event shall not be less than 30 days
prior written notice, and Hynix shall consult with NewCo prior to undertaking or permitting to
occur any such Maintenance Activity. Upon Hynix’s receipt of any notice of any Maintenance
Activities by any third party suppliers, Hynix promptly shall provide NewCo written notice
thereof and shall consult with NewCo to the extent reasonably possible prior to permitting any
such Maintenance Activities to occur.






	5.2.	 	If NewCo receives such notice as set forth in Section 5.1, then
to the extent that the affected Services are insufficient to
meet NewCo’s requirements for NewCo’s use thereof in accordance
with the terms and conditions hereof, Hynix shall (i) to the
extent Hynix has alternative sources available internally,
provide alternate sources for the affected Services for the
duration of the Maintenance Activities, (ii) to the extent that
Hynix obtains any alternate sources for such Services, Hynix
shall make available a pro-rata share of these alternate sources
to NewCo, and (iii) if the foregoing are not available or are
insufficient to meet NewCo’s requirements, Hynix shall cooperate
with NewCo to locate alternate sources for such Services. To the
extent the foregoing alternate sources are provided by Hynix,
there shall be no incremental cost or expense to NewCo. To the
extent the foregoing alternate sources are provided by
third-parties, NewCo shall bear the actual costs of the services
it uses.





Article 6. Coordinating Committee





	6.1.	 	Within thirty (30) days after the Effective Date, the Parties
shall establish a coordinating committee (the “Coordinating
Committee”) which shall consist of four (4) members, two (2) of
which shall be appointed by Hynix and two (2) of which shall be
appointed by NewCo. Each Party, upon prior written notice to the
other Party, may from time to time remove or replace any member
appointed by such Party.






	6.2.	 	Except as the Parties may otherwise agree in writing, the
Coordinating Committee shall have the power and the
responsibility under this Agreement to:






	 	(a)	 	act as a forum for the liaison between the Parties
with respect to the day-to-day implementation of
this Agreement;
	 
	 	(b)	 	subject to Article 14, seek to resolve disputes; and
	 
	 	(c)	 	undertake such other functions as the Parties may agree in writing.





Article 7. Payments for the Services





	7.1.	 	Hynix shall invoice NewCo on the tenth (10th) day (except that
for the Vivendi Services this shall be the fourteenth (14) day,
until the expiration and/or termination of the Vivendi Water and
Wastewater Service Agreement) of each calendar month for the
fees for the Environmental Safety & Facility Monitoring
Services, Hynix Utilities and Infrastructure Support Services
(except for the fees for electricity (substation of the Korea
Electric Power Corporation), water and fuel, which will be
invoiced as set forth in the






15









 









	 	 	third sentence of this Section 7.1), Vivendi Services, Welfare Facility Services and Chemical
Procurement Services, provided during the immediately preceding calendar month specifying the
Services provided during that month and the amount of fees for such Services calculated in
accordance with Exhibits B, C, D, E and F, respectively, and Article 3. By the twenty-fifth
(25th) day of each calendar month so invoiced (except with respect to the Vivendi Services for
which the due date will be the twenty-fourth (24th) day of each calendar month so invoiced,
until the expiration and/or termination of the Vivendi Water and Wastewater Service
Agreement), NewCo shall pay the invoiced amount and value added tax thereto to Hynix’s
designated account by means of a wire transfer in cash. In addition, by the fifth (5th) day
prior to the due date for the fees for electricity (substation of the Korea Electric Power
Corporation), water and fuel supplied by Hynix to NewCo as part of the Hynix Utilities and
Infrastructure Support Services as such due date is set forth on the relevant invoice
therefor, Hynix shall invoice NewCo for the fees for such Services in the amounts for which
such fees are set forth on the relevant invoice issued by relevant agencies and NewCo shall
pay such invoiced amount and value added tax thereto to Hynix’s designated account by means of
a wire transfer in cash by one (1) Business Day prior to such due date.






