Document:

exv10w19

Exhibit 10.19

WARRANT AGREEMENT

     THIS WARRANT AGREEMENT dated as of November 9, 2009 (this “Agreement”) is by and between
MAGNACHIP SEMICONDUCTOR LLC, a Delaware limited liability company (the “Company”), and American
Stock Transfer & Trust Company, LLC, as warrant agent (in such capacity, the “Warrant Agent”).

RECITALS:

     WHEREAS, concurrently with the execution hereof, the Company is emerging from the protection
of Chapter 11 of Title 11 of the United States Code pursuant to that certain Plan of Reorganization
dated August 25, 2009, as the same may be modified or amended (the “Plan”).

     WHEREAS, the Company has entered into the Fourth Amended and Restated Limited Liability
Company Agreement of the Company, dated November 9, 2009 (the “LLC Agreement”).

     WHEREAS, pursuant to the terms of, and subject to the conditions contained in, the Plan, the
Company has agreed to issue to certain holders of subordinated note claims owed by the Company
warrants (each, a “Warrant”) entitling the holders thereof to purchase Common Units of the
Company at the Exercise Price (as defined herein).

     WHEREAS, the Company wishes the Warrant Agent to act on its behalf, and the Warrant Agent is
willing to act on behalf of the Company, in connection with the issuance, exchange, transfer,
substitution and exercise of the Warrants.

     WHEREAS, the Company desires to enter into this Agreement to set forth the terms and
conditions of the Warrants and the rights and obligations of the Company, the Warrant Agent and the
registered holders of the Warrant Certificates evidencing Warrants (the “Holders”).

AGREEMENT:

     NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set
forth herein and in the Plan, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Warrant Agent, intending to be
legally bound, hereby agree as follows:

ARTICLE I.

DEFINITIONS AND INTERPRETATION

     Section 1.01 Certain Defined Terms. Capitalized terms used in this Agreement shall have
the following respective meanings, except as otherwise provided herein or as the context shall
otherwise require:

     “Affiliate” means, with respect to any Person, any other Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by or is under common control with

 

 

such
Person. The term “control” (including, with correlative meaning, the terms “controlled by” and
“under common control with”) means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether through the ownership
of voting securities, by contract or otherwise.

     “Agreement” has the meaning specified in the introduction of this Agreement.

     “Board of Managers” means the managers of the Company as set forth in the LLC Agreement.

     “Business Day” means any day which is not a day on which banking institutions in New York
City, New York are authorized or obligated by law or executive order to close.

     “Change of Control” means if (i) any “person” or “group” (within the meaning of Sections
13(d) and 14(d)(2) of the Exchange Act, other than the current members of the Company, is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of more than one-half of the then outstanding voting securities of the Company; (ii)
there occurs a merger, consolidation or combination of the Company with any other entity, other
than a merger, consolidation or combination which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity or its parent) at
least a majority of the combined voting power of the voting securities of the Company, such
surviving entity or its parent outstanding immediately after such merger, consolidation or
combination; or (iii) all or substantially all of the assets of the Company are sold to an
unaffiliated third party or parties in one transaction or series of related transactions followed
by the dissolution and winding up of the Company.

     “Common Unit” means the Common Units as set forth in the LLC Agreement.

     “Commission” means the Securities and Exchange Commission.

     “Company” has the meaning specified in the introduction of this Agreement.

     “Current Market Value” means, with respect to any security (including Common Units), as of a
specified date (the “date of calculation”):

          (i) if such security is not registered under the Exchange Act, the value of such security as
determined in good faith by the Board of Managers of the Company; or

          (ii) if such security is registered under the Exchange Act, the average of the daily market
prices of such security for the 10 consecutive trading days ending three trading days before the
earlier of the date of calculation and the day before the “ex” date with respect to the event
requiring such calculation or, if such security has been registered under the Exchange Act for less
than 10 consecutive trading days before such earlier date, then the average of the daily market
prices for all of the trading days before such earlier date for which daily market prices are
available; provided, however, that if the market price cannot be calculated (as provided below),

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the Current Market Value of such security shall be determined as if such security were not
registered under the Exchange Act.

     For purposes of this Agreement, (x) the term “market price” means, with respect to any
security for any trading day, (A) in the case of a security listed or admitted to trading on any
national securities exchange, the closing sales price, regular way, on such day, or if no sale
takes place on such day, the average of the closing bid and asked prices on such day on the
principal national securities exchange on which such security is listed or admitted, (B) in the
case of a security not then listed or admitted to trading
on any national securities exchange, the last reported sales price on such day, or if no sale
takes place on such day, the average of the closing bid and asked prices on such day, as reported
by a reputable quotation source designated by the Company or (C) in the case of a security not then
listed or admitted to trading on any national securities exchange and as to which no such reported
sales price or bid and asked prices are available, the average of the reported high bid and low
asked prices on such day, as reported by a reputable quotation service, or a newspaper of general
circulation in the Borough of Manhattan, City and State of New York customarily published on each
Business Day, designated by the Company, or, if there shall be no bid and asked prices on such day,
the average of the high bid and low asked prices, as so reported, on the most recent day (not more
than 30 days prior to the date in question) for which prices have been so reported and (y) the term
“ex’ date,” when used with respect to any distribution, shall mean the first date on which the
security trades regular way on such exchange or in such market without the right to receive such
distribution.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any similar Federal
statute, and the rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time. Reference to a particular section of the Securities Exchange Act of 1934, as
amended, shall include reference to the comparable section, if any, of any such similar Federal
statute.

     “Exercise Price” means $1.97, subject to adjustment as provided in Section 4.01
hereof.

     “Expiration Date” means, with respect to any Warrant, the fifth anniversary of the Original
Issuance Date or, if earlier, the date of the consummation of a Change of Control.

     “Governmental Authority” means (i) any nation or government, (ii) any federal, state, county,
province, city, town, municipality, local or other political subdivision thereof or thereto, (iii)
any court, tribunal, department, commission, board, bureau, instrumentality, agency, council,
arbitrator or other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government and (iv) any other governmental entity,
agency or authority having or exercising jurisdiction over any relevant Person, item or matter.

     “Holders” has the meaning specified in the Recitals of this Agreement.

     “Issue Date” has the meaning specified in Section 2.03 hereof.

     “Laws” means all laws, statutes, rules, regulations, ordinances, orders, writs, injunctions or
decrees and other pronouncements having the effect of law of any Governmental Authority.

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     “Legended Warrant Certificate” means any Warrant Certificate bearing the legend specified in
Section 2.02.

     “LLC Agreement” has the meaning specified in the Recitals of this Agreement.

     “Notice Date Press Release” has the meaning specified in Section 2.04(d).

     “Original Issuance Date” means November 9, 2009, the effective date of the Plan.

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

     “Plan” has the meaning specified in the Recitals of this Agreement.

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

     “Transfer” means any direct or indirect transfer, exchange, donation, bequest, sale,
assignment, mortgage, pledge, lien, option, grant of a security interest or other encumbrance or
disposition of record ownership (including, without limitation, by way of merger, operation of law,
pursuant to any domestic relations or other court order, whether with or without consideration and
whether voluntarily or involuntarily).

     “Transfer Notice” means a written notice to the Board of Managers and, if there be one in
office, the Secretary of the Company, at least five and not more than 20 Business Days prior to
completion of a Transfer, which notice states (i) the name, address, facsimile number and e-mail
address of the transferor and the transferee, (ii) the number of Warrants and underlying Common
Units subject to the proposed Transfer and (iii) the proposed date of completion of the proposed
Transfer.

     “Units” means the Common Units.

     “Warrant” has the meaning specified in the Recitals of this Agreement.

     “Warrant Agent” has the meaning specified in the introduction of this Agreement.

     “Warrant Certificates” has the meaning specified in Section 2.01.

     Section 1.02 Interpretation. In this Agreement, unless a clear contrary intention
appears:

     (a) the words “hereof,” “herein” and “hereunder” and words of similar import refer to this
Agreement as a whole and not to any particular provision of this Agreement;

     (b) reference to any gender includes each other gender and the neuter;

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     (c) all terms defined in the singular shall have the same meanings in the plural and vice
versa;

     (d) reference to any Person includes such Person’s heirs, executors, personal representatives,
administrators, successors and assigns; provided, however, that nothing contained in this clause
(d) is intended to authorize any assignment not otherwise permitted by this Agreement;

     (e) reference to a Person in a particular capacity or capacities excludes such Person in any
other capacity;

     (f) reference to any contract or agreement means such contract or agreement as amended,
supplemented or modified from time to time in accordance with the terms thereof;

     (g) all references to Articles and Sections shall be deemed to be references to the Articles
and Sections of this Agreement;

     (h) all references to Exhibits shall be deemed to be references to the Exhibits attached
hereto which are made a part hereof and incorporated herein by reference;

     (i) the word “including” (and with correlative meaning “include”) means including, without
limiting the generality of any description preceding such term;

     (j) with respect to the determination of any period of time, the word “from” means “from and
including” and the words “to” and “until” each means “to but excluding”;

     (k) the captions and headings contained in this Agreement shall not be considered or given any
effect in construing the provisions hereof if any question of intent should arise;

     (l) reference to any Law means such Law as amended, modified, codified, reenacted,
supplemented or superseded in whole or in part, and in effect from time to time;

     (m) where any provision of this Agreement refers to action to be taken by any Person, which
such Person is prohibited from taking, such provision shall be applicable whether such action is
taken directly or indirectly by such Person; and

     (n) no provision of this Agreement shall be interpreted or construed against any party solely
because that party or its legal representative drafted such provision.

ARTICLE II.

ORIGINAL ISSUE OF WARRANTS

     Section 2.01 Form of Warrant Certificates. The Warrants shall be evidenced by
certificates in registered form (the “Warrant Certificates”), substantially in the form attached
hereto as Exhibit A, and may have such insertions, letters, numbers or other marks of

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identification and such legends and endorsements stamped, printed, lithographed or engraved thereon
as may, consistently herewith, be determined to be necessary or appropriate by the officers of the
Company executing such Warrant Certificates as evidenced by their execution of the Warrant
Certificates, or as may be required to comply with any applicable Law or with any rule or
regulation of any securities exchange or to conform to usage. Each Warrant shall represent the
right, subject to the provisions of this Agreement and of the Warrant Certificate, to purchase one
Common Unit at the Exercise Price, subject to adjustment pursuant to the provisions of Section
4.01. The definitive Warrant Certificates shall be typed, printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other manner permitted by
applicable Law.

     Section 2.02 Legends. Each Warrant Certificate originally issued to a Holder, or
issued upon registration of transfer of, or upon exchange for or in lieu of, any Warrant
Certificate shall bear the following legend:

“THIS WARRANT HAS BEEN, AND THE COMMON UNITS WHICH MAY BE PURCHASED
PURSUANT TO THE EXERCISE OF THIS WARRANT (THE “WARRANT UNITS,” AND TOGETHER WITH
THIS WARRANT, THE “SECURITIES”) WILL BE, ISSUED PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SECTION 1145 OF THE BANKRUPTCY REFORM ACT OF 1978, AS AMENDED
(THE “BANKRUPTCY CODE”). THE SECURITIES MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), PROVIDED THAT THE HOLDER IS NOT DEEMED TO BE AN
UNDERWRITER AS SUCH TERM IS DEFINED IN SECTION 1145(b) OF THE BANKRUPTCY CODE. IF
THE HOLDER IS DEEMED TO BE AN UNDERWRITER AS SUCH TERM IS
DEFINED IN SECTION 1145(b) OF THE BANKRUPTCY CODE, THEN THE SECURITIES MAY ONLY BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED UPON REGISTRATION UNDER THE
SECURITIES ACT OR RECEIPT OF AN OPINION OF COUNSEL SATISFACTORY TO MAGNACHIP
SEMICONDUCTOR LLC AND ITS COUNSEL THAT SUCH DISPOSITION IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND OF ANY
APPLICABLE STATE SECURITIES LAWS. THIS WARRANT MUST BE SURRENDERED TO THE COMPANY OR
ITS TRANSFER AGENT AS A CONDITION PRECEDENT TO THE SALE, PLEDGE OR OTHER TRANSFER OF
ANY INTEREST IN ANY OF THE WARRANT UNITS REPRESENTED BY THIS WARRANT.

THE SECURITIES REPRESENTED BY THIS WARRANT CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER, SALE, ASSIGNMENT, PLEDGE, ENCUMBRANCE OR OTHER SIMILAR
TRANSFER AND VOTING RESTRICTIONS AS SET FORTH IN A LIMITED LIABILITY COMPANY
OPERATING AGREEMENT AMONG THE COMPANY AND THE ORIGINAL HOLDERS OF THE SECURITIES AND
A

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WARRANT AGREEMENT AMONG THE COMPANY AND THE WARRANT AGENT (ON BEHALF OF THE
ORIGINAL HOLDERS OF THE SECURITIES), COPIES OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE COMPANY.”

     Each Holder further acknowledges and agrees that the Units and any other securities
issued upon exercise of the Warrant if certificated shall bear a legend substantially in the form
of the legend appearing above, and any other legends required by applicable federal and state
securities laws or otherwise called for by this Agreement or any other agreement between the
Company and the Holder.

     Section 2.03 Execution, Issuance and Delivery of Warrant Certificates.

     (a) Each Warrant Certificate, whenever issued, shall be dated as of the date of
countersignature thereof by the Warrant Agent (the “Issue Date”), either upon initial issuance or
upon exchange, substitution or transfer and shall be executed on behalf of the Company by its
Chairman of the Board, Chief Executive Officer, President or any Vice President, either manually or
by facsimile signature printed thereon. The Warrant Certificates shall be countersigned by manual
or facsimile signature of the Warrant Agent and shall not be valid for any purpose unless so
countersigned. In the event that any officer of the Company whose signature shall have been placed
upon any of the Warrant Certificates shall cease to be an officer of the Company before
countersignature by the Warrant Agent and the issuance and delivery thereof, such Warrant
Certificates may, nevertheless, be countersigned by the Warrant Agent and issued and delivered with
the same force and effect as though such person had not ceased to be such officer of the Company.

     (b) The Company shall instruct the Warrant Agent to countersign, issue and deliver, at the
expense of the Company, Warrant Certificates evidencing Warrants to purchase an aggregate of up to
15,000,000 Common Units at the times required by, and in accordance with the terms and conditions
of, the Plan. The Warrant Agent shall, and is hereby authorized to, countersign, issue and deliver
Warrants as and when so instructed by the Company. In addition, the Warrant Agent is hereby
authorized to countersign, issue and deliver Warrant Certificates as required by Section
2.04, Section 3.03 or ARTICLE V.

     Section 2.04 Transfer and Exchange of Warrant Certificates.

     (a) The Warrant Agent shall maintain books, subject to such reasonable regulations as it may
prescribe, for the registration of Warrant Certificates and transfers and exchanges of Warrant
Certificates as provided in this Agreement.

     (b) Notwithstanding any other provisions of this Agreement, no Holder shall Transfer any such
Warrants to any Person nor shall the Company effect the Transfer of any Warrants to any Person, if,
at the time of such Transfer, the Company has more than 450 “holders of record” (as understood for
purposes of Section 12(g) of the Exchange Act) of Common Units and/or Warrants. The limitations set
forth in the immediately preceding sentence shall not prohibit: (i) a Transfer of Warrants by a
Holder to another Person that, immediately prior to the Transfer, is a

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holder of record of
Warrants, (ii) a Transfer of Warrants by a Holder to the Company, (iii) a Transfer of Warrants by
the Company to a Person that, immediately prior to the Transfer, is a holder of record of Warrants
or (iv) a Transfer of all Warrants owned by the proposed transferor to a single Person who is
treated as a single record holder of Warrants under the Exchange Act. Any attempted Transfer that
is prohibited by this Section and not approved by the Company shall be null and void and shall not
be effective to Transfer any Warrants. The Company may institute legal proceedings to force
rescission of a Transfer prohibited by this Section and to seek any other remedy available to it at
law, in equity or otherwise, including an injunction prohibiting any such Transfer. By acceptance
of a Warrant or Common Units issued pursuant to the exercise of a Warrant, any transferee of a
Warrant or the Common Units issued pursuant to the exercise of a Warrant accepts and agrees to be
bound by all the terms and conditions of the Warrant and the Warrant Agreement and notwithstanding
anything contained herein, the Company may require any transferee of this Warrant or the Common
Units issued pursuant to the exercise of a Warrant to execute an agreement to be bound by the terms
and conditions of this Warrant and the Warrant Agreement.

