Document:

Interest Rate Swap Transaction Letter Agreement

			
	Deutsche Bank	 	

	Aktiengesellschaft	 	 

  

			
	Date:	  	June 30, 2005
		
	To:	  	MagnaChip Semiconductor S.A.
		
	Attention:	  	Swaps Documentation Department
	Facsimile no.:	  	82 2 3459 3689
		
	Our Reference:	  	Global No. N397355N
		
	Re:	  	Interest Rate Swap Transaction

  
 Ladies and Gentlemen: 
  
 The purpose of this letter agreement is to set forth the terms and conditions of the
Transaction entered into between Deutsche Bank AG (“DBAG”) and MagnaChip Semiconductor S.A. (“Counterparty”) on the Trade Date specified below (the “Transaction”). This letter agreement constitutes a
“Confirmation” as referred to in the Agreement specified below. 
  
 The
definitions and provisions contained in the 2000 ISDA Definitions (the “Definitions”) as published by the International Swaps and Derivatives Association, Inc. are incorporated by reference herein. In the event of any inconsistency between
the Definitions and this Confirmation, this Confirmation will govern. 
  
 For the
purpose of this Confirmation, all references in the Definitions or the Agreement to a “Swap Transaction” shall be deemed to be references to this Transaction. 
  
 1. This Confirmation evidences a complete and binding agreement between DBAG (“Party A”) and Counterparty (“Party
B”) as to the terms of the Transaction to which this Confirmation relates. In addition, Party A and Party B agree to use all reasonable efforts to negotiate, execute and deliver an agreement in the form of the ISDA 2002 Master Agreement with
such modifications as Party A and Party B will in good faith agree (the “ISDA Form” or the “Agreement”). Upon execution by the parties of such Agreement, this Confirmation will supplement, form a part of and be subject to the
Agreement. All provisions contained or incorporated by reference in such Agreement upon its execution shall govern this Confirmation except as expressly modified below. Until Party A and Party B execute and deliver the Agreement, this Confirmation,
together with all other documents referring to the ISDA Form (each a “Confirmation”) confirming Transactions (each a “Transaction”) entered into between us (notwithstanding anything to the contrary in a Confirmation) shall
supplement, form a part of, and be subject to an agreement in the form of the ISDA Form as if Party A and Party B had executed an agreement on the Trade Date of the first such Transaction between us in such form, with the Schedule thereto (i)
specifying only that (a) the governing law is English law, provided, that such choice of law shall be superseded by any choice of law provision specified in the Agreement upon its execution, and (b) the Termination Currency is U.S. Dollars and (ii)
incorporating the addition to the definition of “Indemnifiable Tax” contained in (page 49 of) the ISDA “User’s Guide to the 2002 ISDA Master Agreements”. 

 2. The terms of the particular Transaction to which this Confirmation relates are as follows: 
  

			
	 Notional Amount:
	  	USD 300,000,000.00
	 Trade Date:
	  	June 23, 2005
		
	 Effective Date:
	  	June 27, 2005
		
	 Termination Date:
	  	June 15, 2008
		
	Fixed Amounts:	  	 
		
	 Fixed Rate Payer:
	  	Counterparty
		
	 Fixed Rate Payer Period End Dates:
	  	The 15th day of March, June, September and December of each year, commencing September 15, 2005, through and including the Termination Date with No Adjustment
		
	 Fixed Rate Payer Payment Dates:
	  	The 15th day of March, June, September and December of each year, commencing September 15, 2005, through and including the Termination Date
		
	 Fixed Rate:
	  	4.09%
		
	 Fixed Rate Day Count Fraction:
	  	30/360
		
	 Fixed Rate Payer Business Days:
	  	New York
		
	 Fixed Rate Payer Business Day Convention:
	  	Modified Following
		
	Floating Amounts:	  	 
		