	7.2.	 	NewCo shall invoice Hynix on the tenth (10th) day of each
calendar month for the fees for the NewCo Utilities and
Infrastructure Support Services provided during the immediately
preceding calendar month specifying the Services provided during
that month and the amount of fees for such Services calculated
in accordance with Exhibit C. By the twenty-fifth (25th) day of
each calendar month so invoiced, Hynix shall pay the invoiced
amount and value added tax thereto to NewCo’s designated account
by means of a wire transfer in cash.






	7.3.	 	All payments hereunder shall be made in Korean Won.






	7.4.	 	If a Party fails to make any payment due hereunder by the date
it is due, such non-paying Party shall pay the other party, in
addition to the amount of such payment due, a late charge of
eight (8%) percent per annum of the outstanding amount, prorated
to reflect a pro rata portion of such late charge for the period
from the due date of the payment until finally paid.






	7.5.	 	Notwithstanding any dispute on the amount of payment under this
Agreement, each Party shall continue to perform its obligations
hereunder (including obligations to make payments of the amounts
included on the invoices for the Services which are not disputed
in good faith) and be entitled to exercise its rights under this
Agreement; provided, however, that if a Party fails to pay in
full the portion of sums invoiced by the other which are not
disputed by the invoiced Party in good faith for three (3)
calendar months after such sums become due, the invoicing Party
may suspend or curtail the applicable Services for which payment
was not made until such payment is made in full. Any invoice
amount which remains disputed after thirty (30) days shall be
referred to the Coordinating Committee in accordance with
Section 14.2.






	7.6.	 	Each Party shall, at the request of the other Party, provide the
other Party with relevant data and records for the determination
of such Party’s compliance with its obligations





16









 









	 	 	under this Agreement (other than with respect to calculation of fees hereunder which is
governed by Section 3.13); provided that a Party may make no more than one such
request per calendar quarter and any such request must be reasonably specific. In this regard,
each Party shall prepare and maintain proper books and records of all matters pertaining to
the Services under this Agreement. Subject to Article 15 and the first sentence of this
Section 7.6, upon seven (7) days prior written notice, either Party, or its authorized
representatives, may examine during normal business hours, the books, records and documents of
the other Party to the extent reasonably necessary for verification of compliance under this
Agreement; provided, however, that if a Party is to provide such books and
records to the other Party for such Party’s examination and photocopying purposes, the other
Party
may blackout any information contained in such books and records that relates to the other
Party other than information that is required for the determination of the other Party’s
compliance with its obligations under this Agreement.






	7.7.	 	Notwithstanding anything herein to the contrary, in the event of
a bankruptcy filing with respect to NewCo, NewCo shall deposit
with Hynix an amount equal to the fees paid by NewCo during the
immediately preceding full calendar month under the terms of
this Agreement, against which will be credited fees payable by
NewCo over the thirty day period following such deposit. NewCo
shall renew such deposit each thirty days in each case by
reference to the fees paid by NewCo during the full calendar
month immediately preceding any such renewal until such
bankruptcy protection filing has been accepted by the bankruptcy
court. For the avoidance of doubt, NewCo shall not be relieved
of responsibility for, and shall pay when due, any fees for
services hereunder during any such thirty day period to the
extent in excess of the then actual deposit.





Article 8. Representations, Warranties and Covenants





	8.1.	 	Each Party hereby represents and warrants to the other Party
that all of the statements contained in this Section 8.1 are
true and correct with respect to such Party as of the Effective
Date and at all times thereafter during the Term.






	 	(a)	 	Organization. Such Party is duly incorporated and
validly existing under the laws of Korea and has
full power and authority to perform its respective
obligations herein.
	 
	 	(b)	 	Authorization. Such Party has full corporate power
and authority to execute and deliver this Agreement.
The execution, delivery and performance by such
Party of this Agreement have been duly authorized by
all corporate actions on the part of such Party that
are necessary to authorize the execution, delivery
and performance by such Party of this Agreement.
	 
