exv10w6






Exhibit 10.6




FIRST AMENDMENT TO GENERAL SERVICE SUPPLY AGREEMENT



This First Amendment to General Service Supply Agreement (this “Amendment”) is entered into as of
December 30, 2005 by and between Hynix Semiconductor, Inc. (“Hynix”) and MagnaChip Semiconductor
Ltd. (“NewCo”) (each a “Party”, and collectively the “Parties”).



WHEREAS, the Parties are parties to that certain General Service Supply Agreement dated as of
October 6, 2004 (the “Agreement”), and wish to amend the Agreement as set forth below.




NOW, THEREFORE, the Parties agree as follows:





	 	1.	 	Section 1.1 is hereby amended by adding the following
thereto in the appropriate alphabetical order :
	 
	 	 	 	“Mask Shop Chemicals and Gases Procurement Services” shall mean the provision by NewCo
to Hynix with such quantities of the chemicals (including TMAH2.38, Thinner, HMDS,
H2SO4, H2O2, NH4OH and IPA) and gases (including CI2, CF4, CHF3, SF6, HCI, F2/Kr/Ne,
Kr/Ne) (collectively, the “Chemicals and Gases”) required for Hynix’s mask production
lines installed in C1 and C2 buildings as are requested by Hynix from time to time.”
	 
	 	2.	 	Section 1.1 is hereby amended by deleting the defined
term “Services” and replacing such defined term with
the following:
	 
	 	 	 	“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, Mask Shop Chemicals and Gases Procurement Services , Joint
Purchasing Services and the other services described herein.”





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	 	3.	 	Section 2.6 is hereby amended and restated in its entirety as follows:
	 
	 	 	 	“Each of the NewCo Utilities and Infrastructure Support Services and Mask Shop Chemicals
and Gases Procurement Services shall be provided for the Initial Service Period and for
successive additional one (1)-year periods, unless Hynix notifies NewCo in writing of
its desire not to renew the provision of such Services at least sixty (60) days prior to
the expiration of the Initial Service Period or any annual anniversary thereof or such
Services are earlier terminated pursuant to this Agreement.”
	 
	 	4.	 	Section 3.1 is hereby amended by deleting the second
sentence thereof in its entirety and by adding the
following sentence to the end of such section:
	 
	 	 	 	“NewCo shall provide Hynix with the NewCo Utilities and Infrastructure Support Services
and Mask Shop Chemicals and Gases Procurement Services, and Hynix shall receive such
Services from NewCo, for the periods determined in accordance with Article 2.”
	 
	 	5.	 	Appendix A hereto shall be added as Exhibit H of the
Agreement and Section 3.3 is hereby amended by
deleting the first sentence thereof in its entirety
and by adding the following sentence to the beginning
of such section:
	 
	 	 	 	“The fees for the Environmental Safety & Facility Monitoring Services, Hynix Utilities
and Infrastructure Support Services, NewCo Utilities and Infrastructure Support
Services, Welfare Facility Services, Chemical Procurement Services and Mask Shop
Chemicals and Gases Procurement Services shall be determined in accordance with Exhibits
B, C.1, C.2, E, F and H, respectively.”
	 
	 	6.	 	Section 7.1 is hereby amended and restated in its entirety as follows:
	 
	 	 	 	“Hynix shall invoice NewCo on the last day (except that for the Vivendi Services this
shall be the fourteenth (14th) 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 third sentence of this Section 7.1),




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	 	 	 	Vivendi Services, Welfare Facility Services and Chemical Procurement Services, provided
during such calendar month specifying the Services provided during that month and the
amount of fees for such Services calculated in accordance with Exhibits B, C.1, D, E and
F, respectively, and Article 3. By the twenty-fifth (25th) day of
the next calendar month following the invoice (except with respect to the Vivendi
Services for which the due date will be the twenty-fourth (24th)
day of the invoiced calendar month, 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 therefore, 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.	 	Section 7.2 is hereby amended and restated in its entirety as follows:
	 
	 	 	 	“NewCo shall invoice Hynix on the last day of each calendar month for the fees for the
NewCo Utilities and Infrastructure Support Services and Mask Shop Chemicals and Gases
Procurement Services provided during such calendar month specifying the Services
provided during that month and the amount of fees for such Services calculated in
accordance with Exhibits C.2 and H, respectively. By the twenty-fifth
(25th) day of the next calendar month following the invoice, Hynix
shall pay the invoiced amount and value added tax thereto to NewCo’s designated account
by means of a wire transfer in cash.”