	 Floating Rate Payer:
	  	DBAG
		
	 Floating Rate Payer Period End Dates:
	  	The 15th day of March, June, September and December of each year, commencing September 15, 2005, through and including the Termination Date with No Adjustment
		
	 Floating Rate Payer Payment Dates:
	  	The 15th day of March, June, September and December of each year, commencing September 15, 2005, through and including the Termination Date
		
	 Floating Rate for initial Calculation Period:
	  	3.41%
		
	 Floating Rate Option:
	  	USD-LIBOR-BBA
		
	 Designated Maturity:
	  	Three months
		
	 Spread:
	  	None
		
	 Floating Rate Day Count Fraction:
	  	30/360
		
	 Reset Dates:
	  	The first Floating Rate Payer Business Day of each Calculation Period or Compounding Period, if Compounding is applicable.
		
	 Compounding:
	  	Inapplicable
		
	 Floating Rate Payer Business Days:
	  	New York
		
	 Floating Rate Payer Business Day Convention:
	  	Modified Following

  

 2 

 3. Other Provisions 
  
 The “Cross Default” provisions of Section 5(a)(vi) of the ISDA Form will apply to Party B. 
  
 Each of the following shall constitute an Additional Termination Event: 
  
 A. Party B’s obligations to Party A under this Agreement: 
  
 (i) cease to be secured pursuant to the Security Documents (as such term is
defined in the Credit Agreement); or 
  
 (ii) cease to be equally
and ratably secured with Party B’s obligations to the Lender (as such term is defined in the Credit Agreement) under the Credit Agreement pursuant to the relevant Security Documents; or 
  
 (iii) cease to be guaranteed pursuant to the Guarantees (as such term is
defined in the Credit Agreement) at any time for any reason. 
  
 B. Any collateral under the Security Documents is released at any time when Party A, or an Affiliate of Party A, is not a party to the Credit Agreement, unless Party A shall have consented in writing prior to such release (such consent not
to be unreasonably withheld). 
  
 For the purpose of the
foregoing Termination Events, the Affected Party shall be Party B. 
  
 As used herein and throughout this Agreement, “Credit Agreement” means that U.S. $100,000,000 Credit Agreement dated as of December 23, 2004, among MagnaChip Semiconductor S.A. and MagnaChip Semiconductor Finance Company as
Borrowers, MagnaChip Semiconductor LLC and The Other Guarantors Party Hereto, as Guarantors, The Lenders Party Hereto, UBS Securities LLC as Arranger, Bookmanager, Documentation Agent and Syndication Agent, and Korea Exchange Bank, as Issuing Bank
and UBS AG, Stamford Branch, as Administrative Agent and Collateral Agent, and UBS Loan Finance LLC, as Swingline Lender, as may be amended and supplemented from time to time. 
  
 4. Set-Off 
  
 Upon the designation of any Early Termination Date, the party that is not the Defaulting Party or Affected Party (“X”) may, without prior notice to the
Defaulting or Affected Party (“Y”), set off any sum or obligation (whether or not arising under this Agreement, whether matured or unmatured, whether or not contingent and irrespective of the currency, place of payment or booking office of
the sum or obligation) owed by Y to X or any Affiliate of X (the “X Set Off Amount”) against any sum or obligation (whether or not arising under this Agreement, whether matured or unmatured, whether or not contingent and irrespective of
the currency, place of payment or booking office of the sum or obligation) owed by X or any Affiliate of X to Y (the “Y Set Off Amount”). X will give notice to the other party of any set off effected under this Section 6(f). 
  
 For this purpose, either the X Set Off Amount or the Y Set Off Amount (or the relevant
portion of such set off amounts) may be converted by X into the currency in which the other set off amount is denominated at 

  

 3 

 
the rate of exchange at which X would be able, acting in a reasonable manner and in good faith, to purchase the relevant amount of such currency. 

 
 If a sum or obligation is unascertained, X may in good faith estimate that obligation and
set-off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained. 
  