	 	(c)	 	Binding Agreement. This Agreement has been duly
executed and delivered by such Party and, assuming
due and valid authorization, execution and delivery
hereof by the other Party, is a valid and binding
obligation of such Party, enforceable against such
Party in accordance with its terms except (i) as
limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent




17









 






	 	 	 	conveyance and other similar laws of general application affecting enforcement of
creditors’ rights generally and (ii) the availability of the remedy of injunctive relief
may be subject to the discretion of the court before which any proceeding therefor may
be brought or the general principle of good faith and fairness provided for in the
Korean Civil Code.
	 
	 	(d)	 	No Violation of Laws or Agreements. The execution,
delivery and performance of this Agreement does not,
(i) contravene any provision of the articles of
incorporation or bylaws, or other similar
organizational documents, of such Party; or (ii)
violate, conflict with, result in a breach of, or
constitute a default (or an event which might, with
the passage of time or the giving of notice, or
both, constitute a default) under any agreement to
which such Party is a party or by which it is bound.
	 
	 	(e)	 	Governmental Authorizations. Such Party has obtained
all required Governmental Authorizations in
connection with the supply of the Services.






	8.2.	 	EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
AGREEMENT OR IN THE BTA, NEITHER PARTY NOR ANY OTHER PERSON OR
ENTITY ACTING ON BEHALF OF SUCH PARTY, MAKES ANY REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED (INCLUDING ANY REPRESENTATION OR
WARRANTY FOR SUFFICIENCY, SATISFACTORY RESULT OR FITNESS FOR
PARTICULAR PURPOSE WITH RESPECT TO THE SERVICES PROVIDED
HEREUNDER).






	8.3.	 	Each Party covenants and agrees to endeavor to cooperate with
the other Party so as to minimize any interference with the
other Party’s operation of its business.





Article 9. Force Majeure





	9.1.	 	Neither Party shall be liable to the other Party for failure of
or delay in the performance of any obligations under this
Agreement due to causes reasonably beyond its control including
(i) war, insurrections, riots, explosions and inability to
obtain raw materials due to then current market situations; (ii)
natural disasters and acts of God, such as violent storms,
earthquakes, floods and destruction by lightning; (iii) the
intervention of any governmental authority or changes in
relevant laws or regulations which restrict or prohibit either
Party’s performance of its obligations under this Agreement or
implementation of this Agreement; or (iv) strikes, lock-outs and
work-stoppages (each, an “Event of Force Majeure”). Upon the
occurrence of an Event of Force Majeure, the affected Party
shall notify the other Party as soon as reasonably possible of
such occurrence, describing the nature of the Event of Force
Majeure and the expected duration thereof. Notwithstanding the
foregoing, the Party receiving Services hereunder shall be under
a continuing obligation to make payments for such Services which
have already been supplied to the Party prior to the occurrence
of an Event of Force Majeure.






	9.2.	 	If a Party is unable, by reason of an Event of Force Majeure, to
perform any of its obligations under this Agreement, then such
obligations shall be suspended to the extent





18









 









	 	 	and for the period that the affected Party is unable to perform. If this Agreement requires an
obligation to be performed by a specified date, such date shall be extended for the period
during which the relevant obligation is suspended due to such an Event of Force Majeure under
this Agreement.






	9.3.	 	Notwithstanding anything to the contrary contained herein, a
third party supplier’s (including Third Party Suppliers) failure
to meet its obligations in accordance with the applicable third
party supplier agreement (including Third Party Supplier
Agreements) shall not constitute an Event of Force Majeure and
Hynix shall be liable to NewCo for any breach of this Agreement
resulting from such failure; provided that any such liability to
NewCo shall be limited to the extent that such third party
supplier’s liability to Hynix is limited under the applicable
third party supplier agreement; provided, further, that any such
liability to NewCo shall be limited to the amount that Hynix
actually recovers from such third party supplier. In the case of
a material breach by a third party supplier, and in the event
that NewCo incurs Damages resulting from such breach of the
applicable third party supplier agreement material to NewCo,
Hynix shall use commercially reasonable efforts to vigorously
pursue all available actions for Damage compensation from any
such third party supplier. In the event Hynix receives any
compensation for Damages from the third party supplier for any
breach, Hynix shall pay to NewCo a pro rata portion of such
Damages received from the third party supplier based on the
amount of Damages suffered by NewCo relative to the aggregate
amount of Damages suffered by both Parties. Each Party shall be
responsible for a portion of the reasonable and documented
expenses of any such actions for Damage compensation in
proportion to the allocation of any recovery of Damages pursuant
to the preceding sentence; provided that the Parties shall
cooperate in good faith to minimize such expenses and consult
with each other in advance with respect to the conduct of any
such action.