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	 	8.	 	The “Variable Overhead Cost” definition in Exhibit E.1
is hereby amended and restated as follows:





	 	 	 
	          “Variable Overhead Cost”

	 	means, for any
applicable Service item
(reserve troops; company
broadcasting station; Hynix
Culture Center; men’s
dormitory; women’s dormitory;
Bongmyung dormitory; and
sports field), the amount of
those relatively variable
overhead costs (costs which
fluctuate heavily from month
to month) which have been
historically allocated in
connection with the provision
of such Service item and
which were actually incurred
by Hynix in providing such
Service item for the month of
calculation







	 	9.	 	Capitalized terms not otherwise defined herein shall
have the meanings ascribed to them in the Agreement.
	 
	 	10.	 	Wherever necessary, all terms of the Agreement are
hereby amended to be consistent with the terms of
this Amendment. Except as set forth herein, the
Agreement remains in full force and effect according
to its terms.
	 
	 	11.	 	Articles 1 through 7 of this Amendment shall become
effective from the 6th of October, 2004 and Article 8
of this Amendment shall become effective from the 1st
of April, 2005.
	 
	 	12.	 	This Amendment shall be governed by, and shall be
construed in accordance with, the laws of Korea.





[Signature Page Follows]




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IN WITNESS WHEREOF, the Parties have caused their duly authorized representatives to execute this
Amendment as of the date first set forth above.




	 	 	 	 	 
	MagnaChip Semiconductor, Ltd.	 	 
	 
	 	 	 	 
	By:
	 	/s/ Youm Huh 	 	 
	Name:

	 	 

Youm Huh
	 	 
	Title:

	 	President & Chief Executive Officer	 	 
	 
	 	 	 	 
	Hynix Semiconductor, Inc.	 	 
	 
	 	 	 	 
	By:
	 	/s/ [ILLEGIBLE] 	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 






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APPENDIX A 




Exhibit H 




MASK SHOP CHEMICALS AND GASES PROCUREMENT SERVICES FEES



The total monthly fee for the Mask Shop Chemicals and Gases Procurement Services equal the fee
calculated in accordance with the following formula:








The following terms apply to this formula:




	 	 	 
	“Labor Charge”

	 	means the sum of the
products of (i) the Labor
Cost for each NewCo employee
providing the applicable
Service to Hynix multiplied
by (ii) the Labor
Contribution Rate for such
employee
	 
	 	 
	“Labor Cost”

	 	means, for any NewCo
employee, average monthly (i)
salary plus (ii) amount of
reserve for retirement
allowances plus (iii) amount
of Fringe Benefits for such
employee, over the Standard
Calculation Period.
	 
	 	 
	“Labor Contribution Rate”

	 	means, for any NewCo
employee, the percentage of
the Labor Cost for such
employee allocated to Hynix
(other than the Business) for
the Standard Calculation
Period, which such percentage
is based upon the AUP and
takes into account (in a
manner consistent with
historical practice) such
factors as ratio of time
spent on activities for the
benefit of Hynix (other than
the Business), the relative
importance of such activities
and the other factors
historically taken into
account
	 
	 	 
	“Fringe Benefits”

	 	means, for any NewCo
employee, the fringe benefits
provided to such employee in
accordance with past practice
	 