 Nothing in this Section 6(f) shall be effective to create a charge or other security interest. This Section 6(f) shall be without prejudice and in addition to any right
of set-off, combination of accounts, lien or other rights to which any party is at any time otherwise entitled (whether by operation of law, contract or otherwise). 
  
 5. Account Details: 
  

			
	USD DBAG Payment Instructions:	  	 
	Account With:	  	Deutsche Bank AG, New York
	SWIFT Code:	  	DEUTUS33
	Favor Of:	  	Deutsche Bank AG, New York
	Account Number:	  	100440170004
		
	USD Counterparty Payment Instructions:	  	 
	PLEASE PROVIDE AT YOUR EARLIEST CONVENIENCE

  
 6. Offices: 
  
 The Office of DBAG for this Transaction is New York. 
  
 The Office of Counterparty for this Transaction is Luxembourg. 
  
 7. Calculation Agent: 
  
 The party specified as such in the Agreement, or if not specified therein, DBAG. 
  
 8. Representations 
  
 Counterparty, if it is a nonresident alien individual, foreign corporation, foreign partnership, foreign trust, or foreign estate,
represents that it is a foreign person for purposes of US Treasury regulations relating to information reporting and backup withholding. 
  
 Each party will be deemed to represent to the other party on the date on which it enters into this Transaction that (absent a written agreement between the parties that
expressly imposes affirmative obligations to the contrary for this Transaction): 
  
 (i) Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into this Transaction and as to whether this Transaction is appropriate or proper for it based upon its
own judgement and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into this Transaction; it being understood
that information and explanations related to the terms and conditions of this Transaction shall not be considered investment advice or a recommendation to enter into this Transaction. No communication (written or oral) received from the other party
shall be deemed to be an assurance or guarantee as to the expected results of this Transaction. 
  
 (ii) Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms, conditions and risks of this Transaction. It is also capable of assuming, and assumes, the risks of this Transaction. 
  
 (iii) Status of Parties. The other party is not acting as a fiduciary for, or an adviser to it in respect of this
Transaction. 
  

 4 

 9. Please confirm that the foregoing correctly sets forth the terms of our agreement by having an authorized
officer sign this Confirmation and return it via facsimile or e-mail to: 
  
 Attention: Derivative Documentation 
 Telephone: 44 20 7547 4755 
 Facsimile: 44 20 7545 9761 
 E-mail:
Derivative.Documentation@db.com 
  
 This message will be the only form of
Confirmation dispatched by us. If you wish to exchange hard copy forms of this Confirmation, please contact us. 
  

			
	 Yours sincerely,
  
 Deutsche Bank AG

		
	 By:
	 	 

	 Name:
	 	 Gaby Bolton

	 Authorized Signatory

		
	 By:
	 	 

	 Name:
	 	 Jamie Hunt

	 Authorized Signatory

	
	 Confirmed as of the date first written above:
  
 MagnaChip Semiconductor S.A.

		
	 By:
	 	 

	 Name:
	 	 Robert Krakauer

	 Title:
	 	 CFO

  

 5Quitclaim Deed

							
	 	 	 	 	 	 	 WAKE COUNTY, NC 439
 LAURA M
RIDDICK
 REGISTER OF DEEDS
 PRESENTED &
RECORDED ON
 03/11/2005 AT 14:53:13

				
	 	 	 	 	 	 	BOOK: 011259 PAGE: 81822 - 81828

  
 Tax ID #0150575 
 Excise D 
  
 Prepared by Thomas B. Wood, Department of Transportation, Attorney General’s Office 1505 Mail Service Center, Raleigh, NC 27699-1505 
  
 STATE OF NORTH CAROLINA 
 COUNTY OF WAKE 
  
 THIS QUITCLAIM DEED executed this the 25th day of January 2005, by and between the Department of Transportation, (hereinafter known as the Department), and CAROLINA INVESTMENT PARTNERS, LTD,
(hereinafter known as the GRANTEE); 
  