	9.4.	 	To the extent that the Services affected due to a third party’s
failure to meet its obligations under the applicable third party
supplier agreement are insufficient to meet NewCo’s requirements
for NewCo’s use thereof in accordance with the terms and
conditions hereof, Hynix shall (i) to the extent Hynix has
alternative sources available internally, provide such alternate
sources for the affected Services for the duration the Services
are affected, (ii) to the extent that Hynix obtains any
alternate sources for such Services, Hynix shall make available
a pro-rata share of such alternate sources to NewCo, and (iii)
if the foregoing are not available or are insufficient to meet
NewCo’s requirements, Hynix shall cooperate with NewCo to locate
alternate sources for such Services. To the extent the foregoing
alternate sources are provided by Hynix, there shall be no
incremental cost or expense to NewCo. To the extent the
foregoing alternate sources are provided by third parties, NewCo
shall bear the actual costs of the services it uses. To the
extent that any service which both Parties utilize for their
respective businesses remains partially available during an
Event of Force Majeure (e.g., Hynix makes some quantity of
service available but not the usual amount or Hynix otherwise
accesses an alternative source of some quantity of service),
each Party shall receive, to the extent practically possible,
equal provision of such service up to the amount it would
otherwise receive if there were no Event of Force Majeure.





19









 








Article 10. Termination; Effect of Termination




	10.1.	 	Termination. This Agreement may be terminated at any time
during the Term upon occurrence of any of the following:






	 	(a)	 	by the non-breaching Party serving a written notice
thereof to the other Party and the Coordinating
Committee in the event of a material breach or
default by the other Party of its obligations
hereunder, which default shall not have been cured
by other Party, or otherwise resolved by the
Coordinating Committee, within sixty (60) days after
written notice is provided by the non-breaching
Party to the other Party and the Coordinating
Committee; or
	 
	 	(b)	 	by Hynix’s serving sixty (60) days prior written
notice thereof to NewCo if NewCo ceases to conduct
any Permitted Business (provided that an assignment
pursuant to Article 13 shall not trigger the
application of this provision in so far as such
assignee does not cease to conduct any Permitted
Business).






	10.2.	 	Upon termination of this Agreement, each Party shall
discontinue the use of all Confidential Information provided by
the other Party in connection with this Agreement, and shall
promptly return to the other Party any and all Confidential
Information, including documents originally conveyed to it by
the other Party and any copies thereof made thereafter.






	10.3.	 	Except as provided in this Section 10.3 and Section 10.4,
following the termination or expiration of this Agreement all
obligations and liabilities of the Parties under or arising
from this Agreement shall cease and be of no effect, and
neither Party shall have any liability under or arising from
this Agreement as a consequence of the termination or
expiration of this Agreement in accordance with Section 10.1
except for fraud or willful breach of this Agreement.
Notwithstanding the foregoing, termination of this Agreement
shall be without prejudice to the accrued rights and
liabilities of the Parties prior to the termination of this
Agreement.






	10.4.	 	The respective rights and obligations of the Parties under
Sections 3.9, 3.10 and 3.11 and Articles 11, 14 and 15 and
other Sections which by their nature are intended to extend
beyond termination, shall survive the termination or expiry of
this Agreement.