	 	 
	“Standard Calculation Period”

	 	means the second
calendar year prior to the
year of calculation, with
respect to calculations made
for the first three months of
any calendar year, and the
calendar year immediately
prior to the year of
calculation, with respect to
calculations made for the
last nine months of any
calendar year — e.g., the
calculations for January
through March of 2005 will be
based on calendar year 2003,
while the calculations for
April through December 2005
will be based on calendar
year 2004






 









 






	 	 	 
	“Asset Charge”

	 	means the sum of the products of (i) the Asset Cost for each NewCo
asset used to provide the applicable Service to Hynix multiplied by (ii)
the Asset Contribution Rate for such asset
	 
	 	 
	“Asset Cost”

	 	means, for any asset, one twelfth of the sum of (i) depreciation
expense plus (ii) the product of Book Value multiplied by 8%, allocated to
such asset in accordance with the AUP for the Standard Calculation Period
	 
	 	 
	“Asset Contribution
Rate”

	 	means, for any asset, a fraction the numerator of which equals the
quantity of the Chemical produced by NewCo for Hynix (other than the
Business) for the Standard Calculation Period and the denominator of which
equals the total quantity of the Chemical produced by NewCo for the
Standard Calculation Period
	 
	 	 
	“Book Value”

	 	means, for any asset, the value of such asset on the books of NewCo
as of the last day of the Standard Calculation Period, as may be adjusted
from time to time (a) as a result of the installation of capital
improvements or the incurrence of capital expenditures, as determined in
accordance with Korea generally accepted accounting principles, or (b) as
a result of a revaluation as may be permitted by law
	 
	 	 
	“Fixed Overhead
Charge”

	 	means the sum of the products of (i) the Fixed Overhead Cost for each
NewCo employee providing the Service to Hynix multiplied by (ii) the Fixed
Overhead Contribution Rate for such employee
	 
	 	 
	“Fixed Overhead
Cost”

	 	means, for any employee, the amount equal to one-twelfth of the
product of (i) those relatively fixed overhead costs (those that do not
fluctuate much from month to month) which have been historically allocated
in connection with the provision of the Service and which were actually
incurred by NewCo (or the Business) in providing the Service in the
Standard Calculation Period multiplied by (ii) the percentage of such
costs historically allocated to such employee in connection with providing
the Service
	 
	 	 
	“Fixed Overhead
Contribution Rate”

	 	means, for any employee, the Labor Contribution Rate for such employee






 









 






	 	 	 
	“Variable Overhead Charge”

	 	means the sum of the
product of (i) the Variable
Overhead Cost multiplied by
(ii) the Variable Overhead
Contribution Rate
	 
	 	 
	“Variable Overhead Cost”

	 	means the amount of
those relatively variable
overhead costs (costs which
fluctuate heavily from month
to month) which have been
historically allocated in
connection with the provision
of the Service and which were
actually incurred by NewCo in
providing the Service for the
month of calculation
	 
	 	 
	“Variable Overhead
Contribution Rate”

	 	means, for Variable
Overhead Cost arising from
(i) the raw chemicals and
gases used to produce the
Chemicals and Gases, a
fraction, the numerator of
which equals the quantity of
the raw chemicals and gases
purchased by NewCo to provide
the Service to Hynix for the
month of calculation and the
denominator of which equals
the total quantity of the raw
chemicals and gases purchased
by NewCo for the month of
calculation, (ii) costs to
repair the assets used to
produce the Chemicals and
Gases, a fraction, the
numerator of which equals the
quantity of the Chemicals and
Gases delivered to Hynix
hereunder for the month of
calculation and the
denominator of which equals
the total quantity of the
Chemicals and Gases produced
by NewCo for the month of
calculation and (iii)
temporary workers used to
produce the Chemicals and
Gases, a fraction, the
numerator of which equals the
number of hours such workers
worked to provide the Service
to Hynix for the month of
calculation and the
denominator of which equals
the total number of hours
worked by such temporary
workers to provide the
Chemicals and Gases to NewCo
and Hynix for the month of
calculation