 WITNESSETH:

  
 THAT WHEREAS, by Deed dated July 18, 1986, said Deed being recorded in
Deed Book 3785 at Page 763 of the Wake County Registry, the Department of Transportation acquired a parcel of land from Walsmith Associates, a North Carolina general partnership, during the highway right of way acquisition for State Highway Project
8.1401501, the improvement of US 1, in Wake County; and 
  
 WHEREAS, the GRANTEE,
has requested that the Department quitclaim to it a 1.99 acre tract being a portion of the above-mentioned acquisition; and 
  
 WHEREAS, the Department has determined that the approximately 1.99 acre area is no longer needed for highway purposes and can be considered surplus; and 
  
 WHEREAS, the Department, as part of the settlement of its highway Right of Way claim with the
Grantee, has agreed to convey the 1.99 acre area to the Grantee as part of its consideration for said settlement; and 
  
 WHEREAS, by that resolution adopted the 2nd day of December, 2004, the Board of Transportation approved the conveyance of the approximately 1.99 acre tract to the GRANTEE for $10.00 (TEN DOLLARS) and other good and valuable consideration and authorized the Department to
execute and deliver this instrument to the GRANTEE upon receipt of said sum; 
  
 mail to: Carolina Investment Partners 
               4000 Blueridge Road St.
100 
               Raleigh 27612 

 NOW, THEREFORE, for the receipt of the aforementioned consideration of $10.00 (TEN DOLLARS) and other good and valuable
consideration, receipt of which is hereby acknowledged, the GRANTOR, does remise, release and forever quitclaim unto the said GRANTEE, its successors and assigns, all of its right, title, claim or interest in and to that 1.99 acre area lying and
being in Wake County, North Carolina, and being described as follows: 
  
 Point of
BEGINNING being the southwestern corner of the property of the Department of Transportation, formerly Walsmith Associates, a North Carolina general partnership, and being S 56-44-30 W, 160.69 meters from a point in the centerline of-CPRPB-, Sta
12+00; thence to a point on a bearing of N 46-20-30 E, a distance of 42.00 meters (137.8 feet); thence to a point on a bearing of N 46-20-30 E, a distance of 26.67 meters (87.5 feet); thence to a point on a bearing of N 48-53-30 E, a distance of
25.33 meters (83.1 feet) ; thence to a point on a bearing of N 48-53-30 E, a distance of 16.04 meters (52.6 feet); thence to a point on a bearing of N 33-30-30 E, a distance of 187.34 meters (614.6 feet; thence to a point on a bearing of N 03-25-30
E, a distance of 72.68 meters (238.5 feet); thence to a point on a bearing of S 27-16-30 E, a distance of 37.18 meters (122.0 feet; thence to a point on a bearing of S 28-17-00 E, a distance of 24.97 meters (81.9 feet), thence to a point on a
bearing of S 27-53-30 E, a distance of 34.43 meters (112.9 feet); thence to a point on a bearing of S 45-09-00 W, a distance of 99.83 meters (327.5 feet; thence to a point on a bearing of S 43-04-30 W, a distance of 120.26 meters (394.6 feet);
thence to a point on a bearing of N 45-18-30 W, a distance of 4.71 meters (15.4 feet); thence to a point on a bearing of S 44-51-30 W, a distance of 9.83 meters (32.3 feet); thence to a point on a bearing of S 44-55-30 E, a distance of 5.02
meters (16.5 feet) ; thence to a point on a bearing of S 43-04-30 W, a distance of 9.48 meters (31.1 feet); thence to a point on a bearing of S 56-00-00 W, a distance of 81.39 meters (267.0 feet); returning to the point and place of BEGINNING Having
an area of 8027.03 Square Meters (86.401.9 Square Feet) being 0.80 Hectares (2.0 Acres) 
  