Article 11. Indemnification





	11.1.	 	Subject to Article 12 hereof, each Party (the “Indemnifying
Party”) shall defend, indemnify and hold harmless the other
Party (and its shareholders, partners, members, directors,
officers, employees, agents and representatives) (collectively,
the “Indemnified Party”) from and against, and shall pay to the
Indemnified Party the amount of any Damages arising from any
breach of any representation, warranty, agreement or covenant
made by the Indemnifying Party under this Agreement or the
negligence, gross negligence or willful misconduct of the
Indemnifying Party.





20









 








Article 12. Limitation on Liability




	12.1.	 	Notwithstanding anything to the contrary herein, neither Party
shall have any liability whatsoever to the other Party, and the
other Party shall have no rights or remedies whatsoever (in
each case whether in contract, tort, including negligence, or
otherwise), for or in connection with any failure to provide
(a) any Services in accordance with this Agreement to the
extent such failure is attributable to the occurrence of an
Event of Force Majeure or (b) electricity, except to the extent
such failure is attributable to the Party’s gross negligence,
willful misconduct or intentional breach.






	12.2.	 	Notwithstanding anything to the contrary, no Party shall be
liable to the other Party, whether by way of indemnity or
otherwise, for any punitive damages, whether any such damages
arise out of contract, equity, tort (including negligence),
strict liability or otherwise arising out of, or related to,
this Agreement and each Party hereby waives, to the fullest
extent permitted by law, all rights with respect to punitive
damages.






	12.3.	 	Notwithstanding anything to the contrary contained herein, the
liability of each Party (the “Breaching Party”) hereunder for
Damages resulting from the Breaching Party’s breach of this
Agreement or its negligence, gross negligence or willful
misconduct shall be limited to (a) in the event that the
Breaching Party proves that such breach was the result of the
negligence of the Breaching Party and no other reason or, in
the case of a tort claim, the Indemnifying Party proves that
such Damages resulted from the negligence of the Indemnifying
Party and no other reason, the aggregate amount received by the
Breaching Party in fees hereunder for the calendar year prior
to the year of determination for the Service affected by such
breach and (b) in all other events, including if the breach was
the result of gross negligence, willful misconduct or
intentional breach, the maximum amount permitted by Korean law.






	12.4.	 	If any Indemnified Party is at any time entitled to recover
under any third-party policy of insurance (excluding any
self-insurance that is not reinsured with a third party), in
respect of any Damages for which indemnification is sought
under Article 11, the Indemnified Party shall, at the request
of the Indemnifying Party, use its commercially reasonable
efforts to enforce such recovery for the benefit of the
Indemnifying Party and, upon recovery under such policy, reduce
the amount of Damages for which it is seeking indemnification
under Article 11 by the amount actually recovered under the
policy (net of all costs, charges and expenses of the
Indemnified Party in connection with such recovery).






	12.5.	 	Each Party shall subscribe for and maintain in effect, at its
own expense, such insurance covering the Damages incurred from
any electricity failure, with such amounts and other terms as a
reasonably prudent business would maintain under like
circumstances.





Article 13. Assignment





	13.1.	 	This Agreement shall be binding upon and inure to the benefit
of the Parties and their respective successors and permitted
assigns; provided, however, that no Party will assign its
rights or delegate its obligations under this Agreement without
the express prior





21









 









	 	 	written consent of the other Party, except that (i) NewCo may assign its rights hereunder as
collateral security to any bona fide financial institution engaged in financing in the
ordinary course providing
financing to the Warrant Issuer or its Subsidiaries and any of the foregoing financial
institutions may assign such rights in connection with a sale of NewCo in the form then being
conducted by NewCo substantially as an entirety; (ii) Hynix and NewCo each may, upon written
notice to the other Party (but without the obligation to obtain the consent of such other
Party), assign this Agreement or any of its rights and obligations under this Agreement to any
person, entity or organization that succeeds (by purchase, merger, operation of law or
otherwise) to all or substantially all of the capital stock, assets or business of such party,
to all or substantially all of its assets and liabilities or to all or substantially all of
the assets and liabilities of the portion of the Party’s business to which the subject of this
Agreement relates or of a division of the Party, if such person or entity agrees in writing to
assume and be bound by all of the relevant obligations of such Party under this Agreement; and
(iii) NewCo may, upon written notice to Hynix (but without the obligation to obtain the
consent of Hynix), assign this Agreement or any of its rights and obligations under this
Agreement to one or more direct or indirect Subsidiaries of Warrant Issuer.