     (c) By the fifth Business Day after the Company has 350 or more holders of record of Warrants
and/or Common Units, the Company shall issue a press release stating the number of holders
of record of Warrants and Common Units (the “Notice Date Press Release”). The Company shall notify
the Warrant Agent of such issuance and provide a copy of the Notice Date Press Release to the
Warrant Agent as provided in Section 9.04.

     (d) A Transfer of Warrants that is completed or attempted after the Company issues a Notice
Date Press Release with respect to the Warrants shall be null and void and not effective unless (i)
the holder seeking to make such Transfer provides a Transfer Notice to the Company, (ii) such
Transfer is approved in advance by the Company and (iii) such Transfer otherwise complies with the
terms of this Agreement. No Transfer Notice is required with respect to Warrants for Transfers that
occur prior to the issuance by the Company of a Notice Date Press Release.

     (e) Subject to Section 2.04(b) and Section 2.04(d), a Holder may Transfer its
Warrants by written application to the Warrant Agent stating the name of the proposed transferee
and otherwise complying with the terms of this Agreement and all applicable Laws and provided that
the Warrant Agent has not received a Notice Date Press Release. No Transfer of Warrants shall be
effected until, and such transferee shall succeed to the rights of a Holder only upon, (i) delivery
of written notice of the proposed Transfer to Company, (ii) compliance with the transfer provisions
of this Agreement, (iii) final acceptance and registration of the Transfer by the Warrant Agent in
the register in accordance with this Agreement and (iv) the delivery of an opinion of counsel, in
form and substance reasonably satisfactory to the Company and its counsel, with respect to the
compliance of the Transfer under applicable law, included federal and state securities law, and any
other matters reasonably requested by the Company. Prior to due presentation for registration of
transfer, the Company, the Warrant Agent and any agent of the Company may deem and treat the Person
in whose name the Warrant Certificates are registered as the absolute owner thereof for all
purposes (notwithstanding any notation of ownership or other writing thereon made by anyone), and
neither the Company nor the Warrant Agent shall be affected by any notice to the contrary or be
bound to recognize any equitable or

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other claim to or an interest in any Warrants on the part of
any other Person and shall not be liable for any registration of transfer of Warrant Certificates
that are registered or to be registered in the name of a fiduciary or the nominee of a fiduciary
unless made with actual knowledge that a fiduciary or nominee is committing a breach of trust in
requesting such registration of transfer or with such knowledge of such facts that its
participation therein amount to bad faith. When Warrant Certificates are presented to the Warrant
Agent with a request to register the transfer thereof or to exchange them for an equal number of
Warrant Certificates of other authorized denominations, the Warrant Agent shall register the
transfer or make the exchange as requested solely in the case of any Legended Warrant Certificates
if the requirements of this Agreement for such transaction are met. To permit registrations of
transfers and exchanges, the Company shall execute Warrant Certificates at the Warrant Agent’s
request. No service charge shall be made for any registration of transfer or exchange of Warrant
Certificates, but the Company or the Warrant Agent may
require payment of a sum sufficient to cover any transfer tax or similar governmental charge
payable in connection with any registration of transfer of Warrant Certificates.

     (f) Except as otherwise provided in this Section 2.04, all Warrant Certificates issued
upon any registration of transfer or exchange of Warrants shall be the valid obligations of the
Company, evidencing the same obligations, and entitled to the same benefits under this Agreement,
as the Warrant Certificates surrendered for registration of transfer or exchange.

     (g) The Board of Managers shall have the power to determine, in its sole and absolute
discretion, all matters related to this Section, including matters necessary or desirable to
administer or to determine compliance with this Section and, absent manifest error, the
determinations of the Board of Managers shall be final and binding on the Company and the Holders.

     Section 2.05 Surrender and Cancellation of Warrant Certificates. Any Warrant
Certificate surrendered for registration of transfer, exchange or exercise of the Warrants
represented thereby or pursuant to Section 6.02 shall, if surrendered to the Company, be
delivered to the Warrant Agent, and all Warrant Certificates surrendered or so delivered to the
Warrant Agent shall be promptly canceled by the Warrant Agent and shall not be reissued by the
Company or the Warrant Agent and, except as provided in Section 2.04 (in the case of a
transfer or exchange), Section 3.03 (in the case of the exercise of less than all the
Warrants represented by the surrendered Warrant Certificate) or ARTICLE V (in the case of a
lost, stolen, destroyed or mutilated Warrant Certificate), no Warrant Certificate shall be issued
hereunder in lieu thereof. On request of the Company, the Warrant Agent, provided that any
retention periods established by the Commission have expired, shall destroy canceled Warrant
Certificates held by it and shall deliver its certificates of destruction to the Company. The
Warrant Agent shall destroy all canceled Warrant Certificates in accordance with its normal
procedures.

     Section 2.06 Holdback Agreement. If requested by the lead managing underwriter, each Holder
agrees not to effect any public sale or distribution of any securities of the Company (including
any Warrant, any Unit issued upon the exercise of a Warrant or any securities convertible into,
reclassified from or exchangeable or exercisable for such securities of the Company), including a
sale pursuant to Rule 144 under the Securities Act, during a period of not more than one hundred
and eighty (180) days after, an initial public offering of the Company’s

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securities pursuant to an
effective registration statement filed by the Company under the Securities Act commencing on the
effective date of the registration statement (the “Lock-Up Period”), unless expressly authorized to
do so by the lead managing underwriter; provided, however, that if any other holder of securities
of the Company shall be subject to a shorter period or receives more advantageous terms relating to
the Lock-Up Period, then the Lock-Up Period shall be such shorter period and also on such more
advantageous terms and notwithstanding the
foregoing, the Holders shall not be required to sign lock-up agreements unless all of the
Company’s directors, officers and securityholders owning one percent (1%) or more of the Company’s
fully diluted voting stock have signed lock-up agreements with the managing underwriters. Any such
lock-up agreements signed by the Holders shall contain reasonable and customary exceptions,
including, without limitation, the right of a Holder to make transfers to certain Affiliates and
transfers related to securities owned by Holders as a result of open market purchases made
following the closing of the applicable offering. The Company shall be authorized to impose
stop-transfer instructions with respect to the securities subject to the foregoing restrictions
until the end of the relevant period.

ARTICLE III.

EXERCISE PRICE; EXERCISE OF WARRANTS

     Section 3.01 Exercise Price. Each Warrant Certificate shall, when countersigned by the
Warrant Agent, entitle the Holder thereof, subject to the provisions of this Agreement and such
Warrant Certificate, to purchase one Common Unit (subject to adjustment as provided herein) for
each Warrant represented thereby at the Exercise Price per Common Unit (subject to adjustment as
provided herein), payable in full at the time of purchase.

     Section 3.02 Exercise; Restrictions on Exercise. Each outstanding Warrant may be
exercised on any Business Day which is on or after its Issue Date and on or before the Expiration
Date, but only if (solely in the case of any Legended Warrant Certificate) the exercise of such
Warrants is exempt from the registration requirements of the Securities Act. Any Warrants not
exercised by 5:00 p.m., New York City time, on the Expiration Date (or, if applicable, immediately
prior to consummation of the applicable Change of Control) shall expire and all rights thereunder
and all rights in respect thereof under this Agreement shall automatically terminate at such time.

     Section 3.03 Method of Exercise; Payment of Exercise Price.

     (a) In order to exercise any of the Warrants, the Holder thereof must surrender the Warrant
Certificate evidencing such Warrants to the Warrant Agent at its corporate trust office set forth
in Section 9.04 (with (i) the Subscription Form set forth in the Warrant Certificate and
(ii) the Form of Joinder set forth in the LLC Agreement completed and duly executed), together with
payment in full of the Exercise Price then in effect for each Common Unit as to which a Warrant is
exercised and any documentary, stamp or transfer tax, or other applicable tax or governmental
charges. Payment of the Exercise Price shall be made by the Holder by check payable to the order of
Warrant Agent; provided, however, that in lieu of exercising any Warrants by payment of cash, if
the Company has provided notice under Section 4.04 in connection with any sale of all or
substantially all of the Company’s properties, assets or business or any consolidation, combination
or merger of the Company with or into another

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company, in each case
resulting in a Change of Control in which the consideration receivable upon consummation of such
Change of Control by a holder of Common Units consists of consideration that is not solely cash,
the Holder may elect to exercise its Warrants conditioned upon the occurrence of such Change of
Control, to be effective immediately prior to the time such Change of Control is consummated, in
which event the Company shall issue (or have been deemed to issue) to the Holder upon exercise a
number of Common Units immediately prior to such Change of Control, computed using the following
formula:

X =
Y * (A - B) / A

where:

	 	 	 	 	 
	X

	 	=
	 	the number of Common Units to be issued to the Holder;
	 
	 	 	 	 
	Y

	 	=
	 	the number of Common Units with respect
to which a Warrant is being exercised;
	 
	 	 	 	 
	A

	 	=
	 	the Current Market Value of a Common Unit
determined as of the date the Change of Control is consummated; and
	 
	 	 	 	 
	B

	 	=
	 	the Exercise Price plus applicable taxes.

     Upon the exercise of any Warrant, the Warrant Agent shall promptly provide written notice of
such exercise to the Company, including notice of the number of Common Units to be issued upon the
exercise of such Warrant, and deliver all payments received upon exercise of such Warrant to the
Company in such manner as the Company shall instruct in writing.

     (b) A Holder may exercise all or any number of whole Warrants represented by a Warrant
Certificate. If less than all of the Warrants represented by a Warrant Certificate are exercised,
such Warrant Certificate shall be surrendered and a new Warrant Certificate executed by the Company
of the same tenor and for the number of Warrants which were not exercised shall be issued by the
Warrant Agent. The Warrant Agent shall (i) countersign such Warrant Certificate, (ii) register such
Warrant Certificate in such name or names as may be directed in writing by the Holder and (iii)
deliver such Warrant Certificate to the Person or Persons entitled to receive the same.

     (c) Upon the exercise of any Warrant and the surrender of the Warrant Certificate evidencing
such Warrant in conformity with the foregoing provisions, the Warrant Agent shall, subject to
Section 9.02, (i) transfer promptly to or upon the written order of the Holder of such
Warrant Certificate, appropriate evidence of ownership of any Common Units or other securities or
property (including money) to which it is entitled, registered or otherwise placed in such name or
names as may be directed in writing by the Holder, and (ii) deliver such evidence of ownership and
any other securities or property (including
money) to the Person or Persons entitled to receive the same (together with an amount in cash
in lieu of any fractional Unit as provided in Section 4.05).

     (d) Upon the exercise of any Warrant, the Warrant Agent is hereby authorized and directed to
notify any transfer agent of the Common Units upon the exercise of any Warrant. Upon such
notification, such transfer agent (and all such transfer agents are hereby irrevocably

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authorized
to comply with this Section 3.03(d)) shall register on its books the necessary number of
Common Units to which the Holder of such Warrant is entitled upon such exercise; provided, that
such Holder shall have completed and duly executed the Subscription Form set forth in the Warrant
Certificate and the Form of Joinder Agreement set forth in the LLC Agreement.

     (e) Except for exercises in connection with and conditioned upon a Change of Control, any
Warrant which is exercised hereunder shall be deemed to have been exercised immediately prior to
the close of business on the date of the surrender, as provided above, of the Warrant Certificate
representing such Warrant, together with payment in full of the Exercise Price and any documentary,
stamp or transfer tax, or other applicable tax or governmental charges (unless settlement is on a
cashless basis in connection with and conditioned upon a Change of Control), and, for purposes of
this Agreement, the Person entitled to receive any Common Units or other securities or property
deliverable upon such exercise shall, as between such Person and the Company, be deemed to be the
Holder of such Common Units or other securities or property of record as of the close of business
on such date and shall be entitled to receive, and the Company shall deliver or cause to be
delivered to such Person, any money, Common Units or other securities or property to which he would
have been entitled had he been a record holder on such date.

ARTICLE IV.

ADJUSTMENTS

     Section 4.01 Adjustments. The number of Common Units issuable upon exercise of each
Warrant shall be subject to adjustment from time to time as follows:

     (a) Upon Dividends, Subdivisions or Splits. If, at any time after the Original Issuance Date,
the number of Common Units outstanding is increased by a dividend or distribution on the
outstanding Common Units payable in Common Units or by a subdivision or split-up of Common Units,
other than, in any such case, upon a capital reorganization, reclassification, consolidation or
merger to which Section 4.01(c) applies, then, following the record date for the
determination of holders of Common Units entitled to receive such dividend, or to be affected by
such subdivision or split-up, the number of Common Units purchasable on exercise of the Warrants
shall be increased in proportion to such increase in outstanding
Common Units. The adjustment made pursuant to this clause (a) shall become effective (x) in
the case of any such dividend or distribution, immediately after the close of business on the
record date for the determination of holders of Common Units entitled to receive such dividend or
distribution or (y) in the case of such subdivision or split-up, at the close of business on the
day upon which such corporate action becomes effective.

     (b) Upon Combinations or Reverse Splits. If, at any time after the Original Issuance Date, the
number of Common Units outstanding is decreased by a combination or reverse split of the
outstanding Common Units into a smaller number of Common Units, other than, in any such case, upon
a capital reorganization, reclassification, consolidation or merger to which Section
4.01(c) applies, then the number of Common Units purchasable on the exercise of each Warrant
immediately prior to the date of such combination or reverse split shall be decreased in proportion
to such decrease in outstanding Common Units. The adjustment made pursuant to this

12

 

clause (b) shall
become effective at the close of business on the day upon which such combination or reverse split
becomes effective. For purposes of Section 4.01(a) and Section 4.01(b), the number
of Common Units at any time outstanding shall not include any Common Units then owned or held by or
for the account of the Company.

     (c) Upon Reclassifications, Reorganizations, Consolidations or Mergers.

     (i) In the event of any capital reorganization of the Company, any reclassification of
any of the Common Units, or any consolidation, combination or merger of the Company with or
into another company, in each case not resulting in a Change of Control, where the Company
is not the surviving company or where there is a change in or distribution with respect to
the Units, each Warrant, effective at the close of business on the date such reorganization,
reclassification, consolidation, or merger shall become effective, shall thereafter be
exercisable for the kind and number of membership interests or other securities or property
(including cash) receivable upon the consummation of such reorganization, reclassification,
consolidation or merger, by a holder of the number of Common Units deliverable (immediately
prior to the time of such reorganization, reclassification, consolidation or merger) upon
exercise of such Warrant and, except as specified in Section 4.01(g), otherwise
shall have the same terms and conditions applicable immediately prior to such time of such
reorganization, reclassification, consolidation or merger. The provisions of this clause (i)
shall similarly apply to successive reorganizations, reclassifications, consolidations, or
mergers.

     (ii) In the event of any capital reorganization of the Company, any reclassification of
any of the Common Units, any sale of all or substantially all of the Company’s assets or any
consolidation, combination or merger of the Company with or into another company, in each
case resulting in a Change of Control, and where the consideration receivable upon
consummation of such Change of Control by a holder of Common Units consists solely of cash,
the Company shall not effect any such reorganization, reclassification, sale of assets,
consolidation or merger unless, simultaneously with the consummation thereof, the Company
shall redeem the Warrants and pay to each Holder of a Warrant Certificate evidencing a
number of Warrants, upon surrender thereof to the Company, an amount in cash equal to (A)
the amount in cash that would be received upon such consummation by a holder of the number
of Common Units deliverable (immediately prior to such consummation) upon exercise of such
Warrants less (B) the aggregate Exercise Price therefor.