 The above-described area is subject to a Permanent Drainage Basement described as follows: 
  
 Point of BEGINNING being a point in the southeast line of the property of the Department of Transportation, formerly Walsmith Associates, a North Carolina general partnership, and lying and being S 59-26-30 W, 70.17
meters from a point in the centerline of-CPRP8-, Sta. 12+00; thence to a point on a bearing of N 44-55-30 W, a distance of 5.02 meters (16.5 feet); thence to a point on a bearing of N 44-51-30 E, a distance of 9.83 meters (32.3 feet); thence to a
point on a bearing of S 45-18-30 E, a distance of 4.71 meters (15.4 feet); thence to a point on a bearing of S 43-04-30 W, a distance of 9.87 meters (32.4 feet); returning to the point and place of BEGINNING, Having an area of 47.90 Square Meters
(515.5 Square Feet) being LESS THAN 1 Hectare (LESS THAN 1 Acre) 

 Main Parcel: 
  
 Having an area of 47.90 Square Meters (515.5 Square Feet) being LESS THAN 1 Hectare, (LESS THAN 1 Acre) 
  
 This description was taken from the Master Plans for State Highway Project 8.1401501, Wake County, and from a deed recorded on July 18,1986
in Deed Book 3785 at Page 763 of the Wake County Registry with both the aforesaid Master Plans and deed being on file in the Offices of the Department of Transportation in Raleigh, North Carolina. 
  
 This conveyance is made subject to any underground or above-ground utilities in existence at
the time of the conveyance to Grantee. In the event the Grantee should desire such utilities to be relocated or removed, the costs for said relocation or removal shall be borne by the Grantee. 
  
 TO HAVE AND TO HOLD the above-described land and premises together with all privileges and
appurtenances thereunto belonging to the said GRANTEE, its successors and assigns, free and discharged of all right and title and interest of Grantor or anybody claiming by or through it. 
  
 IN WITNESS WHEREOF, the Department of Transportation has hereunto set its hand and seal on the day and year first above written. 

 

			
	 STATE OF NORTH CAROLINA
 DEPARTMENT OF
TRANSPORTATION

		
	By:	 	 /s/ John B. Williamson, Jr.

	 	 	 JOHN B. WILLIAMSON, JR.

	 	 	 MANAGER OF RIGHT OF WAY

  

	
	ATTEST:
	
	 /s/ Illegible

	 SECRETARY TO THE BOARD OF
 TRANSPORTATION AND CUSTODIAN
 OF THE SEAL OF THE DEPARTMENT
 OF TRANSPORTATION

  
 [SEAL]

	
	 APPROVED AS TO FORM:
  
 ROY COOPER
 Attorney General

	
	 /s/ Thomas B. Wood

	 Thomas B. Wood

	 Assistant Attorney General

 

 

 

 

 NORTH CAROLINA 
 WAKE COUNTY 
  
 This the 25th day of
January, 2005, personally appeared before me, Joe G. Creech, Jr., a Notary Public of Johnston County and State, Tammy Denning, who being by me duly sworn, says that she knows the Seal of the Department of Transportation and is acquainted with John
B. Williamson, Jr., who is Manager of Right-of-Way of the Division of Highways of said Department, and that she, the said Tammy Denning, is the Secretary to the Board of Transportation and Custodian of the Seal of the Department of Transportation,
and saw said Manager of Right of Way sign the foregoing instrument, and that she, the said Secretary to the Board of Transportation and Custodian of the Seal of the Department of Transportation, affixed said seal to said instrument and signed her
name in attestation of the execution thereof in the presence of said Manager of Right of Way. 
  
 WITNESS my hand and Notarial Seal, the 25th day of January, 2005. 
  

	
	
	/s/ Illegible
	NOTARY PUBLIC

  
 My Commission Expires: 
  
 September 8,
2007 
  
 [SEAL]

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