	13.2.	 	Notwithstanding anything to the contrary contained herein,
Hynix may be entitled to utilize any subcontractor or
supplementary provider in performing all or any parts of its
obligations under this Agreement without any prior written
consent of NewCo; provided that Hynix remains liable under this
Agreement for the performance of all of its obligations.





Article 14. Governing Law; Dispute Resolution





	14.1.	 	This Agreement shall be governed by and construed in accordance
with the laws of Korea without reference to the choice of law
principles thereof.






	14.2.	 	Each Party seeking the resolution of a dispute arising under
this Agreement must provide written notice of such dispute to
the other Party, which notice shall describe the nature of such
dispute. All such disputes shall be referred initially to the
Coordinating Committee for resolution. Decisions of the
Coordinating Committee under this Section 14.2 shall be made by
unanimous vote of all members and shall be final and legally
binding on the Parties. If a dispute is resolved by the
Coordinating Committee, then the terms of the resolution and
settlement of such dispute shall be set forth in writing and
signed by both Parties. In the event that the Coordinating
Committee does not resolve a dispute within thirty (30) days of
the submission thereof, such dispute shall be resolved in
accordance with Section 14.3. Notwithstanding the foregoing,
Hynix and NewCo shall each continue to perform its obligations
under this Agreement during the pendency of such dispute in
accordance with this Agreement.






	14.3.	 	The Parties agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the Parties
shall be entitled to an injunction to prevent any breach of
this Agreement and to enforce specifically the terms and
provisions of this Agreement by bringing a relevant action in
the Seoul Central





22









 









	 	 	District Court in Seoul, Korea, in addition to any other remedy to which any Party may be
entitled at law or in equity. In addition, the Parties agree that any dispute, claims or
controversy between the Parties arising out of or relating to this Agreement, whether in
contract, tort, equity or otherwise and whether relating to the meaning, interpretation,
effect, validity, performance or enforcement of this Agreement, which is not resolved by the
Coordinating Committee pursuant to Section 14.2 may be submitted to the exclusive jurisdiction
of the Seoul Central District Court, in Seoul, Korea. Each of the Parties irrevocably waives,
to the fullest extent permitted by law, any objection which it may now, or hereafter, have
with respect to the jurisdiction of, or the venue in, the Seoul Central District Court.





Article 15. Confidentiality





	15.1.	 	Neither Party shall, except as expressly permitted by the terms
of this Agreement, disclose to any third party the terms and
conditions of this Agreement, the existence of this Agreement
and any Confidential Information which either Party obtains
from the other Party in connection with this Agreement and/or
use such Confidential Information for any purposes whatsoever
other than those contemplated hereunder; provided,
however,
that this Agreement (and its terms and conditions) may be
disclosed and filed publicly in connection with a public
offering of securities by NewCo or its Affiliates.
“Confidential Information” shall mean any and all information
including technical data, trade secrets or know-how, disclosed
by either Party to the other Party in connection with this
Agreement, which is marked as “Proprietary” or “Confidential”
or is declared by the other Party, whether in writing or
orally, to be confidential, or which by its nature would
reasonably be considered confidential.






	15.2.	 	The obligation of confidentiality in Section 15.1 shall not
apply to any information that: (a) was known to the other Party
without an obligation of confidentiality prior to its receipt
thereof from the disclosing Party; (b) is or becomes generally
available to the public without breach of this Agreement, other
than as a result of a disclosure by the recipient Party, its
representatives, its Affiliates or the representatives of its
Affiliates in violation of this Agreement; (c) is rightfully
received from a third party with the authority to disclose
without obligation of confidentiality and without breach of
this Agreement; or (d) is required by law or regulation to be
disclosed by a recipient Party or its representatives
(including by oral question, interrogatory, subpoena, civil
investigative demand or similar process), provided that written
notice of any such disclosure shall be provided to the
disclosing Party in advance. If a Party determines that it is
required to disclose any information pursuant to applicable law
(including the requirements of any law, rule or regulation in
connection with a public offering of securities by NewCo or its
Affiliates) or receives any demand under lawful process to
disclose or provide information of the other Party that is
subject to the confidentiality provisions hereof, such Party
shall notify the other Party prior to disclosing and providing
such information and shall cooperate at the expense of the
requesting Party in seeking any reasonable protective
arrangements requested by such other Party. Subject to the
foregoing, the Party that receives such request may thereafter
disclose or provide information to the extent required by such
law or by lawful process.