     (d) Deferral in Certain Circumstances. If the Company shall take a record of the holders of
its Units for the purpose of entitling them to receive a dividend or distribution, and shall
thereafter, and before the distribution to such holders thereof, legally abandon its plan to pay or
deliver such dividend or distribution, then thereafter no adjustment in the number of Common Units
purchasable upon exercise of the Warrants granted by this Section 4.01 or in the Exercise
Price then in effect shall be required by reason of the taking of such record and, as to any
Warrants that remain outstanding, any adjustment previously made in respect thereof shall be
rescinded and annulled. In any case in which the provisions of this ARTICLE IV shall
require that an adjustment shall become effective immediately after a record date of an event, the

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Company may defer, until the occurrence of such event, issuing to the holder of any Warrant
exercised after such record date and before the occurrence of such event the membership interests
issuable upon such exercise by reason of the adjustment required by such event and issuing to such
holder only the membership interests issuable upon such exercise before giving effect to such
adjustments, and paying to such holder any amount in cash in lieu of any fractional Common Units
pursuant to Section 4.05; provided, however, that the Company shall deliver to such holder
an appropriate instrument or due bill evidencing such holder’s right to receive such additional
Common Units and such cash on the date of the occurrence of such event.

     (e) De Minimis Adjustments. No adjustment in the number of Common Units purchasable upon the
exercise of any Warrant shall be required unless such adjustment would require an increase or
decrease of at least 1% in the number of Common Units purchasable upon the exercise of such
Warrant; provided, however, that any adjustments which are not required to be made by reason of
this Section 4.01(e) shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 4.01(e) shall be made to the nearest
one-thousandth of a Unit.

     (f) Determination of Current Market Value. If at any time the Current Market Value of any
security is required to be calculated pursuant to the terms of this Agreement, the determination of
such Current Market Value, if calculated in accordance with the terms of this Agreement, absent
manifest error,
shall be conclusive and binding on all Persons.

     (g) Warrant Price Adjustment. Whenever the number of Common Units into which a Warrant is
exercisable is adjusted as provided in Sections 4.01(a), (b) or (c), the
Exercise Price payable upon exercise of the Warrant shall simultaneously be adjusted by multiplying
such Exercise Price immediately prior to such adjustment by a fraction, the numerator of which
shall be the number of Common Units into which such Warrant was exercisable immediately prior to
such adjustment, and the denominator of which shall be the number of Common Units into which such
Warrant was exercisable immediately thereafter.

     Section 4.02 Notice of Adjustment. Whenever the number of Common Units or other
securities or property purchasable upon the exercise of each Warrant is required to be adjusted
pursuant to Section 4.01, the Company shall deliver to the Warrant Agent a certificate
setting forth (a) the number of Common Units or other securities or property purchasable upon the
exercise of each Warrant and the Exercise Price therefor after such adjustment, (b) a brief
statement of the facts requiring such adjustment and (c) the computation by which such adjustment
was made. Such certificate shall be conclusive evidence of the correctness of such adjustment
absent manifest error. The Warrant Agent shall not be deemed to have knowledge of such adjustment
unless and until it shall have received such certificate. Upon receipt of such certificate, the
Company shall cause the Warrant Agent to mail notice of the adjustment described in such
certificate to each Holder at the expense of the Company. The Warrant Agent shall be entitled to
rely on such certificate and shall be under no duty or responsibility with respect to any such
certificate, except to exhibit the same, from time to time, to any Holder desiring to inspect such
certificate during reasonable business hours. The Warrant Agent shall not at any time be under any
duty or responsibility to any Holder to determine whether any facts exist which may require any
adjustment of the Exercise Price or the number of Common Units or

14

 

other securities or property
purchasable upon exercise of any Warrant, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed in making such adjustment, or the
validity or value (or the kind or amount) of any Common Units or other
securities or property that
may be purchasable on exercise of any Warrant. The Warrant Agent shall not be responsible for any
failure of the Company to make any cash payment or to issue, transfer or deliver any Common Units
or other securities or property upon the exercise of any Warrant.

     Section 4.03 Statement on Warrants. The form of Warrant Certificate need not be
changed because of any adjustment made pursuant to Section 4.01, and Warrant Certificates
issued after such adjustment may state the same Exercise Price and the same number and kind of
Common Units as are stated in the Warrant Certificates initially issued pursuant to this Agreement.
The Company may, however, at any time in its sole discretion (which shall be conclusive), make any
change in the form of
Warrant Certificate that it may deem appropriate to reflect any such adjustment and that does
not affect the substance thereof and any Warrant Certificate thereafter issued or countersigned,
whether in exchange or substitution for an outstanding Warrant Certificate or otherwise, may be in
the form so changed.

     Section 4.04 Notice of Consolidation, Merger or Sale of Substantially All Assets,
Etc. In the event that, at any time after the date hereof and prior to 5:00 p.m., New York
City time (or, if applicable, immediately prior to consummation of the applicable Change of
Control), on the Expiration Date, (a) the Company shall consummate a Change of Control transaction
to which it is a party or otherwise consolidate or combine with another company, merge with or into
another company or sell, transfer or otherwise dispose of all or substantially all of its
properties, assets or business or (b) the Company shall dissolve, liquidate or wind-up its
operations, then in any one or more of such cases, the Company shall cause to be mailed to the
Warrant Agent and each Holder, at the earliest practicable time (and, in any event, not less than
20 calendar days before any record date or, if no record date applies, before any date set for
definitive action), notice of the date on which such Change of Control, consolidation, combination,
merger, sale, dissolution, liquidation or winding up shall take place, as the case may be. Such
notice shall also set forth such facts as shall indicate the effect of such action (to the extent
such effect may be known at the date of such notice), if any, on the kind and amount of Common
Units and other securities, money and other property deliverable upon exercise of the Warrants.
Such notice shall also specify the date, if any, as of which the holders of record of Common Units
or other securities or property issuable upon exercise of the Warrants shall be entitled to
exchange their interests for securities, money or other property deliverable upon such
consolidation, combination, merger, sale, dissolution, liquidation or winding up, as the case may
be.

     Section 4.05 Fractional Interests. Notwithstanding anything to the contrary
contained in this Agreement, if the number of Common Units purchasable on the exercise of each
Warrant is adjusted pursuant to the provisions of Section 4.01, the Company shall not be
required to issue any fraction of a Common Unit upon any subsequent exercise of any Warrant. If
Warrant Certificates evidencing more than one Warrant shall be surrendered for exercise at the same
time by the same Holder, the number of full Common Units that shall be issuable upon such exercise
thereof shall be computed on the basis of the aggregate number of Warrants evidenced by

15

 

Warrant
Certificates so surrendered. If any fraction of a Common Unit would, except for the provisions of
this Section 4.05, be issuable on the exercise of any Warrant (or specified portion
thereof), in lieu of the issuance of such fractional Common Unit, the Company shall pay the Holder
of such Warrant an amount in cash equal to the then Current Market Value per Common Unit multiplied
by such fraction (computed to the nearest whole cent). The Holders, by their acceptance of the
Warrant Certificates, expressly waive their right to receive any fraction of a Common Unit instead
of such cash.

     Section 4.06 Concerning All Adjustments. Notwithstanding anything to the contrary
contained in this Agreement, if an adjustment is made under any provision of ARTICLE IV on
account of any event, transaction, circumstance, condition or happening, no additional adjustment
shall be made under any other provision of ARTICLE IV on account of such event,
transaction, circumstance, condition or happening. Unless otherwise expressly provided in this
ARTICLE IV, all determinations and calculations required or permitted under this
ARTICLE IV shall be made by the Company or its Board of Managers, as appropriate, and all
such calculations and determinations shall be conclusive and binding in the absence of manifest
error.

ARTICLE V.

LOSS, THEFT, DESTRUCTION OR MUTILATION

OF WARRANT CERTIFICATES

     Section 5.01 Lost, Theft, Destruction or Mutilation. Upon receipt by the Company and the
Warrant Agent of evidence satisfactory to them of the ownership and the loss, theft, destruction or
mutilation of any Warrant Certificate, and an indemnity bond in form and amount and with corporate
surety satisfactory to them, and (in the case of mutilation) upon surrender and cancellation
thereof, then, in the absence of notice to the Company or the Warrant Agent that the Warrants
represented thereby have been acquired by a bona fide purchaser, the Company shall issue and the
Warrant Agent shall countersign and deliver to the Holder of the lost, stolen, destroyed or
mutilated Warrant Certificate, in exchange and substitution for or in lieu thereof, a new Warrant
Certificate of the same tenor and representing an equivalent number of Warrants. Upon the issuance
of any new Warrant Certificate under this ARTICLE V, the Company may require the payment of
a sum sufficient to cover any tax or other governmental charge that may be imposed in relation
thereto and other expenses (including the fees and expenses of the Warrant Agent) in connection
therewith. Every new Warrant Certificate executed and delivered pursuant to this ARTICLE V
in lieu of any lost, stolen, destroyed or mutilated Warrant Certificate shall constitute an
original contractual obligation of the Company, whether or not the allegedly lost, stolen,
destroyed or mutilated Warrant Certificates shall be at any time enforceable by anyone, and shall
be entitled to the benefits of this Agreement equally and proportionately with any and all other
Warrant Certificates duly executed and delivered hereunder. The provisions of this ARTICLE
V are exclusive and shall preclude (to the extent lawful) all other rights or remedies with
respect to the replacement of lost, stolen, destroyed or mutilated Warrant Certificates.

16

 

ARTICLE VI.

AUTHORIZATION AND RESERVATION OF

COMMON UNITS; PURCHASE OF WARRANTS

     Section 6.01 Reservation of Authorized Common Units. The Company shall at all times
reserve and keep available for issue upon the exercise of Warrants, such number of its authorized
but unissued Common Units or other securities deliverable upon exercise of Warrants as will be
sufficient to permit the exercise in full of all outstanding Warrants and shall take all action
required to increase the authorized number of Common Units if necessary to permit the conversion of
all outstanding Warrants. The Company will cause appropriate evidence of ownership of such Common
Units or other securities to be delivered to the Warrant Agent upon its request for delivery upon
the exercise of Warrants, and all such Common Units will, at all times, be duly approved for
listing subject to official notice of issuance on each securities exchange, interdealer quotation
system or market, if any, on which such Common Units is then listed. The Company covenants that all
Common Units or other securities that may be issued upon the exercise of the Warrants will, upon
issuance pursuant to the terms of the Warrant and the Warrant Agreement, be duly authorized,
validly issued, fully paid and non-assessable (except as non-assessability may be affected by
Section 18-607 or Section 18-804 of the Delaware Limited Liability Company Act), and free from
preemptive rights and all taxes, liens, charges, encumbrances and security interests, other than
any liens or encumbrances created by or imposed upon the Holders and provided, however, that the
Warrants and the Common Units issued or issuable pursuant to exercise of the Warrants are subject
to restrictions on transfer under applicable Federal and state securities laws and restrictions on
transfer as set forth herein, the LLC Agreement and other agreements between a Holder and the
Company in connection with Company securities held by such Holder.

     Section 6.02 Purchase of Warrants by the Company. The Company shall have the right,
except as limited by law or other agreement, to purchase or otherwise acquire Warrants at such
times, in such manner and for such consideration as it may deem appropriate, upon mutual agreement
with the Holder of such Warrant. In the event the Company shall purchase or otherwise acquire
Warrants, the related Warrant Certificates shall thereupon be delivered to the Warrant Agent for
cancellation; provided, however, that unless and until the Warrant Certificates evidencing such
Warrants are surrendered by the Company to the Warrant Agent for cancellation, such purchase or
acquisition shall not operate as a redemption or termination of the right represented by such
Warrants. Any Warrants purchased or otherwise acquired by the Company shall not be outstanding for
any purpose.

ARTICLE VII.

WARRANT HOLDERS NOT DEEMED MEMBERS

     Section 7.01 Warrant Holders Not Members. Prior to the exercise of any Warrant and
completion and execution of the Form of Joinder set forth in the LLC Agreement, nothing contained
in this Agreement or any Warrant Certificate shall be construed as conferring on the Holder of any
Warrant or Warrant Certificate any rights whatsoever as a member of the Company, either at law or
in equity,
including the right to vote on or to consent to any action of the members, to receive
dividends or other distributions, to exercise any preemptive right or to

17

 

receive any notice of
meetings of members and, except as otherwise provided in this Agreement, shall not be entitled to
receive any notice of any proceedings of the Company.

ARTICLE VIII.

THE WARRANT AGENT

     Section 8.01 Appointment and Acceptance of Agency. The Company hereby appoints the
Warrant Agent to act as agent for the Company in accordance with the instructions set forth in this
Agreement and the Warrant Agent hereby accepts the agency established by this Agreement and agrees
to perform the same on the terms and conditions herein set forth.

     Section 8.02 Correctness of Statements; Distribution of Warrants. The statements
contained herein and in each Warrant Certificate shall be taken as statements of the Company, and
the Warrant Agent assumes no responsibility for the correctness of any of the same except as
describe the Warrant Agent or any action taken by it. The Warrant Agent assumes no responsibility
with respect to the distribution of the Warrants except as herein otherwise provided.

     Section 8.03 Use of Agents. The Warrant Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty thereunder either itself (through its
employees) or by or through its attorneys or agents (which shall not include its employees) and
shall not be responsible for the misconduct or negligence of any agent appointed, provided that due
care had been exercised in the appointment and continued employment thereof.

     Section 8.04 Proof of Actions Taken. Whenever in the performance of its duties under
this Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action hereunder, such fact
or matter (unless such evidence in respect thereof be herein specifically prescribed) may, in the
absence of bad faith on the part of the Warrant Agent, be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, President, Chief Executive
Officer, Chief Operating Officer, Chief Financial Officer, any Vice President, the Treasurer or
Secretary of the Company and delivered to the Warrant Agent; and such certificate, in the absence
of bad faith on the part of the Warrant Agent, shall be full authorization to the Warrant Agent for
any action taken, suffered or omitted by it under the provisions of this Agreement in reliance upon
such certificate.

     Section 8.05 Compensation; Indemnity. The Company agrees to pay the Warrant
Agent compensation for all services rendered by the Warrant Agent in the performance of its
duties under this Agreement. The Company agrees to reimburse the Warrant Agent for all expenses,
taxes and governmental charges and other charges of any kind and nature incurred by the Warrant
Agent (including reasonable fees and expenses of the Warrant Agent’s counsel and agents) in the
performance of its duties under this Agreement. The Company also agrees to indemnify the Warrant
Agent for, and to hold it harmless against, any loss, liability or expenses incurred without
negligence or willful misconduct on the part of the Warrant Agent, for anything done or omitted by
the Warrant Agent in connection with the acceptance and administration of this Agreement, including
the reasonable costs and expenses of defending against any claim of

18

 

liability in the premises. The
indemnity provided for herein shall survive the expiration of the Warrants and the termination of
this Agreement. The reasonable costs and expenses incurred in enforcing this right of
indemnification shall be paid by the Company. Notwithstanding anything in this Agreement to the
contrary, in no event shall the Warrant Agent be liable for special, indirect or consequential loss
or damage of any kind whatsoever (including lost profits), even if the Warrant Agent has been
advised of the likelihood of such loss or damage and regardless of the form of the action.

     Section 8.06 Legal Proceedings. The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other action likely to involve
expense unless the Company or one or more Holders shall furnish the Warrant Agent with reasonable
security and indemnity satisfactory to the Warrant Agent for any costs and expenses which may be
incurred, but this provision shall not affect the power of the Warrant Agent to take such action as
the Warrant Agent may consider proper, whether with or without any such security or indemnity. All
rights of action under this Agreement or under any of the Warrants may be enforced by the Warrant
Agent without the possession of any of the Warrants or the production thereof at any trial or other
proceeding relative thereto, and any such action, suit or proceeding instituted by the Warrant
Agent shall be brought in its name as Warrant Agent, and any recovery of judgment shall be for the
ratable benefit of the Holders, as their respective rights or interests may appear.