23









 









Article 16. Miscellaneous




	16.1.	 	Exercise of Right. A Party may exercise a right, power or
remedy at its discretion, and separately or concurrently with
another right, power or remedy. A single or partial exercise of
a right, power or remedy by a Party does not prevent a further
exercise of that or of any other right, power or remedy. A
failure to exercise a right, power or remedy or a delay in
exercising a right, power or remedy by a Party does not prevent
such Party from exercising the same right thereafter.






	16.2.	 	Extension; Waiver. At any time during the Term, each of Hynix
and NewCo may (a) extend the time for the performance of any of
the obligations or other acts of the other or (b) waive any
inaccuracies in the representations and warranties of the other
contained in this Agreement or in any document delivered
pursuant to this Agreement. Any agreement on the part of a
Party to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such
Party. The failure of any Party to assert any of its rights
under this Agreement or otherwise shall not constitute a waiver
of those rights. Any rights under this Agreement may not be
waived except in writing signed by the Party granting the
waiver or varied except in writing signed by the Parties.






	16.3.	 	Notices. Any notice, request, demand, waiver, consent, approval
or other communication which is required or permitted to be
given to any Party shall be in writing and shall be deemed duly
given only upon delivery to the Party personally (including by
reputable overnight courier service), when telecopied (with
confirmation of transmission having been received) during
normal business hours or three days after being mailed by
registered or certified mail (return receipt requested), with
postage and registration or certification fees thereon prepaid,
addressed to the Party at its address set forth below (or at
such other address for a party as shall be specified by such
Party by like notice):




If to Hynix, to:



Hynix Semiconductor Inc.

Hynix Youngdong Building

891 Daechi-dong, Gangnam-gu

Seoul 135-738, Korea

Attention: Mr. O.C. Kwon

Facsimile: 82-2-3459-5955



If to NewCo, to:



MagnaChip Semiconductor, Ltd.

1 Hyangjeong-dong

Heungduk-gu

Cheongju City

Chung Cheong Bok-do, Korea

Facsimile: 82-43-270-2134

Attention: Dr. Youm Huh




24









 







with a copy to:



Dechert LLP

30 Rockefeller Plaza

New York, NY 10112

Telephone: (212) 698-3500

Facsimile: (212) 698-3599

Attention: Geraldine A. Sinatra, Esq.



 Sang H. Park, Esq.





	16.4.	 	Fees and Expenses. All costs and expenses incurred in
connection with this Agreement shall be paid by the Party
incurring such expenses, except as specifically provided to the
contrary in this Agreement.






	16.5.	 	Entirety; No Third Party Beneficiaries. This Agreement (a)
constitutes the entire agreement between the Parties and
supersedes all prior agreements and understandings, both
written or oral, between the Parties with respect to the
subject matter hereof and (b) is not intended to confer upon
any person other than the Parties hereto any rights or remedies
hereunder.






	16.6.	 	Severability of Provisions. Any term or provision of this
Agreement that is held by a court of competent jurisdiction or
other authority to be unlawful, invalid, void or unenforceable
in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the
offending term or provision in any other situation or in any
other jurisdiction. If the final judgment of a court of
competent jurisdiction or other authority declares that any
term or provision hereof is unlawful, invalid, void or
unenforceable, the Parties agree that the court making such
determination shall have the power to reduce the scope,
duration, area or applicability of the term or provision, to
delete specific words or phrases, or to replace any unlawful,
invalid, void or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest
to expressing the intention of the unlawful, invalid or
unenforceable term or provision.






	16.7.	 	Amendment and Modification. This Agreement (for the avoidance
of doubt, including Exhibits attached hereto) may be amended,
modified and supplemented in any and all respects, but only by
a written instrument signed by the Parties expressly stating
that such instrument is intended to amend, modify or supplement
this Agreement.






	16.8.	 	Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same
agreement.






	16.9.	 	Election of Remedies. Neither the exercise of nor the failure
to exercise a right or to give notice of a claim under this
Agreement shall constitute an election of remedies or limit any
Party in any manner in the enforcement of any other remedies
that may be available to such Party, whether at law or in
equity.






	16.10.	 	Language. This Agreement is being originally executed in the
English language only. In the event that the Parties agree to
have a Korean version of this Agreement following





25









 









	 	 	signing, this Agreement may be translated into Korean. The Parties acknowledge that the Korean
version of this Agreement shall be for reference purposes only, and in the event of any
inconsistency between the two texts, the English version shall control.






	16.11.	 	Relationship of the Parties. Each Party shall perform its
obligations hereunder as an independent contractor. This
Agreement does not create a fiduciary or agency relationship
between Hynix and NewCo, each of which shall be and at all
times remain independent companies for all purposes hereunder.
Nothing in this Agreement is intended to make either Party a
general or special agent, joint venturer, partner or employee
of the other for any purpose.





[SIGNATURE PAGE TO FOLLOW]




26









 





     IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed by its duly
authorized representatives as of the date first above written.



	 	 	 	 	 
	Hynix Semiconductor Inc.	 	 
	 
	 	 	 	 
	By:
	 	/s/ [ILLEGIBLE]	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 
	 
	 	 	 	 
	MagnaChip Semiconductor, Ltd.	 	 
	 
	 	 	 	 
	By:
	 	/s/ [ILLEGIBLE]	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 







 











 








Exhibit A




SHORT TERM SERVICES




	 	 	 
	Service	 	Notice Period for Termination
	waste management or disposal service
	 	15 days
	CAO Operation Support Services
	 	30 days





(STAMP)

 









 





Exhibit B




ENVIRONMENTAL SAFETY & FACILITY MONITORING SERVICES FEES



[***** Note: This exhibit has been redacted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.]




 









 





Exhibit C.1




HYNIX UTILITIES AND INFRASTRUCTURE SUPPORT SERVICE FEES



[***** Note: This exhibit has been redacted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.]




 









 





Exhibit C.2




NEWCO UTILITIES AND INFRASTRUCTURE SUPPORT SERVICES FEES



[***** Note: This exhibit has been redacted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.]




 









 





Exhibit D




VIVIENDI SERVICES FEES & CERTAIN VIVENDI ASSETS



[***** Note: This exhibit has been redacted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.]




 









 





Exhibit E.1




WELFARE FACILITY SERVICES FEES FOR CHEONGJU



[***** Note: This exhibit has been redacted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.]




 









 





Exhibit E.2




WELFARE FACILITY SERVICES FEES FOR ICHON



[***** Note: This exhibit has been redacted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.]




 









 





Exhibit E.3




WELFARE FACILITY SERVICES FEES FOR SEOUL



[***** Note: This exhibit has been redacted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.]




 









 





Exhibit F




CHEMICAL PROCUREMENT SERVICES FEES



[***** Note: This exhibit has been redacted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.]




 









 





Exhibit G




PARKING LOT, SPORTS FIELD AND TENNIS COURT NEAR THE WOMEN’S

DORMITORIES




The parking lot, sports field and tennis court near the women’s dormitories shall be diagramed on a separate page



(STAMP)

 









 







Exhibit G





	Exhibit G
Cheong-ju Plant Diagram





 









 





APPENDIX I




SAMPLE CALCULATION OF FEES



[***** Note: This exhibit has been redacted and filed separately with the Securities and Exchange
Commission pursuant to a request for confidential treatment.]