     Section 8.07 Other Transactions Involving the Company. The Warrant Agent and any
stockholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the
Warrants or other securities of the Company or become pecuniarily interested in any transactions in
which the Company may be interested, or contract with or lend money to the Company or otherwise act
as fully and freely as though it were not Warrant Agent under this Agreement or such director,
officer or employee. Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity including acting as transfer agent or as a
lender to the Company or an affiliate thereof.

     Section 8.08 Actions as Agent. The Warrant Agent shall act hereunder solely as
agent,
and its duties shall be determined solely by the provisions of this Agreement. No implied
duties or obligations shall be read into this Agreement against the Warrant Agent. The Warrant
Agent shall not be liable for anything which it may do or refrain from doing in connection with
this Agreement except for its own gross negligence or willful misconduct.

     Section 8.09 Liability of Warrant Agent. The Warrant Agent may conclusively rely
upon and shall be protected by the Company and shall not incur any liability or responsibility to
the Company or to any Holder for or in respect of any action taken, suffered or omitted by it in
reliance on any Warrant Certificate or other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, direction, statement, notice,
resolution, waiver, consent, order, certificate or other paper, document or instrument reasonably
believed by it to be genuine and to have been signed, executed, sent, presented and, where
necessary, verified or acknowledged, by the proper party or parties.

19

 

     Section 8.10 Validity of Agreement. The Warrant Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution and delivery hereof by the Warrant Agent) or in respect of the validity
or execution of any Warrant (except its counter-signature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition contained in this Agreement or in any
Warrant Certificate; nor shall the Warrant Agent by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any underlying securities (or
other membership interests) to be issued pursuant to this Agreement or any Warrant, or as to
whether any underlying securities (or other membership interests) will, when issued, be validly
issued, fully paid and non-assessable, or as to the Exercise Price or the number or amount of
underlying securities or other securities or other property issuable upon exercise of any Warrant.

     Section 8.11 Acceptance of Instructions. The Warrant Agent is hereby authorized and
directed to accept instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, President, Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer, any Vice President or Secretary of the Company, and to apply to such officers for advice
or instructions in connection with its duties, and shall not be liable for any action taken or
suffered by it in good faith in accordance with instructions of any such officer or officers or for
any delay in acting while waiting for those instructions.

     Section 8.12 Right to Consult and Rely Upon Counsel. Before the Warrant Agent acts
or refrains from acting, it may at any time consult with legal counsel (who may be legal counsel
for the Company), and the opinion or advice of such counsel shall be full and complete
authorization and
protection to the Warrant Agent and the Warrant Agent shall incur no liability or
responsibility to the Company or to any Holder for any action taken, suffered or omitted by it in
good faith in accordance with the opinion or advice of such counsel.

     Section 8.13 Change of Warrant Agent.

     (a) The Warrant Agent, or any successor to it hereafter appointed, may resign from its
position as such and be discharged from all further duties and liabilities hereunder (except
liabilities arising as a result of the Warrant Agent’s own gross negligence or willful misconduct),
after giving 30 days’ prior written notice to the Company, upon (but only upon) a duly appointed
successor Warrant Agent having been appointed and having accepted such appointment in writing. The
Company may remove the Warrant Agent upon not less than 30 days’ prior written notice specifying
the date when such discharge shall take effect, and the Warrant Agent shall thereupon in like
manner be discharged from all further duties and liabilities hereunder (except liabilities arising
as a result of the Warrant Agent’s own gross negligence or willful misconduct), upon (but only
upon) a duly appointed successor Warrant Agent having been appointed and having accepted such
appointment in writing. The Company shall cause to be mailed, at the expense of the Company, to
each Holder a copy of said notice of resignation or notice of removal, as the case may be. Upon
such resignation or removal the Company shall appoint in writing a successor to the Warrant Agent.
If the Company shall fail to make such appointment within a period of 30 days after it has been
notified in writing of such resignation by the resigning Warrant Agent or after such removal, then
the existing Warrant Agent or the Holder of any Warrant may apply to any court of competent
jurisdiction for the appointment of a successor

20

 

to the Warrant Agent. Pending appointment of a
successor to the original Warrant Agent, either by the Company or by such a court, the duties of
the Warrant Agent shall be carried out by the Company.

     (b) Any successor to the Warrant Agent, whether appointed by the Company or by a court, shall
be a bank (or subsidiary thereof) or trust company doing business under the laws of the United
States or any state thereof, in good standing and having a combined capital and surplus of not less
than $50,000,000. The combined capital and surplus of any such successor to the Warrant Agent shall
be deemed to be the combined capital and surplus as set forth in the most recent annual report of
its condition published by such successor to the Warrant Agent prior to its appointment; provided
that such reports are published at least annually pursuant to law or to the requirements of a
federal or state supervising or examining authority. After acceptance in writing of such
appointment by the successor to the Warrant Agent, it shall be vested with the same authority,
powers, rights, immunities, duties and responsibilities as its predecessor Warrant Agent, without
any further assurance, conveyance, act or deed; provided, however, the predecessor Warrant Agent
shall in all events deliver and transfer to the successor Warrant Agent all property, if any, at
the time held hereunder by the predecessor Warrant
Agent and if for any reason it shall be necessary or expedient to execute and deliver any
further assurance, conveyance, act or deed, the same shall be done at the expense of the Company
and shall be legally and validly executed and delivered by the resigning or removed Warrant Agent.
As soon as practicable after such appointment, the Company shall give notice thereof to the
predecessor Warrant Agent and the Holders. Failure to give any notice provided for in this
Section 8.13, however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Warrant Agent or the appointment of the successor Warrant Agent,
as the case may be.

     Section 8.14 Successor Warrant Agent. Any company into which the Warrant Agent may
be merged or with which it may be consolidated, or any company resulting from any merger or
consolidation to which the Warrant Agent shall be a party, shall be the successor Warrant Agent
under this Agreement without any further act; provided, however, that such company would be
eligible for appointment as a successor to the Warrant Agent under the provisions of Section
8.13 hereof. Any such successor Warrant Agent shall promptly cause notice of its succession as
Warrant Agent to be mailed to the Company and the Holders.

     Section 8.15 Other. No provision of this Agreement shall require the Warrant Agent
to expend or risk its own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder or in the exercise of its rights if there shall be reasonable grounds
for believing that repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.

ARTICLE IX.

MISCELLANEOUS

     Section 9.01 Money Deposited with the Warrant Agent. The Warrant Agent shall not be
required to pay interest on any moneys deposited pursuant to the provisions of this

21

 

Agreement,
except such as it shall agree in writing with the Company to pay thereon. Any moneys, securities or
other property which at any time shall be deposited by the Company or on its behalf with the
Warrant Agent pursuant to this Agreement shall be and are hereby assigned, transferred and set over
to the Warrant Agent in trust for the purpose for which such moneys, securities or other property
shall have been deposited; but such moneys, securities or other property need not be segregated
from other funds, securities or other property except to the extent required by law.

     Section 9.02 Payment of Taxes. All Common Units or other securities issuable upon
the exercise of Warrants shall be validly issued, fully paid and non-assessable (except as
non-assessability may be affected by Section 18-607 or Section 18-804 of the Delaware Limited
Liability Company Act).
The Company shall pay all expenses in connection with, and each Holder shall pay all taxes and
other governmental charges that may be imposed with respect to the issuance or delivery of any
Common Units issuable upon the exercise of the Warrants. Without limiting the foregoing, the
Company shall not be required to pay any tax or other charge imposed in connection with any
transfer involved in the issuance of any Common Units or other securities or property issuable upon
the exercise of the Warrants in any name other than that of the holder of the Certificates
evidencing such Warrants, and in such case the Warrant Agent and the Company shall not be required
to issue any interests or pay any cash until such tax or other charge has been paid or it has been
established to the Warrant Agent’s and the Company’s reasonable satisfaction that no such tax or
charge is due.

     Section 9.03 Merger, Consolidation or Sale of Assets of the Company. The Company
will not merge into or consolidate or combine with any other Person, or sell or otherwise transfer
all or substantially all of its property, assets or business to any Person (other than a merger,
consolidation, combination or sale (i) contemplated by Section 4.01(c)(ii) hereof in which
the consideration payable to the holders of Common Units in exchange for their Common Units
consists solely of cash or (ii) that constitutes a Change of Control pursuant to which a Holder may
exercise its Warrants pursuant to the cashless exercise provisions of Section 3.03), unless
the Person resulting from such merger, consolidation or combination, or transferee of such
property, assets or business, as the case may be, executes with the Warrant Agent a supplemental
agreement providing for the express assumption by such Person of the due and punctual performance
and observance of each and every covenant and condition of this Agreement to be performed and
observed by the Company.

     Section 9.04 Notices. Any notice, request, demand or report (each, a
“Communication”) required or permitted to be given or made by this Agreement shall be in writing.
Any Communication authorized by this Agreement to be given or made by the Warrant Agent or by any
Holder to or on the Company shall be sufficiently given or made if sent by registered or certified
mail and shall be deemed given upon receipt, or by facsimile, addressed (until another address is
filed by the Company with the Warrant Agent) as follows:

MagnaChip Semiconductor LLC

c/o MagnaChip Semiconductor Ltd.

891 Daechi-dong, Gangnam-gu

Seoul 135-738 Korea

Attn: General Counsel

Fax: 82-2-6903-3898

22

 

     Any Communication authorized by this Agreement to be given or made by the Company or by any
Holder to or on the Warrant Agent shall be sufficiently given or made if sent by registered or
certified
mail and shall be deemed given upon receipt, or by facsimile or electronic mail, addressed
(until another address is filed by the Warrant Agent with the Company) as follows:

American Stock Transfer & Trust Company, LLC

59 Maiden Lane, Plaza Level

New York, New York 10038

Attn: Carlos Pinto

Fax: 718-921-8355

Email: CPinto@AMSTOCK.com

     Any Communication authorized by this Agreement to be given or made by the Company or the
Warrant Agent to any Holder shall be sufficiently given or made if sent by first-class mail,
postage prepaid, or by facsimile or electronic mail, addressed to such Holder at the address of
such Holder as shown on the registry books of the Company. The Company shall deliver a copy of any
notice or demand it delivers to any Holder to the Warrant Agent and the Warrant Agent shall deliver
a copy of any notice or demand it delivers to any Holder to the Company.

     Section 9.05 GOVERNING LAW. THE VALIDITY, INTERPRETATION AND PERFORMANCE OF THIS
AGREEMENT AND THE WARRANT CERTIFICATES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

     Section 9.06 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Company and the Warrant Agent and their respective successors and assigns, and the
Holders from time to time of the Warrants. Nothing in this Agreement is intended or shall be
construed to confer upon any Person, other than the Company, the Warrant Agent and the Holders of
the Warrants, any right, remedy or claim under or by reason of this Agreement or any part hereof.

     Section 9.07 Counterparts. This Agreement may be executed manually or by facsimile
in any number of counterparts, each of which shall be deemed an original, but all of which together
constitute one and the same instrument.

     Section 9.08 Amendments.

     (a) The Warrant Agent may, without the consent or concurrence of the Holders, enter into one
or more supplemental agreements or amendments with the Company for the purpose of

23

 

(i) evidencing
the rights of the Holders upon consolidation, merger, sale, transfer, reclassification, liquidation
or dissolution under Section 4.01(c)(i), (ii) making any changes or corrections in this
Agreement that are required to cure any ambiguity, to correct or supplement any provision contained
herein that may be defective or inconsistent with any other provision herein or any clerical
omission or mistake or manifest error herein contained, (iii) making such other provisions in
regard to matters or questions arising under this Agreement as shall not adversely affect the
interest of the Holders or be inconsistent with this Agreement or any supplemental agreement or
amendment or (iv) adding further covenants and agreements of the Company in this Agreement or
surrendering any rights or power reserved to or conferred upon the Company in this Agreement.

     (b) With the consent of the Holders of Warrant Certificates evidencing at least a majority in
number of the Warrants at the time outstanding, the Company and the Warrant Agent may at any time
and from time to time by supplemental agreement or amendment add any provisions to or change in any
manner or eliminate any of the provisions of this Agreement or of any supplemental agreement or
modify in any manner the rights and obligations of the Holders and the Company. Notwithstanding
anything to the contrary contained in this Agreement, no supplement agreement or amendment that
changes the rights and duties of the Warrant Agent under this Agreement shall be effective against
the Warrant Agent without the written consent of the Warrant Agent.

     Section 9.09 Common Units. The Common Units issuable upon exercise of any Warrant
are uncertificated. In the event a Holder exercises any Warrant and completes and executes the Form
of Joinder set forth in the LLC Agreement, (i) such Holder shall be deemed to have (w) agreed to be
bound by the terms of the LLC Agreement, (x) represented that it has the capacity, power and
authority to enter into the LLC Agreement, and (y) made the consents and waivers required of
members of the Company contained in the LLC Agreement; (ii) the Company shall admit such Holder as
a member of the Company with respect to the Common Units acquired upon exercise and (iii) the
Company shall record such admission on its books.

     Section 9.10 Third Party Beneficiaries. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one hand, and the
Warrant Agent, on the other hand. All rights of action in respect of this Agreement are vested in
the respective Holders of the Warrant Certificates; provided, however, that no Holder of any
Warrant Certificate shall have the right to enforce, institute or maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, the Warrants evidenced
by such Warrant Certificate, unless (i) such Holder shall have previously given written notice to
the Company of the substance of such dispute, and Holders of at least
25% of the then outstanding Warrants shall have given written notice to the Company of their
support for the institution of such proceeding to resolve such dispute, (ii) written notice of the
substance of such dispute and of the support for the institution of such proceeding by such Holders
shall have been provided by the Company to the Warrant Agent and (iii) the Warrant Agent shall not
have instituted appropriate proceedings with respect to such dispute within 30 days following the
date of such written notice to the Warrant Agent, it being understood and intended that no one or
more Holders of Warrant Certificates shall have the right in any manner whatever by virtue of, or
by availing of, any provision of this Agreement to affect, disturb or prejudice the rights of any
other

24

 

Holders of Warrant Certificates, or to obtain or to seek to obtain priority in preference
over any other Holders or to enforce any right under this Agreement, except in the manner herein
provided for the equal and ratable benefit of all Holders of Warrant Certificates. Except as
provided in this Section 9.10, no Holder of a Warrant Certificate shall have the right to
enforce, institute or maintain any suit, action or proceeding to enforce, or otherwise act in
respect of, the Warrants.

     Section 9.11 Waivers. The Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if (i) the Company has obtained the
written consent of Holders of Warrant Certificates evidencing a majority of the then outstanding
Warrants and (ii) any consent required pursuant to Section 9.08 has been obtained.

     Section 9.12 Inspection. The Warrant Agent shall cause a copy of this Agreement to
be available at all reasonable times at the office of the Warrant Agent for inspection by the
Holder of any Warrant Certificate. The Warrant Agent may require such Holder to submit his Warrant
Certificate for inspection by it.

     Section 9.13 Headings. The descriptive headings of the several Sections of this
Agreement are inserted for convenience and shall not control or affect the meaning or construction
of any of the provisions hereof.

     Section 9.14 Entire Agreement. This Agreement sets forth the entire agreement of the
parties hereto as to the subject matter hereof and supersedes all previous, agreements among all or
some of the parties hereto with respect thereto, whether written, oral or otherwise.

[SIGNATURE PAGE FOLLOWS.]

25

 

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed, as of the
day and year first above written.

	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

[Signature Page — Warrant Agreement]

 

 

EXHIBIT A

FORM OF WARRANT CERTIFICATE

MAGNACHIP SEMICONDUCTOR LLC

No.                    

[                    ] Warrants

WARRANTS TO PURCHASE COMMON UNITS

THIS WARRANT HAS BEEN, AND THE COMMON UNITS WHICH MAY BE PURCHASED PURSUANT TO
THE EXERCISE OF THIS WARRANT (THE “WARRANT UNITS,” AND TOGETHER WITH THIS WARRANT,
THE “SECURITIES”) WILL BE, ISSUED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
SECTION 1145 OF THE BANKRUPTCY REFORM ACT OF 1978, AS AMENDED (THE “BANKRUPTCY
CODE”). THE SECURITIES MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), PROVIDED THAT THE HOLDER IS NOT DEEMED TO BE AN UNDERWRITER AS SUCH
TERM IS DEFINED IN SECTION 1145(b) OF THE BANKRUPTCY CODE. IF THE HOLDER IS DEEMED
TO BE AN UNDERWRITER AS SUCH TERM IS DEFINED IN SECTION 1145(b) OF THE BANKRUPTCY
CODE, THEN THE SECURITIES MAY ONLY BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED UPON REGISTRATION UNDER THE SECURITIES ACT OR RECEIPT OF AN OPINION OF
COUNSEL SATISFACTORY TO MAGNACHIP SEMICONDUCTOR LLC AND ITS COUNSEL THAT SUCH
DISPOSITION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF
THE SECURITIES ACT AND OF ANY APPLICABLE STATE SECURITIES LAWS. THIS WARRANT MUST BE
SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TO THE
SALE, PLEDGE OR OTHER TRANSFER OF ANY INTEREST IN ANY OF THE WARRANT UNITS
REPRESENTED BY THIS WARRANT.

THE SECURITIES REPRESENTED BY THIS WARRANT CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER, SALE, ASSIGNMENT, PLEDGE, ENCUMBRANCE OR OTHER SIMILAR
TRANSFER AND VOTING RESTRICTIONS AS SET FORTH IN A LIMITED LIABILITY COMPANY
OPERATING AGREEMENT AMONG THE COMPANY AND THE ORIGINAL HOLDERS OF THE SECURITIES AND
A WARRANT AGREEMENT AMONG THE COMPANY AND THE WARRANT
AGENT (ON BEHALF OF THE ORIGINAL HOLDERS OF THE SECURITIES), COPIES OF WHICH MAY BE
OBTAINED AT THE PRINCIPAL OFFICE OF THE COMPANY.

A-1

 

     This certifies that                     , or its registered assigns, is the owner of the number
of Warrants set forth above, each of which represents the right to purchase, commencing November 9,
2009, from MAGNACHIP SEMICONDUCTOR LLC, a Delaware limited liability company (the “Company”), one
Common Unit (the “Common Unit”) of the Company (subject to adjustment as provided in the Warrant
Agreement hereinafter referred to) at the purchase price (the “Exercise Price”) of $1.97 per Common
Unit (subject to adjustment as provided in the Warrant Agreement), upon surrender hereof at the
office of American Stock Transfer & Trust Company, LLC or to its successor as the warrant agent
under the Warrant Agreement (any such warrant agent being herein called the “Warrant Agent”), with
the Subscription Form on the reverse hereof completed and duly executed, with signature guaranteed
as therein specified and simultaneous payment in full by check payable to the order of Warrant
Agent of the purchase price for the Common Units as to which the Warrant(s) represented by this
Warrant Certificate are exercised, all subject to the terms and conditions hereof and of the
Warrant Agreement. This Warrant Certificate may be exercised as to all or any whole number of the
Warrants evidenced hereby.

     This Warrant Certificate is issued under and in accordance with a Warrant Agreement dated as
of November 9, 2009 (the “Warrant Agreement”) by and between the Company and American Stock
Transfer & Trust Company, LLC, as Warrant Agent, and is subject to the terms and provisions
contained therein, all of which terms and provisions the Holder of this Warrant Certificate
consents to by acceptance hereof. The Warrant Agreement is hereby incorporated herein by reference
and made a part hereof. Reference is hereby made to the Warrant Agreement for a full description of
the rights, limitations of rights, obligations, duties and immunities thereunder of the Company and
the Holders of the Warrants. The summary of the terms of the Warrant Agreement contained in this
Warrant Certificate is qualified in its entirety by express reference to the Warrant Agreement. All
capitalized terms used in this Warrant Certificate that are defined in the Warrant Agreement shall
have the meanings assigned to them in the Warrant Agreement.

     Copies of the Warrant Agreement are on file at the office of the Warrant Agent and may be
obtained by writing to the Warrant Agent at the following address:

American Stock Transfer & Trust Company, LLC

59 Maiden Lane, Plaza Level

New York, New York 10038

Attn: Carlos Pinto

Fax: 718-921-8355

Email: CPinto@AMSTOCK.com

     The number of Common Units purchasable upon the exercise of each Warrant is subject to
adjustment as provided in the Warrant Agreement. In the event of any capital reorganization or
reclassification of any of the Common Units or any consolidation, combination or merger of the
Company with or into another company (where the Company is not the surviving company or where there
is a change in or distribution with respect to the Units), except in the case of a merger,
consolidation or combination constituting a change of control in the Company, each Warrant will,
upon exercise, entitle the Holder thereof to receive the number of Common Units

A-2

 

or other securities
or the amount of money and other property which the holder of a Common Unit is entitled to receive
upon completion of such reorganization, recapitalization, merger, consolidation or combination.

     As to any final fraction of a Common Unit which the same Holder of one or more Warrants would
otherwise be entitled to purchase upon exercise thereof in the same transaction, the Company shall
pay the cash value thereof determined as provided in the Warrant Agreement.

     All Common Units or other securities issuable upon the exercise of Warrants shall be validly
issued, fully-paid and non-assessable (except as non-assessability may be affected by Section
18-607 or Section 18-804 of the Delaware Limited Liability Company Act), and the Company shall pay
all expenses in connection with, and the holder shall pay all taxes and other governmental charges
that may be imposed with respect to the issuance or delivery of any Common Unit issuable upon the
exercise of the Warrants. Without limiting the foregoing, the Company shall not be required to pay
any tax or other charge imposed in connection with any transfer involved in the issue of any Common
Units or other securities or property issuable upon the exercise of the Warrants in any name other
than that of the holder of the Warrant Certificates evidencing such Warrants, and in such case the
Warrant Agent and the Company shall not be required to issue or deliver any interests or other
property until such tax or other charge has been paid or it has been established to the Warrant
Agent’s and the Company’s reasonable satisfaction that no tax or other charge is due.

     Provided the Company has not issued a Notice Date Press Release suspending the transfer of
Warrants, this Warrant Certificate and all rights hereunder are transferable by the registered
Holder hereof, in any whole number of Warrants, in accordance with the provisions of the Warrant
Agreement, on the register maintained by the Warrant Agent for such purpose at its office at the
address referenced above, upon surrender of this Warrant Certificate duly endorsed, or accompanied
by a written instrument of transfer form satisfactory to the Company and the Warrant Agent
completed and duly executed, with signatures guaranteed as specified in the attached Form of
Assignment, by the registered Holder hereof or his attorney duly authorized in writing and upon
payment of any necessary transfer tax or other
governmental charge imposed upon such transfer. Upon any partial transfer, the Warrant Agent
will issue and deliver to such Holder a new Warrant Certificate with respect to any portion not so
transferred. Each taker and Holder of this Warrant Certificate, by taking and holding the same,
consents and agrees that prior to the registration of transfer as provided in the Warrant
Agreement, the Company and the Warrant Agent may treat the Person in whose name the Warrants are
registered as the absolute owner hereof for any purpose and as the Person entitled to exercise the
rights represented hereby, any notice to the contrary notwithstanding. Each taker and Holder of a
Warrant and each taker and holder of Common Units issued pursuant to a Warrant agrees to be bound
by the terms and conditions of this Warrant and the Warrant Agreement.

     This Warrant Certificate may be exchanged, in accordance with the terms of the Warrant
Agreement, at the office of the Warrant Agent maintained for such purpose, for Warrant Certificates
representing the same aggregate number of Warrants, each new Warrant Certificate to represent such
number of Warrants as the Holder hereof shall designate at the time of such exchange.

A-3

 

     Prior to the exercise of the Warrants represented hereby, the Holder of this Warrant
Certificate, as such, shall not be entitled to any rights of a member of the Company, including,
without limitation, the right to vote or to consent to any action of the members, to receive
dividends or other distributions, to exercise any preemptive right or to receive any notice of
meetings of Unit holders, and shall not be entitled to receive any notice of any proceedings of the
Company except as provided in the Warrant Agreement. In the event a Holder exercises any Warrant
and completes and duly executes the attached Subscription Form and the Form of Joinder attached to
the LLC Agreement, such Holder shall have agreed to be bound by the terms of the Fourth Amended and
Restated Limited Liability Company Agreement of the Company, dated November 9, 2009, as it may be
amended or modified from time to time, the Company shall admit such Holder as a member of the
Company and the Company shall record such admission on its books.

     This Warrant Certificate shall be void and all rights evidenced hereby shall cease on the
Expiration Date.

     This Warrant Certificate shall not be valid for any purpose until it shall have been
countersigned by the Warrant Agent.

	 	 	 	 	 
	 	MAGNACHIP SEMICONDUCTOR LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	Dated:  	
 	 
	 	 	 	 
	 	 	 	 
	 

Countersigned:

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC

	 	 	 	 	 
	 	 	 
	By:  	
 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 

     Dated:

A-4

 

FORM OF REVERSE OF WARRANT CERTIFICATE

SUBSCRIPTION FORM

(to be executed only upon exercise of Warrants)

     To:                                                            

     The undersigned hereby irrevocably exercises ___of the Warrants represented by the Warrant
Certificate for the purchase of ___Common Units (subject to adjustment) of MAGNACHIP
SEMICONDUCTOR LLC, a Delaware limited liability company (the “Company”), for each Warrant
exercised, and herewith (check one, if election is available; otherwise complete first line below):

     o makes payment of $___(such payment being by check payable to the order
of Warrant Agent equal to the Exercise Price of the Warrants being exercised); or

     o elects to make payment by cashless exercise, contingent upon and effective
immediately prior to the consummation of the Change of Control (as defined in the Warrant
Agreement) referred to in the Company’s notice, dated ___, 20___given pursuant to Section
4.04 of the Warrant Agreement,

all at the exercise price and on the terms and conditions specified in the Warrant Certificate and
the Warrant Agreement therein referred to, and hereby surrenders this Warrant Certificate and all
right, title and interest therein to and directs that the Common Units due upon the exercise of
such Warrants be registered or placed in the name and the address specified below.

                                        

Dated

                                                                                

(Signature of Owner)

                                                                                

(Street Address)

                                                                                

(City) (State) (Zip Code)

                                                                                

Signature Guaranteed By1

 

			
	1	 	The Holder’s signature must be guaranteed by a member firm of a registered
national securities exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United States or an
“eligible guarantor institution” as defined by Rule 17Ad-15 under the Exchange Act.

Securities
and/or check to be issued to:        
                   
                    
                     
                    
            

Please insert social security or identifying number:         
                   
                    
                     
                    
            

        
                   
                    
                     
                    
            

Name

         
                      
                      
                    
                  
         

Street Address

         
                     
                     
                   
                   
           

City, State and Zip Code

 

 

FORM OF ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned registered holder of the Warrant Certificate hereby sells,
assigns and transfers unto the Assignee(s) named below (including the undersigned with respect to
any Warrants constituting a part of the Warrants evidenced by the within Warrant Certificate not
being assigned hereby) all of the rights of the undersigned under the Warrant Certificate, with
respect to the whole number of Warrants set forth below:

        
                    
                    
                    
            

Name(s) of Assignee(s):

                                                                                

Address:

                                                                                

No. of Warrants:

Please insert social security or other identifying number of assignee(s):

                                                            

and does hereby irrevocably constitute and appoint                                          the undersigned’s
attorney to make such transfer on the books of                                          maintained for such
purposes, with full power of substitution in the premises.

                                        

Dated

                                                                                

(Signature of Owner)

                                                                                

(Street Address)

                                                                                

(City) (State) (Zip Code)

                                                                                

Signature Guaranteed By1

 

			
	1	 	The Holder’s signature must be guaranteed by a member firm of a registered
national securities exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United States or an
“eligible guarantor institution” as defined by Rule 17Ad-15 under the Exchange Act.exv10w20

Exhibit 10.20

MAGNACHIP SEMICONDUCTOR LLC

2009 COMMON UNIT PLAN

     1. Establishment, Purpose and Term of Plan.

          1.1 Establishment. The MagnaChip Semiconductor LLC 2009 Common Unit Plan (the “Plan”) is
hereby established effective as of December 8, 2009 (the “Effective Date”).

          1.2 Purpose. The purpose of the Plan is to advance the interests of the Participating Company
Group and its members by providing an incentive to attract, retain and reward persons performing
services for the Participating Company Group and by motivating such persons to contribute to the
growth and profitability of the Participating Company Group. The Company intends that Awards
granted pursuant to the Plan be exempt from or comply with Section 409A of the Code (including any
amendments or replacements of such section), and the Plan shall be so construed.

          1.3 Term of Plan. The Plan shall continue in effect until its termination by the Board;
provided, however, that all Awards shall be granted, if at all, within ten (10) years from the
earlier of the date the Plan is adopted by the Board or the date the Plan is duly approved by the
members of the Company.

     2. Definitions and Construction.

          2.1 Definitions. Whenever used herein, the following terms shall have their respective
meanings set forth below:

               (a)“Affiliate” means (i) a parent entity that controls the Company, directly or indirectly,
through one or more intermediary entities, or (ii) a majority-owned subsidiary entity that is
controlled by the Company, directly or indirectly, through one or more intermediary entities. For
this purpose, the terms “parent,” “majority-owned subsidiary,” “control” and “controlled by” shall
have the meanings assigned such terms for the purposes of Rule 701 under the Securities Act.

               (b)“Award” means an Option, Restricted Unit Purchase Right, Restricted Unit Bonus or Deferred
Unit granted under the Plan.

               (c)“Award Agreement” means a written or electronic agreement between the Company and a
Participant setting forth the terms, conditions and restrictions of the Award granted to the
Participant.

               (d)“Board” means the Board of Managers of the Company. If one or more Committees have been
appointed by the Board to administer the Plan, “Board” also means such Committee(s).

               (e)“Cause” means, unless such term or an equivalent term is otherwise defined by the
Participant’s Award Agreement or written contract of employment or service, any of the following:
(i) the Participant’s failure to substantially perform the Participant’s customary duties with a
Participating Company in the ordinary course (other than such failure resulting from the
Participant’s incapacity due to physical or mental illness)

 

 

that, if susceptible to cure, has not been cured as determined by the Participating Company
within 30 days after a written demand for substantial performance is delivered to the Participant
by the Participating Company, which demand specifically identifies the manner in which the
Participating Company believes that the Participant has not substantially performed the
Participant’s duties; (ii) the Participant’s gross negligence, intentional misconduct or fraud in
the performance of his or her Service; (iii) the Participant’s indictment (or equivalent) for a
felony or to a crime involving fraud or dishonesty; (iv) a judicial determination that the
Participant committed fraud or dishonesty against any natural person, firm, partnership, limited
liability company, association, corporation, company, trust, business trust, governmental authority
or other entity; (v) the Participant’s material violation of one or more of the Participating
Company Group’s policies applicable to the Participant’s Service as may be in effect from time to
time; or (vi) the Participant’s conduct that brings or could reasonably be expected to bring the
Participating Company Group or the Affiliates thereof (including, without limitation, Avenue
Capital Group) into public disgrace or disrepute and that has a material adverse effect on the
business of the Participating Company Group or such Affiliates.

               (f)“Change in Control” means, unless such term or an equivalent term is otherwise defined by
the Participant’s Award Agreement, the occurrence of any of the following:

                    (i) an Ownership Change Event or a series of related Ownership Change Events (collectively, a
“Transaction”) in which the members of the Company immediately before the Transaction do not retain
immediately after the Transaction direct or indirect beneficial ownership of more than fifty
percent (50%) of the total combined voting power of the outstanding securities entitled to vote
generally in the election of Managers or, in the case of an Ownership Change Event described in
Section 2.1(u)(iii), the entity to which the assets of the Company were transferred (the
“Transferee”), as the case may be; or

                    (ii) approval by the members of a plan of complete liquidation or dissolution of the Company.

For purposes of the preceding sentence, indirect beneficial ownership shall include, without
limitation, an interest resulting from ownership of the voting securities of one or more
corporations or other business entities which own the Company or the Transferee, as the case may
be, either directly or through one or more subsidiary corporations or other business entities. The
Board shall have the right to determine whether multiple sales or exchanges of the voting
securities of the Company or multiple Ownership Change Events are related, and its determination
shall be final, binding and conclusive. For purposes of clarification, a Change in Control shall
not include (1) the acquisition of voting securities directly from the Company, including pursuant
to or in connection with a public offering of such securities, or (2) an acquisition of additional
voting securities of the Company by a person (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) who on the Effective Date is the beneficial owner (as such term is defined in
Rule 13d-3 under the Exchange Act) of more than fifty percent (50%) of such voting securities.

               (g)“Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations
and administrative guidelines promulgated thereunder.

2

 

               (h)“Committee” means the compensation committee or other committee or subcommittee of the
Board duly appointed to administer the Plan and having such powers as shall be specified by the
Board. Unless the powers of the Committee have been specifically limited, the Committee shall have
all of the powers of the Board granted herein, including, without limitation, the power to amend or
terminate the Plan at any time, subject to the terms of the Plan and any applicable limitations
imposed by law.

               (i)“Company” means MagnaChip Semiconductor LLC, a Delaware limited liability company, or any
successor thereto.

               (j)“Consultant” means a person engaged to provide consulting or advisory services (other than
as an Employee or a Manager) to a Participating Company, provided that the identity of such person,
the nature of such services or the entity to which such services are provided would not preclude
the Company from offering or selling securities to such person pursuant to the Plan in reliance on
either the exemption from registration provided by Rule 701 under the Securities Act.

               (k)“Deferred Unit” means a right granted to a Participant pursuant to Section 8 to receive a
Unit on a deferred basis on a date determined in accordance with the provisions of such Section and
the Participant’s Award Agreement.

               (l)“Disability” means the inability of the Participant, in the opinion of a qualified
physician acceptable to the Company, to perform the major duties of the Participant’s position with
the Participating Company Group because of the sickness or injury of the Participant.

               (m)“Dividend Equivalent Right” means the right of a Participant, granted at the discretion of
the Board or as otherwise provided by the Plan, to receive a credit for the account of such
Participant in an amount equal to the cash dividends paid on one Unit for each Unit represented by
an Award held by such Participant.

               (n)“Employee” means any person treated as an employee (including an Officer or a Manager who
is also treated as an employee) in the records of a Participating Company; provided, however, that
neither service as a Manager nor payment of a Manager’s fee shall be sufficient to constitute
employment for purposes of the Plan. The Company shall determine in good faith and in the exercise
of its discretion whether an individual has become or has ceased to be an Employee and the
effective date of such individual’s employment or termination of employment, as the case may be.
For purposes of an individual’s rights, if any, under the terms of the Plan as of the time of the
Company’s determination of whether or not the individual is an Employee, all such determinations by
the Company shall be final, binding and conclusive as to such rights, if any, notwithstanding that
the Company or any court of law or governmental agency subsequently makes a contrary determination
as to such individual’s status as an Employee.

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

               (p)“Fair Market Value” means, as of any date:

                    (i) the value of a Unit or other property as determined by the Board in good faith without
regard to any restriction other than a restriction which, by its

3

 

terms, will never lapse, and in a manner consistent with the requirements of Section 409A of
the Code; or

                    (ii) except as otherwise determined by the Board or as otherwise permitted or required by
Section 409A of the Code, if, on such date, the Units or equity securities into which Units have
been converted (in either case, “Shares”) are listed or quoted on a national or regional securities
exchange or quotation system, the Fair Market Value of a Share shall be the closing price of a
Share as quoted on the national or regional securities exchange or quotation system constituting
the primary market for the Shares, as reported in The Wall Street Journal or such other source as
the Company deems reliable; provided that if the relevant date does not fall on a day on which the
Shares have traded on such securities exchange or quotation system, the date on which the Fair
Market Value shall be established shall be the last day on which the Shares were so traded or
quoted prior to the relevant date, or such other appropriate day as shall be determined by the
Board, in its discretion.

               (q)“Manager” means a member of the Board.

               (r)“Officer” means any person designated by the Board as an officer of the Company.

               (s)“Operating Agreement” means the Fourth Amended and Restated Limited Liability Company
Operating Agreement of MagnaChip Semiconductor LLC, dated as of November 9, 2009, as the same may
be amended from time to time.

               (t)“Option” means a right to purchase Units granted to a Participant pursuant to Section 6.

               (u)“Ownership Change Event” means the occurrence of any of the following with respect to the
Company: (i) the direct or indirect sale or exchange in a single or series of related transactions
by the members of the Company of more than fifty percent (50%) of the voting securities of the
Company; (ii) a merger or consolidation in which the Company is a party; or (iii) the sale,
exchange, or transfer of all or substantially all of the assets of the Company (other than a sale,
exchange or transfer to one or more Affiliates of the Company).

               (v)“Participant” means any eligible person who has been granted one or more Awards.

               (w)“Participating Company” means the Company or any Affiliate.

               (x)“Participating Company Group” means, at any point in time, all entities collectively which
are then Participating Companies.

               (y)“Restricted Unit Award” means an Award of a Restricted Unit Bonus or a Restricted Unit
Purchase Right.

               (z)“Restricted Unit Bonus” means Units granted to a Participant pursuant to Section 7.

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               (aa)“Restricted Unit Purchase Right” means a right to purchase Units granted to a Participant
pursuant to Section 7.

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

               (cc)“Service” means a Participant’s employment or service with the Participating Company
Group, whether in the capacity of an Employee, a Manager or a Consultant. Unless otherwise
provided by the Board, a Participant’s Service shall not be deemed to have terminated merely
because of a change in the capacity in which the Participant renders such Service or a change in
the Participating Company for which the Participant renders such Service, provided that there is no
interruption or termination of the Participant’s Service. Furthermore, a Participant’s Service
shall not be deemed to have terminated if the Participant takes any military leave, sick leave, or
other bona fide leave of absence approved by the Company. However, unless otherwise provided by
the Board, if any such leave taken by a Participant exceeds ninety (90) days, then on the
ninety-first (91st) day following the commencement of such leave the Participant’s Service shall be
deemed to have terminated, unless the Participant’s right to return to Service is guaranteed by
statute or contract. Notwithstanding the foregoing, unless otherwise designated by the Company or
required by law, an unpaid leave of absence shall not be treated as Service for purposes of
determining vesting under the Participant’s Award Agreement. Except as otherwise provided by the
Board, in its discretion, the Participant’s Service shall be deemed to have terminated either upon
an actual termination of Service or upon the business entity for which the Participant performs
Service ceasing to be a Participating Company. Subject to the foregoing, the Company, in its
discretion, shall determine whether the Participant’s Service has terminated and the effective date
of and reason for such termination.

               (dd)“Unit” means a Common Unit of the Company, as described in the Operating Agreement and as
adjusted from time to time in accordance with Section 4.3.

               (ee)“Vesting Conditions” mean those conditions established in accordance with the Plan prior
to the satisfaction of which an Award or Units subject to an Award remain subject to forfeiture or
a repurchase option in favor of the Company exercisable for the Participant’s monetary purchase
price, if any, for such Units upon the Participant’s termination of Service.

          2.2 Construction. Captions and titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated
by the context, the singular shall include the plural and the plural shall include the singular.
Use of the term “or” is not intended to be exclusive, unless the context clearly requires
otherwise.

     3. Administration.

          3.1 Administration by the Board. The Plan shall be administered by the Board. All questions
of interpretation of the Plan, of any Award Agreement or of any other form of agreement or other
document employed by the Board or the Company in the administration of the Plan or of any Award
shall be determined by the Board, and such determinations shall be final, binding and conclusive
upon all persons having an interest in the Plan or such Award, unless fraudulent or made in bad
faith. Any and all actions, decisions and determinations taken or made by the Board in the
exercise of its discretion

5

 

pursuant to the Plan or Award Agreement or other agreement thereunder (other than determining
questions of interpretation pursuant to the preceding sentence) shall be final, binding and
conclusive upon all persons having an interest therein.

          3.2 Authority of Officers. Any Officer shall have the authority to act on behalf of the
Company with respect to any matter, right, obligation, determination or election which is the
responsibility of or which is allocated to the Company herein, provided the Officer has actual
authority with respect to such matter, right, obligation, determination or election. The Board
may, in its discretion, delegate to the Chief Executive Officer of the Company the authority to
grant one or more Options, without further approval of the Board, to any Employee, including any
Officer other than the Chief Executive Officer; provided, however, that (a) the exercise price per
Unit of each such Option shall be not less than the Fair Market Value per Unit as most recently
determined by the Board and as determined for purposes of Section 409A of the Code, (b) each such
Option shall be subject to the terms and conditions of the appropriate standard form of Option
Agreement approved by the Board and shall conform to the provisions of the Plan, and (c) each such
Option shall conform to guidelines as shall be established from time to time by the Board.

          3.3 Powers of the Board. In addition to any other powers set forth in the Plan and subject to
the provisions of the Plan and the Operating Agreement, the Board shall have the full and final
power and authority, in its discretion:

               (a) to determine the persons to whom, and the time or times at which, Awards shall be granted
and the number of Units to be subject to each Award;

               (b) to determine the type of Award granted;

               (c) to determine the Fair Market Value of Units or other property;

               (d) to determine the terms, conditions and restrictions applicable to each Award (which need
not be identical) and any Units acquired pursuant thereto, including, without limitation, (i) the
exercise or purchase price of Units pursuant to any Award, (ii) the method of payment for Units
purchased pursuant to any Award, (iii) the method for satisfaction of any tax withholding
obligation arising in connection with any Award, including by the withholding or delivery of Units,
(iv) the timing, terms and conditions of the exercisability or vesting of any Award or Units
acquired pursuant thereto, (v) the time of expiration of any Award, (vi) the effect of any
Participant’s termination of Service on any of the foregoing, and (vii) all other terms, conditions
and restrictions applicable to any Award or Units acquired pursuant thereto not inconsistent with
the terms of the Plan;

               (e) to approve one or more forms of Award Agreement;

               (f) to amend, modify, extend, cancel or renew any Award or to waive any restrictions or
conditions applicable to any Award or any Units acquired pursuant thereto;

               (g) to accelerate, continue, extend or defer the exercisability or vesting of any Award or any
Units acquired pursuant thereto, including with respect to the period following a Participant’s
termination of Service;

6

 

               (h) to prescribe, amend or rescind rules, guidelines and policies relating to the Plan, or to
adopt sub-plans or supplements to, or alternative versions of, the Plan, including, without
limitation, as the Board deems necessary or desirable to comply with the laws of, or to accommodate
the tax policy, accounting principles or custom of, foreign jurisdictions whose citizens may be
granted Awards; and

               (i) to correct any defect, supply any omission or reconcile any inconsistency in the Plan or
any Award Agreement and to make all other determinations and take such other actions with respect
to the Plan or any Award as the Board may deem advisable to the extent not inconsistent with the
provisions of the Plan or applicable law.

          3.4 Indemnification. In addition to such other rights of indemnification as they may have as
members of the Board or as officers or employees of the Participating Company Group to the extent
permitted by applicable law and the Company’s By-laws and Articles of Formation, members of the
Board and any officers or employees of the Participating Company Group to whom authority to act for
the Board or the Company is delegated shall be indemnified by the Company against all reasonable
expenses, including attorneys’ fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal therein, to which they
or any of them may be a party by reason of any action taken or failure to act under or in
connection with the Plan, or any right granted hereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal counsel selected by
the Board) or paid by them in satisfaction of a judgment in any such action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in such action, suit or proceeding
that such person is liable for gross negligence, bad faith or intentional misconduct in duties;
provided, however, that within sixty (60) days after the institution of such action, suit or
proceeding, such person shall offer to the Board, in writing, the opportunity for the Company at
its own expense to handle and defend the same.

     4. Units Subject to Plan.

          4.1 Maximum Number of Units Issuable. Subject to adjustment as provided in Sections 4.2 and
4.3, the maximum aggregate number of Units that may be issued under the Plan shall be thirty
million (30,000,000) and shall consist of authorized but unissued or reacquired Units or any
combination thereof. Notwithstanding the foregoing, at any such time as the offer and sale of
securities pursuant to the Plan is subject to compliance with Section 260.140.45 of Title 10 of the
California Code of Regulations (“Section 260.140.45”), the total number of Units issuable upon the
exercise of all outstanding Awards (together with options outstanding under any other plan of the
Company) and the total number of Units provided for under any Unit bonus or similar plan of the
Company shall not exceed thirty percent (30%) (or such other higher percentage limitation as may be
approved by the members of the Company pursuant to Section 260.140.45) of the then outstanding
Units of the Company as calculated in accordance with the conditions and exclusions of Section
260.140.45.

          4.2 Unit Counting. If an outstanding Award for any reason expires or is terminated or
canceled (other than those cancelled in exchange for the payment of value (i) in the case of
Options, for an amount of cash equal to the amount by which the Fair Market Value at the time of
such cancellation exceeds the stated exercise price, or (ii) in the case of Units, for an amount of
cash equal to the Fair Market Value at the time of cancellation; in which case such Options and/or
Units, canceled for value, shall count on a one-for-one basis

7

 

against the available Units hereunder) or if Units are acquired pursuant to an Award subject
to forfeiture or repurchase and are forfeited or repurchased by the Company for an amount not
greater than the Participant’s exercise or purchase price, the Units allocable to the terminated
portion of such Award or such forfeited or repurchased Units shall again be available for issuance
under the Plan. If the exercise price of an Option is paid by tender to the Company, or
attestation to the ownership, of Units owned by the Participant, or by means of a Net-Exercise, the
number of Units available for issuance under the Plan shall be reduced by the gross number of Units
for which the Option is exercised. Units withheld or reacquired by the Company in satisfaction of
tax withholding obligations pursuant to Section 11.2 shall not again be available for issuance
under the Plan.

          4.3 Adjustments for Changes in Capital Structure. Subject to any required action by the
members of the Company and the requirements of Section 409A of the Code to the extent applicable,
in the event of any change in the Units effected without receipt of consideration by the Company,
whether through merger, consolidation, reorganization, recapitalization, reclassification, Unit
dividend, split, reverse split, split-up, split-off, spin-off, combination of Units, exchange of
Units, Solvent Reorganization (as defined by the Operating Agreement) or similar change in the
capital structure of the Company adjustments shall be made as the Board determines appropriate in
order to prevent dilution or enlargement of Participants’ rights under the Plan, including, without
limitation, (i) adjusting the number and/or kind of Units subject to the Plan and to any
outstanding Awards, (ii) adjusting the exercise or purchase price per Unit of any outstanding
Awards; (iii) adjusting Vesting Conditions (e.g., performance measures); (iv) providing for
substitute awards, accelerating exercisability and/or vesting, effecting the lapse of restrictions
and the termination of Awards, and/or providing for a period of time to exercise the Award prior to
the applicable event; and/or (v) cancelling any one or more outstanding Awards; provided, however,
that in the case of any “equity restructuring” (within the meaning of the Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 123 (revised 2004)), the Board
shall make an equitable or proportionate adjustment to outstanding Awards to reflect such equity
restructuring. For purposes of the foregoing, conversion of any convertible securities of the
Company shall not be treated as “effected without receipt of consideration by the Company.” If a
majority of the Units which are of the same class as the Units that are subject to outstanding
Awards are exchanged for, converted into, or otherwise become (whether or not pursuant to an
Ownership Change Event) securities of another business entity (the “New Securities”), the Board may
unilaterally amend the outstanding Awards to provide that such Awards are for New Securities. In
the event of any such amendment, the number of New Securities and the exercise or purchase price of
each unit of New Securities subject to the outstanding Awards shall be adjusted in a fair and
equitable manner as determined by the Board, in its discretion. Any fractional Unit resulting from
an adjustment pursuant to this Section shall be rounded down to the nearest whole number, and the
exercise price per Unit shall be rounded up to the nearest whole cent. Such adjustments shall be
determined by the Board, and its determination shall be final, binding and conclusive.

          4.4 Assumption or Substitution of Awards. The Board may, without affecting the number of
Units available pursuant to Section 4.1, authorize the issuance or assumption of benefits under
this Plan in connection with any merger, consolidation, acquisition of property or stock, or
reorganization upon such terms and conditions as it may deem appropriate, subject to compliance
with Section 409A and any other applicable provisions of the Code.

8

 

     5. Eligibility.

          5.1 Persons Eligible for Awards. Awards may be granted only to Employees, Consultants and
Managers.

          5.2 Participation in the Plan. Awards are granted solely at the discretion of the Board.
Eligible persons may be granted more than one Award. However, eligibility in accordance with this
Section shall not entitle any person to be granted an Award, or, having been granted an Award, to
be granted an additional Award.

          5.3 Issuance of Units Subject to Operating Agreement. Notwithstanding any provision of the
Plan to the contrary, if required by the Board, as a condition to the grant and/or receipt of Units
under an Award, a Participant may be required to execute and deliver to the Company a written
undertaking in a form acceptable to the Board to be bound by the terms and conditions of the
Operating Agreement and/or any lock-up or other documents the Board reasonably determines to be
necessary or appropriate in connection with the issuance of an Award Agreement or such Units to
such person.

     6. Options.

          All Options shall be nonstatutory options and not incentive options described in Section
422(b) of the Code. Options shall be evidenced by Award Agreements specifying the number of Units
covered thereby, in such form as the Board shall from time to time establish. Such Award
Agreements shall incorporate all applicable terms of the Plan by reference and shall comply with
and be subject to the following terms and conditions:

          6.1 Exercise Price. The exercise price for each Option shall be established in the discretion
of the Board; provided, however, that the exercise price per Unit for an Option shall be not less
than the Fair Market Value of a Unit on the effective date of grant of the Option. Notwithstanding
the foregoing, an Option may be granted with an exercise price lower than the minimum exercise
price set forth above if such Option is granted pursuant to an assumption or substitution for
another option in a manner that would qualify under the provisions of Section 409A of the Code.

          6.2 Exercisability and Term of Options. Subject to Section 12, Options shall be exercisable
at such time or times, or upon such event or events, and subject to such terms, conditions,
performance criteria and restrictions as shall be determined by the Board and set forth in the
Award Agreement evidencing such Option; provided, however, that no Option shall be exercisable
after the expiration of ten (10) years after the effective date of grant of such Option. Subject
to the foregoing, unless otherwise specified by the Board in the grant of an Option, any Option
granted hereunder shall terminate ten (10) years after the effective date of grant of the Option,
unless earlier terminated in accordance with its provisions.

          6.3 Payment of Exercise Price.

               (a) Forms of Consideration Authorized. Except as otherwise provided below, payment of the
exercise price for the number of Units being purchased pursuant to any Option shall be made (i) in
cash, by check or in cash equivalent; (ii) if permitted by the Board and subject to the limitations
contained in Section 6.3(b), by means of (1) a Unit Tender Exercise, (2) a Cashless Exercise or (3)
a Net Exercise; (iii) by such other

9

 

consideration as may be approved by the Board from time to time to the extent permitted by
applicable law, or (iv) by any combination thereof. The Board may at any time or from time to time
grant Options which do not permit all of the foregoing forms of consideration to be used in payment
of the exercise price or which otherwise restrict one or more forms of consideration.

               (b) Limitations on Forms of Consideration.

                    (i) Unit Tender Exercise. A “Unit Tender Exercise” means the delivery of a properly executed
exercise notice accompanied by a Participant’s tender to the Company, or attestation to the
ownership, in a form acceptable to the Board of whole Units having a Fair Market Value that does
not exceed the aggregate exercise price for the Units with respect to which the Option is
exercised. A Unit Tender Exercise shall not be permitted if it would constitute a violation of the
provisions of any law, regulation or agreement restricting the redemption of the Units. If
required by the Board, the Option may not be exercised by tender to the Company, or attestation to
the ownership, of Units unless such Units either have been owned by the Participant for a period of
time required by the Board (and not used for another option exercise by attestation during such
period) or were not acquired, directly or indirectly, from the Company.

                    (ii) Cashless Exercise. A Cashless Exercise shall be permitted only following a conversion of
Options into options for shares of stock of a corporation having shares of the same class which
have become publicly traded in an established securities market. A “Cashless Exercise” means the
delivery of a properly executed exercise notice together with irrevocable instructions to a broker
providing for the assignment to the Company of the proceeds of a sale or loan with respect to some
or all of the shares being acquired upon the exercise of the Option (including, without limitation,
through an exercise complying with the provisions of Regulation T as promulgated from time to time
by the Board of Governors of the Federal Reserve System). The Board reserves, at any and all
times, the right, in the Board’s sole and absolute discretion, to establish, decline to approve or
terminate any program or procedures for the exercise of Options by means of a Cashless Exercise,
including with respect to one or more Participants specified by the Board notwithstanding that such
program or procedures may be available to other Participants.

                    (iii) Net Exercise. A “Net Exercise” means the delivery of a properly executed exercise
notice followed by a procedure pursuant to which (1) the Company will reduce the number of Units
otherwise issuable to a Participant upon the exercise of an Option by the largest whole number of
Units having a Fair Market Value that does not exceed the aggregate exercise price for the Units
with respect to which the Option is exercised, and (2) the Participant shall pay to the Company in
cash the remaining balance of such aggregate exercise price not satisfied by such reduction in the
number of whole Units to be issued.

          6.4 Effect of Termination of Service.

               (a) Option Exercisability. Subject to earlier termination of the Option as otherwise provided
by this Plan and unless a longer exercise period is provided by the Board, an Option shall
terminate immediately upon the Participant’s termination of Service to the extent that it is then
unvested and shall be exercisable after the Participant’s termination of Service to the extent it
is then vested only during the applicable time period determined in accordance with this Section
and thereafter shall terminate:

10

 

                    (i) Disability. If the Participant’s Service terminates because of the Disability of the
Participant, the Option, to the extent unexercised and exercisable for vested Units on the date on
which the Participant’s Service terminated, may be exercised by the Participant (or the
Participant’s guardian or legal representative) at any time prior to the expiration of twelve (12)
months after the date on which the Participant’s Service terminated, but in any event no later than
the date of expiration of the Option’s term as set forth in the Award Agreement evidencing such
Option (the “Option Expiration Date”).

                    (ii) Death. If the Participant’s Service terminates because of the death of the Participant,
the Option, to the extent unexercised and exercisable for vested Units on the date on which the
Participant’s Service terminated, may be exercised by the Participant’s legal representative or
other person who acquired the right to exercise the Option by reason of the Participant’s death at
any time prior to the expiration of twelve (12) months after the date on which the Participant’s
Service terminated, but in any event no later than the Option Expiration Date. The Participant’s
Service shall be deemed to have terminated on account of death if the Participant dies within three
(3) months after the Participant’s termination of Service.

                    (iii) Termination for Cause. Notwithstanding any other provision of the Plan to the contrary,
if the Participant’s Service is terminated for Cause, the Option shall terminate in its entirety
and cease to be exercisable immediately upon such termination of Service.

                    (iv) Other Termination of Service. If the Participant’s Service terminates for any reason,
except Disability, death or Cause, the Option, to the extent unexercised and exercisable for vested
Units on the date on which the Participant’s Service terminated, may be exercised by the
Participant at any time prior to the expiration of three (3) months after the date on which the
Participant’s Service terminated, but in any event no later than the Option Expiration Date.

               (b) Extension if Exercise Prevented by Law. Notwithstanding the foregoing other than
termination of Service for Cause, if the exercise of an Option within the applicable time periods
set forth in Section 6.4(a) is prevented by the provisions of Section 12 below, the Option shall
remain exercisable until the later of (i) thirty (30) days after the date such exercise first would
no longer be prevented by such provisions or (ii) the end of the applicable time period under
Section 6.4(a), but in any event no later than the Option Expiration Date.

          6.5 Transferability of Options. During the lifetime of the Participant, an Option shall be
exercisable only by the Participant or the Participant’s guardian or legal representative. An
Option shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer,
assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the
Participant’s beneficiary, except transfer by will or by the laws of descent and distribution and
in accordance with the Operating Agreement. Notwithstanding the foregoing, to the extent permitted
by the Board, in its discretion, and set forth in the Award Agreement evidencing such Option, an
Option shall be assignable or transferable subject to the applicable limitations, if any, described
in Rule 701 under the Securities Act and the Operating Agreement.

11

 

     7. Restricted Unit Awards.

          Restricted Unit Awards shall be evidenced by Award Agreements specifying whether the Award is
a Restricted Unit Bonus or a Restricted Unit Purchase Right and the number of Units subject to the
Award, in such form as the Board shall from time to time establish. Such Award Agreements shall
incorporate all applicable terms of the Plan by reference and shall comply with and be subject to
the following terms and conditions:

          7.1 Types of Restricted Unit Awards Authorized. Restricted Unit Awards may be granted in the
form of either a Restricted Unit Bonus or a Restricted Unit Purchase Right. Restricted Unit Awards
may be granted upon such conditions as the Board shall determine, including, without limitation,
upon the attainment of one or more performance goals.

          7.2 Purchase Price. The purchase price for Units issuable under each Restricted Unit Purchase
Right shall be established by the Board in its discretion. No monetary payment (other than
applicable tax withholding) shall be required as a condition of receiving Units pursuant to a
Restricted Unit Bonus, the consideration for which shall be services actually rendered to a
Participating Company or for its benefit.

          7.3 Purchase Period. A Restricted Unit Purchase Right shall be exercisable within a period
established by the Board, which shall in no event exceed thirty (30) days from the effective date
of the grant of the Restricted Unit Purchase Right.

          7.4 Payment of Purchase Price. Except as otherwise provided below, payment of the purchase
price for the number of Units being purchased pursuant to any Restricted Unit Purchase Right shall
be made (a) in cash, by check or in cash equivalent, (b) by such other consideration as may be
approved by the Board from time to time to the extent permitted by applicable law, or (c) by any
combination thereof.

          7.5 Vesting and Restrictions on Transfer. Units issued pursuant to any Restricted Unit Award
may (but need not) be made subject to Vesting Conditions based upon the satisfaction of such
Service requirements, conditions, restrictions or performance criteria as shall be established by
the Board and set forth in the Award Agreement evidencing such Award. During any period in which
Units acquired pursuant to a Restricted Unit Award remain subject to Vesting Conditions, such Units
may not be sold, exchanged, transferred, pledged, assigned or otherwise disposed of other than
pursuant to an Ownership Change Event or as provided in Section 7.8. Upon request by the Board
and/or the Company, a Participant shall execute any agreement evidencing such transfer restrictions
prior to the receipt of Units hereunder and shall promptly present to the Company any and all
certificates representing Units acquired hereunder for the placement on such certificates of
appropriate legends evidencing any such transfer restrictions.

          7.6 Voting Rights; Dividends and Distributions. Except as provided in this Section, Section
7.5 and any Award Agreement, during any period in which Units acquired pursuant to a Restricted
Unit Award remain subject to Vesting Conditions, the Participant shall have all of the rights of a
member of the Company holding Units, including the right to vote such Units and to receive all
dividends and other distributions paid with respect to such Units; provided, however, that if so
determined by the Board and provided by the Award Agreement, such dividends and distributions shall
be subject to the same Vesting Conditions as the Units subject to the Restricted Unit Award with
respect to which such

12

 

dividends or distributions were paid. In the event of a dividend or distribution paid in
Units or other property or any other adjustment made upon a change in the capital structure of the
Company as described in Section 4.3, any and all new, substituted or additional securities or other
property (other than normal cash dividends) to which the Participant is entitled by reason of the
Participant’s Restricted Unit Award shall be immediately subject to the same Vesting Conditions as
the Units subject to the Restricted Unit Award with respect to which such dividends or
distributions were paid or adjustments were made.

          7.7 Effect of Termination of Service. Unless otherwise provided by the Board in the Award
Agreement evidencing a Restricted Unit Award, if a Participant’s Service terminates for any reason,
whether voluntary or involuntary (including the Participant’s death or disability), then (a) the
Company (or its assignee) shall have the option to repurchase for the purchase price paid by the
Participant any Units acquired by the Participant pursuant to a Restricted Unit Purchase Right
which remain subject to Vesting Conditions as of the date of the Participant’s termination of
Service and (b) the Participant shall forfeit to the Company any Units acquired by the Participant
pursuant to a Restricted Unit Bonus which remain subject to Vesting Conditions as of the date of
the Participant’s termination of Service. The Company shall have the right to assign at any time
any repurchase right it may have, whether or not such right is then exercisable, to one or more
persons as may be selected by the Company.

          7.8 Nontransferability of Restricted Unit Award Rights. Rights to acquire Units pursuant to a
Restricted Unit Award shall not be subject in any manner to anticipation, alienation, sale,
exchange, transfer, assignment, pledge, encumbrance or garnishment by creditors of the Participant
or the Participant’s beneficiary, except transfer by will or the laws of descent and distribution.
All rights with respect to a Restricted Unit Award granted to a Participant hereunder shall be
exercisable during his or her lifetime only by such Participant or the Participant’s guardian or
legal representative and in accordance with the Operating Agreement.

     8. Deferred Unit Awards.

          Deferred Unit Awards shall be evidenced by Award Agreements specifying the number of Deferred
Units subject to the Award, in such form as the Board shall from time to time establish. Such
Award Agreements shall incorporate all applicable terms of the Plan by reference and shall comply
with and be subject to the following terms and conditions:

          8.1 Purchase Price. No monetary payment (other than applicable tax withholding, if any) shall
be required as a condition of receiving a Deferred Unit Award, the consideration for which shall be
services actually rendered to a Participating Company or for its benefit.

          8.2 Vesting. Deferred Unit Awards may (but need not) be made subject to Vesting Conditions
based upon the satisfaction of such Service requirements, conditions, restrictions or performance
criteria as shall be established by the Board and set forth in the Award Agreement evidencing such
Award.

          8.3 Voting Rights, Dividend Equivalent Rights and Distributions. Participants shall have no
voting rights with respect to Units represented by Deferred Unit Awards until the date of the
issuance of such Units (as evidenced by the appropriate entry on the books of the Company or of a
duly authorized transfer agent of the Company). However,

13

 

the Board, in its discretion, may provide in the Award Agreement evidencing any Deferred Unit
Award that the Participant shall be entitled to Dividend Equivalent Rights with respect to the
payment of cash dividends on Units during the period beginning on the date such Award is granted
and ending, with respect to each Unit subject to the Award, on the earlier of the date the Award is
settled or the date on which it is terminated. Such Dividend Equivalent Rights, if any, shall be
paid by crediting the Participant a cash amount (or additional whole Deferred Units as of the date
of payment of such cash dividends on Units, as determined by the Board), which amounts shall be
subject to the same terms and conditions and shall be settled in the same manner and at the same
time as the Deferred Units originally subject to the Deferred Unit Award. In the event of a
dividend or distribution paid in Units or other property or any other adjustment made upon a change
in the capital structure of the Company as described in Section 4.3, appropriate adjustments shall
be made in the Participant’s Deferred Unit Award so that it represents the right to receive upon
settlement any and all new, substituted or additional securities or other property to which the
Participant would be entitled by reason of the Units issuable upon settlement of the Award, and all
such new, substituted or additional securities or other property shall be immediately subject to
the same Vesting Conditions as are applicable to the Award.

          8.4 Effect of Termination of Service. Unless otherwise provided by the Board and set forth in
the Award Agreement evidencing a Deferred Unit Award, if a Participant’s Service terminates for any
reason, whether voluntary or involuntary (including the Participant’s death or disability), then
the Participant shall forfeit to the Company any Deferred Units pursuant to the Award which remain
subject to Vesting Conditions as of the date of the Participant’s termination of Service, and, in
the event of the Participant’s termination for Cause, such Deferred Unit Award to the extent not
yet settled.

          8.5 Settlement of Deferred Unit Awards. The Company shall issue to a Participant on the date
on which Deferred Units subject to the Participant’s Deferred Unit Award vest or on such other date
determined by the Board, in its discretion, and set forth in the Award Agreement one (1) Unit
(and/or any other new, substituted or additional securities or other property pursuant to an
adjustment described in Section 8.3) for each Deferred Unit then becoming vested or otherwise to be
settled on such date, subject to the withholding of applicable taxes, if any. If permitted by the
Board, the Participant may elect, consistent with the requirements of Section 409A of the Code, to
defer receipt of all or any portion of the Units or other property otherwise issuable to the
Participant pursuant to this Section, and such deferred issuance date(s) and amount(s) elected by
the Participant shall be set forth in the Award Agreement. Notwithstanding the foregoing, the
Board, in its discretion, may provide for settlement of any Deferred Unit Award by payment to the
Participant in cash of an amount equal to the Fair Market Value on the payment date of the Units or
other property otherwise issuable to the Participant pursuant to this Section.

          8.6 Nontransferability of Deferred Unit Awards. The right to receive Units pursuant to a
Deferred Unit Award shall not be subject in any manner to anticipation, alienation, sale, exchange,
transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the
Participant’s beneficiary, except transfer by will or by the laws of descent and distribution. All
rights with respect to a Deferred Unit Award granted to a Participant hereunder shall be
exercisable during his or her lifetime only by such Participant or the Participant’s guardian or
legal representative.

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     9. Standard Forms of Award Agreements.

          9.1 Award Agreements. Each Award shall comply with and be subject to the terms and conditions
set forth in the appropriate form of Award Agreement approved by the Board and as amended from time
to time. No Award or purported Award shall be a valid and binding obligation of the Company
unless evidenced by a fully executed Award Agreement.

          9.2 Authority to Vary Terms. The Board shall have the authority from time to time to vary the
terms of any standard form of Award Agreement either in connection with the grant or amendment of
an individual Award or in connection with the authorization of a new standard form or forms;
provided, however, that the terms and conditions of any such new, revised or amended standard form
or forms of Award Agreement are not inconsistent with the terms of the Plan.

     10. Change in Control.

          Subject to the requirements and limitations of Section 409A of the Code, if applicable, the
Board may provide for any one or more of the following:

          10.1 Accelerated Vesting. The Board may, in its discretion, provide in any Award Agreement
or, in the event of a Change in Control, may take such actions as it deems appropriate to provide
for the acceleration of the exercisability and/or vesting in connection with such Change in Control
of each or any outstanding Award or portion thereof and Units acquired pursuant thereto upon such
conditions, including termination of the Participant’s Service prior to, upon, or following such
Change in Control, to such extent as the Board shall determine.

          10.2 Assumption, Continuation or Substitution of Awards. In the event of a Change in Control,
the surviving, continuing, successor, or purchasing entity or parent thereof, as the case may be
(the “Acquiror”), may, without the consent of any Participant, assume or continue the Company’s
rights and obligations under each or any Award or portion thereof outstanding immediately prior to
the Change in Control or substitute for each or any such outstanding Award or portion thereof a
substantially equivalent award with respect to the Acquiror’s securities. For purposes of this
Section, if so determined by the Board, in its discretion, an Award or any portion thereof shall be
deemed assumed if, following the Change in Control, the Award confers the right to receive, subject
to the terms and conditions of the Plan and the applicable Award Agreement, for each Unit subject
to such portion of the Award immediately prior to the Change in Control, the consideration (whether
units, stock, cash, other securities or property or a combination thereof) to which a holder of a
Unit on the effective date of the Change in Control was entitled; provided, however, that if such
consideration is not solely common equity of the Acquiror, the Board may, with the consent of the
Acquiror, provide for the consideration to be received upon the exercise of the Award for each Unit
to consist solely of common equity of the Acquiror equal in Fair Market Value to the per Unit
consideration received by holders of Units pursuant to the Change in Control. If any portion of
such consideration may be received by holders of Units pursuant to the Change in Control on a
contingent or delayed basis, the Board may, in its discretion, determine such Fair Market Value per
Unit as of the time of the Change in Control on the basis of the Board’s good faith estimate of the
present value of the probable future payment of such consideration. Any Award or portion thereof
which is neither assumed or continued by the Acquiror in connection with the Change in Control nor
exercised as of the time of

15

 

consummation of the Change in Control shall terminate and cease to be outstanding effective as
of the time of consummation of the Change in Control. Notwithstanding the foregoing, Units
acquired upon exercise of an Award prior to the Change in Control and any consideration received
pursuant to the Change in Control with respect to such Units shall continue to be subject to all
applicable provisions of the Award Agreement evidencing such Award except as otherwise provided in
such Award Agreement.

          10.3 Cash-Out of Outstanding Awards. The Board may, in its discretion and without the consent
of any Participant, determine that, upon the occurrence of a Change in Control, each or any Award
or portion thereof outstanding immediately prior to the Change in Control and not previously
exercised shall be canceled in exchange for a payment with respect to each vested Unit (and each
unvested Unit, if so determined by the Board) subject to such canceled Award in (i) cash, (ii)
securities of the Company or of another business entity a party to the Change in Control, or (iii)
other property which, in any such case, shall be in an amount having a Fair Market Value equal to
the Fair Market Value of the consideration to be paid per Unit in the Change in Control, reduced
(but not below zero) by the exercise or purchase price per Unit, if any, under such Award. If any
portion of such consideration may be received by holders of Units pursuant to the Change in Control
on a contingent or delayed basis, the Board may, in its sole discretion, determine such Fair Market
Value per Unit as of the time of the Change in Control on the basis of the Board’s good faith
estimate of the present value of the probable amount of future payment of such consideration. In
the event such determination is made by the Board, an Award having an exercise or purchase price
per share equal to or greater than the Fair Market Value of the consideration to be paid per Unit
in the Change in Control may be canceled without payment of consideration to the holder thereof.
Payment pursuant to this Section (reduced by applicable withholding taxes, if any) shall be made to
Participants in respect of the vested portions of their canceled Awards as soon as practicable
following the date of the Change in Control and in respect of the unvested portions of their
canceled Awards in accordance with the vesting schedules applicable to such Awards.

     11. Tax Withholding.

          11.1 Tax Withholding in General. The Company shall have the right to deduct from any and all
payments made under the Plan, or to require the Participant, through payroll withholding, cash
payment or otherwise, to make adequate provision for, the federal, state, local and foreign taxes
(including any social insurance tax), if any, required by law to be withheld by the Participating
Company Group with respect to an Award or the Units acquired pursuant thereto. The Company shall
have no obligation to deliver Units or to release Units from an escrow established pursuant to an
Award Agreement until the Participating Company Group’s tax withholding obligations have been
satisfied by the Participant.

          11.2 Withholding in Units. The Company shall have the right, but not the obligation, to
deduct from the Units issuable to a Participant upon the exercise or vesting of an Award, or to
accept from the Participant the tender of, a number of whole Units having a Fair Market Value, as
determined by the Board, equal to all or any part of the tax withholding obligations of the
Participating Company Group. The Fair Market Value of any Units withheld or tendered to satisfy
any such tax withholding obligations shall not exceed the amount determined by the applicable
minimum statutory withholding rates. Notwithstanding the foregoing, this Section 11.2 shall not
apply with respect to an Option to purchase Units or

16

 

shares of stock of a corporation either of which is not publicly traded in an established
securities market.

     12. Compliance with Securities Law.

          The grant of Awards and the issuance of Units pursuant to any Award shall be subject to
compliance with all applicable requirements of federal, state and foreign law with respect to such
securities and the requirements of any stock exchange or market system upon which the securities of
the Company may then be listed. No Award may be exercised or Units issued pursuant to an Award
unless (a) a registration statement under the Securities Act shall at the time of such exercise or
issuance be in effect with respect to the securities issuable pursuant to the Award or (b) in the
opinion of legal counsel to the Company, the securities issuable pursuant to the Award may be
issued in accordance with the terms of an applicable exemption from the registration requirements
of the Securities Act. Furthermore, except as otherwise determined by the Board, in its
discretion, no Option may be exercised if the number of record holders of Units immediately
following such exercise and issuance of Units would exceed ninety percent (90%) of the number of
such record holders that would require the Company to register the Units pursuant to Section 12(g)
of the Exchange Act, in which case the Board can, among other things, toll the stated exercise
period or unilaterally cancel Options in exchange for a cash payment equal to the excess of the
Fair Market Value on the attempted date of exercise over the stated exercise price for such Option.
The inability of the Company to obtain from any regulatory body having jurisdiction the authority,
if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of
any securities hereunder shall relieve the Company of any liability in respect of the failure to
issue or sell such securities as to which such requisite authority shall not have been obtained.
As a condition to issuance of any securities, the Company may require the Participant to satisfy
any qualifications that may be necessary or appropriate, to evidence compliance with any applicable
law or regulation and to make any representation or warranty with respect thereto as may be
requested by the Company.

     13. Amendment or Termination of Plan.

          The Board may amend, suspend or terminate the Plan at any time. However, without the approval
of the Company’s members, there shall be (a) no increase in the maximum aggregate number of Units
that may be issued under the Plan (except by operation of the provisions of Section 4.3) and (b) no
other amendment of the Plan that would require approval of the Company’s members under any
applicable law, regulation or rule, including the rules of any stock exchange or market system upon
which the securities of the Company may then be listed. No amendment, suspension or termination of
the Plan shall affect any then outstanding Award unless expressly provided by the Board. Except as
provided by the next sentence, no amendment, suspension or termination of the Plan may have a
materially adverse effect on any then outstanding Award without the consent of the Participant.
Notwithstanding any other provision of the Plan or any Award Agreement to the contrary, the Board
may, in its sole and absolute discretion and without the consent of any Participant, amend the Plan
or any Award Agreement, to take effect retroactively or otherwise, as it deems necessary or
advisable for the purpose of conforming the Plan or such Award Agreement to any present or future
law, regulation or rule applicable to the Plan.

17

 

     14. Miscellaneous Provisions.

          14.1 Repurchase Rights. Units issued under the Plan may be subject to a right of first
refusal, one or more repurchase options, or other conditions and restrictions as determined by the
Board in its discretion at the time the Award is granted or as required by the Operating Agreement.
The Company shall have the right to assign at any time any repurchase right it may have, whether
or not such right is then exercisable, to one or more persons as may be selected by the Company.
Upon request by the Company, each Participant shall execute any agreement evidencing such transfer
restrictions prior to the receipt of Units hereunder and shall promptly present to the Company any
and all certificates representing Units acquired hereunder for the placement on such certificates
of appropriate legends evidencing any such transfer restrictions.

          14.2 Provision of Information. At least annually, copies of the Company’s balance
sheet and income statement for the just completed fiscal year shall be made available to each
Participant and purchaser of Units upon the exercise of an Award; provided, however, that this
requirement shall not apply if all offers and sales of securities pursuant to the Plan comply with
all applicable conditions of Rule 701 under the Securities Act. Except as otherwise provided by
the Operating Agreement, the Company shall not be required to provide such information to key
persons whose duties in connection with the Company assure them access to equivalent information.
The Company shall deliver to each Participant such disclosures as are required in accordance with
Rule 701 under the Securities Act and by the Operating Agreement.

          14.3 Rights as Employee, Consultant or Manager. No person, even though eligible pursuant to
Section 5, shall have a right to be selected as a Participant, or, having been so selected, to be
selected again as a Participant. Nothing in the Plan or any Award granted under the Plan shall
confer on any Participant a right to remain an Employee, Consultant or Manager or interfere with or
limit in any way any right of a Participating Company to terminate the Participant’s Service at any
time. To the extent that an Employee of a Participating Company other than the Company receives an
Award under the Plan, that Award shall in no event be understood or interpreted to mean that the
Company is the Employee’s employer or that the Employee has an employment relationship with the
Company.

          14.4 Rights as a Member. A Participant shall have no rights as a member with respect to any
Units covered by an Award until the date of the issuance of such Units (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer agent of the
Company). No adjustment shall be made for dividends, distributions or other rights for which the
record date is prior to the date such Units are issued, except as provided in Section 4.3 or
another provision of the Plan.

          14.5 Delivery of Title to Securities. Subject to any governing rules or regulations, the
Company shall issue or cause to be issued the securities acquired pursuant to an Award and shall
deliver such securities to or for the benefit of the Participant by means of one or more of the
following: (a) by delivering to the Participant evidence of securities credited to the account of
the Participant on the books of the Company or an agent of the Company, (b) by depositing such
securities for the benefit of the Participant with any broker with which the Participant has an
account relationship, or (c) by delivering such securities to the Participant in certificate form.

18

 

          14.6 Fractional Units. The Company shall not be required to issue fractional Units upon the
exercise or settlement of any Award.

          14.7 Retirement and Welfare Plans. Neither Awards made under this Plan nor Units or cash paid
pursuant to such Awards shall be included as “compensation” for purposes of computing the benefits
payable to any Participant under any Participating Company’s retirement plans (both qualified and
non-qualified) or welfare benefit plans unless such other plan expressly provides that such
compensation shall be taken into account in computing such benefits.

          14.8 Beneficiary Designation. Subject to local laws and procedures, each Participant may file
with the Company a written designation of a beneficiary who is to receive any benefit under the
Plan to which the Participant is entitled in the event of such Participant’s death before he or she
receives any or all of such benefit. Each designation will revoke all prior designations by the
same Participant, shall be in a form prescribed by the Company, and will be effective only when
filed by the Participant in writing with the Company during the Participant’s lifetime. If a
married Participant designates a beneficiary other than the Participant’s spouse, the effectiveness
of such designation may be subject to the consent of the Participant’s spouse. If a Participant
dies without an effective designation of a beneficiary who is living at the time of the
Participant’s death, the Company will pay any remaining unpaid benefits to the Participant’s legal
representative.

          14.9 Severability. If any one or more of the provisions (or any part thereof) of this Plan
shall be held invalid, illegal or unenforceable in any respect, such provision shall be modified so
as to make it valid, legal and enforceable, and the validity, legality and enforceability of the
remaining provisions (or any part thereof) of the Plan shall not in any way be affected or impaired
thereby.

          14.10 No Constraint on Company Action. Nothing in this Plan shall be construed to: (a) limit,
impair, or otherwise affect the Company’s or another Participating Company’s right or power to make
adjustments, reclassifications, reorganizations, or changes of its capital or business structure,
or to merge or consolidate, or dissolve, liquidate, sell, or transfer all or any part of its
business or assets; or (b) limit the right or power of the Company or another Participating Company
to take any action which such entity deems to be necessary or appropriate.

          14.11 Choice of Law. Except to the extent governed by applicable federal law, the validity,
interpretation, construction and performance of the Plan and each Award Agreement shall be governed
by the laws of the State of California, without regard to its conflict of law rules.

          14.12 Member Approval. The Plan or any increase in the maximum aggregate number of Units
issuable hereunder as provided in Section 4.1 (the “Authorized Units”) shall be approved by a
majority of the outstanding securities of the Company entitled to vote by the later of (a) a period
beginning twelve (12) months before and ending twelve (12) months after the date of adoption
thereof by the Board or (b) the first issuance of any security pursuant to the Plan in the State of
California (within the meaning of Section 25008 of the California Corporations Code). Awards
granted prior to security holder approval of the Plan or in excess of the Authorized Units
previously approved by the security holders shall become exercisable no earlier than the date of
security holder approval of the Plan or such increase in the Authorized Units, as the case may be,
and such Awards shall be

19

 

rescinded if such security holder approval is not received in the manner described in the
preceding sentence.

          14.13 Foreign Plans/Sub-Plans. With respect to Participants who reside or work outside of the
United States of America, Awards granted hereunder shall be interpreted in accordance with, and
shall be deemed amended to the minimum extent necessary so as to comply with, applicable law and in
a manner that preserves to the extent possible the original intent of such Awards.

20

 

PLAN HISTORY

	 	 	 
	December 8, 2009

	 	Board adopts Plan, with an initial reserve of 30,000,000 Units.
	December 8, 2009

	 	Members of the Company approve Plan.

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